Tag Archives: synergy

AN AMERICAN SYNERGISTIC TRILOGY: The Space Program, The Free-Market Economy And Philanthropy

Dr. V.E.”Bill” Haloulakos is an AIAA National Distinguished Lecturer and a contibutor to The Business Thinker

The Space Program, The Free-Market Economy and Philanthropy, form the earth-shaking and world-shaping triumvirate of American Exceptionalism. The most important part of this “trinity” is The FreMarket Economy, for it is the beating heart that feeds everything else. Because of the aspects and practices of the free-market economy the space program was such a spectacular success and along with the numerous other attributes of the American System, to be enumerated later, vast wealth and prosperity were created that allowed an expandedphilanthropic activities, although they of themselves are the core of the greatest philanthropy known to man which is “Modern-Day Responsible Capitalism”.

A WORD ON SYNERGY 

Synergy is a mathematical concept, which specifies that one plus one is not always equal to two. Sometimes it is more in which case we say, “The total is greater than the sum of its parts”. This is known as positive synergism and there’s also negative synergism when the “total is less than the sum of its parts”.  The mathematical concept of one plus one is always equal to two is called “the principle of superposition”, i.e. putting one thing on the top of the other, so they just “pile up”. According to the principle of synergism, what the sum of one plus one is equal to depends on the particulars of the case, e.g. when one buys auto insurance as a bundle for two or more cars he saves money as compared to buying them separately. So, one can say that one plus one, synergistically, are less than two because of the lower cost or that it is more than two, because for a given amount of money one effectively buys more insurance. We have and we shall enumerate a multiplicity of items and activities within the American Exceptional System where positive synergism is at work and “like an invisible hand”, to quote Adam Smith, creates a multiplication factor that improves things and situations far and beyond any “normal” (whatever normal is) expectations.

Continue reading AN AMERICAN SYNERGISTIC TRILOGY: The Space Program, The Free-Market Economy And Philanthropy

Building a Fortune 500 Manufacturing Corporation from Scratch (Synergy and Homogeneity for Growth in Manufacturing)

Dr. John Psarouthakis, Founder and former CEO, JPIndusries,Inc., a Fortune 500 industrial corporation. Publisher of www.BusinessThinker.com

J.P. Industries. Inc. (JPI) made its first acquisition – a metal stamping firm with annual sales of $3 million. Within the next ten years JPI joined the Fortune 500 Industrial Corporations. It was merged into T & N, plc of the UK in its 11th year.

Writing about JPI, I would like to start with the two factors I consider central to the success of JPI: synergy and homogeneity.

You are probably saying to yourselves that synergy was a concept of the 1960’s which was not notably successfully employed by the conglomerates which coined it, and that homogeneity reminds you more of processing milk than of conducting business. However, I believe that understood and applied correctly, the   concepts   expressed by these words have clear practical meanings and direct application to business growth.

Continue reading Building a Fortune 500 Manufacturing Corporation from Scratch (Synergy and Homogeneity for Growth in Manufacturing)

AN OPERATING CORPORATE GROWTH STRATEGY: Building a Fortune 500 Manufacturing Business (7th article in the series on M&A)

I  write about two of the factors I consider central to successful growth and I used to build JPIndustries (JPI) in to A Fortune 500 Corporation at a time of economic recession, high interest rates and an exodus of manufacturing operations from the mid west: synergy and homogeneity.

You are probably saying to yourselves that synergy was a concept of the 1960’s which was not notably and successfully employed by the conglomerates which coined it, and that homogeneity reminds you more of processing milk than of conducting business.

But these words, synergy and homogeneity are Creek.  And I of Greek origin. I believe   that understood and applied correctly, the concepts expressed by these words    have clear practical meanings and direct application to business growth.

First: synergy.

Synergy comes from the Greek synergia, meaning “working together”. From the same root we have synergism, which means cooperative action of separate agencies such that the total effect is greater than the sum of the effects taken independently. This is the basis for the famous 2+2=5 definition of synergy promoted as the strategy of the conglomerates of the 1960’s.

I would propose to you that in the 1960’s the term synergy was poorly understood and in many cases poorly applied. That is the fault not of the concept, but of its utilization. And I would further propose that, correctly understood and applied the concept of synergy works.

Continue reading AN OPERATING CORPORATE GROWTH STRATEGY: Building a Fortune 500 Manufacturing Business (7th article in the series on M&A)