Sony still has silo divisions

Probably the most common reason for mergers and acquisitions is synergies. Here is a good example of how difficult it is to reap synergies. Sony owns Sony Pictures. Sony Pictures is producing the new James Bond movie. Sony Electronics wants a product placement for the new Xperia mobile phone. With joint ownership of the two divisions this should be a low hanging synergy.

Instead the executives spend countless hours arguing with each other. Sony Electronics is willing to pay $23M but Sony Pictures want more. Whether they pay $1 or $100M does not make any economic difference for Sony group, The key number is the benefit for Sony Electronics of the product placement. How many extra phones are being sold by the product placement? The CEO should step in and find the answer. Then he should set down the foot.

Maybe the benefit is even less than Samsung's offer of $55M. In that case, give the contract to Samsung and accept that the synergies are non-existent.