Analysis of Synergetic Management in Telecommunication Enterprises

The Journal of China Universities of Posts and TelecommunicationsVol. 11 ,No.2 ,Jun. 2004Analysis of Synergetic Management inTelecommunication EnterprisesWANG Liang-yuan，LIU Yu-bi，ZHANG Ying quanDepartment of Management Engineering , Nanjing University of Posts and Telecommunications , Nanjing 210003 ,P. R. China.Abstract : Based on the essence of Symnergia , the status of synergetic effect of telecommunication enterprises in Chinais analyzed qualitatirely and quantitatively. Some strategic suggestions，such as building the concept of symergia com-scibusly，analysing the synergia of resources timely and building the synergetic enviromment of resources properly , areprvided for the management of telecommunications enterprises in the paper .Key words: synergia ; synergetic effect ; telecommumnication enterprises ; resourcesCLC number : F626Document code : AArticle ID : 10058885( 2004 )02-0113-06havior of the systems are not the total of their sub-1 Introductionsystems simply. Under the given condition , Syner-gia often takes place between them temperately ,In the 21st century , with the domain of marketspurposefully and spontaneously1]. These are theexpanding and the varieties and the amount of prod-synergetic phenomenon all over the nature and theucts or services increasing rapidly , the success of en-society.terprises is often decided by Synergia within each re-In management science , Synergia means that thesource and each field. Specially , the past ten yearsvalueof a company is larger than the total value ofhave been the significant period for the telecommu-the independent parts , namely ,2 + 2>4 ,if ex-nication enterprises in China. Growth has increasedpressed simply in a math fornt21. Synergia in busi-in the fields of building infrastructure to developingness management is a quite complicated conceptvalue- added services in telecommunication enterpris-which involves many fields. There are some syner-es.This complex and challenging environmentgetic effects in the fields of the resources and the or-makes it important that managers seek strategic syn-ganizations inside enterprises 1 and of the customers ,ergetic opportunities and dig synergetic advantagesthe markets and the technologies outside enterpris-from the resources of enterprises.s.These are some basic concepts which help to catch2 Essence of Synergiathe essence of Synergia better.( 1 ) Tangible Asset vs. Intangible AssetIn systems science , Synergia refers to the harmo-It is pointed out in business resource theory that anious state between each part of the system. Thecon中国煤化工series of concrete ser-systems of nature and society can be divided into:YHC N M H Ge assets and intangiblesome subsystems. The systems and subsystems areassets, namely ,a set of resources. I angible assetsdiversified ; the structure , the character and the be-refer to the assets that can not be applied to twoReceived date:. 2003-06-25Foundation on万数据work was supported by the Committe of Jiangsu Province Developing Plani Emphases of Info constuce'114The Journal of CHUPT2004value-added activities at the same time or refreshedrapidly and the competition of the telecommunica-after being used ; and intangible assets refer to thetion market simmering , the telecommunication ofassets that can be applied to more than two value-China has been undergoing some reforms and the en-added activities at the same time and don' t wearterprises are in the complex and changeable environ-down though they are used repeatedly31. With thisment now. Managers in the telecommunication en-theory deepened , the concepts of tangible assets andterprises should attach more importance to the com-intangible assets have come into an academic basispetitive advantages and the long- term benefits in-for synergetic analyses of enterprises.stead of keeping the market shares 61.( 2 ) Synergetic Effect vs. Complementary Effect( 1 ) Intangible asset is the most important re-Based on the characters of tangible assets and in-source to create the persistent competition advan-tangible assets , their combined effects can be dividedtages of telecommunication enterprises.into two parts : complementary effect and synergeticThe tangible asset of telecommunication enterpris-effect. Complementary effect is the effect that comeses mainly includes the fixed asset like networks andby making the best of the tangible assets of enter-the financial asset such like active money ; and theprises ;and synergetic effect is the effect that comesintangible asset mainly includes experiences , skills ,by sharing and reusing the intangible assets integra-competency , brands and culture , which are accumu-tively and making the whole and the parts improvedlated and summarized in the enterprises chronically.on the basic of taking full advantages of the tangibleSurely，the tangible asset is important for theassets 4]. Actually , the complementary effect is antelecommunication enterprises since it is the basis toaccumulation in quantity , while the synergetic effectrun normally. However，the competitive