[notauser]

The problem is that people who say it's a "functional organization" problem are both correct and incorrect at the same time.

The kind of problems described certainly seem to have been exacerbated by the way they are structured. But all organization structures have their own problems, and the issues caused by (say) a project based organization* might have been even more detrimental to success.

The most professionally managed organizations I have worked for have generally been matrix orgs (sort of functional, with projects 'borrowing' resource for a year or two at a time) and that worked pretty well, but only because they burned a lot of time and money managing the process. In many cases it may be cheaper just to live with doing it imperfectly.

*Lack of product integration, break up of technical pool of talent, even bigger resource fights, duplication of effort, lack of communication, and zombie projects amongst other things.