Improving Performance Through The Concept Of Cross Functional Teams Business Essay Example

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Operational Strategies

Starting with sewing machines, Singer has expanded its product portfolio to include a successful multi-brand strategy that combines top global brands with its own products in various household, industrial, and financial categories.

Over the years, Singer construction has greatly strengthened to incorporate the strategies developed to address the modifiers in the environment. Singer possesses a portfolio of 38 different brands and has a strong penetration rate that spans across various consumer segments. Singer has partnered with leading appliance industries including Hitachi, Samsung, Galanz, TCL, Philips, and others, enabling them to introduce the latest global technology into the country. Singer has adopted a multi-channel strategy to cater to different market segments. They have identified and segmented their customer base based on their purchasing power, level of education, standard of living, brand loyalty, etc.

Various channels are in place to cater to different client groups. As a transnational company, managing 38 different brands through nine channels with over 300 establishments is challenging. It requires careful attention to improve channel performance while maintaining brand equity. This necessitates the contribution of all managers, regardless of their department (Marketing, Sales, Production, Finance, Human Resources, etc.).

Typical Ways of Managing an Organization

Here, we aim to comprehend the traditional methods of managing an organization by analyzing Singer's past management strategies (without generalizing the topic) and exploring potential drawbacks of that system. The management structure at Singer (Sri Lanka) is relatively larger compared to an organization of similar size.

The enlargement of trade names and channels has led to the evolution of Singer Sri Lanka's construction. On the surface level, the construction appears functional. Functional construction is defined as grouping places into sections based

on similar accomplishments, expertness, work activities, and resources usage. However, depending on the nature of the operation, divisions can have different constructions, both in terms of divisional and functional aspects. The divisional construction is defined as grouping sections together based on organizational end products. Therefore, due to the combination of these factors, we can classify Singer Sri Lanka's construction as a "HYBRID" construction.

Hybrid construction combines the features of functional and divisional constructions in order to leverage their strengths and mitigate their weaknesses. While it is a successful combination, there are still several drawbacks to this construction. It primarily focuses on vertical structures and lacks sufficient horizontal connectivity.

Vertical constructions prioritize functional goals over the corporate objectives of an organization, resulting in a significant gap in communication between departments and divisions. Singer (Sri Lanka) had been implementing this vertical approach (in which management aligns with the hierarchy and formal structure of the organization) for many years until they identified the major weaknesses in the system. These weaknesses were often evident in Singer, particularly between various departments, as they focused solely on their individual departmental goals while disregarding the overall company objectives. The following example illustrates the general drawbacks of this system and how it affects the overall company performance. For instance, in the previous system, when organizing marketing promotions, there was a frequent occurrence of issues between the marketing and finance divisions. This was not solely due to differing departmental goals but also due to a failure to understand each other's functions.

When there is a need for an attractive publicity campaign during the Christmas season with a large budget, the finance department focuses on historical sales

figures. If the sales have been low in the past three months, the budget is reduced accordingly. As a result, the sales team has to adjust their plan and work with limited resources. This can potentially lead to another unsuccessful campaign and a significant waste of resources. However, if there is better collaboration and clear communication between the marketing and finance departments, the outcome could be different. Marketing should inform finance about the current state of the company, while finance should be aware of market dynamics.

This lack of communication has always existed in the old system and it was difficult to eliminate those problems as well.

The Concept of Cross Functional Teams

Background Issues

• As discussed Singer (Sri Lanka) had vertical Hybrid structure and inter-department communication gaps frequently arise.
• Additionally, to face the disruptive environment, the structure needed to be "more flexible", "team supported" and "empowered".
• To achieve the optimal results in the diversification strategy with minimal resources and waste, Singer needed to develop horizontal team structure.

If we relate this concept in Figure 3.1 to Singer, we can adopt the "Cross Functional Team Concept" as a prominent ingredient to bridge the gap between Strategy and structure. By doing so, we can have a well balanced cross functional team to drive the course to long term results. Composition of a horizontal team should be based on the contribution of the team to the overall success.

How Cross Functional Teams Function in Organizations

New combination of strategy and structure

will result in superior long term outcomes.

Role of Cross Functional Teams [ CFT ]
Cross Functional Teams (CFT) consist of the appropriate number of members based on their respective roles within the team. Each member is empowered to handle their own function according to the CFT plan. All CFT members are responsible for managing business units to promote organizational growth with a strong commitment. This is a unique aspect of our work life that brings together different functional areas, allowing them to collaborate as "Teams" and contribute towards a shared goal. Together, they can experience the joy and inspiration that success will bring to the company.

The company requires the involvement of all CFT members to ensure success each year. Each Business Unit will appoint a coordinator who will be responsible for organizing regular meetings, releasing minutes promptly, and following up on project management. The common features of CFT include regular meetings and reporting to cooperate management, selecting the right people for the team, effective strategy and dedicated team members, attracting strategic clients, and maintaining a sustainable market share. Key concerns of CFTs related to business entities are illustrated using Singer (Sri Lanka) as an example. Competitor pricing is crucial for success, as Singer may lose revenue and market share if its prices are higher than those of competitors.

