Value of organisational model based on capabilties not functions

Value of organisational model based on capabilties not functions: maximises potential and organisational coherence. bit.ly/XBq3w3

Extract from strategy+business – Paul Leinwand and Cesare Mainardi:

The prevailing functional model in most companies dates back to the 1850s. Some of the first private-sector functionaries were railroad telegraph operators who managed schedules. Soon after, food and tool companies created sales forces instead of depending on outside wholesalers as intermediaries. Then came finance departments, followed by in-house research and development labs, which took the place of R&D contractors—including the original labs of Thomas Edison and Alexander Graham Bell. By placing their specialists at headquarters, divided into corporate functional departments, large companies could make better use of their people’s expertise, give them career tracks, and harness the power of scale to build superior capabilities. During the decades that followed, as companies grew steadily, the “corporate staff” (as it was originally called) grew accordingly.

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