Towars Org Integration

Organization Design
Toward a Theory of Organizational Integration

Xavier Castañer, Mikko Ketokivi,
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TOWARD A THEORY OF
ORGANIZATIONAL INTEGRATION
Xavier Castañer and Mikko Ketokivi
ABSTRACT
In this chapter, the authors theorize organizational integration by extending,
elaborating, and combining various theoretical perspectives, such as struc-
tural contingency theory, organization economics, and organizational culture.

The aim of this study is to provide the foundation for a holistic theory of inte-
gration that examines the different relevant facets of integration and a com-
prehensive set of tools integrative devices by which integration can be
sought by those who design the organization. To this end, the authors exam-
ine the integration challenge that arises from various types of subunit
interdependence pooled, sequential, and reciprocal and theorize which
configurations of integrative devices are more likely to be effective in a given
task environment. The authors close by discussing directions for future
research on organizational integration.
Keywords: Organization design; organization structure; interdependence;
organizational integration; integrative devices; fit
INTRODUCTION
One of the fundamental tasks in organization design is to ensure that the activi-
ties of interdependent organizational subunits are adequately integrated.
Specifically, when organizational subunits depend on one another for resources
materials, technologies, expertise, or information the designer’s task is to
create an organization that facilitates the effective management of these subunit
interdependencies.
Organization Design
Advances in Strategic Management, Volume 40, 5380
Copyright r 2019 by Emerald Publishing Limited
All rights of reproduction in any form reserved
ISSN: 0742-3322/doi:10.1108/S0742-332220180000040002
53
54 XAVIER CASTAÑER AND MIKKO KETOKIVI
In this chapter, we argue that despite being one of the most researched topics
in management, our understanding of organizational integration is inadequate.
The problem stems from fragmented and incomplete theorizing of when and
how organizational members should use different tools integrative devices
(Lawrence & Lorsch, 1967a) to address different types of interdependence in
search for integration. For instance, what are the integrative devices that can
jointly be used to effectively address the pooled interdependence (Thompson,
1967) of two subunits? Which devices are complementary in that their integra-
tive effects are mutually reinforcing? Which devices are incompatible and should
not be used concurrently? More fundamentally, when is a managerial tool used
as an integrative device in the first place? The aim of this chapter is to address
these questions by laying the foundation for a theory of organizational integra-
tion by focusing on one of its main features: interdependence (Thompson, 1967).
While there are other organizational features such as uncertainty, idiosyncrasy,
analyzability, and cost, interdependence is fundamental in that without subunit
interdependencies, there would be no need for organizational integration.

Interdependence thus seems like the logical starting point for a theory of organi-
zational integration.
We start with the premise that organizational design in general and integration
in particular are first and foremost a practical, not theoretical challenges.
Complex practical challenges tend not to lend themselves to parsimonious theoriz-
ing. Instead, all feasible tools regardless of their intellectual origin or theoretical
basis should be considered. We believe that one of the reasons for our incomplete
understanding of integration is precisely the intellectual siloing of organizational
research, our “deepening interest in understanding parts of the overall design”
(Greenwood & Miller, 2010, p. 80). In our patently reductionist approaches to
organization design, the organization economists among us think of the organiza-
tion as “a nexus of contracts” (Jensen & Meckling, 1976), and understandably,
approach integration by examining incentives and control. The social psycholo-
gist, in turn, predictably focuses on social interactions and emphasizes socializa-
tion, norms, and common values as the basis of economic action and
organizational integration (e.g., Granovetter, 1985; Ouchi, 1980). Finally,
process-oriented organization theorists and operations management researchers
highlight the advantages of standardizing behaviors, pointing to formalization as
a proper approach to integration (Adler & Borys, 1996; March & Simon, 1958).
Theoretical and intellectual specialization is common and perhaps unavoid-
able, but if the objective is to address the complex practical organizational chal-
lenge in its entirety, we must acknowledge the limits of reductionist theorizing.
Accordingly, in this chapter we set aside parsimony and simplicity and look at
the entire assortment of integrative devices. In addition to the conventional
structural tools proposed by structural contingency theorists (e.g., Lawrence &
Lorsch, 1967b), we also incorporate the following tools from other theories of
organization and management: formalization, incentives, multi-skilling, commu-
nication, and socialization. We then evaluate which tools are feasible in the
given task environment, focusing on the type of interdependencies among the
subunits. In addition to examining feasibility of individual tools in a given task
Theory of Organizational Integration 55
environment (external fit), we also examine whether and how the tools can be
used on conjunction with one another, that is, which configurations are more
effective (internal fit).
We believe that the integration challenges that stem from different kinds of
subunit interdependencies are at times misunderstood and must be critically re-
evaluated. In his classic treatise of interdependence in organizations, Thompson
(1967) distinguished between pooled, sequential, and reciprocal interdependence,
suggesting that pooled was the least complex of the three. We argue that in the
context of integrating an organization, pooled interdependence has characteris-
tics that give rise to a challenge that may be in some ways more complex than in
sequential or reciprocal interdependence.
Finally, in order to avoid confusion, it is also important to examine whether a
specific managerial tool is used (and useful) as an integrative device or used simply
as a general managerial tool. For example, we discuss the use of authority as an
integrative device. But managers routinely use authority, for instance, to delegate
tasks to their subordinates by command or direct order. However, this delegation
is often simply a decision to allocate the subordinate’s time to complete a task and
has nothing to do with managing subunit interdependencies or integrating the
organization. One of the sources of confusion is that many of the managerial tools
which can be leveraged as integrative devices may also be used as general manage-
rial tools. But when used as integrative devices they develop a character of their
own. Incentives are perhaps the best example: incentives become integrative
devices only when they are used in an explicit attempt to align the interests of
interdependent subunits. This is typically achieved by implementing some kind of
a collective incentive structure that motivates the members of the interdependent
subunits to focus on the specific subunit interdependence (e.g., Ghoshal &
Gratton, 2002; Gupta & Govindarajan, 1986; Kretschmer & Puranam, 2008).
This chapter makes the following contributions to the literature on organiza-
tion design in general and organizational integration in particular by providing:
(1) a more nuanced formulation and understanding of pooled interdependence
in particular;
(2) a holistic typology of integrative devices by incorporating ideas from struc-
tural contingency theory, organization economics, work design, and organi-
zational culture;
(3) a systematic treatment of feasibility of integrative devices (external fit); and
(4) a systematic treatment of the configurations of integrative devices (internal
fit).
In order to illustrate the key concepts and arguments, we use the integration of
degree programs at a university as an example. We chose university degree pro-
grams because this chapter is primarily intended for readers that likely to have
spent a considerable portion of their professional careers working within the subu-
nits (departments) of one or more universities. We all have an experiential under-
standing of subunit tasks in the university environment: designing and teaching
courses, conducting research, organizing seminars, managing programs, etc. We
also know that even though daily activities at a university occur largely within
departments, there are significant cross-departmental interdependencies that
require integration through various coordination efforts designing and intro-
ducing a new degree program is a good example. We know that cross-
departmental integration efforts often leave much to be desired.
This chapter is structured as follows. We first cover the key concepts and
their definitions. We then develop the typology of integrative devices. In the the-
ory development part, we present propositions regarding the feasibility and
effective configuration of integrative devices in task environments characterized
by different types of interdependence. We conclude with a discussion of the con-
tributions and directions for future research.
ORGANIZATIONAL INTEGRATION: KEY CONCEPTS

