Cross-functional management emerged from the
following two needs:1
a need for top management to clarify its quality, cost, and delivery
goals and deploy them to all employees at every level, and
a need to establish a system of close coordination among different
What Is Cross-functional
Cross-functional management (CFM)
manages business processes across the traditional boundaries of the
functional areas. CFM relates to coordinating and
the activities of different units for realizing the superordinate
cross-functional goals and policy deployment. It is concerned with
building a better system for achieving such cross-functional goals as
quality, cost, and delivery.
Toyota was first in Japan with cross-functional management
Toyota Production System
At Toyota, all members of the cross-functional
committee are board members representing the departments involved in a
particular cross-function, such as quality or delivery. The goals and
measures defined by the committee carry almost the same weight as those
coming from the board. Each committee has about 10 members and is headed by
a senior officer appointed by the president.1
The Toyota Way: 14 Principles
Two Components of a Policy
Policy is composed of both goals and measures.
Goals are usually quantitative figures such as
targets for market share, sales, and profits.
Measures, on the other hand, are the specific
means or action programs to achieve these goals.
A goal that is not supported by a description of
specific measures to achieve it is merely a slogan. Thus,
should determine both the goals and the measures and then deploy them
throughout the organization.
Two Interwoven Goal
The two key management's concepts supporting
TQM strategy are cross-functional management and policy deployment.
Management's commitment to these concepts is expressed by directions
provided by top management.
Top management usually formulates
its annual goals on the basis of long-range strategies and plans.
The major goal categories are:
Goals related to such measurable factors as
products, market share, and profits. These goals are a corporate
response to external requirements such as shareholder pressures for
Goals relating to overall improvements in the companies various systems
and cross-functional activities such as employee education,
cost reduction, quality assurance, delivery, and
new product development.
These goals is a self-generated move for improvement in corporate
culture, and competitiveness. They call for cross-functional efforts
cutting horizontally across the whole organization.
These two major goals for profit and
improvement are interwoven.
Cross-functional goals should be set prior to
determination of functional goals.
Cross-functional Goals are
In Total Quality
Management (TQM) and Kaizen, the
cross-functional goals of QCD (Quality, Cost, Delivery) are clearly defined
as superior to such line functions as planning, design, production and
Implementing Kaizen: 7 Conditions
The positioning of cross-functional goal as
superordinate ones necessitates a new
systems approach to management,
thinking and decision
making. To achieve this, top managers must build their
The goals for each cross-function of quality,
cost, and delivery should be determined by either top management or a
cross-functional committee organized at the top-management level.
Strategic Cross-Functional Management
Peter Drucker likens today's executive and his
or her strategic plan to the symphony conductor with a complex musical score
to direct.2 The conductor cannot hope to play each instrument as
well as the specialized symphony members can, and so those experts are left
alone to perfect their individual contributions. However, the conductor
interprets the score and communicates to the orchestra an overall vision for
how the piece should sound. Without the conductor and this shared
understanding of the score, symphony becomes cacophony. Similarly, without
and direction provided through some overall strategic plan, decentralization
and self-direction result in organizational mayhem.
Strategic cross-functional management is central to capitalizing on
functional excellence, and in order for functional specialists to make the
greatest possible contribution, they must take a broader view of their
functions and understand how they fit into the web of the organizational
processes and, ultimately, into the overall