Management Myth # 4—A Business is Best Organized around Functions

Abstract

The newly appointed CEO, Samantha, identifies as her first major challenge, the imperative to break down the boundaries between departments in the government agency she now leads. Samantha observes the agency is organized around several “silos”—it’s a typical bureaucracy. Even at the senior management level, this is evident. The most important cross-functional team—the senior management team—is disjointed and not operating as a team. Managers arrive at executive meetings with their functional “hat” on and fail to consider issues from the perspective of the overall organization. Samantha knows she has a problem and has her work cut out in breaking down these traditional departmental boundaries and the rivalries they breed.

With its concentration on vertical lines of communication, the functional model’s capacity for adaptive performance is severely curtailed. Approval to make a reasonably simple decision, for instance, can pass through several hands and this can take unnecessary time.