Morphological Analysis

The concept of Morphological Analysis(MA) is derived from the Greek word “morphe”, which means shape or form. It deals with the arrangement of various objects and mutual acceptability in forming a complete structure. To arrive at the possible solutions all the various outcomes involving all the various dimensions are explored and improbable solutions are eliminated by using the technique of cross consistency assessment (CCA) (Ritchey, 1998). This methodology is useful in solving problems where the scope of application of mathematical models and simulation functions is low and a judgemental approach is followed. “Specific forms of morphological analysis are used in a number of scientific disciplines –for instance, linguistics, zoology and geology – in which formal, structural relationships are more important than quantity as such”. During the last couple of decades, “MA has been extended and applied in the area of futures studies and for structuring and analysing complex policy spaces”. Problems in question could be related to physical structure (e.g. a new prototype of a car), a social system (e.g. a newer form of governance) or employment scenario in the world of outsourcing (e.g. preparing for non-tradable jobs). The primary question is: can we put a judgmental approach (MA) – on a sound methodological and scientific basis?

From Mess:




To Puzzle:






What MA is good for?
In his book “Redesigning the Future”, Russell Ackoff has defined 3 levels of complex problems. They are
Mess : which is a complex issue and does not have a well-defined structure. The complex issues deal with different interacting aspects of the same problem but all these aspects are dealt as a whole.
Problem: It is has a defined structure or form unlike the mess. At the same time it does not have a single, clear-cut solution. The alternative solutions depended on future outcomes and “Since we may not know these things yet, we have to leave the problem's solution open to different hypotheses about how the future might turn out”.
Puzzle: It is a well defined structured problem with a specific solution.

MA was developed to work at the unstructured level of messes and turn them into structured puzzles. To complete the structural change, initially we generate alternative solutions depending on our input-output model and on different hypothesized conditions. This is achieved through a process of cross-consistency assessment: all the parameters corresponding to different dimensions are pair-wise compared with one another. During comparison, “a judgment is made as to whether – or to what extent– the pair can coexist, i.e. represent a consistent relationship. Note that there is no reference here to causality, but only to internal consistency”. The inconsistencies are of 2 types: a) purely logical (based on nature o concepts) and b) empirical constraints (judged as highly improbable on empirical grounds). The resultant morphological field becomes a highly flexible and dynamic in this outcome space, as any input can be combined with any input to obtain a totally new output or outcome.

Advantages of MA:
It has a much more structured approach which helps to integrate inputs of different dimensions and helps to identify new relationships or configurations. As a structured process, this method demands that parameters be clearly defined. Ill-defined parameters are immediately evident when assessed for internal consistency.
This method may bring in conservative bias, if very satisfied people are choosen for survey. So, experienced facilitation is required for proper sample survey and further cross-consistency analysis.





References:
1) Retrieved September 7,2008 from http://en.wikipedia.org/wiki/Corporate_strategy
2) Retrieved September 7,2008 from http://en.wikipedia.org/wiki/Morphological_analysis_(problem-solving)
3) Adapted from the paper "Fritz Zwicky, Morphologie and Policy Analysis",
presented at the 16th EURO Conference on Operational Analysis, Brussels, 1998, Tom Ritchey, 2002-2008 ,Retrieved September 7,2008 from http://www.swemorph.com/ma.html
4) Adapted from a paper presented at the 9th International Command and Control Research and Technology Symposium Copenhagen – September 14-16, 2004,Tom Ritchey ,Retrieved September 7,2008 from http://www.swemorph.com/pdf/iccrts1.pdf
5) Adapted from an Article for the UN University Millennium Project:Futures Research Methodology Series,Tom Ritchey, 2005-2008, Retrieved September 7,2008 from http://www.swemorph.com/pdf/futures.pdf
6) Adapted from an address to the Swedish Parliamentary IT Commission, Stockholm, December 2002, Tom Ritchey, 2003-2006, Retrieved September 7,2008 from http://www.swemorph.com/pdf/it-webart.pdf

Synergy in Merger & Acquisitions

Synergy means that the final outcome of a system is greater than the sum of its constituent parts. It helps in unleashing the greatest powers within the people by emphasizing on principle-centered leadership. New heights (results) are achieved through proper synergy. The highest form of synergy focuses on the motive of win/win aspects of both or all its stakeholders. This is true in every aspect of human life e.g. social, political, business, international relations.
We can draw this analogy to the world of business. Corporate synergy refers to the financial benefit that both the acquiring company and the target company will accrue when it merges or acquires another corporation. There are 2 distinct of synergies which takes places in business:
a) In terms of Increased Revenue ( Soft synergy): through cross-selling & complementary matching of strength and weakness.
b) In terms of Cost advantage (Hard Synergy): by eliminating redundancies in administration, production and logistics.

Recent observations in Mergers & Acquisitions as an Economic Phenomenon:
Reports have shown that that there has been a significant proportion of M&A failures over last five decades since the waves of mergers (MAE grounds) started. The actual success rate could be something like 50 % but some studies are very alarming:
1) “Millman and Grey show that …83% of mergers produce no benefit whatsoever to shareholders
2) Sirower finds 60-70% of acquisitions failing to produce positive returns.”

According to the synergy theory, applicable for M&A, is that it “expects that there is really “something out there” which enables the merged entity to create shareholders value”. Technically it could be frames as the ability of merged companies to generate higher shareholders wealth than the standalone entities. In economic terms, it suggests to further limit competitors’ ability to input and output markets and looking for increasing the responsiveness. So, looking for synergy can be compared with the quest for the Holy Grail.

 

Drivers of Synergy in M&A:













The strategic relatedness of synergy issues can be looked as:
Whether an acquisition decision is related or in cross-sector. If acquisition is in a related sector, then how it related to the present organizational- vertical or horizontal. This is diagrametically represented as:














The Cornerstones of synergy in M&A are:
1) Strategy : For financing and revenue enhancement.
2) Operational Implementation: Detailed Corporate planning is required for joint contracts acquiring.
3) System Integration: unless proper planning is done, it can be a very significant limiting factor of many well-planned acquisitions.
4) Control & Culture: Have increasingly become the most CRITICAL SUCCESS FACTOR.


The challenges of Synergy is to make people cooperate mainly in lower management levels by creating a “ Code of Joint Working”.




 
References:
1) Stephen R.Covey (1989). The 7 Habits of Highly Effective People.
2) Retrieved September 7,2008 from http://en.wikipedia.org/wiki/Synergy
3) Retrieved September 8,2008 from nb.vse.cz/~pichanic/cesp363/synergy.ppt