advantagesis an improvement of quality. To say popularly ,from the tangible asset are not permanent ; and thesynergy is an action of lift.enterprises will have more difficulties to develop( 3 ) Main Body of Synergetic Effectwhen their tangible assets have become too large 77.In enterprises , synergetic effect takes place notOnly by the possession of the' core competence" 8」only in the diversification and the integrations , butwould the competitive advantages stand long. Thealso in each process of operating flows within thecore competence of telecommunication enterprises issame strategic unit. Besides , there is synergetic ef-the key operating skill ; the key operating skill is theect between all teams or employees in one depart-most important intangible asset in the telecommuni-ment. However ，synergetic effect mainly comescation enterprises. Consequently , the intangible as-from intangible assets ; the essence of intangible as-set is the source to create the long- term competitivesets is information or knowledge ; man is the cre-advantages of telecommunication enterprises.ator , disseminator and consumer of information or( 2 ) Synergia can manifest the essence of theknowledge. Therefore , the smallest unit as the maintelecommunication enterprises better.body of Synergia should be man rather than a strate-When telecommunication enterprises run , all thegic business unit or a part of the value chain withinresources need collocating. The tangible asset andan enterprise- group5I. It should attach importancethe intangible asset can correspondingly produce theto the main body that creates synergetic effect- thecomplementary effect and the synergetic effect.creative employees.Cor:fH中国煤化工h in the management,incc N M H Ghe enironment outside3 Synergia-vital Source to Improveenterprises and the consistency between all organiza-Competitive Advantagestions or all resources inside enterprises. Comparedwith the tangible asset , the intangible asset is moreWith瓦夜数摒ormation technology developingflexible. The synergetic effect from the intangibleNo.2WANG Liang-yuan ,et al. : Analysis of Synergetic Management in Telecommunication Enterprises115asset enhances the cooperation , optimizes the re-ating resources are the physical basis of ancourses, and improves the operating efficiency.enterprise's running. And without each elementHence , Synergia , compared with complement , rep-harmoniously running , such as the equipment re-resents the essence of enterprise management.source，the human resource and the financial re-( 3 ) Synergia reflects the meaning of team-spirit.source , would the enterprises not supply products orAccording to the above analysis , the main body ofservices and not get the customers ultimately. Thethe synergetic effect is not a part of the stratagem orproducts or services that telecommunication enter-the value chain , but the creative employees in enter-prises can supply will decide the target market.prises. Human resource in telecommunication enter-Meanwhile the customers' demands affect the direc-prises is a precious resource. How to employ it astion of products or services. The core skill and themuch as possible becomes a direction in research ofkey technology of each of the above fields do not on-modern management science. One of its key con-ly play the key role in its field , but also affect thecepts is' team-spirit"t91 , which is a basic desire forother fields. Hence ,it is necessary for the managersemployees. It can make the organizations solidaricto analyze those four strategic resources and find outand strong. And Synergia in the enterprises accordsthe core skill and the key technology to achieve thewith the meaning of team-spirit in essence.strategic goal.( 4 ) Synergia shows the need of keeping pace withProductResourccsthe time on management.Telecommunication enterprises as intensive capitaland knowledge ones require their managementmodes to keep pace with the time objectively andtheir managers to keep pace with the time subjec-tively 10] Synergia as a branch of the systems sci-ence ,applied to the management , is a creative theo-CustomerTechunologyretical method. Accordingly , synergetic analysis inFig.1 Synergetic analysis of strategic resourcesthe management of telecommunication enterprises isa creative method，which shows the need of keepingTake a mobile communication enterprise for anpace with the time in management.example , its field of technology is analyzed as shownin Fig.2( a). In the figure , the y-axis denotes the4 Synergetic Analysis in Manage-importance of communications in the future , and thementx-axis denotes the strength of the enterprise com-pared by the competitors in the same field. The size4.1 Synergetic Analysis of Strategic Resourcesof the circles denotes the cost invested in the tech-The strategic resources in enterprises includenologies. It can be known that in the application ofproduct , operating resources , customer and technol-2G , this enterprise is holding a big market- share.ogy , each of which interrelates and restricts , andAnd its cost is low relatively for the technicalcooperates with other. In