AND DEFINITIONS
How do organizations become integrated? What exactly requires integration in

the first place? How do designers plan for the management of subunit interde-
pendences? How do the members of interdependent subunits address the interde-
pendence themselves?
Some aspects of integration are purely technical, others are cognitive or intel-
lectual, yet others are social, or ideological (normative or cultural). The ways in
which tasks are integrated in organizations are multi-faceted (Ghoshal &
Gratton, 2002). Consider a bachelor’s degree in liberal arts as an example. The
minimal integration requirement is that the student completes a total of 120 cred-
its of coursework to satisfy the formal degree requirements. We label this behav-
ioral integration. Fully understanding that the word “behavioral” has multiple
meanings, we use the term to underscore the fact that the focus is on what we do.
Behavioral integration refers to both the effort as well as the outcome of success-
fully managing the workflow such that the task is accomplished to the desired
standards of quality. Behavioral integration in organizations is analogous with
technical integration of physical products: when we say an airplane or a smart-
phone must be properly integrated, we mean the technical system functions
(“behaves”) the way it is intended to function.
The published literature on organizational integration has implicitly focused
on behavioral integration in that researchers have been mainly interested in how
organizational tasks (organizational behaviors) are coordinated through effective
information processing and information systems (e.g., Galbraith, 1973; March &
Simon, 1958; Puranam, Raveendran, & Knudsen, 2012). Consequently, the pri-
mary integrative devices examined involve the management of information
embedded in rules, budgets, procedures, plans, and schedules (Galbraith, 1974;
Van de Ven, Delbecq, & Koenig, 1976). In contrast, in this chapter we propose
that a theory of integration would benefit from incorporating other devices, such
as incentives and multi-skilling. This is important because integrating organiza-
tions often extends to integrating organizational members, which is distinct from
integrating tasks (Ghoshal & Gratton, 2002; Puranam et al., 2012). A case in
point, integrating a university degree program in the behavioral sense is only a
necessary, minimal condition: whereas one would certainly want undergraduate

students in liberal arts to follow the proper sequence of tasks and complete their
courses according to a predetermined plan, one would also want the learning
acquired in the early courses to intellectually support the subsequent ones.
Those who teach in undergraduate programs know very well that such integra-
tion across courses, particularly those taken across diverse departments and dis-
ciplines of the university, can leave much to be desired. Who has not at least
once experienced a situation where a formal pre-requisite turned out not to pro-
vide the necessary intellectual foundation for an advanced course? It takes
more than course descriptions and other professors’ syllabi to determine what
exactly the students have been taught, and in particular, what they have learned
in previous courses. Seeking integration of student experience beyond the
behavioral dimension requires attempts that extend beyond the use of technical
tools such as having a database of course syllabi available to professors. To this
end, at least some universities promote cognitive integration, where attempts to
integrate the organization extend beyond what we do to how we think (cf.

