Why Microsoft’s reorganization is a bad idea | stratechery by Ben Thompson:
DuPont, the famous chemical company, was actually built on gunpowder. Founded in the early 1800s, DuPont was a small family concern until the early 1900s, when Pierre DuPont modernized and organized the company around functions: primarily sales and manufacturing. The structure served DuPont well, particularly in World War I, when in response to overwhelming demand DuPont vertically integrated its supply chain, and grew to become one of the largest companies in the world.
After the war, DuPont needed to diversify, and paint, which involved a similar compound to gunpowder, was the area they chose to focus on. Yet, despite the fact DuPont was perhaps the most professionally run corporation in America, losses soared. Eventually, a disconnect between sales and manufacturing was identified as the root cause, and the cure was a new organization around two separate gunpowder and paint divisions.
And thus, the divisional structure was borne. It returned DuPont to profitability, and remains the model for nearly every corporation of significant size, except, notably, for Apple.
And now, Microsoft.