Cognitions and Knowledge Sharing In a Post-Acquisition Integration Context: The Case of the Indian IT Industry

Abstract

Following the economic liberalisation of the Indian economy, Indian information technology (IT) firms entered the global market for software. Beginning as a low-cost activity base for low-end labour intensive projects, the Indian IT industry has experienced rapid growth since the late 1990s. Recently, Indian IT firms have been actively engaging in cross-border acquisitions in developed countries. This explosive growth of the Indian IT industry has sparked the interest of several academics, which cite the motivation for these acquisitions to be the pursuit of knowledge. Individual behaviour is influenced by the internal processes of cognitions; therefore, cognitive processes play a significant role in individual level knowledge sharing behaviour. The two cognitive processes examined in this study are inter-group cognitions and social identity, which are related to the process of categorisation. As no academic literature has primarily focussed on the relationship between individual knowledge sharing and cognitions however, the overall research question of this study is: How do cognitive factors influence knowledge sharing in a post-acquisition context? In order to answer the overall research question, two sub-research questions are asked: (1) How does inter-group behaviour impact knowledge sharing among individuals in a post-acquisition integration context? (2) How does social identity impact knowledge sharing among individuals in a postacquisition integration context? In-depth interviews in Bengaluru, India were conducted among senior managers in Indian IT firms to answer these questions. In this research I provide an empirically motivated discussion, which examines the moderating effect of the mode of integration on cognitions and knowledge sharing, the discrepancies between the senior managers and middle managers' account of knowledge sharing and the actual knowledge sharing between the acquired and acquiring organisation. Ultimately the findings of this research are that the cognitive processes of inter-group behaviour and social identity influence knowledge sharing. Employees of the acquiring organisation categorise themselves as the in-group, and the employees of the acquired organisation as the out-group, which leads to in-group favouritism and out-group bias. This tendency to categorise hinders knowledge sharing. Social identity, however, can have the effect of fostering knowledge sharing if managers are successfully able to establish a shared organisational identity.