Team approach to organizational structure #mba #management #marketing #business_adminstration

Team approach
Probably the most widespread trend in departmentalization in recent years has been the implementation of team concepts. The vertical chain of command is a powerful means of control, but passing all decisions up the hierarchy takes too long and keeps responsibility at the top. The team approach gives managers a way to delegate authority, push responsibility to lower levels, and be more flexible and responsive in a complex and competitive global environment. Chapter 18 will discuss teams in detail.

How It Works
One approach to using teams in organizations is through cross-functional teams, which consist of employees from various functional departments who are responsible to meet as a team and resolve mutual problems. For example, at Total Attorneys, a Chicago-based com- pany that provides software and services to small law firms, CEO Ed Scanlan realized that the functional structure, which broke projects down into sequential stages that moved from one department to another, was slowing things down so much that clients’ needs had some- times changed by the time the product was completed. He solved this problem by creating small, cross-functional teams to increase horizontal coordination. Now, designers, coders, and quality-assurance testers work closely together on each project.50 Cross-functional teams can provide needed horizontal coordination to complement an existing divisional or functional structure. A frequent use of cross-functional teams is for change projects, such as new product or service innovation. Team members typically still report to their functional departments,
but they also report to the team, one mem- ber of whom may be the leader.
The second approach is to use permanent teams, groups of employ- ees who are organized in a way simi- lar to a formal department. Each team brings together employees from all functional areas focused on a specific task or project, such as parts supply and logistics for an automobile plant. Emphasis is on horizontal communica- tion and information sharing because representatives from all functions are coordinating their work and skills to complete a specific organizational task. Authority is pushed down to lower lev- els, and front-line employees are often given the freedom to make decisions and take action on their own. Team members may share or rotate team lead- ership. With a team-based structure, the entire organization is made up of horizontal teams that coordinate their work and work directly with customers to accomplish the organization’s goals. At Whole Foods Market, a team struc-
ture is considered a major contributor to the company’s success. Each Whole Foods store is made up of eight or so self-directed teams that oversee departments such as fresh produce, prepared foods, dairy, or checkout. Teams are responsible for all key operating decisions, such as product selection, pricing, ordering, hiring, and in-store promotions, and they are accountable for their performance.51 Teams are related to the “bossless” trend, which is described further in the Manager’s Shoptalk.
Team Advantages and Disadvantages
The team approach breaks down barriers across departments and improves coordination and cooperation. Team members know one another’s problems and compromise rather than blindly pursuing their own goals. The team concept also enables the organization to adapt more quickly to customer requests and environmental changes and speeds decision making because decisions need not go to the top of the hierarchy for approval. Another big advan- tage is the morale boost. Employees are typically enthusiastic about their involvement in bigger projects rather than narrow departmental tasks. At Lockheed Martin’s Missiles and Fire Control division’s Pike County Operations in Troy, Alabama, all employees work in self-directed teams that set performance goals and make decisions related to assembling and testing advanced missile systems. Teams at Pike County Operations have contributed to 100 percent on-time delivery with zero customer rejects for the division.52
Yet the team approach has disadvantages as well. Employees may be enthusiastic about team participation, but they may also experience conflicts and dual loyalties. A cross-functional team may make different work demands on members than do their department managers, and members who participate in more than one team must resolve these conflicts. A large amount of time is devoted to meetings, thus increasing coordination time. Unless the organization truly needs teams to coordinate complex projects and adapt to the environment, it will lose produc- tion efficiency with them. Finally, the team approach may cause too much decentralization.