MERGERS AND ACQUISITIONS AS GAP-CLOSING ACTIVITIES IN COMPETENCE BUILDING AND LEVERAGING

Abstract

This paper discusses a number of issues affecting mergers and acquisitions (M&A) from the perspective of competence-based management. A new framework for competence gap analysis is developed which can be used to assess important aspects of M&A decisions. The usefulness of M&A is compared with other gap-closing actions. This model is founded in the systems view of the firm as developed by Sanchez and Heene (1996), where strategic gaps perceived by managers motivate actions to change the resource and competence base of a firm. In the analysis process derived from this model, several resource states must be identified and analyzed, especially those critical to competences that are needed to achieve sustained competitive advantages in targeted future markets. This approach to strategic gap analysis is also helpful in evaluating alternative gap-closing actions. In this context, M&A are shown to be particularly appropriate actions to fill numerous and large competence gaps especially with a high degree of interaction between involved resources.

Citation

Metzenthin, R. (2005), "MERGERS AND ACQUISITIONS AS GAP-CLOSING ACTIVITIES IN COMPETENCE BUILDING AND LEVERAGING", Sanchez, R. and Heene, A. (Ed.) Competence Perspective on Managing Internal Process (Advances in Applied Business Strategy, Vol. 7), Emerald Group Publishing Limited, Leeds, pp. 129-150. https://doi.org/10.1016/S0749-6826(04)07007-6