Question

In a bottle-manufacturing company, employees were divided into two teams, hoping to increase production by fostering competition. Each team produced 100 bottles per day. However, when the two teams were integrated into one single team, the numbers of bottles produced per day was 300. This was due to the increased division of labor and coordination among the employees. This approach is an example of _____

Answer 1

Answer: synergy

Explanation: Synergy refers to the idea that the total value and output of two groups of individuals should surpass the total of that same individual components.

Synergy is really a concept most frequently used within mergers and acquisitions (M&A). Synergy is most often a driving factor underneath a merger, or the possible financial gain gained through the combination of businesses.

Stockholders will profit if, owing to the synergistic impact of the transaction, the post-merger stock price of a corporation rises. The projected savings gained through the merger can be linked to various factors such as higher revenues, shared expertise, and innovation, or reduced costs.