Functional organizations are the mortar that holds the building blocks of a complex organization together. And they are often the source of capabilities that help businesses compete, to innovate, and to deliver complex solutions to customers.
The HR function builds talent pathways across businesses by managing common approaches to selecting people, creating alignment with the right reward systems, and by stewarding leadership talent as company-wide resources that can be readily moved across operating units and functions.
Finance integrates a divisional structure by driving common measurement systems, setting financial targets, and helping to assure capital moves to the right opportunities across the portfolio.
Corporate technology and supply chain organizations all play similar critical roles in connecting and leveraging the parts, even in a loosely-related portfolio of businesses, in order to ensure diverse enterprise assets are brought to bear in solving customer problems.
Today, the demands for companies to be innovative, efficient, and locally responsive all at the same time, make the integrative and capability-building roles that functions play all the more important.