Adverse factors of knowledge integration in a product development organization after M&A: A case study of a precision device manufacturer

This study discusses knowledge integration in a product development organization after M&A. The goal is to contribute to establishment of methodology that helps to accomplish the purpose of M&A. This study analyzes establishment of a new product development organization and its entry into a new market. This study indicates that knowledge integration is conducted in three phases: 1) Knowledge of the acquiring company and the acquired company is assessed. 2) Product development organization is reorganized based on the assessment. 3) Knowledge is created in the process of product development in the new organization. This study indicates that one of the adverse factors against knowledge integration in product development organizations is difference of corporate cultures between the acquiring company and the acquired company. This problem will be resolved in mid-term and long-term, since new corporate culture will mature in the product development organization. If the acquiring company persists on its existing knowledge, it is difficult to develop new products suitable for the new market. Thus another adverse factor against knowledge integration is persistence in the knowledge not necessary for the new market. In order to prevent this, abandonment of such knowledge is conducted during reorganization of the product development organization.