From the following reading and adding general knowledge;

1. Clarify what is meant by 'differentiation' and 'integration' of the internal structure of an organization
2. What are the implications of differentiation and integration
3. What mechanisms might be adopted to achieve integration?

READING: Differentiation and integration

The internal structures of the firms were analysed in terms of 'differentiation' and 'integration'.

Differentiation describes 'the difference in cognitive and emotional orientation among managers in different functional departments' with respect to:

• the goal orientation of managers - for example, the extent to which attention was focused on particular goals of the department;
• the time orientation of managers and relation to aspects of the environment with which they are concerned - for example, longer-term horizons, or short-term horizons and problems requiring immediate solutions;
• the interpersonal relations of managers to other members - for example, a managerial style based on concern for the task, or on concern for people relationships; and
• the formality of structure - for example, the extent of mechanistic or organic design.

Integration describes 'the quality of the state of collaboration that exists among departments that are required to achieve unity of effort by the demands of the environment'. It is the degree of co-ordination and co-operation between different departments with interdependent tasks. Lawrence and Lorsch's view of integration was not the minimising of differences between departments and the provision of a common outlook. It was the recognition that different departments could have their own distinctive form of structure according to the nature of their task, and the use of mediating devices to co-ordinate the different outlooks of departments.

Different structures for individual

Given the possibility that different demands of the environment are characterised by different levels of uncertainty, then it follows that individual departments may develop different structures. The study of the firms in the plastics industry supported this hypothesis and Lawrence and Lorsch found a clear differentiation between the major departments of research, production and sales.

• Research was more concerned with the long-run view and was confronted with pressures for new ideas and product innovation. The department operated in a dynamic, scientific environment and had the least bureaucratic structure.
• Productionwas more concerned with the here and now, short-term problems such as quality control and meeting delivery dates. The department operated in a fairly stable, technical environment and had the most bureaucratic structure.
• Saleswas in the middle between research and production. The department was concerned with chasing production and had a moderately stable market environment.

The two most successful firms were those with the highest degree of integration and were also among the most highly differentiated.

Organisation structure and different environments

This view of differentiation and integration was confirmed in the subsequent study of firms in the container and consumer food industries. In this part of the study a comparison was made of both high and low performance firms operating in different environments. The aim was to discover what forms of organisation structure were required for different environments. It was concluded that the extent of differentiation and integration in effective organisations will vary according to the demands of the particular environment.

• The more diverse and dynamic the environment, the more the effective organisation will be differentiated and highly integrated.
• In more stable environments, less differentiation will be required but a high degree of integration is still required. Differences in the environment will require different methods of achieving integration.

Integrating mechanisms

The mechanisms used to achieve integration depend on the amount of integration required and the difficulty in achieving it.

• In mechanistic structures, integration may be attempted through the use of policies, rules and procedures.
• In organic structures, integration may be attempted through teamwork and mutual co-operation.
• As the requirements for the amount of integration increase, additional means may be adopted, such as formal lateral relations, committees and project teams.
• When there is a high degree of differentiation, the use of assigned 'integrators' or possibly a separate unit with a number of integrators were suggested. Because they are not dominated by any particular perspective, these integrators can help resolve problems of co-ordination and work programming between different departments.
• It is important, however, to achieve the right balance of integration. Too high a level of integration may involve costs which are likely to exceed possible benefits. Too low a level of integration is likely to result in departments 'doing their own thing', poorer quality decisions and failure to make the best use of resources.²⁵

Patterns of organisation and management

Lawrence and Lorsch do not see the classical and human relations approaches as being out of date but as part of a continuum of patterns of organisation and management related to the environment in which they operate. The work of Lawrence and Lorsch is an extension of this continuum and their case for 'a contingency theory of organisations' has provided a further insight into the relationship between organisation structure and the demands of the environment.