“DIFFERENTIATION AND

INTEGRATION IN COMPLEX
ORGANIZATIONS”
La w re n ce & Lo rsch
1967

Presented by Hila Lifshitz

Doctoral Student, Management
Organizational Analysis

Feb 23, 2010

 Synopsis: “Pre L&L”


Which organizational structure is best?

?



 Synopsis: L&L


1 . There is no one best way to organize :

The best structure is a function of the environment
2 . Organizations
 are complex and their subsystems need to
be analyzed separately
Each subsystem ’ s optimal structure depends on its
subenvironment
3 . Due to the high organizational differentiation
organizations need to diligently manage their
integration mechanisms

E n viro n m e
nt
O rg
 Research question
 The basic concepts used in this examination of the internal
functioning of large organizations are differentiation and
integration
 Differentiation: the state of segmentation of the organizational system
into subsystems, each of which tends to develop particular attributes
in relation to the requirements posed by its relevant external
environment.
 Integration is defined as the process of achieving unity of effort among
the various subsystems in the accomplishment of the organization‘s
task.
 Organizations are complex. Past analysis made simplifying
assumptions or analyzed only limited aspects of the organization

Research question :
W h a t p a tte rn o f d iffe re n tia tio n a n d in te g ra tio n o f th e p a rts o f
a la rg e o rg a n iza tio n a l sy ste m is a sso cia te d w ith th e
o rg a n iza tio n 's co p in g e ffe ctiv e ly w ith a g iv e n e x te rn a l
e n v iro n m e n t?
Unit of analysis and Method
 The primary unit of analysis: The organizational system:
organizations and their larger subsystems
 An organization = a system of interrelated behaviors of people who are
performing a task that has been differentiated into several distinct
subsystems, each subsystem performing a portion of the task, and the efforts
of each being integrated to achieve effective performance of the system
 The unit of analysis is a sociological entity but they do not view individuals in
organizations as passive instruments of organization, but as feeling, reasoning,
and motivated beings.
 They conduct a comparative study of six organizations operating in
the same industrial environment (plastics industry), mainly using
interviews.
 They assume that organizations and their subsystems are influenced
by their environment
 Each major subsystem is seen as coping with its respective segment
of the total external environment:
 Marketing& Sales market subenvironment
 Production the technical-economic subenvironment,
 research and development the scientific subenvironment.
H1, H2 : Degree of formalized structure and
orientation


H1
Subenvironment Formalized
Certainty

Structure

H2
Subenvironment Social vs . Task
Certainty members ’ orientation
High Certainty Task orientation
Moderate Social orientation
Certainty
Low Certainty Task orientation
 H3, H4 : Time Orientation and Goals of Members

H3
time required to The time orientations
get

definitive of subsystem members
feedback from
the relevant
subenvironment

H4
Subsystem
members’ concern
Marketing & Sales
members’ concern
Subenvironment Goal
Customers and
competitive action

Production Operation of equipment and

members’ concern suppliers actions

Research and Science

development
 H5, H7 : integration efficiency and devices


H5
Differentiatio Integration efficiency
n attributes
[In the same org., for a pair of subsystems with similar degree of requisite
integration]

H7
Environment Integration devices
requirements
for
Differentiatio
n &
integration
 H6 : Integration Mechanisms


H6
The fit of both Organization performance
differentiation
& integration
subsystems with
their
Subenvironment
 Discussion
 Contribution
 The contingency theory challenged the assumption that there is
one best way to organize and that it cannot be determined
without considering the org environment
 Their insight about the subsystems of the organization and how
they effect their members was new and still poses a
challenges for organizational analysis
 Their emphasis on the tension between differentiation and
integration as a prime obstacle to manage is still an unsolved
and important topic in the literature and in the field
 It is the first empirical studies of this kind
 Rakesh Khurana: Contingency theory had a huge impact of the
organizational field and in a way might have led to the divide
between micro org behavior (teams…) and Macro Ob (the org
and its environment)

 Discussion
 Critic and thoughts:
 The organization-environment relationship developed was static and
deterministic (as acknowledge by the authors)
 Causality is not established from cross sectional data yet they
implicitly assume that environment usually shapes the org
(evident in their recommendation to organizations)
 The authors believe they could have done more to recognize the role
of strategic choice in determining what specific environment the
organization encountered
 Is contingency theory is the ultimate solution to every important
debate in the literature? Where will that lead us?



 Where are we heading?
 Is contingency theory is the ultimate solution to every important
debate in the literature? Where will that lead organizational
theory?
