| Through merger and acquisition (M&A), company can enlarge its market share, decrease the transaction cost, and produce scale economy, operation synergy and financial synergy. However, not all M&As can create shareholders' value. During the past decades, many researches indicate that: (1) the possibility of lost is bigger than of success in an acquisition. (2) the value creation of M&A is from the post-merger integration(PMI). PMI is the key factor deciding the success of M&A. Based on these researches, the paper is trying to start from the analysis of main reasons of unsuccessful M&A, and then construct a general analysis framework for PMI based on the core competence theory, explore the methods to cultivate and promote the core competence through effective PMI, so to improve the performance of M&A.According to core competence theory, core competence is the fundamental source of corporate competitive advantage, and M&A is one of the important methods to construct the corporate core competence. In PMI, value creation can become reality only through effective capability management. Generally, the researches of core competence locate in four aspects: technology, knowledge, resource, organization harmonization and culture. From the viewpoint of the four aspects, the core competence is presented as key technology and skills, internal knowledge aggregation, organization and management system, unique culture. The carriers of core competence locate in person and organization. The key subsystems that influence the cultivation and promotion of core competence are in systems of technology and R&D, human resource, organization and culture. Based on the strategic priority of core competence, the paper builds a synthesis analysis framework which focous on the PMI of human resource, culture, organization system, technology and R&D.The analysis framework of PMI is described as below:Firstly, The main task of core competence based human resource integration is to keep the key employee stabilization. The issue of key employee stabilization will both impact the accumulation and effective connection of knowledge and skills that are carried by person and the organization, and impact the integrity and validity of core competence system. The transfer of capability and resource after M&A can only be achieved when the carriers of core competence are not destroyed. An indication of the paper is that there are four key factors that influence the stability of human resource. They are human resource crisis management, key staff reservation, high-level management integration and cutoff.Secondly, the integration efficiency of other subsystems will be greatly impacted by culture confliction, and culture confliction will bring further impactto unilateral or bilateral capability transfer between the two organizations. Culture integration is the core of PMI. Researches imply that culture difference is the key factor that determines if the anticipated target of M&A performance can be achieved. To decrease the culture risk during PMI and to enhance the culture synergy, the review of culture fit is necessary during the due diligence period. Essentially, the culture conflict is from the culture difference between the two organizations, and other contingency variables will also bring influence. The main factors include the model of culture integration, culture fit of both sides, tolerance of multiculture and size of M&A.The positive effect of culture conflict is that it drives the top management to think what is the best culture to favorite the organization and take the chance to conduct culture transform. Effective conflict management can bring consistency to both sides to achieve the potential synergy effects. So to create a harmonious environment in the two organizations, to eliminate the negative impact from the culture conflict and to promote the capabilities transfer. There are five modes of culture integration: assimilation, separation, integration, transformation and deculturation. The paper concludes that the core compete...
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