This is a past event.
The campus community is invited to hear Manish Srivastava, associate professor of strategy and innovation in the Michigan Tech College of Business, present "The Choice Between Alliances and Acquisitions: A Knowledge Recombination Perspective" as part of the College of Business Brown Bag Research Seminar Series, from noon to 1 p.m. next Wednesday (Feb. 23) in the Academic Office Building, Room 101.
From the abstract:
When searching for external knowledge, firms often face this dilemma: should they ally with or acquire a target firm? Prior literature that has examined how the choice between the two governance modes is driven by the dissimilarity in knowledge with a target or partnering firm has not fully utilized the knowledge recombination perspective and the distinction that it makes between domain knowledge—knowledge that firms possess in distinct technological domains—and architectural knowledge—knowledge that firms possess about how to combine elements from different technological domains. In this study, we examine how the dissimilarities in the domain and architectural knowledge drive the choice between the two governance modes and how this choice affects the knowledge gains from the chosen governance mode. Our results show that firms are more likely to choose acquisitions over alliances when a target or partnering firm has dissimilar domain knowledge. We find that such choices also lead to more significant changes in domain knowledge post-acquisition than after an alliance. Further, we find that firms are equally likely to choose either mode when a target or partnering firm has dissimilar architectural knowledge. Still, such choices led to more changes in architectural knowledge after an alliance than post-acquisition. Overall, our results show that alliances are more effective in acquiring architectural knowledge, while acquisitions are more effective in acquiring domain knowledge.
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