Learning or Inertia? The Impact of Experience and Knowledge Codification on Post-Acquisition Integration

Industrial and Corporate Change, Forthcoming

37 Pages Posted: 27 Dec 2018

See all articles by Francesco Castellaneta

Francesco Castellaneta

SKEMA Business School, Université Côte d'Azur (GREDEG)

Giovanni Valentini

Bocconi University - Department of Management and Technology

Maurizio Zollo

Bocconi University - Department of Management and Technology

Date Written: December 9, 2018

Abstract

This article develops and tests a theory on the evolution of complex organizational decisions, such as the decision to integrate (or not) a target company during the post-acquisition management phase. Using a sample of US bank mergers, we show that persistence in — or variation of — integration decisions depends on two key factors: integration experience and related knowledge codification. Integration experience tends to generate persistence in the integration decision, which is associated with poor deal performance. Moreover, we show that when knowledge codification is low, the persistence caused by integration experience further increases. However, when knowledge codification is sufficiently high, the inertial effect of experience diminishes significantly. Hence, high levels of knowledge codification can weaken the effects of decision inertia, which suggests that as knowledge codification increases, the role of knowledge codification switches from strengthening inertia to promoting learning.

Suggested Citation

Castellaneta, Francesco and Valentini, Giovanni and Zollo, Maurizio, Learning or Inertia? The Impact of Experience and Knowledge Codification on Post-Acquisition Integration (December 9, 2018). Industrial and Corporate Change, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3298269

Francesco Castellaneta (Contact Author)

SKEMA Business School, Université Côte d'Azur (GREDEG) ( email )

France

Giovanni Valentini

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Maurizio Zollo

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
5
Abstract Views
211
PlumX Metrics