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Functional Versus Unit Organizations

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Functional Versus Unit Organizations

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How you choose to organize your company matters – both for your employees and your products.

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Editorial Rating

8

Qualities

  • Analytical
  • Applicable
  • Well Structured

Recommendation

“Functional” or “unit” organization – which one is best for your business? In this detailed and pragmatic article, Steven Sinofsky, former president of Microsoft’s Windows division, tackles the myths and misconceptions surrounding structural reorganization endeavors. Using his time at Microsoft for exemplification, Sinofsky lays out the strengths and weaknesses of functional and unit organizational structures and lists basic insights about the challenge of reorganization. Although Sinofsky’s post would have benefited from a round of editing, getAbstract recommends this valuable article to managers pondering change.

Summary

The structure of a company not only affects its human talent, but also the products it creates. In theory, CEOs have a choice between a “functional” or “unit” organizational model. However, few companies exemplify either structure exclusively – and for good reason. For instance, even a company with a unit-based structure – which builds its teams around product lines – would probably have a global sales team led by a sales manager rather than a bunch of small teams.

The tendency to pit the unit and functional models against one another also means that, in times of...

About the Author

Steven Sinofsky is a board partner at Andreessen Horowitz and former president of Microsoft’s Windows division.

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