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Cross-functionality teams made up of employees from different departments which could lead to organisation success. It is also defined as the degree to which team members differ in terms of their functional backgrounds (Jackson, May, & Whitney, 1995; Milliken & Martins, 1996). Thus, cross functionality reflects the number of different functions such as marketing, manufacturing, R&D, etc that are represented within a team (Harrison & Klein, 2001). It is also called functional diversity.
A cross-functional team is a group of individuals with complementary skills, chosen to achieve a common goal and all team members are accountable for the team success (Katzenback and Smith, 1993). Members of cross-functional teams should be selected to provide sufficient diversity, complementary skills and balance. Teams that have these qualities will be more productive and creative thus enhance innovations. Right mix of people should include members with technical or functional expertise (e.g knowledge, experience), members with problem-solving and decision making skills (e.g developing opportunities, abilities to recognize problems, interpersonal skills and compatibility (e.g communications, intervention skills) (Institute of management accountant , 1994).
According to Parker (1994), vertical hierarchical organisation structures are being replaced by all kinds of organisations such as network, informal and horizontal structures. Right in the middle of them sit cross-functional teams of experts who ready to move flexibly and quickly to adapt to changing organisation requirements. Team members are made up of employees from different departments, who perform different functions and thus bring variety of skills and experience to a particular team. Some cross-functional team members never met each other before their first team meeting. In other words, team members were strangers at first. For example, the designer may never have talked with the marketer who sells the cars he designs. Diversity within cross-functional teams would create a whole new culture (Parker, 1994).
A team made up of members from similar department may work more easily but a cross-functional team is more to illustrate the saying “The whole is greater than the sum of its parts”. Since Year 1994, companies began to see that cross-functional teams can create competitive advantages especially if the particular business is in market that value speed and adaptability. Many survey results, conferences, books and observation also show that cross-functional team is getting important in today’s competitive and changing business environment (Parker, 1994).
However, building an effective cross-functionality team is not easy. For example, marketers may not understand those in finance and some people might be more loyal to their own departments than to the team (Parker, 1994).
Relationship between Cross-functionality and Innovation
Cross-functionality indicates diï¬€erences in regard to members’ knowledge bases and experiential backgrounds (informational diversity; Jehn, Northcraft, & Neale, 1999); which will increase a team’s range of potentially useful ideas (Milliken & Martins, 1996). Thus, cross-functionality facilitates the development of innovation in organisation. In order to transfer a technical solution into a marketable product, it is important that diï¬€erent organizational divisions (e.g., R&D, marketing, etc.) collaborate closely from the beginning. Different expertise and skills will ensure successful innovation. According to Steve Denning, having a cognitively diverse group of individuals who work together, self-organize are the best way to solve a complex problem and being innovative. In order to efficiently and effectively solve a problem, teams must have all the skills required to produce value and that different skills need to work together (Steve Denning, 2010).
Cross-functionality basically improves the quality of decision making as teams are better able to provide a thorough view of whole organisations. It also increase organisation flexibility as teams can be quickly assembled, deployed and disbanded. Other than that, it increase organisational productivity as teams usually committed to a common purpose thus they have clear goal. Improving the organisation flexibility, productivity and quality of decision making will definitely increase organisations’ level of innovations (Institute of management accountant , 1994).
Cross functional teams work as a unit which communicate frequently, provide mutual support, cooperate with each other when coordinating activities and fully utilize the skills and capabilities of the individual members (Institute of management accountant , 1994). Such criteria will foster team to react quickly from a broad perspective and to do in parallel the tasks that used to be done sequentially thus better able to innovate. They provide a manageable way to bring together diverse resources which will facilitate innovations. For example, a cross-functional team includes both marketing and R&D functions. Marketing function they provide market research report, and then the R&D members will develop new product ideas according to the market research. From all of the above, we can see that there is a positive relationship between cross-functionality and team innovations (Institute of management accountant , 1994).
However, there are some empirical analyses shows that there is a negative relationship between cross-functionality and team innovations. In other words, cross-functionality might enhance or hinder synergistic communication among team members, which in turn fosters or impedes team innovations. This is because cross functionality is also associated with diï¬€erences concerning deep-seated beliefs, values, and attitudes (Jackson et al., 1995) which are important with respect to the innovation process in organisations. It will have some cooperation barriers within the team (Reagans & Zuckerman, 2001) as diversity will increase conflict, reduce cohesion and different functions they have different goals. Other than that, people from different functional areas hold biases and stereotypes towards one another (Rajesh Sethi, 2001).
When numbers of functional areas involved increase, the variety of perspectives and ideas brought to the cross-functional team will also increase. This in turn increases the possibility of innovations. However, if the numbers of functional areas in a team go too large, the diversity of ideas will create information overload (Rajesh Sethi, 2001).
The challenges of forming a cross-functional team increased when the team is a global team in which team members are distributed around the globe. It is difficult to develop trust among global team members because team members rely heavily on technology to communicate and thus have fewer chances to interact face-to-face (Roxanne Zolin, 2002). It will hinder the development of team’s rapport and thrust (Kiesler and Cummings, 2002). When teams rely on technologies to interact, information flow between team members may be more difficult (Hollingshead, 1996), team members may not develop the same understanding of the information that is shared (Cramton, 2001). These will result in innovation constraint.
Rajesh Sethi, Daniel C.Smitj and C.Whan Park in their journal concluded that there is no relationship between cross-functionality and innovativeness although at first cross-functionality was expected to have an inverted U relationship with company innovation. The coefficients of the linear term (b= -.22, t= -.67, p< .30) are not significant. The hypothesis that innovativeness will be highest at moderate level of cross-functionality is not supported.