Performance effects of economic synergies

Creating profitable economic synergies is the quest of a lot of managers nowadays. Diversifying to other businesses is a complex phenomenon that managers often miscalculate.This paper is a literature review that will discuss the different forms of economic synergies that exist. It states the necessity of market failures. It provides theoretical concepts on the importance of resources of a firm and how it leads to the creation of value. Then the relation between the diversification and the performances of firms is analyzed. The aspect of anti-synergies and the related costs is developed as well as the biases that might influence choices of the managers.The last part of the work has for objective the redaction of guidelines for managers. It is represented as a decision tree that integrates the different theoretical parts. This tree helps the decision makers ask themselves the important questions to make sure they realise profitable economic synergies for their firm.