Jeffrey W. Bennett, Thomas E. Pernsteiner, Paul F. Kocourek, and Steven B. Hedlund

Corporations of any significant size cannot make all the necessary transactional decisions “with one mind.” To provide manageable spans of control and to benefit from functional specialization, companies are forced to subdivide their organizations. Unfortunately, this subdivision fragments the information, decision rights, measures, and rewards that guide individual decisions. Rational individuals tend to strive for narrow optimums defined by functional or business-unit objectives, rather than by company-wide objectives. The result is often organizational silos and interdepartmental friction, driven by increasingly divergent views and objectives.