The connected enterprise: beyond division of labor

Abstract

PurposeThe central messages of the article are threefold. First, a summary of research testing the perception that cross‐functional organization designs provide key advantages and differentiators for firms in today's hypercompetitive business climate. Second, includes a multifaceted “body of evidence” (e.g. multiple data sources, a range of industries, and various levels of management). Third, pragmatic recommendations regarding how to advance elusive cross‐functional organization design constructs, which today's executives are increasingly seeking to implement.Design/methodology/approachThe article addresses several key questions – are organizations today more like cross‐functional “symphonies” or do they still resemble the traditional, functional, manufacturing model? Are cross‐functional organizations really more effective than functional organizations? And, if cross‐functional organizations are more effective, why aren't they more prevalent? To answer these questions, information from three key sources was assembled to test a body of evidence: first, a Business Schools Programs Review: a comparison of “functional” versus “cross‐functional” business school programs, that included 61 schools offering Masters of Business Administration degrees, located across the USA; second, a scan of the business literature available from five key online sources; and third, a management survey that included 212 total respondents from 37 different industries.FindingsThe evidence presented supports five key conclusions: “Functionality” is still the prevailing organization design. Business schools are not functionally focused, but corporate training is. Functionality dominates the management literature. More managers manage functionally. Cross‐functional organizations appear to have several performance advantages over functional organizations.Research limitations/implicationsThe key limitation of the current research, and implication for future research, is that cross‐functional and functional organizational financial performance comparisons were not conducted. Financial performance comparisons should be addressed by future research.Practical implicationsThe article provides a set of 12 pragmatic recommendations regarding how to implement cross‐functional organization design structures.Originality/valueThe content of the article is useful to executives and managers for several reasons, including: pragmatic recommendations regarding how to implement cross‐functional organization design structures, which today's executives are increasingly seeking to employ. Multifaceted evidence highlighting the differences between functional and cross‐functional structures. Research confirming the assumption that cross‐functional organization designs provide a key differentiator for firms in today's hypercompetitive business climate. Broad application to companies across multiple industries. An overview of available organization design literature and case examples.