The much mocked "synergies" that come from an acquisition. I never did understand why people make fun of that term so much, it's a very simple concept.
When a word is used to the point of meaninglessness (when "expected synergies" don't exist), or when its use is really a euphemism for "we're going to fire a bunch of people" then it exposes itself to mockery.
Synergy's eventual heat death was, I'd hypothesize, greatly accelerated due to its preponderance in merger announcements and consulting decks in the 80s, 90s, and 2000s.
Would be nice to use it again without caveats. Maybe one day.
Eliminating duplicative or wasteful structures are “synergies” whether that’s engineering, sales, support, manufacturing, or G&A staff, real estate, or basically anything else that has a fixed cost component.
The fact that we’re in a people-heavy and asset-light industry means that these synergies are often people-related doesn’t make the use of the term improper or a euphemism any more than any other industry common term.
The dictionary definition of this is typically something like "when combined, greater than the sum of their individual parts."
I guess technically if you combine two companies and accomplish the same thing but more cheaply due to overlap the company is therefore "greater" but you see where the meaning is already watered down from its original intent. This is elimination of redundancy, not synergy.
"This merger will result in a big ROI due to redundancy that can be eliminated" is the proper way to say it. Not "This merger will realize a number of synergies". Hence the euphemism comment.
> Eliminating duplicative or wasteful structures are “synergies” whether that’s engineering, sales, support, manufacturing, or G&A staff, real estate, or basically anything else that has a fixed cost component.
I would characterize that as removing redundancy. Synergy has a different definition altogether.
The definitions I found across several dictionaries (after looking just now) all amounted to something like:
> the interaction of elements that when combined produce a total effect that is greater than the sum of the individual elements, contributions, etc.
When an intended effect of a for-profit company is profit and a combination of two companies becomes more profitable (has a greater total intended effect) as a result of the combination, how is that altogether different?
Because the definition of "synergy" doesn't contain the part where you start firing people and closing departments to deduplicate jobs done in the now merged companies.
It's because it was radically overused by managers trying to justify all sorts of dumbassery, so much so that it became a joke. E.g., it was memorialized in this lovely deck of corporate jargon flashcards: https://www.amazon.com/Corporate-Flashcards-Knock/dp/1601060...
