Knoll Cross-Business Synergies
1. Auflage 2008
ISBN: 978-3-8349-9687-9
Verlag: Betriebswirtschaftlicher Verlag Gabler
Format: PDF
Kopierschutz: 1 - PDF Watermark
A Typology of Cross-Business Synergies and a Mid-range Theory of Continuous Growth Synergy Realization
E-Book, Englisch, 389 Seiten, Web PDF
Reihe: Business and Management (R0)
ISBN: 978-3-8349-9687-9
Verlag: Betriebswirtschaftlicher Verlag Gabler
Format: PDF
Kopierschutz: 1 - PDF Watermark
Sebastian Knoll investigates what cross-business synergies actually are and how they are realized successfully. In a first step, a theory-based typology of cross-business synergies is developed and two new types of synergies are conceptualized: (1) Growth synergies, i.e. profitable growth advantages from recombining complementary operative resources across businesses, and (2) corporate management synergies, i.e. performance advantages from leveraging corporate management capabilities across businesses. In a second step, the author focuses on growth synergies and inducts a framework for their continuous realization from a longitudinal in-depth single case study. He suggests that the successful realization of growth synergies is associated with a selective focus on specific growth opportunities, decentralized cross-business collaboration that motivates productive business unit self-interest, and a corporate management approach that guides and balances this self-interest in an evolutionary fashion.
Zielgruppe
Research
Weitere Infos & Material
Introducing and Classifying Cross-Business Synergies.- Concept and Characteristics of Cross-business Synergies.- Types of Cross-business Synergies.- Summary and Discussion of Part I.- Realizing Growth Synergies.- Literature Review: Operative Synergies.- Empirical Approach.- Exploratory Work: Strategies for Growth Synergies.- Case Study: The continuous realization of growth synergies.- Results: Key success factors for the continuous realization of growth synergies.- Summary and Discussion of Part II.
3 Types of Cross-business Synergies (p. 24-25)
In the previous chapter, we provided a definition of cross-business synergies and identified conditions under which cross-business synergies contribute to corporate advantage. The purpose and contribution of this chapter is to derive various sources of crossbusiness synergies from the literature and categorize them into specific synergy types. This chapter seeks to answer our first research question and aims to generate further insights into the nature of the corporate effect. Furthermore, this chapter establishes a dedicated research perspective on cross-business synergies, which sets the stage for our in-depth investigation of growth synergies in the second part of this study.
Several streams of literature ranging from industrial economics to financial theory and strategic management refer to the concept of cross-business synergy. However, theoretically grounded typologies of cross-business synergies are largely absent from the literature. Most typologies are arbitrary. For instance, Ansoff (1965) differentiates sales synergy, operating synergy, investment synergy, and managerial synergy as types of cross-business synergies without providing proper definitions, classification criteria, or theoretical grounding.
Similarly, in a more recent typology, Goold and Campbell (2000) classify synergies randomly without a clear underlying logic into shared knowhow, shared tangible resources, pooled negotiation power, coordinated strategies, vertical integration, and combined new business generation.14 By providing a typology that clearly delineates different sources of cross-business synergies based on the latest research, we aim to address this shortcoming.
Our synergy typology is grounded in a resource-based perspective of the firm. Following Barney (1991), we employ a broad notion of resources, which we define as "(…) all assets, capabilities, organizational processes, firm attributes, information, knowledge, etc., controlled by a firm that enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness" (Barney, 1991:101).
We posit that leveraging resources across businesses creates cross-business synergy and delineate different types of cross-business synergies based on four classes of resources (see exhibit 3-1 on the next page): operative resources, market power resources, financial resources and corporate management resources. Operative resources refer to the tangible and intangible business-level resources necessary for ongoing operations.
Market power resources entail all sources of the firm to reduce competition and increase prices. Financial resources include the firm’s risk capacity and all means of financing. Finally, corporate management resources refer to managerial capabilities at the corporate level. Based on these resources, we conceptualize four types of cross-business synergies: Operative synergies focus on advantages of MBFs from leveraging operative resources across their related businesses that increase efficiency and profitable growth.
Market power synergies center on advantages of MBFs from conglomerate power that reduce business-level competition. Financial synergies concentrate on financial advantages of MBFs that reduce capital costs and increase the firm’s financial flexibility. In addition to these three types, which we derive directly from the literature, we propose a fourth type of cross-business synergies, corporate management synergies. Corporate management synergies focus on advantages of MBFs from leveraging corporate management resources that improve the profitability of the individual businesses of the firm.
