How this demand for management efforts is currently meet in a comprehensive way shall be investigated in a third step. The majority of published books or research articles in the field of synergetic interaction are focused on specific problem areas.
Insights generated via this research shall provide the basis for discussing a holistic synergy management approach specifically focusing on cross-border interaction of small and medium- sized manufacturing businesses. Factors characterizing this business segment as listed in chapter 1.
This integrated framework is composed of a number of interdependent modules. The underlying research focuses on the manufacturing industry which covers all elements of the standard value chain as proposed by Porter. The consideration of trading, consulting or for example logistic businesses would have limited the explanatory power of the insights gathered as those sectors function differently. This integrated system shall provide strategists of SMBs, operating in the international environment, with the most relevant information and guidance to make the best possible decision in regards to synergetic interaction between the headquarter and the foreign subsidiaries.
The dissertation discusses cross-border interaction and synergy management from a corporate strategy standpoint. In this context the paper touches other disciplines such as human resources; however it cannot be classified as an interdisciplinary paper as these fields are rather mentioned in the overall context than analyzed in detail. The relevance of this research project can be underlined as follows: First, a variety of research has investigated modes applied in the internationalizing process of small and medium-sized businesses. However, research addressing the strategic design and management of synergetic interaction between the corporate headquarter and the foreign subsidiaries within this business segment is rather limited.
As, according to the German institute for research in the field of medium-sized businesses IFM , SMBs will increase the relocation of business activities to foreign countries Kayser et al, this aspect becomes even more relevant. According to the institute for research in the field of small and medium-sized businesses every fifth business carries a product portfolio which is competitive on an international level. This underlines the potential for further internationalization within this business segment, especially driven by high tech industries, such as environmental-, medical- and biotechnology, information and communication technologies.
Second, as a result of globalized markets SMBs are more intensively confronted with competitive pressure.
As a consequence, cost efficiency improvement campaigns, aiming for cost reduction or performance enhancement for the same price level, are even more in focus and listed by executives as the major factor in increasing competitiveness see figure 2. Efficiency of global activities has to be combined with the sensitivity for expectations of local customers.
International corporate networks are often driven by heterogeneous process structures and the unequal application of business management methods on operational level. These businesses deliver a significant level of unutilized potential for performance enhancement. The coordination of those challenges with traditional hierarchical organization forms is critical. Network-, team-and process-oriented structures characterize the shape of the future business system. Cross-border interaction can have a positive impact on all factors listed above.
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For example, multiple studies have underlined the important relationship between the cumulative experience achieve by a corporation and its unit costs. On cross-border level this symbiotic effect can be even stronger as positive insights from a variety of markets can benefit the corporate network. Lacks in the field of managing synergies across borders were observed by the author while implementing a new department in a foreign subsidiary of a German medium-sized organization over the time period of one year.
The research problem and the related sub problems are defined in the introduction chapter, which in addition delivers the scope and the pertinence of this research project. The second chapter reviews critically the relevant literature, published in German and English language. The methodology chapter introduces the overall strategy and techniques applied in order to answer the underlying research problem. The research hypotheses are derived in the following chapter based on a single case study.
In order to test these tentative hypotheses, results gathered via a survey are presented and analyzed in chapter 5. The final chapter proposes a comprehensive approach for small and medium-sized manufacturing businesses to manage cross-border interaction and increase corporate efficiency and performance.
Small and medium-sized businesses are defined differently by individual institutions. The German institute for research in the field of medium-sized businesses, as well as the European Union are both using two indicators in order to characterized this business sector from a quantitative perspective - the annual turnover volume and the number of employees see table 1. This research paper applies the definition as proposed by the German institute for research in the field of medium-sized businesses.
According to this guidline SMBs do not exceed staff members and the turnover volume is limited to 50 Mio.
PRAGMATICS OF RUNNING CLINICAL TRIALS: DESIGN, MANAGEMENT AND THE PROCESSES OF CHANGE
The latter is the business investigated via a case study approach in chapter 4, whereas the first is mentioned as a source throughout the entire text. This chapter critically reviews the academic literature related to the research problem examined within this dissertation and delivers the initial foundation for this research project.
The text first outlines the concept of synergetic interaction by contrasting the key contributions before structuring a variety of practical implementation scenarios. In order to receive a comprehensive overview selected titles written in German and English language are considered. The topic of identifying and strategically managing business synergies is discussed throughout a variety of literature.
Consequently, contributions are highly fragmented and partially limited in providing a comprehensive overview across all relevant aspects.
