Somehow, it seems like the military is still the only organization to really get this right, but they of course have at least two pretty serious advantages over private organizations:
1) The personnel can't quit
2) They actually get training budgets and dedicated schools and enough slack in headcount to send people away from their units solely to learn their profession and then go back to the units
I don't think you need a matrix management system, and actually kind of hate matrix management. In general (there are exceptions) I AM arguing for cross-functional teams. More like D&D teams, with Fighters and Wizards and Rogues and Clerics on the same team.
The management structure is a kind of separate topic. You can have cross-functional teams with or without matrix management, and I'd argue it's way better to have it without matrix management. But this is a complex topic and a separate one.
Sloan's model of a corporation comprised of largely autonomous divisions, with a central administrative department (legal, bookkeping, taxes, some marketing and the like) was the "new style" business of the 1940s -- 1960s.
The older monolithic structure was the "M" type.
Problem being that I can't find these terms readily (single-character terms tend to be search-averse). Do these ring a bell with anyone?
How do you tell the difference between malice and having a high task load?
A lot of company red tape was thought to be green tape when implemented.
Edit: to be clear, I'm not saying any delay that isn't caused by high utilisation is attributable to malice. Just saying that if you've narrowed it down to those two, you've done the hard work. Those to are very easy to tell apart.
The solution was to integrate vertically from the end product lines. So each of Chevrolet/Pontiac/Cadillac/Buick would have its dedicated teams for all it's neededs. No more delays and innovation was much faster. This turned GM from a mess to beating Ford.
The problem is this was seen as the ultimate organizational structure and Business Schools love magic recipes.
But I've seen the same problems in IT companies with massive Dev, QA, Production teams who end up antagonizing. Prom passive aggression (e.g. delaying approvals) to the occasional openly sabotaging (e.g. approving faulty releases). From experience, QA drifts into being the most political, Dev drifts into carelessness, and Production/Ops ends up over-reacting. This can be solved by integrating vertically.
But there is no silver bullet in organizational structures. There are many factors like culture, what's the product/service, the size of the organization, the geographical distribution of the teams and organization, and what kind of company it is (e.g. lean vs. moonshot).