Have you ever worked for a company that changed its structure, and you couldn't quite figure out why? Me too. Ages ago I was working for a consulting company that was organised by function. But then management at the company decided the firm really should be organised by industry and went about the process of reorganisation.
As you can imagine, the move was a pain, as most reorgs are. When employees would question the logic behind the move, management always had convincing arguments for why the move made sense. Employees eventually bought the logic and began grudgingly working with their new colleagues.
In part as a result of such moves, I used to think that unless you can come up with very sound reasons why an organisation needs to change its structure, there is no justification for dragging everyone through a reorg. But I've changed my mind. Dragging everyone through a reorg is exactly what you should do every now and then, even if it is unclear why.
I have not lost my mind. Let me explain: There is real value in re-organising. Typically in a company, once people become comfortable in their existing groups, they stop communicating and co-ordinating with others outside their department and fail to see others' perspectives. Over the years, employees will only identify with others in their units and their networks in the firm will be dominated by those people (because that is the people they interact with most). Gradually they will become insular and this can have a deleterious effect on a company's ability to innovate and identify new opportunities.
The trick to resolve this - or even avoid it, if you manage to do it pro-actively - is to simply swap your units around. Break up the old functional departments and put them all together in departments defined by product or function or geography or whatever you think makes sense. The employees won't like it, because they think these other folks are a bit weird. They will tell you they felt quite comfortable in their old functional departments - precisely the reason you should change them!
An added benefit: For some time after the reorganisation, they will still have their social networks, perspectives and knowledge of their old functional departments, while already working with the new structure. As a result, you can actually get a bit of the best of both worlds. And once they start to lose that, you can just reorg again.