Differentiation and integration

Lawrence and Lorsch (1967) argued that different environments place different requirements on organizations and that organizations exist because they have adapted to their environments. Organizations are open systems in which different forms of structure emerge as the organizations adapt to different environments. Two structural forces simultaneously fragment and bind an organization, differentiation, and integration. An imbalance between these forces can obstruct the effectiveness of an organization. Differentiation is the specialization that causes people to think and act differently. Excessive differentiation causes inefficiency and conflict, breaking apart the organization. To offset differentiation and bind together the organization, managers use integration to achieve cooperation among specialists to achieve common goals. Lawrence and Lorsch concluded that successful organizations exhibit higher degrees of differentiation and integration as the complexity of the environment increases. In short, successful organizations adapt by effectively balancing integration and differentiation to fit their environment. Likewise, unsuccessful organizations develop too much differentiation without sufficient integration. Achieving integration becomes increasingly tricky as differentiation increases (Lawrence & Lorsch, 1967).

The critical lesson from Lawrence and Lorsch for managers in a dynamic and growing environment is to strive continuously and creatively for integration (Kreitner & Kinicki, 2007). The dynamic environment may require the organization to build a more diverse employee base, which requires managers to master leadership that unites divergent people to work together toward common goals. In short, the more dynamic the environment, the more differentiated the organization needs to become (Lewin, Weigelt, & Emery, 2004).