The company system is a mental model for modern knowledge-based organizations. It can be further simplified - a company is made of people systems (individuals and teams), and technical systems (products and markets).

Managing both can be an arduous task, and what most companies do at a certain stage is divide and conquer that responsibility through a “matrixed organization”. A certain portion of leadership is responsible for the individuals and teams, and another responsible for the business results of those teams.

This division of responsibility removes management overhead from business owners, and outcome overhead from people managers - but requires a strong culture of collaboration and information sharing to be successful as well. When it works, it works really well, and worth a continued investment to get it right. Matrixed orgs were also popularized through Andy Grove’s management bible, High Output Management.

That said, just like any organization design - matrixed orgs are only one framework, and companies should continue to go to first principles to re-evaluate and adjust according to how well things are working.