The advantages of an open office spaceA great deal of companies I've worked for have implemented this kind of office layout. Whole floors of buildings are free of walls, apart from some meeting offices, having multiple teams located in one big room (if you can speak of a room). Why do companies do this?
The arguments for this office layout, sometimes referred to as "radical collocation" are obvious: improved communication among team members, improved problem solving and improved learning. Multiple studies have proved these arguments, see the references in this post. So what's wrong?
Were does it go wrong?It's the way companies put the idea of a collaboration-enabling space to use. I see companies going way overboard with this. This leads to two problems in my opinion. As I mentioned, some companies turn a whole floor into one big war room. Such a room is noisy and distraction is all around. This is the first problem in a war room. I think there is an upper limit of the number of people in one room after which focus, concentration and communication get more difficult because of distractions. What's even worse is the fact that companies place multiple teams doing unrelated things in the same room. More irrelevant communication takes place and adds to the distraction.
The second problem I see is the office culture. Companies change their office layout but do not change their culture. They don't enforce or even encourage some 'rules of conduct', leading to ad hoc meetings in the room instead of in an office, people making phone calls in the room, and doing their personal business in the room, which all add to distraction.
SolutionsThe solutions to these problems are respectively finding a balance and implementing a whole concept and not just one facet. I also think that the principle for using the right tool for the right job applies here to. Observing the reactions to the question "Cube or office" in the Joel on Software forum a war room is not always preferred. Are you sure a big open space increases your productivity? If so, use a room for one team and create a culture in which distractions are minimized. For a great post on an office layout specifically for (agile) software development teams check out the earlier referenced Ultimate Software Development Office Layout.
I think using the right office layout and the right software development methodology (Agile for instance) can greatly improve your productivity and your work's quality. Ofcourse, the right solution depends on the context.