Organizing for Software Product Development: The Effects of Team Structure, Product Complexity, and Cross-Team Coordination

This study investigates how software development team structures influence performance under varying conditions of product and architectural complexity. Using computational simulation grounded in organizational theory, the research compares feature teams—organized around end-to-end functionality—and component teams—organized around technical subsystems. The findings indicate that feature teams generally outperform component teams, particularly when product complexity is high. Moreover, the study reveals that the effectiveness of team structures is moderated by coordination intensity and team scope. Moderate levels of cross-team coordination yield better outcomes than minimal or excessive coordination, whereas broader subteam scopes can improve performance when coordination is costly or limited. These results have significant managerial implications for software development practice: team structure should be aligned with both the problem space and solution space complexity, coordination mechanisms must be strategically calibrated, and team boundaries should be adjusted based on the organization’s capacity to manage dependencies. The study provides a robust framework for informing team design decisions, offering insights relevant to agile software development. Practitioners are encouraged to adopt a contingency-based approach to team organization, tailoring structural choices to contextual demands in order to optimize delivery efficiency and innovation.