What is one issue when organizing around hierarchical functions?

Question

Options

• AIt creates a dual operating system
• BIt is not how value flows
• CIt moves the decision to where the information is
• DIt creates leaders at all levels

• A
  5% (1)
• B
  86% (19)
• D
  9% (2)

Explanation

Organizing around hierarchical functions creates silos that cut across the natural flow of value - which travels horizontally, from concept to delivery to customer. When a company structures itself vertically by department (finance, engineering, marketing), work must hand off repeatedly between these silos, creating bottlenecks and delays precisely where customers need speed and coherence. Value delivery requires cross-functional collaboration, and hierarchy actively obstructs it.

Why the distractors are wrong:

• A - A dual operating system is associated with Kotter's change model, where a network layer runs alongside the hierarchy; it's not an inherent consequence of functional organization.
• C - Moving decisions to where the information is is actually a goal of good design (decentralized authority), not a problem caused by hierarchy.
• D - Developing leaders at all levels is a desired outcome in agile and lean organizations, not a drawback of hierarchical structures.

Memory tip: Picture value flowing like a river - sideways, toward the customer. Hierarchical functions are dams built perpendicular to that current. The issue isn't the levels; it's that the structure runs against the flow.

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