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Synergy
A synergy is defined as a situation where the final outcome of a system is greater than the sum of its parts. The operations of a business is best conducted when all departments are working in conjunction. Also, individual additions to the business can mean hidden benefits. For example, if free samples are offered outside restaurant in a shopping mall, then that would attract more customers inside. Not only profit is increased, but something else improves as well, including the atmosphere of the restaurant and the mood of the employees.
I would like to emphasize that synergies are not linear in return. If we add a component in business and it seems to generate a set amount of additional revenue, we nor the accounting department cannot calculate the long-term benefits, the total throughput of benefits yielded by the addition of a specific element. Because an additional element is not just another source of revenue, it is more complex than that. An element, vague as the term may seem, may have additional features and properties that make it much more than just mere profit; the returns are exponential.
The other definition of synergy is a dynamic state in which combined action is favored over the sum of individual component actions. We see collectivism is popular in certain types of companies. During board meetings, mutual consensus is reached and there are no debates on how to run the company, and a single direction exists. By working together instead of conducting office politics for personal gain, a company can offer a more competitive product than its rivals.
The best synergies often arise when two very different persons or components of a company, are put together. Of course we can hire many like-minded and talented individuals, but that would be overkill for a certain task. Instead, you downsize the number of employees, since less members with different talents can often achieve more by doing multiple tasks at once, and hire a competent manager that is not only able to harness the different talents, but also see to that the members get along.
Many techniques exist to take advantage of synergies when we see companies as an individual unit. The first would be a revenue synergy where the first company, AMD, for example, sells microchips and has a strong global marketing ability. AMD then goes to acquires another smaller company which has little to no marketing ability but has a strong potential product. Then the parent company markets that product at greater efficiency. The second method is a cost synergy where different companies work together to share equipment and resources. If a serious merger is considered, the company cab then consider to eliminate extra departments that result as a duplicate of the merger (e.g. two marketing departments, two human resource departments).