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Home » Transversal Management and Finance Functions in Business

Transversal Management and Finance Functions in Business

By Richard Daniels Reading Time: 3 mins
Updated February 11, 2018

The growth of companies, the internationalization, the specialization of functions, and the development of matrix organizations explain the development of transversal management. How are financial functions affected?

In what way does Transversal Management concern the Finance Function?

The cross manager manages a permanent activity or a process and not a team. It requires the contribution of actors often spread over different sites or in different subsidiaries over which it has no hierarchical power.

The financial function is primarily concerned by this type of management because part of the financial teams is frequently spread over different geographical sites or subsidiaries. These actors are generally hierarchically dependent on a local manager and are functionally attached to the finance department.

Examples:

  • The CFO coordinates subsidiary financial controllers who report directly to the management of each subsidiary;
  • The credit manager coordinates a team of recovery managers or credit managers spread over different sites;
  • The group treasurer coordinates a network of cash correspondents in a subsidiary for whom this task is sometimes only part of their missions;
  • The person in charge of management control coordinates the controllers close to the operational managers;
  • Transversal management is therefore characterized by a triangular relationship between the contributor, his line manager and the cross-functional manager.

An agreement must be found between the three to define the nature of the expected contribution, the objectives, the time spent, the means made available. The transversal manager makes sure not to bypass the line manager, even if he has direct contact with the actors.

The transversal manager’s challenge is to coordinate locally dispersed contributors to achieve their own overall goals.

Among the Financial Functions, two cases escape this mode of Operation:

  • The accounting function is less concerned by this type of management because the teams are most often centralized at headquarters or in a shared services center.
  • When the financial managers of a subsidiary report hierarchically to the financial management of the group to preserve their independence vis-à-vis the local manager. In this case, we are not in a situation of transversal management but of remote management.

What is the role of the Transversal Manager vis-à-vis Contributors?

The transversal manager provides the actors with resources to accomplish their mission:

  • It harmonizes policies, tools, methods;
  • It capitalizes on the best practices of each actor codified in procedure or guide of good practices;
  • It provides assistance and technical expertise, which it provides to stakeholders, particularly to handle the most difficult cases. A delegation mechanism sometimes makes its intervention mandatory in certain situations. For example, only the credit manager group has the power to sign credit limits from a certain threshold.

What are the levers of influence to Fulfill its role?

To coordinate the actors without having the hierarchical power of reward / sanction, the transversal manager develops its influence. It is not manipulative because the transversal manager clearly explains his objectives and has a positive attitude towards the actors.

The first lever of influence is related to the position of the transverse manager. In the finance function, he most often finds his legitimacy in his technical expertise. Its previous successes reinforce this legitimacy. It also relies on the line manager who will validate the goals of the actor and his own management.

The second lever of influence of the transversal manager is linked to his personal capacity to convince, train, and make join the actors to the objectives related to his activity to put them in action.

The third lever of influence relates to the strategic nature of the activity for the company.

A real Role of Management

The transversal manager coordinates actors of the activity:

  • It determines the objectives of each actor in relation to their hierarchical manager;
  • It contributes to their evaluation by the line manager by providing his or her own assessment, participating or not in the evaluation interviews;
  • It is concerned with raising their level of competence by organizing training sessions or taking informal contact with them;
  • He has the newcomers trained by a confirmed peer;
  • It facilitates exchanges between the different actors by organizing, for example, cross-audits, working groups, seminars;
  • It develops the emulation between them by creating for example a dashboard comparing the performance of the different actors;
  • It values ​​the activity with its actors and the entire company by exposing the contribution of the activity to the overall performance of the company,
  • It strives to create a sense of belonging to the function,
  • He cares about the evolution of the various actors by suggesting with the agreement of the hierarchical manager a promotion, a change of horizontal function
Author at Business Study Notes
Richard DanielsAuthor at Business Study Notes

Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
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