Ghoshal & Gratton, 2002). Attempts at integrating ways of thinking obviously
present a different challenge than integrating ways of behaving. The former is
both more profound and more difficult to achieve and to evaluate. The former
also shifts focus, at least in part, from tasks to organizational members, and
from task interdependence to what Puranam et al. (2012) labeled epistemic
interdependence. We suggest that cognitive integration paves the way to addres-
sing epistemic interdependence.
Finally, sometimes integration extends beyond the behavioral and the cogni-
tive to the social, cultural, and even the ideological aspects of organizations. We
use the label cultural integration to refer collectively to the facet of integration
that has a predominantly cultural, as opposed to behavioral or cognitive basis
(cf. Ouchi, 1980). Cultural integration focuses directly neither on the task nor
the members, but rather, on the foundational values and the espoused beliefs
endorsed by the organization (Argyris & Schön, 1978; Schein, 1985). The social
and the cultural aspects of integration are conspicuous in just about any univer-
sity course syllabus. Students are expected to respect intellectual property and
plagiarism is heavily sanctioned; many courses formally incorporate joint learn-
ing and the final grade consists of both an individual and a group component;
examples are numerous. These norms, of course, have both behavioral and cog-
nitive implications, but the essence of the integration challenge is social and cul-
tural. Specifically, students are not only expected to understand the norms and
adhere to them by exhibiting the requisite behaviors, the aim is clearly a
deeper sense of integration: to have students embrace and genuinely respect
these norms to the point that they become self-enforcing. This is crucial, because
instructors cannot possibly monitor and control the way group work is per-
formed in student teams, for example. Instead, free-riding is a problem students
must often address themselves, without instructor involvement.
Similar explicit attempts at cultural integration are found in organizational
contexts where the entire organization is defined by a common system of values
and beliefs: sports clubs, community groups, political parties, and religious
organizations. The foundation of cultural integration is the idea that organiza-

tions are social collectives in which membership and activities are not instrumen-
tal but essentially meaningful. In cultural integration, the organization becomes
intertwined with our identities. The key consideration is not on what we do or
how we think but on who we are.
Our Focus
To set the theoretical boundaries for our examination, a few preliminaries are nec-
essary. In our inquiry, we take the degree of structural differentiation as given. We
start at the assumption that the designer has already not only identified subtasks
and allocated them to different structural subunits but also that this has been done
rationally, that is, in a way that at least seeks to minimize the residual interdepen-
dencies (Galbraith, 1973). We also assume that these residual interdependencies
are not trivial: the overall task cannot be fully decomposed (Simon, 1962) or mod-
ularized (Schilling, 2000) so as to make the subtasks organizationally independent

(Postrel, 2002). This assumption is critical, because if subunit interdependencies
were trivial, so would be integration, and there would be nothing left to theorize.
Integration becomes theoretically and managerially relevant when a high degree
of differentiation leaves the organization in a state where interdependencies among
subunits require the designer’s attention (Lawrence & Lorsch, 1967b). Because
interdependencies can be complex and heterogeneous, the designer’s task is to
select and implement a set of integrative devices that meets the organizational
demands that the interdependencies create: How does the designer create the req-
uisite administrative (Penrose, 1959) and the structural (Bower, 1970) contexts to
ensure that organizational integration is achieved?
We also leave environmental changes outside the scope of our inquiry. How
the organization’s environment changes over time certainly alters the integration
requirements and the utility of specific integrative devices. Further, some devices
may exhibit more organizational inertia than others; culture and values are proba-
bly more stable and more difficult to modify than the use of technical devices such
as plans and schedules. To be sure, these are important considerations but doing
justice to the dynamics of integration would require a much more elaborate treat-
ment than what is possible in this chapter. At the same time, we believe this chap-
ter can ultimately be extended to examine the dynamics of integration as well.
One might start with the proposition that the designer may want to anticipate the
need for adaptation and maintain a broader repertoire of integrative devices than
is immediately required. Organization design in general and organizational inte-
gration in particular are ongoing organizational concerns, not one-off efforts. The
nature of critical subunit interdependencies must be monitored and re-evaluated
because “neither interdepartmental interdependencies nor coordination mechan-
isms are constant over time” (e.g., Adler, 1995, p. 148). In many activities that
become routinized in organizations over time, reciprocal interdependence and the
need for continuous cross-unit collaboration turn into sequential interdependence
requiring only the efficient dissemination of information.
TOWARD A COMPREHENSIVE TYPOLOGY OF

INTEGRATIVE DEVICES
The earliest theoretical attempts at addressing integration in organization design
perspective were based on structural contingency theory (Burns & Stalker, 1961;
Lawrence & Lorsch, 1967a; Thompson, 1967). As the name implies, the focus
was on various vertical and lateral structural arrangements as the primary inte-
grative devices. The aim of these structural arrangements is to facilitate informa-
tion sharing, vertical and lateral communication, mutual adjustment through
bargaining, and joint decision making (Adler, 1995; Galbraith, 1973; March &
Simon, 1958; Marschak, 1955; Van de Ven et al., 1976). Much of the structural
contingency theory literature centered explicitly on the behavioral facet of inte-
gration. This is understandable, given the early contingency theorists’ practical,
mainly empirical focus on integration in industrial firms (Lawrence & Lorsch,
1967a; Woodward, 1965).

To complement the contingency-theoretic approach, authors in the general
literature on organization theory, organization behavior, and organization eco-
nomics introduced a plethora of other integrative devices many of which link
more closely to the administrative as opposed to the structural context: authority
(Miller, 1992; Simon, 1997; Williamson, 1975); plans, rules, and routines
(Ketokivi & Castañer, 2004; March & Simon, 1958; Nelson & Winter, 1982;
Thompson, 1967); incentives embedded in contracts (Barnard, 1938; Eisenhardt,
1989; Ross, 1973); multi-skilling through cross-training and job rotation
(Hackman & Oldham, 1976; Postrel, 2002); information systems (Barki &
Pinsonneault, 2005; Galbraith, 1973; Narasimhan & Kim, 2001); and socializa-
tion into an organizational culture (Ouchi, 1980; Schein, 1985; Van Maanen &
Schein, 1979). Considering these jointly with the ideas from contingency theory,
we arrive at a theoretical inventory of seven integrative devices available to the
designer. Again, we emphasize that many of the devices discussed can be used
both as integrative devices and as more general management tools. Our empha-
sis is on the former, and we caution against conflating the integrative use and
the general use of a managerial tool or procedure.
Authority
Organizational authority is essentially formal power embedded in organizational
positions: A has power over B if, by virtue of its organizational position, A can
determine the behavior of B, such as have B engage in certain actions (e.g.,
Weber, 1997). Most decisions in organizations require someone’s authorization
and authority that is embedded in the power structure of the organization sets at
least some guidelines for decision making. When we speak of authority as an inte-
grative device, the emphasis is on integrating interdependent subunits. When
authority is used to integrate the organization, integration of subunits is achieved
by referral to a superior in the vertical dimension of the organization. This makes
authority an essentially structural device for integration.
To clarify, when authority is examined as an integrative device, a top-down

