Skip to main content

The rising of Functional Managers

By
In recent years, the market globalization is fueling greater competition among corporates. Now large institutional shareholders are becoming a new source of external governance. 

In response to these massive shifts in the environment, the firms are spinning off their peripheral businesses, focusing on core areas and outsourcing selected activities. 

One of the recent transformations in the corporate world is the skyrocketing number of executive team.

According to a survey of some 300 Fortune 500 companies, the number of functional managers reporting directly to the CEO has doubled, from an average of 5 direct reports in 1986 to an average of 10 today. 

A power shift is occurring in modern businesses as the functional managers who report directly to the CEO – are taking greater control in business management. 

CEOs are eliminating layers in management ranks, broadening their spans of control, and changing pay structures by increasing incentives.  This has given a rise of Functional Managers in the organization.  This rise of functional  

Managers are working in favor of the organization as these executive team of chief officers are advising best decisions related to their function and involving the function in strategic decision making with the CEO– realizing synergies and improving overall organization efficiency. 

With de-layering of corporations and flattening of the corporate hierarchy, firms are moving decisions down the corporate ladder faster than ever by making it easier to respond directly to their customers.

This even helps the CEOs to focus more on the overall profitability of the organization, as they are under constant pressure from both, Investors and the Board for the development and execution of long-term strategies for the company.

Functional managers can keep informed and guide his team members on what is expected from management and the way to achieve the organization goal. Once the team has a better understanding of the goals and requirements, they can work together to achieve the goals by implementing the strategies. Functional managers can also help their team members in reaching their own career goals.

When the alignment of all such cross-functional team happens, it exponentially increases organizational alignment.  

Apart from firm diversification, another factor which has driven the C-suite change is an overall increase in IT investments. Cost effective and advanced information technology is creating opportunities for the rise of functional managers. With advances in information technology, one can manage the increased number of people since it makes easier to communicate with many people at the single point of time.

Now it's no more lonely at the top ….

Pankaj Minglani
Principal Consultant and Director


Comments

Post a Comment

Popular posts from this blog

HR Agility: Managing the Change!

By
Progressive organizations that are seeking a profound competitive edge in the digital world have been increasingly focusing on the need for HR agility. However, there is lurking concern that HR agility is endangered to become a trending buzzword in corporate conversations. HR agility is basically the ability of the HR function to react instantly and adequately to the evolving employee expectation, business conditions and workplace disturbances. Therefore, HRs are expected to elevate their functions to a level where they can keep pace with the evolving demand. Today’s business processes have a more stable environment. The objective is to drive efficiency, consistency and risk reduction through tight procedures and controls. It is with the emergence of global competition, changing customer demand, political turmoil, supplier upheavals and economic troughs that the stability is getting replaced with permanent volatility. Gone are the days when the pre-structured polici...
1 comment
Read more

How to get grip on workplace bullying?

By
Akeela having completed her executive MBA in marketing from a top b-school has recently joined a tech startup in Bangalore. During the interviews, she was trying to gauge the culture of the company however with limited time available in the office space and lack of inputs available on the internet about the startup company, she couldn't find much information and reviews. Shortly after joining, she realised that her boss, an ex-star rated employee of a big 4 firm, has been extremely loud and foul mouth. While Akeela was on the learning curve in the very first week of joining, she found her boss to have humiliated her in public twice for not knowing a few data analytics processes. This was an extremely unsettling feeling for Akeela. Soon she found from her colleagues that there has been a high drop out in the past because of the bad behaviour with the employees. And in the very first month of her joining, she started regretting her decision of joining a startup. In the pres...
Post a Comment
Read more

CASE STUDY INTERVIEW

By
The way the current salaries are shooting up, the job of hiring professionals has become a lot more challenging to acquire the best talent who can add real value to the organization. On the other side,  mis -hiring causes big damage to the organization.  Based on the recent study, the average cost of  mis -hire can be six times base salary for a sales rep, 15 times base salary for a manager, and as much as 27 times base salary for an executive.  In a study conducted by Dr. Bradford Smart, author of Top grading, the cost of  mis -hiring executives (average compensation: $114,000) was 24 times the person's base compensation For doing the assessment of the right talent, the interview is still the preliminary and powerful process.  To derive better inferences, the hiring professionals are constantly trying to make the interview process more effective.  In this rega...
Post a Comment
Read more