The acquisition of the company, its restructuring and resulting efficient operating condition are treated as part of the expansion strategy.Ĭollaboration, cooperation, mergers, acquisitions, forms of interaction are synergies resulting form advantages of joint action, expressed in increased effects, as well as possibility to reduce operating costs. Synergies can be divided into those that can be achieved in a short time (e.g., by use of the basic management techniques, access to cash, increase credit opportunities, etc.) and those whose achievement is only possible in the long term (i.e., economies of scale resulting from the integration of production, marketing, distribution, research and development, increased ability to control prices, etc.). An example of cost synergy is development of a common system of management accounting.
Pure synergy is for example: increased creditworthiness of the merged company giving access to cheaper sources of financing. Scientist usually distinguish between pure synergies and cost synergies. Synergistic effect are commonly expressed as equation 2 + 2 = 5 The benefits of synergy can be expressed by an increase in profitability or as an increase in the value of an integrated organization. This term is used mainly in managerial circles about good companies and individuals operating within them. Meaning of synergy implies multiple benefits through skilful combination of all components. Synergistic effects can be achieved by integrating two or more activities, so that both of then bring more result than without integration. Synergy in management is also called as organizational effect or synergistic effect.
Synergy has positive sense due to the difference between the effect obtained due to the cooperation and the combined effect of the factors isolated and separated (in the opposite case, when this difference takes the negative it is called: dis-synergy). Synergy in business means a specific type of relation between factors, which results that final effect is better than the sum of the effects of each factor acting separately and thus independently of one another.
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