1. Chapter 4 Achieving Integration

2. Scope of Chapter 4 1. Integration: the concept
2. Integration: the need
3. Analyzing a need for better integration
4. Integration capability
5. Integration mechanisms
6. Cross-functional teams

3. Integration: The Concept
A condition in which there is adequate coordination between the different, but complementary, activities that collectively create value
Signifies cohesion and synergy between different roles or units
The concept can apply to vertical relations (e.g. plans implemented as intended)
It is more usually applied to lateral or horizontal organizational relations

4. The Need for Adequate Integration
Co-ordination issues are becoming more pressing:
internationalization of business: global activities cannot be managed solely by an international division
shortening time-to-market requirements: concurrent rather than sequential development activities required
growing R&D expenditures: wasteful to duplicate
market segmentation: greater variety of products and services may require coordinated production and other support
competitive importance of quality

5. Factors Creating a Need for More Cross-Functional Communication
Diversity and variety
Unanticipated changes
Interdependence of tasks
Total quality initiatives
Time compression

6. Growing Use of Lateral Organization
Flexibility is increased through bringing organizational units together directly rather than relying on communications up and down parallel hierarchies
“Lateral organization is the decentralization of general management issues to be resolved by working across organizational units”
Galbraith, Competing with Flexible Lateral Organizations (1994)

7. Lateral Organization Requires a High Level of Integration
Galbraith identifies three general types of lateral integration:
coordination across functions
coordination across business units
coordination across countries
Galbraith, Competing with Flexible Lateral Organizations (1994)

8. But Integration may Cost!
Goold & Campbell, Harvard Business Review, Sept-Oct 1998:
need to evaluate potential for synergy (“working together”), not assume that it is always the holy grail, otherwise it can accumulate costs, waste energy, and generate cynicism
Possible costs of integration:
time taken in meetings, etc
additional overhead costs of co-ordinators
potential conflict and confusion with matrix arrangements
compromising of specialist standards
Therefore important to assess what is needed

9. Identifying a Need for Better Integration
Signs of an integration problem
Persistent conflict between departments or units
Integration issues fudged
Overloading of top management
‘Red tape’ becomes a ritual
Empire building by coordinators
Customer complaints

10. Analytical tools quality of relationships matrix customer surveys
benchmarking:
- comparison of product development lead-times
- comparison of decision leadtimes

11. Integration Capability
top management understanding
supportive organizational culture
willingness to make necessary system adjustments:
reward systems
HRM (especially selection & training)
job and task definitions

12. Integration Mechanisms
Three main categories:
1. Standardization: procedures and rules
2. Plans and schedules
3. Mutual adjustment: direct integration by the people concerned
face-to-face: personal meetings, teams
use of coordinators

13. Direct Integration Mechanisms for Mutual Adjustment

14. Requirements for Effective Coordination
Choose people who are already influential and have respect of departments or groups they have to co-ordinate
Choose people who can cope with the ambiguity inherent in their position
Clarify rights attached to the role, such as the right to call meetings and set schedules for project work
Provide necessary back-up resources and staff

15. Difficulties of the Coordinator Role
Responsibility exceeds authority
If remains outside an established unit for too long, future career line may be unclear

16. Types of Team Top management teams Cross-functional teams
Project teams
Quality circles
Self-managed teams
Affinity groups

17. Cross-Functional Teams
Work designed around processes not functions
Team responsible for a product, service, or process
Multi-skilled/cross-trained
Expanded responsibilities including leadership
Support staff/skills incorporated into teams
May assume wider organizational responsibilities (e.g. members may advise on customer service, HR policy)

18. Example: Hannaford Brothers Company
Food warehouse supplying supermarkets
Functions: inventory controllers, selectors, forklift operators, schedulers
Teams created to take responsibility for all functional duties, focusing on specific customers (up to three) that they directly supplied, including maintaining regular contact with them via surveys, store visits
Results: major productivity & cost savings and improved customer satisfaction

19. Back to the Issue of Cost
Costs tend to increase with sophistication of the integration mechanism
Time devoted to integration
Difficulty experienced in implementation (e.g. strain on coordinators)
Costs of training, including team building
Possible side-effects on communication within units