the telecommunication en-standard and the business mode has been rather ma-中国煤化工、terprises , the relationship of those is depicted as inturvelopment , 2G serviceFig. [11].has:MYHCNMH Gns. At present,2.5GIn telecommunication enterprises ，technology isservice has been applied in the market and is devel-the technical basis of all resources , which makes op-oping. But as a transitional standard ,it will not runerating resources refreshed , products or services de-long.3G is the direction of mobile communica-veloped,, 磊市数据mers' demands innovated. Oper-tions121 However , because the business mode is116The Journal of CHUPT2004not clear yet , its strength is waiting for being ex-The size of the circles denotes the revenue amount ofplored.the product or service. Now the market- share of theunderlying services of telecommunication enterprises3GHumanresourceFinancialis absolutely superior ; and in China , the underlying2.5Gservices are still the main source of the revenue.However , the value- added services increase rapidly ,20and they have incredible potential to be developed.MaterialOthersThe value added services will be the key factor thatComparative advantageComparative unit cost(a) Analysis of tchnology(b). Analysis of operatingaffcts the market in the future 131.resourcesIn Fig. 2( d), the y- axis denotes the planning in-crease of services ，and the x-axis denotes the mar-号Value-acudedgroup High-walueservicdsindividualket -share compared by the main competitors. TheUpderlyingLow-valuesize of the circles denotes the customers' value. Bygservicescustomerthis analysis , the customers who apply for servicesincreasingly，such as the high-value group and theComparative market shareComparative market shurehigh- value individual in the figure can be defined as(e)Analysis of products or(d)Analysis of customertomorrow customer" ; the customers ，whose con-marketsumption abilities are decreasing , such as the low-value customer in the figure ,can be defined as' yes-Fig.2 Analysis of each total strategic resouresterday customer". ( ombining the customer resourceIn Fig. 2( b), analyzing the operating resources ofwith the operating resources ，we can find out manytelecommunication enterprises , we can identify thechances. For example ，customer service depart-key operations and estimate their cost performancements are set in telecommunication enterprises wide-compared with the competitors. The operating re-. ly , which can better centralize the resources to ser-sources can be classified as human，material , finan-vice for the”tomorrow customer" , and attain morecial and some other ones acoording to the function.benefit. Besides , it can give a corresponding analysisIn the figure , the y- axis denotes the increasing abili-together with other strategic resources , and identifyty of the business , and the x-axis denotes the com-more opportunities 14].petitive advantage that can be figured by the unit4.2 Synergetic Analysis of the Resources insidecost. The size of the circle in the figure denotes thethe Enterprisepercentage of the cost in the total cost. Obviously ,Fig.3 describes a way of assorting the resources ofhuman resource is the most precious fortune and de-telecommunication enterprises.cides the enterprises running. And financial resourceHuman resource (X)is a resource which can not be lacked in telecommu-Finance (X2)nication enterprises. ( )therwise , many telecommuni-Credit&|Material (X;)Credit &ogologoTechnology (x)cation enterprises have a large scale of the fixed as-Equipment| Service & market (Xs)Productset , and their services depend much on the scale andf Manaoement (X)the scope of the fixed asset.中国煤化工网serviceC N M H Gdit(Xo)For example , in a mobile communication enter-THprise likewise , the y-axis in Fig. 2( c ) denotes theFig.3 The resources of telecom enterprisesincrease of market-share in the next planning peri-od ,and the x-axis denotes the relative share com-The synergetic degree of resources in enterprises ispared by互熬插competitors in the same market.rather fuzzy ,and it is often analyzed in a qualitativeNo.2WANG Liang-yuan ,et al. : Analysis of Synergetic Management in Telecommunication Enterprises117way. Here by means of the contrast average methodin fuzzy mathematics 15 J , we analyze the Synergia of5Suggestions about Synergia inthe resources quantitatively.ManagementAs depicted in Fig.3 , we select the domain as E={X1 ,X2 ,X;,X4 ,Xs X6 X7 ,Xg}, and define gHaving analyzed the synergetic status of the re-( X; ,X; )as the synergetic gradeof X; to X; ,and gsources in qualitative and quantitative ways , we can( X; ,X; )as the synergetic grade of X; to X;. Judg-figure out that Synergia in telecommunication enter-ing by experience , we can build the synergetic esti-prises is very important. Many international enter-prises have achieved much strategic strength by thismating matrix of the resources below.g(X;X;)XrX2X3X4XsX6X7Xssynergetic management，especially in the integra-X1 0.6 0.7 0.6 0.7 0.4 0.5 0.5tion. For example ,AT&T- -a big telecom carrierin America-- with its acquisitions of TCI and Me-X20.7 1 0.7 0.8 0.6 0.7 0.7 0.8diaC