Things to Maintain or Change: The Importance of Critical Territory in Post-acquisition Integration Boundary Issues

Based upon two different but related post-acquisition cases of a global medical system manufacturing and service firm, this study explains why the preservation of a certain knowledge bearing domain, called critical territory, is essential in post-acquisition integration (PAI), particularly for the target firm. The lack of clear knowledge boundaries between the acquiring firm and the target firm and critical territories therein can jeopardize knowledge integration in PAI. The case analyses reveal both acquiring and target firms should promptly build and adjust their knowledge boundaries and critical territories, allowing selective, intelligent knowledge sharing and integration. It is also found that critical territory contributes to completing the ever-evolving knowledge cycle by enabling the synthesis and appropriation of PAI knowledge management activities of both the acquiring and target firms. Without the preservation of critical territory, knowledge integration in PAI hampers target firm knowledge management activities and maximum synergy generation, the goal of acquisition.