approach is not implied (Leavitt, 2005). When the members of two subunits face
a situation in which a mutual (sequential or reciprocal) interdependence must be
managed, they may have well-developed ideas on how the interdependence could
be handled by applying various integrative devices (Barnard, 1938; Williamson,
1975). But managing the interdependence might be formally and organizationally
resolved in the vertical organization structure because the subunits themselves
may not have the authority to allocate the resources necessary to implement the
integrative devices. In the university setting, input from faculty is often sought in
designing degree programs, but the decisions about program structure are ulti-
mately made by the designer who is formally responsible for subtask integration.
As far as designing degree programs is concerned, the designer the Office of
University Programs, or the like has authority over faculty.
Formalization
A common, intuitive way of managing subunit interdependencies is to create stan-
dard operating procedures that must be followed when a certain stimulus arises
(March & Simon, 1958). These standard operating procedures may govern both
subunit activities and interactions across subunits. When the College of Liberal
arts wants to introduce a new degree program, a formal procedure is followed to
ensure that the relevant interdependencies are taken into account. Formalization
is, of course, prevalent in most industrial settings: an industrial firm with a dozen
production facilities may not only formalize its activities within individual facili-
ties but also standardize them across the facilities. Intel, for instance, is known for
its Copy EXACTLY!-principle, whereby production facilities would be more or
less “copies of one another,” which would make technology transfer and
problem solving across facilities more effective (McDonald, 1998).
Cross-unit Structure
Structural devices are the legacy of structural contingency theory. In the context
of integration, the focus is on various lateral structures, such as cross-functional
teams in new product development (Adler, 1995) or cross-divisional collabora-
tion in matrix structures (Davis & Lawrence, 1977). The aim of these integrative
devices is to create a structural context in which the interdependence is
addressed by establishing formal structural channels that enable subunit collabo-
ration. Structure, of course, has a broader meaning as well, but in the case of
organizational integration, the focus is specifically on the more or less perma-
nent lateral structural devices (Galbraith, 1994) that determine which subunits
collaborate on which tasks. By designing lateral structures, the designer thus
seeks integration by defining which subunits participate in which tasks. In the
context of organization design, the designer can tackle subunit interdependence
by placing subunit managers in participatory decision-making structures; middle
management involvement in strategic decision making is a good example
(Ketokivi & Castañer, 2004; Wooldridge & Floyd, 1990). More generally,
processes of inclusion (e.g., Feldman & Khademian, 2000) invite members of

organizational subunits to share their concerns regarding subunit
interdependencies.
Lateral structural devices and cross-subunit participation are important
because the differentiation of the organization into subunits often leaves the subu-
nits structurally separated but interdependent. In the case of new product develop-
ment in an industrial firm, designers must address the interdependence of
customer needs, technological feasibility, and operational efficiency. In function-
ally differentiated organizations a standard way of differentiating industrial
organizations (Mintzberg, 1979) integration may be sought by creating cross-
functional teams from the Sales and Marketing, Research and Development, and
Operations departments (Pinto, Pinto, & Prescott, 1993). These teams provide a
structural context for mutual adjustment across the functions, where issues such as
concurrent engineering designing products that both meet customer needs and
are efficient to manufacture as well can be addressed (Clark & Wheelwright,

1993).
Collective Incentives
Monetary incentives and other inducements are perhaps the most established
means of seeking contributions from organizational members who are not
intrinsically motivated to work toward the organization’s goals (Barnard, 1938).
Discussion of incentives has a rich history in the agency theory literature in par-
ticular (Jensen & Meckling, 1976; Ross, 1973). Incentives come in many forms
and can, of course, be geared toward many goals. In the context of seeking
integration of subunits, various profit-sharing schemes and collective-level incen-
tives can be effective in fostering collaboration and knowledge sharing across
subunits (e.g., Ghoshal & Gratton, 2002; Gupta & Govindarajan, 1986;
Kretschmer & Puranam, 2008). Rewarding the managers of one business unit
for the success of other business units within the firm is a good example. Such
rewards are particularly effective in corporations with interdependent structures,
where expertise that resides in one business unit can be leveraged in others
(Goold & Campbell, 2002a; Prahalad & Hamel, 1990).
Communication
Knowing what to do is the cornerstone of any organization, and to this end,
communication in organizations is fundamental. In the context of integration,
the focus is specifically on communication that is aimed at achieving integration
of subunits with idiosyncratic tasks, objectives, behaviors, and language; indeed,
subunit idiosyncrasy is the essence of differentiation (Lawrence & Lorsch,
1967b). The objective of communication in the context of integration is to
ensure that members of organizational subunits are aware of not only the objec-
tives of their own subunits but also other subunits and the organization in gen-
eral. Organizational integration becomes more efficient when organizational
members know how their work relates to the work of others. To this end,
knowing where the relevant organization-level information is stored and how it

