Organization and Environment: Managing Differentiation and Integration

Lawrence and Lorsch's groundbreaking work "Organization and Environment" was a key step in the study of organizational integration. They used a precise definition, studied integration's impact on organization performance, and explored a subset of the factors that lead to integration. They defined integration as the "state of collaboration that exists among departments that are required to achieve unity of effort." and measured it by asking people to rate the state of interdepartmental relations on a seven-point scale going from "serious problems exist" to "full unity of effort is obtained". They used the term differentiation to refer to different departments having different structures and orientations (e.g. short versus long-term time orientation, relationship versus task focus, and high versus low formality of structure). A key finding of their research was that although organizational integration and differentiation were usually inversely proportional to each other, the most successful organizations simultaneously achieved high levels of both. Prior to Lawrence and Lorsch, organizational experts generally believed that issuing orders from above was adequate to achieve organizational integration. In contrast, Lawrence and Lorsch believed that integration required resolution of conflicts between departments through the efforts of teams and individual managers working both inside and outside of formal channels. These "integrators" need to be in the middle of the organization, and not simply at the top. Factors leading to effective integration included having an orientation that was intermediate between those of the departments being integrated, high influence based on competence and knowledge, and integrators being rewarded for achieving effective unified solutions. Moreover, high performing organizations resolved conflicts at the level in the organization where the knowledge (competence) needed to find a good solution existed. For organizations in stable environments this tends to be high in the organization, while for organizations in rapidly changing environments it tends to be lower down. High performing organizations confronted differences in perspectives in an open problem solving manner, rather than immediately finding a compromise, or trying to smooth over conflict, or referring the issue to a higher level for decision. Lawrence and Lorsch's recognition of the importance of organizational integration and its dependence on the work of "integrators" was a major step in our understanding of organizational effectiveness. The primary weakness in their work is that it focuses overwhelmingly on only one organizational integrating mechanism, namely the use "integrators" to resolve interdepartmental conflict.