Exploring Synergies in Business Restructuring: A Dynamic Framework

Business restructuring activities, such as divestitures, spin-offs, strategic alliances, joint ventures, or mergers and acquisitions (M&A), aim to achieve growth or to develop competitive advantages. Value from business-restructuring activities should stem from synergetic sources within and across different business activities. The synergetic value derived from the combination of external and internal resources is often considered a key source of growth from business restructuring. Although practitioners and academics typically differentiate between bottom- and top-line synergies, the underlying mechanisms for evaluating and realizing these synergies, as well as their interactions, remain unclear. We take a business model perspective on synergies by introducing the Dynamic Synergy Flow Framework (DSF), rooted in the concept of osmosis. Using M&As, we show how synergies flow throughout the entire process and highlight the challenges associated with realizing different types of synergies. However, DSF elements are relevant to a broader range of business restructuring.