successful cross-functional integration – example from an engineering company

Project Paper

Spring term 2012

Successful cross-functional integration –

Example from an engineering company

Name: David Gädeke-‐Borek

Address: Hauptstraße 32, 65347 Hattenheim -‐ Eltville

Submitted to: Alina Stanczyk

Submission Date: 02.09.2012

Table of Contents

List of Abbreviations.................................................................................................................i

List of Figures and Tables........................................................................................................ii

1 Introduction...................................................................................................................1

1.1 Objevtive and Problem Definition.......................................................................1

1.2 Course of Investigation…………........................................................................1

2 Cross-Functional Integration (CFI)............................................................................2

2.1 Definition of CFI.................................................................................................2

2.2 Antecedents of CFI…………………………………..........................................3

2.3 How to achieve CFI……………….....................................................................5

2.4 Performance Effects of CFI…………………………………………………….6

3 Example from an Engineering Company....................................................................8

3.1 Company description – BBR - Verkehrstechnik GmbH…………….............8 3.2 CFI at BBR……………………………............................................................10

3.2.1 How BBR meets the Antecedents of CFI..............................................10

3.2.2 CFI achievement at BBR.......................................................................12

4 Conclusion....................................................................................................................13

5 Reference List..............................................................................................................15

6 Appendix......................................................................................................................17

Successful Cross-Functional Integration – Example from an Engineering Company

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List of Abbreviations

AG Aktiengesellschaft (Stock Corporation)

BBR Baudis Bergmann Rösch – Verkehrstechnik GmbH

CFI Cross-Functional Integration

EBIT Earnings Before Interest and Taxes

KVB Kölner Verkehrs Betriebe (Cologne Transportation Services)

LED Light-emitting diode

R&D Research & Development

TU Technische Universität (Univesity of Technology)


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List of Figures and Tables

Figure 1: Antecedents and Consequences of Cross-Functional Collaboration.......16


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1. Introduction

1.1. Objective and problem definition

With an increasing tendency to specializing tasks, employees barely think outside of

their area of responsibility. Kahn & Mentzer (1996) state that departments are thinking

in terms of transactions with other departments, viewing themselves as single entities.

These entities are competing for company resources and contact with other departments

is viewed as cost-incurring (p. 7). The status of competition between departments is

comparable to the competition between different companies. Even though our economic

system is built on competition, it is certainly not supportive within the organization.

Important knowledge will not be shared between the departments, preventing good

solutions from being found.

It is questionable if there is a better structure than the classical hierarchy consisting of

several departments. The aim of this paper is to take a close look on Cross-functional

integration, in order to see how it can be achieved and if it has positive effects on an

organizations performance. Also a real life example from my internship at a medium

sized engineering company will be included to see how they use CFI in their processes

and if and to what extend the academic theory is practically relevant.

1.2. Course of investigation

In the first part of the paper I will analyze CFI, while in the second part I will compare

the findings to the experiences I made during my internship at BBR. In the first

subchapter of the first part I will provide a definition of CFI, giving the reader a broad

overview of what the literature states what CFI is. Afterwards the antecedents of CFI

will be analyzed to see what foundation an organization needs before it can implement

it. In the third subchapter I will take a close look on how to achieve CFI by

distinguishing between achieving it externally and internally. Finally the paper focuses

on the performance effects of CFI, meaning what CFI actually achieves and if the

organization can profit from it.


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The first subchapter of the second part provides a company description of BBR in order

for the reader to get an idea of what company the paper uses as an example. The second

subchapter, which itself is divided into two parts, deals with CFI at BBR. First if and

how BBR meets the antecedents for CFI and second how they achieve CFI. In order to

do so I will use examples from the observations I made and conversations I had in the

two months of my internship.

