Synergy in Business Management

Synergy in Business Management

Synergy can be defined as a situation whereby two or more get along and work together to achieve better results than what they could produce while working individually. Synergy is a Greek term that means working together while sharing ideas and respect (Morris, 1981). There are two main concepts of synergy, which are interpersonal relations and problem-solving. Work done in a team is way off better compared to that which is done individually. This is because when working as a team, it is easy for the members to share ideas and complete tasks within a short period hence meeting their goal. The aspect of synergies can be illustrated from an in-class assignment, in any class set up the ideas presented during group work have always been better than those done separately.

A synergy can either be achieved through franchising, geographical expansion, mergers and acquisitions, the addition of new products, or setting up of a new related or complementary business. Franchising is a state where the business owner gets to distribute products and services using other affiliated dealers. This means that the trademark of a franchisor is used by the franchisee to market and sell their products under a license. Geographical expansion refers to the act of setting up more businesses in other locations and even internationally. The expansion of a company helps in securing a more substantial target population, which offers lots of profits in return. Mergers and acquisitions are whereby two complementary businesses decide to team up and work as one. The majority of the companies opt for this type of synergy when they feel that they are not making enough returns and would want to cut down on the number of employees.

The addition of new products entails bringing in new stuff, maybe due to the demand of clients or as a way of diversification. However, this strategy is beneficial because the new products will automatically complement the services and goods in existence. Having a variety of products broadens the customer base. Lastly, starting a complementary business is also a synergy concept that works mostly when one has a monopoly in an area. A clear understanding of what the consumers want and prefer is what makes this strategy logical. Since setting up various complementary businesses in a location will enable the owner to source returns from multiple consumers who may prefer one office to the other. Thus, every business considers a synergy option that is more likely to help them achieve their set goals.

Synergy, just like teamwork, is essential in any business that seeks to grow. Although the majority of the business owners look at this concept from a management point of view, it is more detailed than just sharing of powers. Consequently, every decision has its benefits and disadvantages; however, the advantages that come along with synergies outweigh the cons. Synergies help in maintaining good work relationships such that employees can respect and appreciate the differences that they have and also make up for their weaknesses (Hunger, 2011). For instance, when a firm wants to merge, they always have to reduce employees to avoid redundancy. Only those hardworking employees will be retained, and as a result, the operations in the merger will be better.

Besides, synergies give room for innovation and invention. This happens since the psychological, mental, and emotional differences in the employees are valued. When the employees feel that they are valued and their voices matter, they usually feel free to share new ideas on how to handle issues. Therefore working in a synergy boosts the aspects of teamwork, and the goals set by a firm are highly achieved.

References

Hunger, J. D., & Wheelen, T. L. (2011). Essentials of strategic management. Boston: Prentice-Hall.

Morris, W. (1981). The American Heritage Dictionary of the English language. Boston: Houghton Mifflin Company