Cross-functional Management (CFM)





Building a Better Synergistic System for Quality, Cost, and Delivery, and Innovation







Why Cross-functional Management?

Cross-functional management emerged from the following two needs:

① a need for top management to clarify its quality, cost, and delivery goals and deploy them to all employees at every level, and

② a need to establish a system of close coordination among different departments.


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What Is Cross-functional Management?

CFM manages business processes across the traditional boundaries of the functional areas. CFM relates to coordinating and synergizing the activities of different units for realizing the superordinate cross-functional goals and policy deployment. It is concerned with building a better system for achieving such cross-functional goals as innovation, quality, cost, and delivery.


Successful Company

5 Basic Elements

Balanced Business System

Performance-based Company

Value Chain

Effective KPI




Two Interwoven Goal Categories

① Goals relating to overall improvements in the companies various systems and cross-functional activities;

 ② Goals relating to such measurable factors as profits, market share, and products... More




Stretch Goals

Performance Management System




Intertwined Functional and Cross-Functional Activities

Functions: each functional department has several cross-functional responsibilities; each top manager in charge of a particular function has several cross-functional responsibilities.

Cross-functions: each cross-function runs through several departments; several top managers are involved in the same cross-functional activity.

For instance, in total quality management (TQM), the two key management concepts are Cross-Functional Management and Policy Deployment.

Two Components of a Policy

Policy is composed of both goals and measures.

Goals are usually quantitative figures such as targets for market share, sales, and profits.

Measures, on the other hand, are the specific means or action programs to achieve these goals.

A goal that is not supported by a description of specific measures to achieve it is merely a slogan. Thus, top management should determine both the goals and the measures and then deploy them throughout the organization.




Example: Toyota

Toyota was first in Japan with cross-functional management. At Toyota, all members of the cross-functional committee are board members representing the departments involved in a particular cross-function, such as quality or delivery.

The goals and measures defined by the committee carry almost the same weight as those coming from the board. Each committee has about 10 members and is headed by a senior officer appointed by the president.


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Toyota Production System (TPS)

5 Features

5 Ss

Just-in Time (JIT)




Systems Approach to Management





The concept and practices of cross-functional management were developed to meet the need for systems approach to achieving the cross-functional goals of quality, cost and delivery. Within this concept:

Quality is concerned with building a better system for quality assurance;

Cost is concerned with building a system for identifying cost factors and with reducing costs;

Delivery refers to a better system for both scheduling and quantity.

Strategic Cross-Functional Management

Peter Drucker likens today's executive and s/his strategic plan to the symphony conductor with a complex musical score to direct. The conductor cannot hope to play each instrument as well as the specialized symphony members can, and so those experts are left alone to perfect their individual contributions. However, the conductor interprets the score and communicates to the orchestra an overall vision for how the piece should sound. Without the conductor and this shared understanding of the score, symphony becomes cacophony. Similarly, without executive leadership and direction provided through some overall strategic plan, decentralization and self-direction result in organizational mayhem.




Strategic cross-functional management is central to capitalizing on functional excellence, and in order for functional specialists to make the greatest possible contribution, they must take a broader view of their functions and understand how they fit into the web of the organizational processes and, ultimately, into the overall strategy.

Cross-functional customer service is another example of CFM adoption in a customer-focused culture.

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