How does a functional view differ from a process view of a firm?

Question

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The Answer is A functional view and a process view are two different perspectives through which a firm can be analyzed and understood. Each view provides a distinct way of looking at how a firm operates and organizes its activities to achieve its objectives. Here's how they differ:

Functional View:
- The functional view breaks down the firm into its constituent parts based on specialized activities or functions such as marketing, finance, human resources, operations, and research and development.
- Each function is typically managed by a separate department with its own set of objectives, resources, and management.
- This view emphasizes the expertise and efficiency within each specialized area, as functions are often staffed by experts in that particular field.
- The functional view is often associated with a hierarchical organizational structure, where decision-making follows a top-down approach.
- It can lead to silos within an organization, where functions operate independently of one another, which can sometimes result in a lack of coordination and communication across the firm.
- Performance is usually measured within each function, which may not always align with the overall goals of the firm.

Process View:
- The process view, on the other hand, looks at the firm as a collection of processes that cut across traditional functional boundaries.
- A process is a sequence of activities that together create value for the customer, such as order fulfillment, product development, or customer service.
- This view emphasizes the flow of activities and information across the organization, focusing on how different functions interact and contribute to the completion of these processes.
- The process view encourages a more holistic approach to management, where the performance of the firm is measured by the effectiveness and efficiency of its processes.
- It often leads to a flatter organizational structure, where cross-functional teams work together to manage and improve processes.
- The process view aims to optimize the end-to-end processes to enhance customer satisfaction and achieve strategic objectives, rather than optimizing individual functions.

In summary, the functional view is more about the specialization and optimization of individual business areas, while the process view is about understanding and improving the flow of activities that deliver value to customers. Firms often need to balance both views to operate effectively, ensuring that specialized functions are well-managed while also maintaining a strong focus on the processes that integrate these functions to meet customer needs and achieve business goals.

How Does a Functional View Differ from a Process View