One now use wireless in areas not served by cableX30.5 0.4 1 0.4 0.4 0.4 0.3 0.4depending on its cost-effctiveness ，which has0.4 0.6 0.5 1 0.5 0.5 0.5 0.4brought great strategic strength to itself 71. Here are.Xs0.80.70.60.610.70.70.6some suggestions about Synergia in the management0.60.70.60.70.810.70.6of telecommunications enterprises.X70.8 0.8 0.7 0.8 0.7 0.8 1 0.7( 1 ) Build the concept of Synergia consciously0.7 0.8 0.7 0.8 0.8 0.8 0.8 1As Professor Haken , the founder of SynergiaUnder the condition of average weight and non-points , an open system far from balance does not on-average weight , Synergia of the resources can bely goes through from disorder to order but also fromcalculated in a quantitative way. In practice , man-order to the mess in some situation ; there usuallyagers pay different attention to different resourcesexist two processes which are contrary and comple-according to the situation. They can empower perti-mentary as materials develop in nature or soci-nently each resource to gain synergetic effect whichety16]. But there is something different betweenthey have planned. Setting weight vectors as Z =natural Synergia and artificial Synergia. Managers[0.150.1 0.1 0.1 0.1 0.15 0.15 0.15], Syn-should consciously identify the tangible asset and theergia can be calculated under the condition of non-intangible asset , and create the synergetic circum-average weight as follows ( the same as averagestance to cut down the cost in the course.' This is thefirst level for the managers of telecommunication en-weight ).terprises to Synergia. Otherwise , since the orderlyX1=(1 +0.6+0.7+0.6+0.7+0.4 +0.5+structure's forming in the non- balanced system is0.5)x0.15=0.75only a course toward the balanced system , managersSimilarly , we can get the synergetic grade of X2of the telecommunication enterprises whose syner-toXg.SowegetthedomainE.getic effect is not good should immediately consultE={0.750.6 0.38 0.44 0.57 0.855 ,the better ones ,so that it will cut short to get Syn-0.945 0.96}ergia. This is the second level for the managers ofUnder the condition of non -average weight , the中国煤化工domain E can be figured in a fuzzy way as follows :TYHCNMHGe: resources timeX&>X;>X6>Xj>X2>Xs>X4>X;As Professor Haken describes , the disorderly stateWhich show that under the condition of non: aver-in a non-balanced system is bound to be order even-age weight , the desired synergetic value of the brandtually. Synergia of the resources is also a changeablecredit is而方数据process. As the 4h part of this paper analyzes , we18The Journal of CHUPT2004find that Synergia of the strategeic resources are cor-ergidC M] New York : Oxford University Press Inc ,2003.relative with each other ; and Synergia which is the[6] JAMES K , SHAW. Strategic Management in Telecom-munication[ M] Londor( UK ): Artech House , 2000. .calculated is different from the expected one. Under[7] JAMES K SHAW. Strategies For Success In The Newthe condition of empowering , generally , if a re-Telecommunications Marketplace[ M] London( UK ):Artech House ,2001.source is desired in high weight ,its synergetic grade[8] PRAHALADC K ,HAMEL G. The Core Competenceof the Corporation[ J ] Harvard Business Review ,is high correspondingly. Hence , by comparing Syn-1990 , 68( 3):79-91.ergia in the two states ，managers can take some[9] PARKER GLENN M. 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To manage suchters{[J] Z Phys B-- Condensed Matter , 1986 ,63 :487-491.a complicated system well , the high-quality employ-Biographies :WANGLiang-yuanees with the abilities of management and technology( 1947- ), male , from Jiangsu Province ;are indispensable. Since it is flexible to the change -Professor，Management Engineering De-partment，NUPT ; major in telecommuni-able environment，human resource is an importantcations economics and management. Nowhe presides a main thesis- emphases in in-precondition for enterprises to gain competitive ad-formatzation construct of Jiangsu Pronvicein 11th Five-Year Plan of Jiangsuvantages ,and it also plays an important role in af-公Province. .fecting Synergia of resources. Thus managers of theLIU Yu-bi ( 1978-)， female， fromtelecommunication enterprises should set out , fromGuangdong Zhongshan ; Tutor ; Manage-the prime contributing factors , from the essentialmentEngineering Department， NUPT ;Major in teleommunications economicsproblems, by the point of human resource ，to im-andmanagement.prove Synergia of the resources in telecommunicationenterprises properly.References :ZHANG Ying -auan( 1975- ); male , from[1] HAKEN H. Advanced Synergetics[ M ] Berlin :ger , 1983中国煤化工Master ;ChangzhoubranchSprugerigsu Mobile Communication[2] ANSOFF H I. Corporate Strategy , revised editior[ M ]New York : Penguin Books Limited , 1987.YCN M H Gior intelecommunications e-[3] PETERAF M A. The Cormerstones of Competitive Ad-uRUIICS allu management.vantage: A Resource Based View[ J ] Strategic Man-agement Journal ,1993 ,14(3):179- 191.[4 ] ITAMI HIROYUKI. Mobilizing Invisible assets[ M ]Cambridge( MA ): Harvard UniverPress, 1987T. 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