Question

Discuss the difference between horizontal silos and vertical silos and the problems associated with information silos.

Answer 1

Functional silos are the categorization of operational units in an organization. There are basically two types of functional silos horizontal and vertical silos.

Horizontal silos are the classification of functional units of an organization in terms of accounting operations and human resource operation. It includes planning, organizing, staffing, directing, coordinating, reporting, and budgeting.

Vertical silos on the other hand classified the functional roles into a general categorization include strategic planning, management control, and operational unit.  

• Strategic planning unit: It is where the upper hand of the organization involves such as CEO’s and presidents that they are responsible for planning strategy
• Management control unit: They are the management responsible for the execution of the planning.
• Operational control unit: They are the operational staffs specialized and responsible for the day-to-day operations in the organization.

Information silos happen when different organizational departments were unable or choose not to exchange information within an organization. When information is not shared across different levels of functional units in an organization it may create problems.

• When the information flow is down across different departments in an organization, it leads to inaccurate information that leads to failed operations and duplication of operations that may increase the cost and effort, that affect the functional operation of an organization inadequately.
• When the functional units do not share information, it confuses the priorities made by the organization on different departments and it leads to wasted effort, time lost and often failing to achieve organizational goals.