Abstract
Synergies play a vital role in organizations; they are one of its key foundations. This chapter explores first the meaning of “synergies” and then reframes the question about the right degree of (de-)centralization in the light of the VSM. From there, this chapter discusses how to identify the level from which synergies should be controlled. Synergies have a positive connotation, but there are also risks involved that must be kept in mind. This chapter will discuss three of them.
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- 1.
All figures in this chapter related to the VSM are or contain, and if not stated otherwise, adapted (detail) views from Beer (1995, p. 136, Fig. 37).
- 2.
Viability of the entire organization means in this context primarily the viability including all the other systems 1 in the organization across time.
- 3.
Expressed more formally, synergies must respect the principle of the mutually adjusting horizontal varieties and the axiom of requisite vertical eigen-variety (see volume 2).
- 4.
These types can in reality overlap.
- 5.
The primary beneficiary of synergies should always be the systems 1 and not the metasystem alone.
- 6.
Not only the financial value but also, for instance, reputational or ethical values need to be considered.
- 7.
We need to add a cautionary note here: this case should not be understood as a general recommendation. There might be many cases where for good reasons a centralized R&D is the only viable solution, especially if the development of product-specific and platform-related aspects cannot be separated.
- 8.
Service level agreements (SLA) between the “central” and “decentral” units are in that regard a valuable, albeit only formal instrument. They must be supplemented by mechanisms that generate a common understanding and perspective between the employees of the “central” and “decentral” units.
Reference
Beer, S. (1995). Diagnosing the system for organizations of organization.The managerial cybernetics of organization. Chichester [West Sussex], New York: Wiley. (Figures 21, 25 and 37 republished with permission of John Wiley and Sons Inc. and the permission conveyed through the Copyright Clearance Center, Inc.).
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Lassl, W. (2020). The “Interior Design” (Part 3): How Can We Achieve Synergies?. In: The Viability of Organizations Vol. 3. Springer, Cham. https://doi.org/10.1007/978-3-030-25854-2_13
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DOI: https://doi.org/10.1007/978-3-030-25854-2_13
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