2. Cross-functional Integration

2.1. Defining CFI

Folett (1948/1987) saw that there are three different ways to eliminate problems within

an organization that are domination, compromise and integration. She continues by

stating that the first two options are unsatisfactory since with domination only one side

gets what it wants and with compromise both sides do not get what they want (pp. 65-

66). “There is a way beginning now to be recognised [sic!] at least and sometimes

followed, the way of integration . . . . Integration involves invention, the finding of the

third way, and the clever thing is to recognise [sic!] this and not to let one's thinking

stay within the boundaries of two alternatives which are mutually exclusive. In other

words, never let yourself be bullied by an either-or situation. Never think you must

agree to either this or that. Find a third way. “ (Folett, 1948/1987, p. 66). In the context

of cross-functional integration crossing departmental borders leads to finding the third

way that is satisfactory for everyone and eventually leads to the best solution.

“The need for cross-functional cooperation stems from the complex interdependencies

among members of functional groups working together on project teams.“ According to

the authors cross-functional collaboration describes the same idea as CFI (Pinto, Pinto,

and Prescott, 1993, p. 1286). Joshi (1998) defined cross-functional integration as an

establishment of processes that facilitate the coordination of the activities of different

functions to ensure that these work together to achieve the overall goal of an

organization (p. 22). Pinto et al. (1993) use a similar definition stating that CFI is the

degree and extend to which interpersonal relationships between project team members

from different functional areas exist (p. 1286).


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According to Turkulainen & Ketokivi (2012) the organization works as a unit when the

achieved integration is high and able to transfer, process, interpret and exploit

information across functional sub-units. But this does not imply that the sub-units

merged into one entity, but instead the organization enjoys the benefits of the functional

diversity while it is integrated (p.450). Taking the same point of view Galbraith (1977),

according to Turkulainen & Ketokivi (2012), states that with high integration the

organization achieves efficient transfer of information across functions and the ability to

exploit that information (p. 450). Joshi (1998) explains further that integration is

necessary across organizations in order to create a highly responsive and less costly

supply chain (p. 22).

2.2. Antecedents of CFI

The organization needs to have several antecedents in order to achieve CFI. A rough

overview about the necessary antecedents according to Pinto et al. (1993) for the

implementation of CFI and the consequences is given by figure 1. The figure includes

the antecedents and consequences of Cross-functional Cooperation.

One of the antecedents for CFI is the existence of superordinate or congruent goals.

Hunger & Stern (1976) state that the implementation of superordinate goals leads to

conflicting groups reconceptualizing the situation. This leads to the conflicting parties

reducing their conflict-oriented behavior (p. 591). Pinto et al. (1993) describe how

according to the theory different departments should follow complementary goals

derived from one organization-wide goal. In practice this theory often fails, since

organization-wide goals are separated into specific functional goals that are conflicting

with one another. This conflict leads to the effect that one team has to sacrifice or at

least compromise in order for another team to reach its goal (p. 1284). According to

Hirunyawipada, Beyerlein and Blankson (2010) goal congruence supports

communication in a CFI team and helps team members to focus on team specific

interaction, coordination and collaboration (p. 653). The theory of Sherif (1962) is

according to Pinto et al. (1993) in favor of Hirunyawipada et al. (2010) and says that

superordinate goals increase intergroup cooperation, which improves group output (p.

1284).


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The second antecedent according to Pinto et al. (1993) are rules and procedures,

meaning the degree to what extend activities or tasks on the project team were

mandated or controlled (p. 1284). A similar approach is taken by Hirunyawipada (2010)

et al. who claim that task cohesion is necessary in order for individuals to pursue their

assignment effectively (p. 653). Galbraith & Nathanson (1978), according to Pinto et al.

(1993) claim that rules and procedures are of high importance for CFI because they are

mechanisms for integrating and coordinating especially those activities that go beyond

divisional or departmental boundaries. They go further by stating that interdepartmental

coordination is supported by the implementation of rules and procedures (pp. 1284-

1285). McCann & Galbraith (1981), according to Pinto et al. (1993) state more

specifically that rules and procedures are commonly used to assign duties, evaluate

performance and minimize the occurrence of conflicts between departments (p. 1284).