can be retrieved is crucial. Moreover, the benefits of communication may
extend even beyond knowledge management. Ketokivi and Castañer (2004)
showed that strategic planning processes that incorporate both participation
and communication promote the convergence of goals in industrial firms.
Organizational integration becomes even more effective when organizational
members not only know how and why certain activities are performed, but also
agree on what the overall objectives are. In this context, behavior is not merely
“going through the motions,” it is about authentically internalizing and pro-
moting specific actions.
Multi-skilling
Multi-skilling involves the use of generalists in addition to specialists. In the con-
text of integration, a generalist is an individual organizational member who is
not merely familiar but also competent in the activities of several interdependent
subunits (cf. Freeman & Hannan, 1983). In collaborating with specialists in
these subunits, the generalist has the absorptive capacity (Cohen & Levinthal,
1990) to understand the specialist knowledge domains involved in the
interdependence.
Multi-skilling is distinct from structural devices such as cross-functional
teams, which typically consist of specialists representing different subunits. In
contrast, generalists are individuals who have thorough experience to master the
activities of multiple subunits and, consequently, are in a unique position to
understand the interdependence more deeply than individuals who are experts of
only one of the subunits (Hackman & Oldham, 1975; Postrel, 2002). Generalists
can be highly effective in various liaison positions, which suggests that expertise-
based integrative devices can complement structural devices.
Multi-skilling can be sought in different ways. One approach is to recruit gen-
eralists; another is to train them by implementing organizational practices such
as cross-training and job rotation that transform specialists into generalists over
time (e.g., Edström & Galbraith, 1977). In this regard, multi-skilling is related
but distinct from work redesign (Hackman & Oldham, 1976). The two are
related because both focus on the skill sets of organizational members. But they
are distinct in that theories and research on work redesign focus on managing
the content of individual job descriptions through practices such as job
enlargement and enrichment as an attempt to promote employee motivation
and satisfaction (Herzberg, 1966). Theories of work redesign have a psychologi-
cal basis that is both theoretically and managerially distinct from efforts at inte-
grating interdependent subunits.
Socialization
All organizations are also social collectives with distinct organizational cultures
(Schein, 1985) that consist of shared, taken-for-granted assumptions, beliefs,
values, norms, and rituals. Organizational culture defines the socially
appropriate ways of thinking and behaving. However, even though we speak of

organizational cultures, the origin of the culture is seldom merely the organiza-
tion itself. Specifically, while culture may partly arise endogenously from within
the organization, it often also reflects some of the characteristics of the broader
professional environment in which the organization is embedded (e.g., Wallace,
1995). Research conducted in universities, for instance, is governed primarily
not by organizational but by general professional norms of scholarship. A com-
monly accepted value in the broader professional community is the idea of not
merely applying ideas but seeking novel, original contributions through one’s
research. Use of student evaluations is another widely adopted practice; it mani-
fests the institutionalized belief that student experience should be incorporated
into evaluating faculty performance.
Socialization refers to the general processes by which organizational members
identify with their organization (Albert, Ashforth, & Dutton, 2000; Albert &
Whetten, 1985) and adopt the organizational culture (Schein, 1985). In addition
to the processes of selection, induction, and training, socialization covers organi-
zational rituals that link both task- and non-task-related activities; celebrating
employee birthdays is an example of the latter. But socialization may be instru-
mental in the context of integration as well: to the extent that common values and
norms transcend subunit boundaries, they facilitate the management interdepen-
dencies across subunits by shifting attention from the subunit to the collective
level (Lawrence & Lorsch, 1967b; Ouchi, 1980). Socialization may also be
employed as a device in the sense that various socialization activities can create
and maintain an organizational culture. Social bonds within organizations obvi-
ously arise serendipitously in the form of emergent friendships, but they are also
something the designer can explicitly endorse by creating an organizational con-
text that facilitates various social encounters (Granovetter, 1973; Kanter, 1977;
Portes, 1998).
THEORIZING INTEGRATIVE DEVICES: FEASIBILITY

AND CONFIGURATION
Having introduced and defined the set of seven general integrative devices to cope
with interdependence in general, we now turn to theorizing their effectiveness by
examining two questions. The first question is: Given the task environment, which
integrative devices are feasible in addressing subunit interdependencies? Because
the focus is on integrating subunits, it seems prudent to focus on the nature of the
subunit task interdependencies. To this end, we use Thompson’s (1967,
pp. 5456) interdependence typology to describe the task environment:
(1) Pooled interdependence: subunits conduct their activities independently of
one another, each adding a discrete contribution to the whole.
(2) Sequential interdependence: subunits must add their contributions to the
whole in a predetermined sequence, where the outputs of one subunit
become the inputs of another. One subunit must act before another can act.
(3) Reciprocal interdependence: subunits must add their contributions to the

whole in a setting in which they depend reciprocally on one another’s out-
puts as inputs.
There is an important distinction between pooled interdependence and the
other two. Specifically, in sequential and reciprocal interdependence, the interde-
pendence is salient to the members of the interdependent subunits in that they
likely fully understand how and why the subunits depend on one another. This
salience alone can provide the motivation for autonomous integration efforts.
Consider the School of Statistics offering a major in Statistical Practice. In this
context, it is likely that every professor involved in the workflow fully under-
stands why students must take a course in applied linear models before they
take the courses in experimental design and time series analysis sequential
interdependence is salient. Professors of experimental design realizing that stu-
dents have not mastered linear regression analysis in the course they took the
previous semester are likely to be intrinsically motivated to bring the issue up

