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Synergy Development and Use
Dr. Fred Mugambi Mwirigi
JKUAT
Introduction
Businesses and business units cannot afford to operate in silos
A lot of capacity is lost because of failure to develop and harness intra-business and inter-business synergy
Businesses and business units must identify and harness synergies in order to optimize their performance
Chapter 16 - Organizational Issues PPT 16-3
KenyaSoftware Marketing HR
ICT Production
Functional Silos
Nigeria
TrainingProjectors Rwanda S. Africa
Product Silos Country Silos
The Silo World
Hardware
Silo-Driven Problems
1. Misallocation of resources
2. Lack clarity & linkage
3. Competence not diffused across silos
4. Success is not leveraged across silos
5. Communication and cooperation weak
Chapter 16 - Organizational Issues PPT 16-4
A Framework for Analyzing Organizations
People Structure
Systems Culture
People Structure
Systems Culture
External AnalysisExternal Analysis
StrategyStrategy
Internal AnalysisInternal Analysis
PerformancePerformance
Obtaining Information about Organizational Components
Structure What is the organization’s structure? How decentralized
is it? What are the lines of authority and communication? What are the roles of task forces, committees,
organizations, or similar mechanisms?
Chapter 16 - Organizational Issues PPT 16-6
Obtaining Information about Organizational Components
Systems How are budgets set? What is the nature of the planning system? Does it
happen in all silos? How is inter-silo planning coordinated? What are the key measures used to evaluate
performance? How does the accounting system work? How do product and information flow?
Chapter 16 - Organizational Issues PPT 16-7
Obtaining Information about Organizational Components
People What are the skills, knowledge, and experience of the
firm’s employees? What is their depth and quality? What are the employees’ expectations? What are their attitudes toward the firm and their jobs?
Chapter 16 - Organizational Issues PPT 16-8
Chapter 16 - Organizational Issues PPT 16-9
SharedValuesSharedValues
Norms of BehaviorNorms of Behavior
Symbols andSymbolic Action
Symbols andSymbolic Action
Obtaining Information about Components
Organizational Culture
Figure 16.3
OrganizationalCulture
Obtaining Information about Organizational Components
Culture Are there shared values that are visible and accepted? What are these shared values and how are they
communicated? What are the norms of behavior? What are the significant symbols and symbolic activities? What is the dominant management style? How is conflict resolved?
Chapter 16 - Organizational Issues PPT 16-10
Silo-Spanning Objectives
Chapter 16 - Organizational Issues PPT 16-11
Dysfunctional objectives
Centralize Standardize Reduce the number of
divisions or agencies Singularity
Appropriate objectives— to improve
Silo-spanningprograms & offerings
Brand consistency & linkage Resource allocation and sharing Marketing competence Communication & cooperation
Prerequisites for Building Synergies
Sobering Implications: Identify the real need for synergy and the intended outcomes as a result of the synergy
Common goal: focus on a common and relevant purpose, shared activities and minimize or eliminate time spent on nonessential concerns and issues
Interdependence: realize the need for unified action to maximize the participation of each key player
Stages in Synergy Development
1. Interacting
2. Appreciative Understanding
3. Integrating
4. Implementing
Interacting
Synergistic communication occurs when diverse perspectives, ideas, meanings, attitudes, feelings, and values are expressed and received openly and honestly in a supportive environment.
Appreciative Understanding
This is a nurturing atmosphere characterized by people who recognize and value their distinct frames of reference regarding the task at hand.
Integrating
Only when appreciative understanding is established can individuals seek ways to merge or combine their separate views into mutually supportive patterns for thinking and acting.
It is during this integration phase that individuals invent and experiment with creative ways to move beyond their current thinking.
Implementing
Merely finding innovative approaches to integrate various viewpoints is not enough.
It is only through active planning, goal setting, discipline, and consistent application of various change facilitating methods that a transition can be successfully achieved.
Without a structured implementation plan, the likelihood is low that a synergistic advantage will occur
Leadership Roles in Synergy Building
Get the CEO on Board Get the right people Cross-silo teams Get easy wins Be facilitator/consultant Engage the business units Deliver excellence Balance central opportunities with local needs
Chapter 16 - Organizational Issues PPT 16-18
Chapter 16 - Organizational Issues PPT 16-19
In conclusion
• The organizational levers are structure, systems, people, and culture. Each must be congruent and support the business strategy.
• Decentralization with powerful silo groups can inhibit synergy and efficiency.
• For marketing, it leads to misallocation of resources, confused brands, inhibited cross-silo offerings and programs, weak marketing staffs, the failure to leverage success, and inadequate cooperation and communication.
The organizational structure lever provides the option to centralize selectively, use teams and networks, use matrix reporting structures, and to employ a virtual organization.
Thank you