Complexity: It had better be worth it!

A response to the StackExchange question: What is the Optimal Organizational Structure for IT?

Conway's Law states:

"..organizations which design systems ... are constrained to produce designs which are copies of the communication structures of these organizations"

The corollary of this is that the best organizational structure is the same as the best software architecture.
Not knowing the specifics of your business, I am basing the following on some sweeping generalizations:

Experience indicates that software development is both expensive and risky; and that this risk and expense can only (even with strenuous effort) be reduced to a very limited extent.

Since cost & the level of risk is (approximately) fixed, you need to increase returns to achieve an acceptable reward:risk ratio.

The first obvious consequence of this is that organisations should focus on projects with a big pay-off. This is not always achievable, as the opportunities might not exist in the marketplace. The second obvious consequence of this is that development costs should be amortized as much as possible. For example, by spreading development costs over multiple product lines & projects. (I.e. code reuse).

So, back to Conway's law: What organizational structure maximises code reuse? The obvious answer would be to align organizational units around libraries & APIs, with each developer responsible for one or more libraries AND one or more products. How libraries get re-used is then no longer a purely technical decision, but an important business decision also. It should be a management function to ensure that development costs are amortized effectively to maximise return per unit development effort.

Each developer then has responsibility for the development, testing & in-service performance of the features supplied/supported by his library.