According to Pinto et al. (1993) the effectiveness of rules and procedures among the

functional areas decreases as the complexity of an organization increases (p. 1285).

The third antecedent according to Pinto et al. (1993) is physical proximity, meaning the

organizations physical entities like office buildings (p. 1285). Communication within

organizations is significantly influenced by the characteristics of buildings, the structure

of the offices and by the location of the different departments. An example would be

that placing two departments that need to work closely together e.g. Bookkeeping and

Controlling next to one another would support the two departments in working together.

In a study conducted by Pinto et al. (1993) “Project managers from three engineering

firms commented that their organizations would often incur great expense to relocate all

individuals involved in a particular project to the same office floor. Their contention

was that when individuals work near each other they are more likely to communicate

and cooperate with each other.” (p. 1286).

The final antecedent according to Pinto et al. (1993) is the accessibility, which

determines the frequency of dialogues between the parties. In this context M. Pinto et al.

(1993) emphasize accessibility as the ability to interact and contact other organizational

members. The three main factors influencing the accessibility of an organizational

member are a members schedule, position and out-of-office comments (p. 1286). In my

opinion accessibility through mobile devices like smartphones should be added, since it

is becoming more and more important in the communication within organizations. Also


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accessibility in the form of attendance at regular meetings should be added, since

different individuals even in different positions would have to communicate with each

other. For example, consider the controlling being physically placed next to the R&D

department of the organization. Even though they are placed nearby one another

communication can lack because of different work schedules, different goals and

performance measurements and fear of contact of each department.

2.3. How to achieve CFI

When the antecedents of CFI exist within an organization, CFI is still not achieved,

even though the requirements for the implementation are met. Droge, Jayaram and

Vickery (2004) distinguish between achieving CFI externally and internally (p. 558).

With external integration they mean the relationship between a firm and its suppliers

and customers in order to support product development, while internal integration is

about coordinating the design drawings and the manufacturing (Droge et al., 2004, pp.

558-560). Ettlie & Reza (1992) have a similar opinion when it comes to successful

process innovation, stating that simultaneous external and internal integration are

needed (p. 801). According to Kahn and Mentzer (1996) integration can be achieved

when collaboration and continuous relationships between departments are stressed with

an emphasis on a shared vision, collective goals, joint rewards and an informational

structure to manage the communication. The approach of shared goals will also lead to

the reduction of penalties when dealing with other departments and therefore will lead

to a work atmosphere of cooperation instead of competition (p. 8). In my opinion this

way of achieving integration works for both external and internal integration.

According to Ettlie & Reza (1992), Von Hippel (1988) claimed that external or market-

directed integration with customers and suppliers is a great source of new ideas (p. 802).

Especially the information from suppliers about materials, pricing and process

capability is of high value for the organization (Kofteros, Vonderembse and Jayaram,

2005, p. 105). Koufteros et al. (2005) state that suppliers should be seen as strategic

collaborators with open communication and mutual trust (p. 103). Implementing a new

processing technology with the suppliers of raw materials and components is a key

mechanism (Ettlie & Reza, 1992, p. 803). According to Koufteros et al. (2005)


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customers like to help with product development and appreciate when their suggestions

are used in the design of new products. Customers are integrated when their desires are

determined and internal activities are changed in a direction to meet these requirements.

With customer integration the organization makes sure that the product or services it is

providing are what the customers are demanding (pp. 101-102).

There are two mechanisms for internal or organizational integration (Ettlie & Reza,

1992, pp. 802-804). The first one as believed by Ettlie & Reza (1992) is that R&D and

design need to be integrated in order to achieve technical and economic success.

Koufteros et al. (2005) emphasize the importance of concurrent engineering for internal

integration. Concurrent engineering means that product design, process design and

manufacturing activities are planned simultaneously (pp. 100-101). This simultaneous

planning requires communication and knowledge sharing between the departments.

