This is when working together is initiated at the corporate center and enforced on the basis of formal hierarchy (top-down). It is an answer to the question ‘who owns added value creation?’: This axis distinguishes who has the power to get the business units to work together. When resources and/or activities split between business units are aligned on a project basis (temporary team), a coalition is formed.ī. When resources and/or activities split between business units are continuously orchestrated (on-going alignment), they are coordinated. When resources and/or activities are brought together into a single organizational entity (one unit), they are concentrated. It is an answer to the question ‘how is added value created?’: This axis distinguishes three different methods by which business units can work together. The 11C Synergy Model is a 3X2 matrix with the following axes:Ī. Framing the balancing act of synergy and responsiveness as ‘centralization-decentralization’ negates the fact that there are five other ways of organizing synergies besides centralization.
The 11C Synergy Model challenges the broadly held assumption that synergy is achieved by centralization, while responsiveness requires decentralization. This is called the paradox of synergy and responsiveness. This is tricky, as working together to achieve synergies undermines the autonomy business units need to be responsive to the specific demands of their market. These corporate synergies need to be organized. operations, sales) and/or value propositions (e.g.
At the same time, these companies will seek to benefit from having two or more business units by pursuing synergies – added value by leveraging their resources (e.g. Larger companies are often divided into business units, each with a measure of autonomy to tailor their approach to the competitive dynamics in their specific market. How can I organize synergies across business units in my company? TIAS professor of Strategic Leadership Ron Meyer presents an insightful tool to kickstart your thinking: 11C Synergy Model.
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