To survive and compete, many organizations are developing cross-functional structures. They recognize how the strengths and flexibility of this new structure can help them respond to business challenges.
There are two approaches you can take to develop a cross-functional organization: top down and bottom up.
The top-down approach begins with top-level management defining an organizational vision. Management then states a mission and a strategy to deliver on that mission. Employees then take concrete actions based on these.
The top-down approach has the advantage of consistency. Setting goals at the top and distributing them down through the organization means that all goals are based on one overall goal.
It allows goals to be based on key stakeholders’ views of the business and the competition, giving goals a sound commercial footing. Finally, the top-down approach allows top-level expectations to be clearly communicated to each participant.
There are, however, several disadvantages to the top-down approach:
lower-level managers aren’t empowered to take the initiative based on their experience.
- goals handed down may not be recognized as being relevant to those working on lower levels. This might result in reduced productivity.
- top management may drive goals that would be better driven at lower levels.
- employees may not understand or accept goals, and therefore aren’t motivated to deliver on them.
The bottom-up approach takes the reverse path. It means that there is active employee input in setting goals and strategies.
The bottom-up approach has a number of advantages:
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