Hirunyawipada et al. (2010) takes the approach that CFI is achieved by integrating

knowledge and therefore describes it as a knowledge transformation tool (pp. 650-651).

Kahn & Mentzer (1996) also mention that integration is reached through information

sharing of the departments (pp. 8-9). According to Nonaka (1994) socialization is

essential in the transformation of individual into collective knowledge (p. 19). The

second mechanism according to Ettlie & Reza (1992) is a structured change in hierarchy

with it operating as a coordinating device for relationships among individuals. Also

important in this step is to increase the power sharing between hierarchical levels and

coordinated decentralization (pp. 802-803).

2.4. Performance effects of CFI

When CFI is achieved the question arises what performance effects CFI has, if CFI

effects are generally positive and if CFI has a significant impact on performance.

As examined in the previous chapter, external performance can be affected through

customers and suppliers. A close integration of manufacturers and suppliers leads to a

unity of effort to meet customer requirements and to quick respondence to changes in

the marketplace (Koufteros et al., 2005, p. 104). Also according to Koufteros et al.

(2005) the supplier integration can have a significant impact on quality, performance,


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features, pricing and timing (p. 105). Customer integration on the other hand according

to Koufteros et al. (2005) increases an organizations product innovation and quality

since it leads to the availability of firsthand customer information. With the integration

of the customer in the product development process the organization gets to know what

new products and features the customer would desire (p. 103). Turkulainen & Ketovici

(2012) have a similar belief by stating that market needs can be integrated early in order

to prevent expensive adjustments to products and processes, leading to a positive impact

on manufacturing cost efficiency (p. 453). In my opinion it is most likely that external

integration has a positive effect on an organizations overall performance.

Koufteros et al. (2005) claim that internal integration leads to all integrated employees

having an influence on the decisions until they are finalized. This leads to an increase in

commitment and the clarification of product requirements at an early stage, saving

money and time (p. 101). According to Turkulainen & Ketovici (2012) conformance

quality, which is the extend to which a product meets its design specifications, is

positively affected by integration of product development and manufacturing. When

manufacturing cannot meet the product design specifications, deficiencies will occur

which can be avoided by integration. Manufacturing costs will also decrease with

integration between product development, operations and marketing/sales considering

that manufacturing costs are mainly determined during the product development phase.

They also make clear that achieved integration of operations and marketing/sales has

beneficial effects on volume and design flexibility, since manufacturing gets better

information about the demand in volume an variety (p. 453). Turkulainen & Ketovici

(2012) state that integration between operations and R&D leads to shorter lead times.

When operations are involved early in the product development process, the

manufacturing process speeds up. This happens since steps are eliminated and delays

are prevented. Most importantly integration has a positive effect on product

innovativeness. Due to the early involvement of operations and marketing in product

development, creativity is supported and essential market information is used (p. 454).

“Therefore, we hypothesize the link from achieved integration to product

innovativeness.” (Turkulainen & Ketovici, 2012, p. 454).

In order to do internal CFI, socialization plays a major role. By establishing a CFI team,

members from different functions are enabled to become part of a larger social group


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that increases the probability of them to share feelings, perceptions and collaborative

experiences with the help of physical proximity, leading to the process of knowledge

sharing (Hirunyawipada et al., 2010, p. 652). But Hirunyawipada et al. (2010)

emphasize that socialization can also have negative effects since interpersonal cohesion

leads to members desiring to reach consensus and returning each other favors (p. 653).

We can conclude that internal CFI has mostly beneficial effects on the performance due

to information sharing. The, for CFI necessary, socialization can have negative effects

due to the development of personal relationships. All in all CFI is beneficial for quality,

manufacturing costs, flexibility, pricing, lead times and innovativeness.

3. Example from an engineering company

3.1. Company description – BBR-Verkehrstechnik

BBR is a medium-sized engineering company based in Braunschweig, Germany.

