Synergy created by coordinating sourcing in related diversified firms : A study of the Norwegian utility industry

In order to create synergy of sourcing activities in related diversified firms, some coordination mechanisms must be in place. Coordination by organizational structure, management control, and process, systems and tools are examined in the Norwegian utility industry. Sourcing is found to be coordinated across business units by centrally decided sourcing strategies defining overall goals and policy for the sourcing area. Sourcing is also coordinated by sourcing professionals and category managers operating as devised liaisons, coordinating the sourcing processes, and performing supplier and market management horizontally across the business units. Sourcing needs are pooled when appropriate. Coordination by joint planning and sharing of cost information is done. All the identified forms of synergy are found to be created; economies of scale, economies of information and learning and economies of process