The concept of Synergy and Dysergy is used in Strategic management for corporate portfolio analysis. We have given the Definition and Meaning of Synergy and Dysergy with suitable examples.
Synergistic effects may be negative or positive, we can say it either Synergy or Dysergy based on its effect.
“An idea that the whole is greater or lesser than that the sum of its parts”.
It helps to develop competencies.
SYNERGY in Strategic Management
Synergy is also known as “Positive Synergy”.
Origin of word synergy: Derived from Greek word “Sunergos“.
Meaning: Working Together or Joint Together
“Synergy can be defined as an idea that the whole is greater than that the sum of its parts.”
Meaning of Synergy
The concept of synergy can be simplified with the statement given below-
2+2=5 (The two plus two is equal to five)
In the above example, each individual or function produce only 2 units. By combining them together effectively, we can get 5 units of outputs.
We combine organizations strengths and weaknesses like resources and behaviour to get maximum output. Here sometimes the two strong points can double the strength.
A synergistic effect may occur in a number of ways – within a functional area like marketing – it may occur at the time of the product, pricing, promotion aspects – which can result in a high level of marketing synergy.
Here we can give 1 more example to elaborate the concept of Synergy. Suppose there are two persons in the company to carry some load. If each person carries 10 Kg of material easily from one place to another but unable to carry 15 kg of material. If we combine these both persons working together and effectively, they can carry more than 20 Kg of material from one place to another. This is the synergistic effect where the sum of two is greater than the individuals.
Meaning of Synergy (given by Wordweb Dictionary)
“The working together of two things (muscles or drugs for example) to produce an effect greater than the sum of their individual effects.”
Features of Synergy
Greater capability for the organization by combining resources properly (as compared to individual work).
Synergy can help the organization to work in a team to achieve goals effectively with a reduction in cost.
There will be an optimization of resources which can lead to increased productivity.
Types or areas of Synergy
1. Marketing Synergy
2. Sales Synergy
3. Operations Synergy
4. R&D Synergy (Research & Development)
5. Financial Synergy/ Investment Synergy
6. General Management Synergy
A simple list of Synergy Criteria
Criteria: Yardstick/Measurement Tools
Startup synergy: Skills critical to success, Common management skills, Common organizational capacities, Common equipment and factory Timing Advantage
Operating Synergy: potential for new joint product
Disadvantages of SynergyAdvantages of Synergy
“Generally Synergy is created when the combination of Buyer and Seller eliminates weaknesses and leverages strengths.” The following benefits or advantages can be observed from Synergy.
Functional Advantages i.e. Economical Benefits
Economies of scale
Financial Benefits (Cooperation by Mergers & Acquisitions or any other strategy)
Three financial benefits are –
- Cash slack
- Debt capacity
- Tax benefits
Increased Market Share
More Geographical Presence
Gain in Efficiency
Competitive Advantage to the firm
Company Image building or enhancement in Company’s image
Easy theory, Practically difficult
Thinking Problems due to different groups
Some times cost may be high
Lack of clarity of roles & responsibilities may lead to ambiguity and conflicts
Increased numbers of persons or authorities, Longer decision time, increased work
Loss in Jobs ( Disadvantage for Workers)
Examples of Synergy effect
- Sony Pictures – Spiderman – Joint venture with Marvel Comics
- Sony – Casino Royale –
DYSERGY in Strategic Management
These are the combined negative attitude or results.
- Also called Negative Synergy.
- Can be observed or result in diversified groups.
- 2+2=3 Effect
“Dysergy can be defined as an idea that the whole is lesser than that the sum of its parts.”
Meaning of Dysergy
2+2=3 (Two plus two is equal to three)
Dysergy is simply a negative synergy.
Where Dysergy occurs, a marketing inefficiency reduces production efficiency, the overall impact being negative.
This is all about similarities and differences between Synergy and Dysergy in strategic management with examples.