Founded in 1990 by today’s managing directors Arne Baudis, Thomas Bergmann and

Frank-Michael Roesch. The founders and management directors of BBR all did their

mechanical engineering studies at the TU Braunschweig, after which they directly

started their business. BBR focuses on developing and manufacturing electronic

systems in the field of traffic engineering. In the past 22 years, since BBR is in

business, the company grew to a medium sized business with more than 150 employees

and three premises built in 1992, 1998 and 2006. The company is still owned by the

three founders in equal parts. In 2011 the company had an EBIT of app. 15 million

Euros and profits of app. 1.5 million Euros.

The company started with the development of bespoke passenger information systems

(MOFIS), with the KVB being the first customer. Today MOFIS, which mainly consists

of LED screens with the arriving information of the busses and streetcars, became one

of the most popular products offered by BBR. BBR started MOFIS by having sensors in

the railways, which recognize the streetcar or train and calculate when it will arrive at

the next stations in order to give precise information.


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In 1991 BBR already started to enter their main area, which is signaling and point

controller systems. These systems for example are used at depots in order to get the

trains to the desired position or in industrial railroads of companies. Today customers of

this product are mainly government authorities and large companies with their own

industry railroad. BBR also offers security systems which for example slowdown the

trains if they drive faster than the maximum speed. With their whole product portfolio

BBR and their partners are able to offer most of the technology and assembly needed to

build the technology for the railway lines.

The main departments of the company are project operations, sales, hardware and

software development and financials. The departments are distributed under the

managing directors and each department has its own director. Due to the placement of

all the employees in the same premises the distances are short and the hierarchies flat.

What differentiates BBR from its main competitors is the ability to offer customized

solutions, since the hardware and software development is kept in-house. This also

allows them to be flexible and take prompt customized orders. Considering the whole

product portfolio BBR has very few competitors, which mainly consist of large stock-

listed companies like Siemens AG. Being an innovative company, BBR’s portfolio

includes several patents and samples. Due to the high safety standards and the

complexity of the systems the entry barrier is hard to overcome for potential

competitors.

Today 41% of BBR’s revenues come from abroad with an increasing tendency. In

recent years BBR had large orders in Manchester, England, and Bergen, Norway, but

also outside of Europe in Bursa, Turkey and Manila, Philippines, which made BBR an

internationally relevant railway technology company. In 2010 BBR founded its first

subsidiary company BBR-TS (Transportation Systems) in Hong Kong, which in the

future will operate in the Asian market for BBR.


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3.2. CFI at BBR

In this chapter I will first give a little introduction about CFI at BBR, then I will explain

if and how BBR meets the antecedents of CFI, then if and how CFI is achieved and at

the end how BBR profits from implementing CFI.

Cross-functional integration plays a key role in the daily working life at BBR. Since the

company is rather small compared to its competitors, the hierarchies are flat and the

departments work closely together. Many tasks are not clearly done by one single

department and it can even happen that an employee from one department completely

switches to another department. From my observations I learned that the main part of

the spirit at BBR comes from cross-functional integration. For example during lunch in

the company-owned cafeteria employees from different departments get the chance to

hear with what problems other departments are concerned with, which leads to the

lunch break actually being effective working time. The managing directors usually join

the employees for lunch to be up-to-date on the current problems in the different

departments.

During my eight-week internship in June and July I gained an inside look into BBR. In

the first half of the internship I worked in the financial department, mostly in

controlling but also some days in bookkeeping. In the second half of the internship I

moved to work in the sales department. The good thing about working in controlling

first was that it was the perfect department to get to know the company and what each

department does, since you gain an insight into the numbers of all departments. So

when I worked in the sales department I already knew a lot about the project

calculations and how the projects are done.

3.2.1. How BBR meets the antecedents

BBR fulfills the first antecedent, superordinate goals limitedly. The completition of

orders with a profit could be seen as the superordinate goal for all departments, even

though some orders are taken strategically even when BBR already knows that a loss

from that order will occur. From my observations the organization-wide goal is not


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clear and departments rather follow their own complementary goals then an

organization-wide goal. The sales department for example has the goal of winning

public invitations to tender. They calculate what the order will approximately cost,

which bares conflict potential, since the project leaders sometimes are not satisfied with

the calculations. Overall I would say that there are superordinate goals for the

departments but they could be communicated more clearly.

