Peter Merholz's Levels of Product Design Altitude and Team Structure
Let's say you have a decent amount of employees in your company and you want to group them. Let's say the Product you are designing is an Online Buying Portal. There are three ways we can arrange the structure -
Centralized - A common design pool dealing with everything. Resource allocation would be a problem if you attempt to do this. After all, a designer doesn't have much work after the actual work starts, right?
Decentralized - Every individual entity has got it's own top-down structure. Because the designer is tagged to a Product Manager, he can be loaned when need arises. However, coordination becomes a problem in such a structure as design is decentralized.
User-Experience based - It's a sort of two dimensional structure but with overlapping responsibilities. In this case, it loosely follows a centralized structure but with the whole organization divided on the basis of user experience. This helps in a product manager having a bird eye view of everything what is relevant to him and what impacts the product lifecycle and experience.
There is no hard and fast rule as to which model to work over and if the choice is between a decentralized model and a user experience based model, always go for user experience based model.
Not exactly, but this loosely follows the standard Scaled Agile Model - the only tweak you need to make is that an ART should focus on a customer journey experience map and not the organizational structure.
The other aspect of the discussion is the amount of information which should be made available to a specific role. The higher management doesn't need the intricacies of the product design; they just need the big picture. For a Product Manager, it's something between the Big Picture and Strategy. For the Architects, Designers and Developers, it's the Structure and Surface. This kind of demarcation should be rigidly maintained for information flow. It's a different case altogether that a Product Manager can double up as a Department Head reporting to the CEO directly as well - it becomes his personal responsibility to balance out between both the sets of information he receives.
References
Org Design for Design Orgs by Peter Merholz, Kristin Skinner
Levels of Product Design Altitude - Robert Mayer