Design Organisation

Operating models


The functionally-based operating model separates specialties such as marketing, product delivery and finance into divisions.

It operates well in a stable environment and is generally accompanied by centralised decision-making.

Functionally Based


  • Encourages consistent standards and functional loyalty
  • Complements centralised control
  • Expedites vertical information flow
  • Creates efficiencies through economies of scale
  • Simplifies due to the clarity of roles and relationships


  • Responds slowly
  • Lacks flexibility and common problem
  • solving/goal focus
  • Limits horizontal information flow
  • Limits expertise made available to customers
  • Suffers from coordination and control problems
  • Tends to produce bottlenecks in business flows

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