Most organizations have a vertical orientation, which creates a division of labor between functional areas where daily operations are carried out by people who have been trained in a specific type of business activity (e.g., Product Manufacturing, Marketing, Sales, Finance, Customer Service).

However, according to the most basic enterprise arithmetic, the sum of all vertical functions is one horizontal organization. For example, in an organization with five vertical functions, 1 + 1 + 1 + 1 + 1 = 1 (and not 5).

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