This research identifies the factors affecting capability transfer at the subsidiary level during acquisitions. Acquisitions provide acquiring firms with the opportunity to acquire new capabilities and to apply current capabilities in new settings and in doing so improve the firm’s competitiveness. Capability transfer, therefore, is critically important for acquisition performance. Limited subsidiary level analysis has been conducted on the factors affecting capability transfer during acquisition.The study identifies implementation factors, socio-cultural factors, management practices and absorptive capacity as the key factors affecting capability transfer. To exploit and enhance these factors, strong leadership is required to create the atmosphere necessary for capability transfer though the creation of a common vision and shared identity. Aligned performance measures channel the stakeholder behaviour towards capability transfer and the achievement of acquisition objectives. Training intervention and support facilitate the contribution of retained employees to the combined firm.Understanding the key factors affecting capability transfer allows managers to better approach capability transfer in acquisitions. Managers are then in a better position to formulate appropriate and comprehensive strategies to ensure successful transfer. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

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