Cross‐functional integration and performance: what are the real benefits?

Abstract

PurposeConventional wisdom has it that cross‐functional integration is a “must”. The purpose of this paper is to take an information‐processing approach to integration and elaborate the conventional wisdom by theoretical examination of both the concept of integration as well as theoretical and empirical elaboration of its link to operational performance.Design/methodology/approachThe authors develop six propositions on how cross‐functional integration affects performance and test the propositions in an international sample of 266 manufacturing plant organizations in nine countries.FindingsThe results strongly suggest that disaggregation of performance is important, because the effects of cross‐functional integration on performance are contingent: even though the effects of achieved integration on several dimensions of operational performance are positive, the performance effect varies from one dimension to the next. This is an important finding given that performance has typically been treated at an aggregate level in prior research on the performance effects of integration.Originality/valueAlthough most research on integration has focused on the performance implications in particular, theoretical work on the nature of the integration‐performance relationship is required. In this paper, the authors argue the benefits of cross‐functional integration to be fundamentally context‐dependent and elaborate the link between integration and performance by developing the definition of the concept of integration further, as well as by disaggregation of performance, to its constituent dimensions.