Business: Mergers and Acquisitions

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“Mergers and acquisitions are the key to an organization's strategic development of knowledge. Knowledge acquisition is what drives organizations to carry out these activities."
Critically evaluate this statement, using academic literature and current business examples.

1.0 Introduction

In principle, the increasing competition in the market environment has underlined the importance of mergers and acquisitions (M&A) (Kanter, 2009, pp. 121). M&A activities represent a channel that has helped various organizations to acquire and maintain competitive advantage through the acquisition of valuable knowledge. Kanter (2009, pp. 121) asserts that the global economic recession that started in 2008 profoundly affected the implementation of M&A activities leading to a decline of over 40% compared to other economic times. The risks of recessionary environments, as well as limited access to syndicated loans, can be attributed as one of the essential causes of a decline in the M&A activities across the United States. Nonetheless, the recovery phase of the economy has created situations that necessitate the activities and implementation of M&A occasioned by the need for business organizations to strengthen and streamline operations. 

Even so, the process of acquiring knowledge as a result of various M&A activities has attracted significant interest in both industrial practice and academic studies (Platt, 2009, pp. 52). Presently, different business organizations have created platforms that promote the integration of knowledge through the acquisition of better knowledge so that to spur strategic development. Through the acquisition of knowledge, business organizations can increase the value realized by the customers, boast synergy levels as well as develop core competencies. Management researchers have increasingly focused on knowledge acquisition courtesy of M&A activities. Nonetheless, most of the existing literature on the topic can be described as explorative; thus various critical factors concerning the acquisition of knowledge are unexploited; besides, the subject cannot be theorized. For that reason, this paper-based essay aims at investigating different core factors regarding the acquisition of knowledge as a result of M&A activities.

2.0 Literature review

            The business world is characterized by M&A activities in a fundamental way based on the efforts utilized during regrouping of firms based on their previous business performance during the different phases of global economic development. Consequently, this has led to the acquisition of knowledge as a result of M&A activities being an extensively discussed topic by finance, accounting, and economics researchers. Most of the analysis regarding the acquisition of knowledge as a mean of strategic development revolves around discussions on challenges and issues realized in the fields of financial performance after M&A process, economic policy and so forth (Wang et al., 2009, pp. 1183). For instance, most of the researchers focus much attention on discussing the impact of M&A on industrial and global diversification as well as the influence of the M&A process on financial performances of various institutions.

            Besides, the successful acquisition of knowledge is dependent on many factors, for instance, the knowledge possessed by...