Research

Resistance to knowledge transfer in mergers between professional service firms

Why do individuals resist knowledge transfer in the context of mergers between professional service firms (PSFs)?

We know that the announcement of a merger creates a highly stressful environment of uncertainty, fear and distrust. Even if redundancies are not planned, individuals in both the acquired and the acquiring firms may fear loss of status and changes to their established work norms. They may react by resisting senior management's initiatives to encourage co-operation between the combining firms and may ultimately resign.

We know too that there can be problems in knowledge transfer that are largely due to the characteristics of knowledge itself. Tacit knowledge, for example, is inherently difficult to transfer because it cannot be fully articulated through written and verbal communication but must be learned through experience. There can also be other impediments which are inherent in the organisation, such as the lack of an appropriate knowledge management infrastructure.

A study by Professor Laura Empson, looking in depth at three cases featuring mergers or acquisitions between professional service firms (two accounting firms and four management consulting firms), aimed to develop a deeper and more subtle understanding of the process of knowledge transfer in the context of merging PSFs.

In the two accounting firms, given the code names Sun and Moon, interviewees reported that knowledge transfer was relatively unproblematic. This may have been partly because accountancy is a profession that requires all members to be trained in an extensive and codified common body of technical knowledge. Within each firm too, knowledge already existed in a codified form: it had been articulated and depersonalised, and individuals therefore did not feel so strongly that they had personal 'ownership' of it. Each firm had established internal procedures for knowledge sharing and dissemination, and these served to facilitate inter-firm knowledge transfer as well.