A firm’s strategic business exit may stimulate knowledge transfer within the organization that would not otherwise have occurred. The key mechanism behind this effect is the reallocation of its employees. The analysis results show that patents related to cellular phones increased their influence within the company after Mitsubishi Electric Corporation’s withdrawal from the cellular phone business. This result suggests that synergies may be realized following a business exit and that reallocating employees is crucial. These findings have critical implications for understanding the inter-temporal scope economies of multi-divisional firms.