with the faculty that teaches regression analysis. Such autonomous efforts at
integration are conducive to solving the integration problem, although organiza-
tional intervention may still be required. Particularly if the problem is system-
atic, structural devices such as faculty meetings may be required.
Pooled interdependence is different, because the interdependencies may not
be salient. This stems from the fact that in pooled interdependence, the interde-
pendent subunits are not directly dependent on one another in terms of the
workflow. Instead, the interdependence may be observable only at the level of
the collective organization. If subunit members are not aware of the interdepen-
dence, how could they possibly understand what kind of integration is required
and why? Consequently, they may exhibit indifference, doubt, or even hostility
to integration attempts, thinking these attempts constitute unnecessary control
of subunit activities. How did you react the last time you received an e-mail
from your university administration requiring you to do something, the purpose
of which was not clearly communicated to you? Is it possible that the request
stemmed from pooled interdependence that is not salient to you?
Even though organizational integration is primarily the designer’s task, in
order for integration to be effective, it is not only the designer but also the mem-
bers of the interdependent subunits who must understand what the interdepen-
dencies are and why subunits require integration. In the case of sequential and
reciprocal interdependence, understanding is greatly facilitated by the fact that
subunit members are directly exposed to the interdependence in their daily activ-
ities, and in the case of failure to integrate, they immediately “feel the pain.”
One of the main arguments in this chapter is that some devices are more
effective in addressing a particular type of interdependence. This is a question of
feasibility. But this question leads directly to a second one: Given the set of fea-
sible devices to manage the interdependencies, which combination of them is
(most) effective in seeking integration? Just because four different devices are
feasible does not mean they should all be used. For instance, the integrative
effects of two feasible devices may be substitutable. In other cases, it may be
desirable to use two devices specifically because they are complementary or

because using one enables the use of the other. Just like organizational subtasks
or their subunits, integrative devices themselves may exhibit interdependencies.
In sum, feasibility is about which device fits which environment, configuration is
about which devices should be used jointly. Both external and internal fit are
important (Miller, 1992).
In discussing both the feasibility and the configuration of integrative devices,
we maintain our focus on the type of task interdependence, which is one of the
main traits discussed in the organization design literature (Simon, 1962;
Thompson, 1967). To be sure, there are other task-environmental contingencies
in addition to interdependence (e.g., Van de Ven et al., 1976), but for the pur-
poses of theorizing integration in particular, the nature of the interdependence
of the subunits is particularly relevant: the very purpose of employing integrative
devices is to address the interdependence. Of course, organizations must cope
with factors such as uncertainty as well, but effective ways of addressing uncer-
tainty have more to do with adaptation and flexibility (Burns & Stalker, 1961;
Williamson, 1991) than with integration.
Pooled Interdependence
Consider again the design of the degree program. Even though departments
within the university have their own knowledge domains, activities, and identi-
ties, they are all members of the same organization that supports them. It is not
just the fact that their efforts are pooled to achieve completion of college and
university-wide tasks such as offering degree programs, it is the fact that they
are specifically supported by the same organization that is essential to pooled
interdependence. Consider in contrast a potluck dinner. A potluck dinner
involves a division of labor through coordination: one guest brings the appetizer,
another the wine, the third the dessert, and the host prepares the main course
and provides the dinnerware. Each guest obviously benefits from the others in
that all contributions are required for everyone to enjoy the dinner. But the dif-
ference with the university example is that there is no collective entity that must
support the individual contributions, there are no residual interdependencies,
and no integration is required. A clear division of tasks to organize who brings
what is sufficient.
Potluck dinners are ad hoc, temporary and informal organizations (Mintzberg,
1979), whereas offering a degree program is an ongoing and recurring formal con-
cern that requires a stable organization. A stable organization generates pooled
interdependence among its subunits, in fact, pooled interdependence is the essence
of somewhat permanent formal organizations where the name and identity of the
organization matter. In temporary, ad hoc organizations, organizational identity
is superfluous and the subunits require no support in activities such as resource
acquisition.
A stable organization is reliable and predictable and consequently, able to
attract the requisite collaboration of its key stakeholders through resource con-
tributions (Hannan & Freeman, 1977, 1984; Pfeffer & Salancik, 1978). Stability
is often supported by at least some degree of formalization in the form of perfor-

mance programs or standard operating procedures (March & Simon, 1958).
Further stability is provided by symbols, such as the organization’s name and
brand (Selznick, 1957). But the essence of pooled interdependence in the context
of organizational integration is that not only the organization but also all its
subunits are supported by this stability. Pooled interdependence is challenging
to manage.
In the case of the university, there are numerous instances of pooled interde-
pendence across departments and programs. In many cases, something occurring
within an individual department or program tends to affect all departments and
programs associated with the university name and brand. But this relation is
reciprocal in the sense that in order to maintain the organization, subunits and
their members must act in certain ways and embrace certain standards that
derive directly from their common (pooled) membership in the organization:
“unless each [subunit] performs adequately, the total organization is jeopar-
dized” (Thompson, 1967, p. 34).