The second antecedent, rules and procedures, is fulfilled by BBR. Each department has

its clear tasks and experienced procedures. For example after a mandate is won by the

sales department of BBR a project leader, who is in charge of realizing the project, takes

over. He is now overseeing the project until it is completed. The project leader is also

the one who is giving the tasks to the hardware and software development. The

controlling can evaluate the performance of the different departments due to the clearly

defined tasks of each department. With BBR being a medium-sized and not too

complex organization the effectiveness of rules and procedures, described by M. Pinto

et al. (1993), is still high (p. 1285).

The third antecedent, physical proximity, is definitely met by BBR. The companies’

premises include three buildings that are all connected by passages. The ways between

the departments are all short and departments that work closely together like hardware

and software development or controlling and bookkeeping are placed closely together.

BBR also provides many conference rooms, which can be booked by the employees, in

order to support communication. During my internship a new brainstorming room was

opened for the employees. The idea is that the room, which includes a black- and a

whiteboard, can be booked for a maximum of thirty minutes by employees in order to

talk and get ideas.

The final antecedent the accessibility, meaning the frequency of dialogues between

parties, is completely fulfilled by BBR. The company is equipped with a system that

allows every employee to see which employees are currently in office in order to see if

they can contact them. From my observations I noticed that whenever an employee has

a small problem or question he immediately gets the answer he needs from his

colleagues and whenever the problem is bigger a meeting can be arranged really quick.

The managing directors, even though they have a tight schedule, can also easily be


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contacted. There are also meetings on a regular basis between parties of different

departments. For example once a month each project leader had a meeting with the

financial director and the controlling department in order to talk about the financial

development of the project. They compare the calculated costs of the sales department

with the real costs and take a look if the deadlines can be met or the finalization date

needs to be moved back.

All in all BBR is meeting the antecedents to implement CFI. Only the formulation of

superordinate goals could be improved in order to make clear where the organization is

moving and what they want to achieve in the long run.

3.2.2. CFI achievement at BBR

For BBR to fully achieve CFI they need to integrate externally, meaning their suppliers

and customers, and the different departments internally. In order to achieve external

integration BBR is working closely with their very few suppliers. BBR rarely has

problems of running out of stocks, since most of their orders are long before planned

projects. Only in very few cases BBR just delivers their product, since mostly they also

install their technology at the location where the customer wants to have it. Since the

components are really expensive the purchasing department orders them specifically for

the projects and their suppliers always deliver on time to make sure that there are no

project finalization delays. BBR has long lasting relationships with most their suppliers,

which leads to mutual trust and a good quality of their products. During my internship

BBR was in the development of a new shunting switch, which was relatively cheap and

easy to handle. In order to get the materials for it the manufacturing department also had

to work with the suppliers to see which materials they need to use for the new product.

The idea for the new shunting switch was developed through customer integration. A

customer with a very small depot asked if there could not be a cheaper solution for the

shunting switches he needed, since he did not really need all the technology that is

usually installed. The head of manufacturing came up with a really simple solution of

building a shunting switch that needs to be operated by hand, like they were decades

ago. The product was easy to develop, has a high margin and will be a cheap alternative


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for customers with small depots. With integrating their customers BBR met their

requirements and both parties profit from this kind of integration.

Special about BBR is that they do not have an R&D department. Usually new

developments arise from the need to meet customer requirements, like the example I

explained previously. Or sometimes one department comes up with a new idea and then

needs to work with the other departments in order to develop a concrete new product.

