Knowledge management in the context of mergers and acquisitions.

The majority part of a firm’s value is more likely to be expressed in terms of its intangible assets, for which in a merger or an acquisition a significant premium is paid. More than half such ventures fail in their objectives, due to cultural dissonance and other losses associated with intellectual capital. Knowledge and experience lies at the heart of intangible assets, and may be seen in three different forms – explicit, tactical and relationship. An essential activity in mergers and acquisitions is to understand which specific areas of knowledge are critical to the strategic goals of the merger, and which are critical to the value adding process to stakeholders.
This leads to mapping the different assets in the target firm, and also to understanding the cultural elements which support, or otherwise, effective knowledge management. At each stage in the merger process, understanding of the above can be enhanced, leading to
appropriate action to safeguard the valuable knowledge assets acquired.