Lawrence, P., and Lorsch, J., "Differentiation and Integration in Complex Organizations" Administrative Science Quarterly 12, (1967), 1-30.

Summary In this paper Lawrence and Lorsch develop an open systems theory of how organizations and organizational sub-units adapt to best meet the demands of their immediate environment. They used interview data from executives in six chemical processing companies to support the following propositions: 1. Organizations must balance differentiation and integration to be successful. Those companies who manage to achieve high sub-unit differentiation and yet still maintain high integration between sub-units seem to be best equipped to adapt to environmental changes. 2. Groups that are organized to perform simpler, more certain tasks (e.g., production groups) usually have more formal structure than groups focusing on more uncertain tasks (e.g., research and development). 3. The time orientation of sub-groups is primarily dependent on the immediacy of feedback from their actions. Thus sales and production groups have shorter time orientations than R&D. 4. The goal orientation of sub-units is based relative to the part of the environment that affects them the most.

Comparative study of six organizations in the same industrial environment. The researchers were most interested in comparing the degree of inegration and differentiation between subgroups in each company, and how these subgroups related to the environment the firm operated within. Rather than start with the individual, they decided to start with an ecological view of the organizations and their environment. They define an organization as a "system of interrelated behaviors of people wha are performing a task that has been differentiated into several distinct subsystems, each subsystem performing a secion of the task, adn the efforts of each being integrated to achieve effective performance of the system."

they theorized that the more differentiated the subsystems were. 4. Time Orientation and Members. the more difficult it would be to achieve effective integration (and hence cooperation) between them. and scientific sub-environment. 3. technical-economic sub-environment. Their hypotheis was that these subsystems would develop differently based how they interact with their environment. Degree of Structure.They define differentiation as "the state of segmentation of the organizational systems into subsystems. planning depts. etc. production. they hypothesized that overall performance was dependent on the degree of differentiation in subsystems consistent with environmental requirement AND an a degree of integration between subsystems consistent with the environment. Prior studies showed that more structure helped with simpler tasks. they felt that the varying attributes would be: 1. and subsystems with either high or low certainty would have members more task-oriented interpersonal relationships. Goal Orientation of Members: Member of subsystem would develop concern with the primary goals of coping with their particular environment. 2. each of which tends to develop particular attributes in relation to the requirements posed by it relevant external environment.". integrative devices (task-groups. they hypothesized that when the environment requires high differentiation and integration. Furthermore. and R&D. uncertain tasks. cross-functional teams. They theorized that subsystems with environments of moderate certainty would have more people in social interpersonal orientations." They see basic subsystems as sales. Time orientation of members dependent on the time needed to get definitive feedback from the environment. Orientation of Members Toward Others. Finally. They define integration as "the process of achieving unity of effort amont the various subsystems in the accomplishment of the organization's task. Based on these differences. They segment tasks into sectors for market sub-environment. and a more informal structure was better for more complex. Also. .) will emerg.

and comparing their differentiation and integration scores. research had longest time span. and production groups more task oriented. Production tended to have the highest amount of structure. There was alot of variability between subsystems. Time Orientation. Then they examined the relative levels of the four attributes under study at each company using various scales: 1. 2. 3. Structure. the researchers confirmed that firms with high differentiation and high integration tended to do better than those with low differentiation and low integration. Sales had shortest time spans. which was going through rapic product changes and improvements. sales people were more concerned with market subenvironment. Interpersonal Orientation.Research Findings They did their research in the chemical processing industry. Differentiation and Integration Basically. They found that high requesite integration between sales and research and research and production. They found that certainty ranking in the environment was scientific/product change (low certainty). The research people were both in technical-economic and scientific subenvironments.Exam Ques . They got all their data from interviews with top executives at each company. Goal Orientation. Fundamental research had least structure. product with technical-economic. Data suggested that sales groups were more socially oriented. technical-economic (high certainty). market situtaion (mod certainty). There were also two subsystems within research (applied and fundamental research). As expected. the data confirmed that highly differentiated subsystems had more difficulty in integration. It was clear that time orientation was related to time for definitive feedback. In Support of Lawrence & Lorsch -. Diff and Integ on Performance By ranking the industry's market performance. 4.