Due to the fact that there is no R&D department the product design, process design and

manufacturing are integrated automatically, since these departments themselves develop

the products. In order to keep the communication frequency high, employees from the

involved departments, which usually are manufacturing, project management, software

development, hardware development and sales, meet on a regular basis to discuss the

development of the product and to talk about problems that occur. During my internship

I had to do the calculation for the sales department of the new shunting switch and come

up with a final price that BBR would charge its customers. In order to do so I attended

the meetings and I worked closely with the manufacturing department, since they could

give me the prices of the materials they used. But also the other departments were

involved, because a main cost component are the hours the different departments are

working on each shunting switch.

4. Conclusion

In this paper I explained what CFI is, what companies need in order to implement it,

how to achieve it and the performance effects CFI has. In order to have a real life

example I used the information out of my internship at a medium sized engineering

company and explained to what extend they use CFI. All in all one can say that CFI has

positive effects for organizations. In order to implement CFI the organization first has to

meet a few antecedents. The smaller the company is the easier it is to fulfill them. BBR

meets nearly all antecedents perfectly and therefore is a good candidate for

implementing CFI, even though they can still improve their goal congruence.

External CFI gives companies the opportunity to profit from the integration of their

suppliers and customers. Supplier integration can lead to a reduction of costs, increased


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quality and higher flexibility through timing. Customer integration has the effect of

knowing what the customer requires, so the company can meet the demand with their

products. With integrating their suppliers, BBR makes sure to have small stocks in

order to reduce costs and due to long lasting relationships with their suppliers BBR

could improve their product quality over the years. Sometimes customers request

products or solutions that are not included in the BBR portfolio. This leads to BBR

developing new products in order to meet the customer requirements. BBR achieves

both external and internal integration and therefore is strong at external integration.

Internal integration leads to the reduction of costs, saving of time, volume and design

flexibility, shorter lead times and product innovativeness by integrating several

departments. One of the most obvious internal integrations is the one of R&D and

manufacturing, since R&D needs to know if the product they develop can be

manufactured and the manufacturing can give them ideas on how to change products in

order for them to be manufactured more easily and less costly. BBR achieves internal

integration on the one hand because they are really small with departmental boarders

sometimes not being clearly drawn and on the other hand with actively supporting the

departments in working together by scheduling regular meetings with employees from

many departments and placing the whole organization in one premises in order to

support the accessibility of the employees.

Medium sized companies like BBR often have the advantage that they are more

flexible, since because of their size they are pushed into using CFI. Larger corporations

on the other side have more difficulties in doing CFI, since the departmental borders are

more clearly and often departments are at different premises. In my opinion large

corporations could orientate themselves at smaller corporations on how achieve CFI.

There is no doubt that CFI has a positive impact on organizations. In the future

researchers could focus on how to measure the success of CFI in order to give it a

broader basis and to see how much of an impact CFI really has. More advice for

organizations on how to achieve CFI would be helpful for real life in order to

implement CFI. Also researchers could emphasize the difference between CFI at small

and larger companies and analyze why it is easier to cross-functionally integrate at

smaller compared to larger companies.


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5 Reference List

Droge, C., Jayaram, J., & Vickery, S. K. (2004). The effects of internal versus external

integration practices on time-based performance and overall firm performance. Journal

of Operations Management, 22, 557-573.

Ettlie, J. E., & Reza, E. M. (1992). Organizational Integration and process innovation.

Academy of Management Journal, 35, 795-827.

Folett, M. P. (1987). Freedom and coordination: lectures in business organization. New

York: Management Publications Trust Limited (Original work published 1948).

Galbraith, J. R. (1977). Organization Design. Addison-Wesley Publishing Company.

quoted according to: Turkulainen V., & Ketokivi M. (2012). Cross-functional

integration and performance: what are the real benefits?. International Journal of

Operations & Production Management, 32, 447-467.

Galbraith, J.R., & Nathanson, D. A. (1978). Strategy implementation: The role of

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6 Appendix

Figure 1: Antecedents and Consequences of Cross-functional Cooperation: Pinto, Pinto

and Presscot, 1993, p. 1283

successful cross-functional integration – example from an engineering company

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