Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization's communication structure.
In 1967 I submitted a paper called "How Do Committees Invent?" to the Harvard Business Review. HBR rejected it on the grounds that I had not proved my thesis. I then submitted it to Datamation, the major IT magazine at that time, which published it April 1968. The text of the paper is here.
Here is one form of the paper's thesis:
Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization's communication structure.
Fred Brooks cited the paper and the idea in his elegant classic "The Mythical Man-Month," calling it "Conway's Law." The name stuck.
Following is an extract from an article in Wikipedia. (The concept originated in the software world but is not limited to any specific domain.)
Conway's law was not intended as a joke or a Zen koan, but as a valid sociological observation. It is a consequence of the fact that two software modules A and B cannot interface correctly with each other unless the designer and implementer of A communicates with the designer and implementer of B. Thus the interface structure of a software system necessarily will show a congruence with the social structure of the organization that produced it.
Brooks recognized that the law has important corollaries in management theory. Here is one stated in the paper.
Because the design that occurs first is almost never the best possible, the prevailing system concept may need to change. Therefore, flexibility of organization is important to effective design.
In retrospect, HBR's basis for rejecting the paper says more about differences in notions of "proof" than it does about the paper.
[Note: I assume no responsibility for information in other Web sites. The reference to Fred Brooks in Wikipedia, for example, was accurate to the best of my knowledge at the time I created the link to it, but it is subject to change beyond my control (as is all information on the Web not in this site).]