CFT's that focus on managing gross borders perform better than those solely focused on gross. Higher gross border levels also result in higher gross earnings. Entry point pricing is important because new market entrants typically enter with lower prices, temporarily capturing market share. This phenomenon is consistent with brand 'B' replacing brand 'A', and so on. It is crucial

to address obsolescence promptly. CFT's that neglect obsolescence will face two charges: provision for obsolescence and interest cost.

The text emphasizes the importance of focusing on above the line advertisement and the need for adequate market intelligence. When products or models are not advertised sufficiently, they tend to disappear from the customer's sight and get replaced without notice. This lack of awareness is due to a deficiency of market intelligence among cross functional teams (CFTs) who fail to grasp market dynamics, changes, consumer behavior, and trends.

Two examples are given to highlight this issue. In example one, the need for a water filter in rural and suburban areas was not identified through market intelligence but rather discovered accidentally. Example two discusses the gradual replacement of the Paddy thrasher by the combined reaper as a relevant change in consumer behavior that has not been recognized.

To address these challenges, the company needs to be more aware of market interactions and the dynamics of change. Achieving excellence through cross functional teams is essential. Brand Managers, in particular, should focus on developing a model that answers questions such as "How do we get there?" and "When do we get there?". Supporting the company in achieving its objectives requires attention to other key areas of responsibility for CFTs.

To drive the company towards its goals, it is crucial to establish a free flow of information among all levels of management and staff.Organizations have the ability to adopt this culture through CFT's, which offer increased flexibility and facilitate quicker responses to necessary changes in order to stay competitive in the business environment.

Successful companies are not afraid to try new things and conduct research.

Open communication and an informal culture also play a role in this. CFT members support each other in exploring new ideas or initiatives, and if something goes wrong, the entire team takes responsibility. Passion for the customer is a common trait in successful companies, demonstrated through reliability and high-quality products and services. By working as a CFT, necessary resources and enthusiasm are provided to cater to customers effectively, leading to overall business success. If all CFT members embrace flexibility and support the creative process, long-term success can be achieved.

The organization should consider developing a culture that values input from all individuals in order to enhance the chances of finding new ways to optimize performance and reduce costs. This can involve making changes in methods and considering ideas from everyone in the company. By doing so, productivity will ultimately increase, and CFT (Cross-functional team) is an excellent starting point for this process. It is important to be adaptable when dealing with rapidly changing circumstances. If a failure occurs, it may not be due to flawed practices but rather issues with execution.

The company must prioritize efficiency in all aspects and be quick to respond to threats. This is also a key motive behind the creation of CFTs. For example, members of the Television CFT are responsible for managing the television operations at Singer Mega and other channels. Therefore, their sales from that category are important, regardless of which channel they come from.

Through organizational changes, CFT aims to empower all company staff to make decisions, even at the field level. This will help employees recognize their importance in making company-wide decisions. CFT also takes

responsibility for creating a development plan to advance all management courses, allowing them to participate in meetings regularly. CFT can support this by optimizing available staff and using department sub-committees to address constraints and problems. Additionally, they can seek assistance from other departments to solve common problems. Companies are aware that certain departments (such as marketing in Singer) have experienced significant losses due to malpractices and neglecting internal controls, despite having a complete internal audit. To enhance internal controls within the organization, CFT suggests periodically improving methods, procedures, and regulations.

Every large company typically has a waste component that accounts for about 10 to 15% of the total cost. Cross-functional teams (CFTs) can contribute by focusing on eliminating this wastage without negatively impacting operations through ad-hoc cost cuts that may harm the business. It is also the responsibility of CFTs to introduce successful new products that align with the existing business.

Way Forward - Beyond the Excellence

Andy Grove, the renowned former Chairman of Intel, shares his perspective on cross functionality. He suggests always assuming responsibility, even for tasks that may not be directly assigned to you. This concept promotes taking proactive action to improve the company, whether it involves picking up trash or generating a new product idea.

Those individuals who recognize this are the ones who ultimately become the most successful. Strategies, rules, and templates alone will not be sufficient to cultivate the kind of high motivation among employees within an organization. What is required is professionalism and a genuine commitment from top management, starting with the CEO and permeating through all levels of the organizational structure. Achieving exceptional performance through the concept of Cross Functional Teams

(CFT) is dependent on developing an intrinsic quality in employees, rather than simply implementing another means of control within the organization. In a broader sense, this approach has the potential to bring about a cultural change within the organization by enhancing the motivation, courage, and enthusiasm of all employees with positive attitudes.In order to achieve exceptional public performances by CFTs, in addition to the tasks mentioned earlier, it is crucial to regularly conduct gap analysis to enhance:

• increasing profit margins
• filling model gaps
• improving quality
• reducing outdated and non-moving inventory

Therefore, the constant emphasis on the company's operations and the active involvement of management are key factors that determine whether the company can go the extra mile or, in other words, whether the company can surpass excellence.

Decision

Our analysis shows that the construction plays a significant role in contributing to the long-term success and sustainability of the organization. The previous discussion with Singer (Sri Lanka) highlighted the major issues caused by the former structure, resulting in a lack of communication between functional departments. This is a common problem in many industries in Sri Lanka, where most departments focus on their own objectives without considering the overall company goals. By implementing the CFT strategy and adopting a more matrix-based structure, changes can be made to improve communication and accountability. This change will also facilitate a more effective control system and ultimately lead to increased profitability for the organization.