From a chronological perspective Ansoff and Porter provided the two fundamental contributions in the relevant area. Both authorities have delivered the foundation for discussing the topic of business synergies in the scientific community. Numerous authors have repeated their thoughts and enhanced first concepts by contributing their individual findings. In addition, this effect occurs while transferring managerial skills, leading to improved executive decisions. Ansoff does not examine the phenomenon separately as it merely functions in his concept as a key performance indicator to select between potential markets.
Porter contributed essential insights by introducing the concept of strategic interrelationships based on his value chain framework.ignamant.cl/wp-includes/56/438-como-puedo.php
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He highlights the fact that interrelationships are a main driver in the process of achieving and sustaining a competitive advantage, either by reducing costs or supporting diversification. In contrast to Ansoff , Porter discusses synergies as a key aspect in the context of corporate strategic management and does not limit the discussion to business expansion only.
This demands a platform for participation through the development of dialogues, between disciplines and people, the very stuff of systems thinking. In regards to the direction of synergetic interaction Rodermann distinguishes between three cases see figure 3. This is the case when for example the corporate headquarter and the foreign subsidiaries are sharing one research laboratory. The analysis of scientific synergy definitions has shown that most explanations interpret the idea of synergetic interaction as an interrelationship between value adding activities of two or more individual value chains Rodermann, This strategic approach is specifically relevant for designing the relationships between the corporate parent and the foreign subsidiary which is producing the same product or group of products.
Second, interrelationships can be established between upstream and downstream activities of one single value chain. For example, sales activities are coordinated with the physical delivery of goods in order to reduce deliver times. Finally, collaboration can take place within one value adding activity. Furthermore, Rodermann introduced a systematic approach of classifying different types of synergetic interaction by reviewing them from five different dimensions in a first step and several sub dimensions in a second step see table 2.
All dimensions listed above are relevant for this research project. However, the key delineation, valuable in this context, is not considered. This approach separates between synergies achieved between business units both located within one country and units operating in different markets. The specifics, importance and relevance of this dimension shall be underlined with this research project. Ansoff is using simple mathematical terms to illustrate positive synergetic effects. Rodermann delivers an overview across the different effects of synergetic interaction based on an empirical analysis.
Steidl is differentiating between three types of synergetic effects. First, universal synergetic effects can be generated through every kind of interaction. This type of effect is not depending on the interacting units producing the same products or operating in the same industry. Usually it occurs in supporting activities such as finance and human resources.
Interaction in the best case leads to a decrease of fix costs on both sides. Second, endemic synergy effects occur in similar industries or between businesses which are linked to each other Rodermann, It arises for example due to a concentration of production capacity and marketing capacities. For example, paper mills often use steam while producing and drying paper.
In the case of a company located in Germany the required steam is supplied from the power plant operating next door. There the steam was previously used to drive a turbine in order to generate electricity. The waste product can be sold profitably by the power plant, and the paper mill does not have to make high investment for producing the steam.
This synergetic effect was already considered in the process of setting up the paper mill. Third, specific synergy effects occur only in certain interaction scenarios. The combination of special assets such as patents hold by one party and an appropriate distribution channel hold by the second party can be mentioned exemplary.
Porter is discussing effects of synergetic interaction in regards to the competitive environment a business is operating in. According to his theory individual positive effects e. As this is a major argumentation for seeking synergies chapter 2. Campbell and Goold emphasize that the attempt to achieve synergetic interaction leads to problems within a majority of corporations.
Rodermann points out that synergies do not necessarily have to have a positive impact. Consequently, he characterizes synergetic interaction as the net total of numerous positive and negative effects. Even before, Cockerill argued in the same direction. Ansoff and Porter emphasize that benefits of synergetic effects have to outweigh costs, produced in the process of seeking, establishing and keeping them.
Rodermann adds two additional aspects, delivering the following classification of negative synergetic effects.
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Porter delineates three types of costs which might occur while sharing activities or resources. Synergetic interaction might have a negative effect on revenues. According to Rodermann synergetic interaction can increase the unsystematic as well as the systematic risk level organizations are facing. The latter rises if profits of the interacting units correlate, which can be assumed in the case of operative synergies.
On the other hand, synergetic interaction may increase the level of unsystematic risk. This could be the case if for example a natural disaster destroys physical resources which are for synergetic reasons centrally stored. According to Johnson et al corporations can select between two main alternatives in achieving a sustainable competitive advantage. Businesses can either seek for external market opportunities by positioning itself advantageously in relation to the competitors operating in the same field market based-view or base their competitive advantage on the application of company specific valuable resources and capabilities resources based-view.
Ensign specifies this statement, stating that the process of sharing activities can results in a competitive advantage under the following preconditions: First, interaction must take place between units activities which produce a significant part of the overall operating costs.
Second, cooperation has to decrease costs of running shared activities.