In the context of pooled interdependence, the notion of “adequate performance”
is not merely about the technical content of the subtasks, as in the case of the pot-
luck dinner; it also involves the part that links to common organizational support.
For example, most contemporary business schools have a Communications
Department that supplies a standard presentation template to all faculty; the aim is
to provide a consistent image of the university not only in the classroom but also in
conference presentations, industry talks, and the like. Similarly, the content and the
design of faculty business cards and departmental websites are centrally managed
to ensure consistency. But in order to be supported by the common organization,
these norms and policies must obviously “penetrate” (to use Thompson’s term) the
activities of the subunits even if their technical workflows are independent of one
another. This need arises from pooled interdependence. Failure to understand this
is a likely source of conflict in university organizations.
Pooled interdependence calls for the design and enforcement of standards
and policies across subunits, that is, use of formalization as an integrative
device. More fundamentally, pooled interdependence more or less implies some
notion of formalization. But in order for formalization to be experienced by
members of the subunits as meaningful, the designer may have to convince the
subunits that formalization is not a matter of coercive control but indeed one of
integration (cf. Adler & Borys, 1996). If the goal is to develop a genuine under-
standing of the integration challenge within the subunits, the two obvious inte-
grative devices that can support this are communication and socialization. Both
authority and incentives can, of course, be used, but while they may be instru-
mental in eliciting the desirable behaviors, they will not enhance understanding.
To the extent the designer seeks to develop an authentic understanding as well,
the importance of formalization must be understood and internalized by subunit
members. To this end, communication will contribute to understanding and
socialization will be beneficial for the internalization of formalization as a value.
If communication and socialization are used as integrative devices to explain
and justify the importance of formalization, the use of formalization as an
integrative device will be more effective. In sum, we propose a complementary

effect between these three devices in addressing pooled interdependence:
P1: In the case of pooled interdependence, formalization complemented
with communication and socialization constitutes an effective configura-
tion of integrative devices.
To be clear, we do not mean to imply that Thompson was wrong. Instead,
what we propose is that in the context of organizational integration, the mean-
ing and the implications of pooled interdependence must be elaborated. In the
case of organizational integration, the designer’s integration task is not merely
to ensure that the requisite tasks are performed, it is also about ensuring that the
integrity of the organization is maintained (Fombrun & Shanley, 1990; Selznick,
1957). A university cannot preserve its reputation if students in the same pro-
gram are exposed to an entirely different classroom experience, quality of educa-
tion, and norms of conduct across the courses they take; different faculty
members from the same school using entirely different presentation templates at
an academic conference signals not only lack of consistency but perhaps also
lack of organizational commitment. More generally, even in cases where the
workflow exhibits only pooled interdependence, the designer must focus on the
use integrative devices that ensure subunit attempts at preserving organizational
integrity, even though the subunits ultimately act independently of one another.
This is in our view the essence of addressing pooled interdependence in its
entirety.
Sequential Interdependence
Sequential interdependence is perhaps the most straightforward and salient
example of interdependence: in many organizational tasks, one subtask must be
completed before another can be started, which is salient to organizational mem-
bers affected by the workflow interdependence. Both in designing and executing
workflow of university degree programs, these input-output relationships and
sequential interdependencies are ubiquitous. For instance, introduction of a new
degree program typically proceeds through a sequence of design, approval, staff-
ing, advertising, and recruitment of students.
Management of sequential interdependencies is primarily a communication
task (Melcher & Beller, 1967; Thayer, 1968; Tushman, 1979). Let us label the
two subunits of a sequential interdependence relationship the sender and the
recipient. The interdependence is effectively managed when the recipients know
who their senders are, what they supply and when. Also, senders must know
what their recipients need, when, and why. If the sender and the recipient are
aware of one another’s needs, communication is likely to be spontaneous with-
out explicit organizational interventions.
Another effective option for integrating sequentially interdependent subunits
is formalization. Specifically, if the sequence of activities is recurring, the
designer can create a standard operating procedure for the activity. A good
example is the Stage-Gate Model of new product development (Cooper, 1990).
In development projects that follow the model, the innovation process is divided
into a predetermined set of stages: preliminary assessment, detailed investiga-
tion, development, testing and validation, and production and market launch.
The project enters each stage through a “gate” that defines the hurdles that the
project must clear to enter the next stage.
In the context of sequential interdependence, it is often easy to think of vari-
ous collective incentives that may direct the attention of subunits and their mem-
bers to do their best to ensure that integration is effective (Ocasio, 1997).
Factory workers could be incentivized by overall throughput rates by linking
bonuses to the time from the receipt of an order to when it is ready to be
shipped. To the extent the steps along the critical path that determines through-
put time are under the subunits’ control, workers will see how their efforts at
becoming more effective in the relevant subtasks work toward achieving the col-
lective objective, and consequently, the bonus. These incentives alone may be
sufficient in eliciting the requisite communication (e.g., Harrigan, 1984).

