Sep
27
Written by:
adayal
9/27/2011 8:47 PM
Vertical Management
Almost all Businesses are structured functionally in the shape of a pyramid. Managers sit in various boxes inside functional structure and manage the function/subfunction assigned to them . All their managerial work is circumcised by the function /subfunction they hold right from data collection to analysis to goal- setting to planning , communicating ........... to review to corrective action . All these activities are cascaded downwards / rolled upwards and interactions are vertical top down/bottom up . It is therefore also called Vertical management
Except top level ( also called business level), for all subsequent levels all the managerial work is sliced functionally . Since a company has usually 10 to 20 functions and about 50 to 60 subfunctions , it can also be inferred that more than 90 % managing is vertical in businesses
Horizontal Management
With the rising supremacy of the customer, it has become imperative to look at the business horizontally on how the value builds up and is delivered to the customer. This has lead to development of horizontal models for managing business based on the fundamental that a business is a series of processes that blend to create value for the customer. The process pressures have led to intense focus on a battery of new parameters to win the customer like turnaround time, reliability, consistency, Just in time, zero error, zero defect, zero slip, responsiveness, defect free documents, OTIF etc.
Consequently managing businesses besides vertical management now has component called horizontal management. In horizontal management the focus is on business processes cutting across functions.
Managing a process also consists of 10-15 primary activities like : collect data , observe ,analyse , set objectives , define targets , communicate , lead , motivate , coordinate , feedback , report , get into cause , action etc.
Additional high value activities are involved while designing or modifying a process like discover , complex analysis , envision , design , strategise , innovate. These are carried out by seniors /crtical position holders
Ratio of vertical management to horizontal management
The more the competitive pressures, the greater the need to look for winning the customer based on value rather than product(product has become a commodity). The more is the need to identify horizontal parameters and manage them. Currently the ratio of vertical to horizontal management in India is 97:3
To gain edge over competitors, companies should strive to move towards a ration of 80:20 and then to 50:50 in the long term.