Other integrative devices seem either unnecessary or irrelevant. A case in
point, while multi-skilling tends to be always useful at least to an extent, it does
not seem particularly suitable for managing sequential interdependencies. The
essence of sequential interdependence can usually be readily understood by the
senders and the recipients, even if they are specialists. But some processes may
require communication across specialists that can be facilitated by generalists.
Translating product characteristics into engineering specifications in the post-
development review stage of a product development process (Cooper, 1990,
p. 46) might benefit from a generalist with expertise both in development and
production. In general, however, employing or training generalists to manage
sequential interdependencies seems excessive.
Whether the relevant information that subunits need exists is one thing, whether it
can be effectively retrieved is another. Socialization and authority may both be effec-
tive in ensuring that subunits will always have the requisite information available to
them. Not all subunits and their members are willing to share information, particu-
larly if there are no collective-level incentives for doing so. Why would a faculty mem-
ber who is successful in securing funding particularly from within the university
share the information with colleagues who compete for the same resources? Some
requisite information is privately held and subject to negotiation and bargaining
(Coff, 1997). Subunits may, of course, be required to disclose information through
the exercise of authority: the university administration may, for instance, require that
all applications for both internal and external funding be public. But without the
proper organizational culture of openness and sharing, subunit members may con-
sider this intrusive, which may have political costs (e.g., Axelrod, 1984).
In summary, we propose:
P2: In the case of sequential interdependence, formalization, incentives,
and communication complemented by socialization constitute an effective
configuration of integrative devices.
Reciprocal Interdependence
A conversation between two people is a good example of reciprocal interdepen-
dence: whatever the sender says constitutes an output that might become an
input to the recipient, who then becomes the sender in the next round of com-
munication by providing a new input to the original sender. The ultimate out-
come is one of joint production. Because integration is required throughout the
process, reciprocal interdependence requires constant attention from the interde-
pendent subunits. Consequently, managing reciprocal interdependent often
involves the most extensive amount of integration effort (Thompson, 1967; Van
de Ven et al., 1976).
Whenever academic programs are either developed or modified, activities of
different departments are reciprocally interdependent: What should the composi-
tion of a 120 credit degree be? What majors and minors can students declare?
Subunits become reciprocally interdependent because there are important bound-
ary conditions that must be incorporated. Also, there must be some kind of a
mutual understanding of what exactly a specific degree contains and what knowl-
edge domains are represented: To what extent must a major in business analytics
and evidence-based management incorporate courses in statistical theory and
research design? Will emphasis be on working on data obtained from authentic
organizations or will students work with simulated data provided by the faculty?
These are questions that require conversation, debate, and deliberation across
individual subunits, and the interdependencies are likely reciprocal. The members
of one subunit must authentically understand the positions and the arguments of
the other subunits, as well as the degree requirements as a whole.
The obvious integrative device is communication. Again, intrinsically moti-
vated spontaneous communication can be complemented by structural devices,
such as cross-subunit teams that discuss and debate the key issues. In these dis-
cussions, multi-skilled generalists can be effective in facilitating communication
between specialist experts. As far as integration is concerned, the central organi-
zational task is to provide a context that enables communication that seeks to
incorporate the expertise of the specialists.
Multi-skilling can complement communication, but in some cases it may also
substitute for and reduce the need for communication across subunits. Consider
the challenge of design for manufacturability, the principle of designing products
that are easy to manufacture (von Hippel, 1976). Meeting the challenge often
involves the co-design of the production system and the product. But to the
extent the expertise of both are located in the same unit, even one single individ-
ual, the need for cross-departmental (product design and manufacturing engi-
neering) communication does not exist, or at least not to the same degree as in
an organization where the design department is responsible for product design
and manufacturing engineering for process design. Multi-skilled employees have
the requisite absorptive capacity that enables both a mutual understanding of
one another (e.g., Borys & Jemison, 1989; Cohen & Levinthal, 1990; Puranam,
Singh, & Chaudhuri, 2009) and an understanding of the subunit
interdependence. Cohen and Levinthal’s absorptive capacity is closely related to

Tyre and Hauptman’s (1992) idea of functional overlap, that is, the creation of
organizational subsystems whose domains are not completely distinct. Tyre and
Hauptman (1992, p. 306) specifically hypothesized that greater use of functional
overlap would result in more successful new product introductions. In the uni-
versity context, professors who serve, or have served, on the faculty of several
departments, are an analogous manifestation of “departmental overlap.”
Much like in the case of sequential interdependence, collective incentives are
feasible. But careful attention must be paid to what the objectives are. In the case
of sequential interdependence, collective incentives should be tied to successful
workflow, which can be measured with metrics such as throughput time in a
new product development project, time to market is a good example of a relevant
metric. But it is much more difficult to think of a way to measure the successful
management of reciprocal interdependence. In the context of a university degree
program, exit surveys and interviews with students seem like a feasible approach.
These are common in the evaluation of MBA programs. Indeed, alumni responses
contribute almost 60 percent in the Financial Times rankings of MBA programs
(www.rankings.ft.com, read January 3, 2017). Alumni are surveyed on topics such
as salary increases, perceived “value for money” (salary increases scaled to inputs
such as course length and fees), and career progress. These are, of course, not
direct measures of successful integration. In the context of new product develop-
ment, commercial success of newly introduced products might indicate successful
integration of the R&D and Sales & Marketing functions.
Managing reciprocal interdependencies requires communication: dialogue,
deliberation, and debate. Authority thus seems here clearly ineffective. The orga-
nization may have formalized procedures in place that encourage or even man-
date joint problem solving between the interdependent subunits. Collective
incentives might also motive the units to address the reciprocal interdependence.
Socialization is less relevant for reciprocal interdependence than for sequential
interdependence, where we noted that private knowledge may constitute a prob-
lem that socialization could address. In a reciprocal-interdependence relation-
ship, private information is less of a concern, because the subunits are bilaterally
interdependent, which immediately creates a disincentive to withhold private
information. Similar relationships of mutual, bilateral dependence are found in
many buyer-supplier relationships (Williamson, 1985). In sum, we propose:
P3: In the case of reciprocal interdependence, communication complemen-
ted by structures, formalization, multi-skilling, and incentives constitute
an effective configuration of integrative devices. Multi-skilling can func-
tion as a substitute for communication.
Theorizing Configurations
Propositions 13 already contain some ideas of how the individual integrative
devices relate to one another. In examining the relationships among the integra-
tive devices, we turn to investigate their internal fit. In the following, we discuss
the ways in which integrative devices can be substitutable, complementary, or per-

haps incompatible (see also Ketokivi & Castañer, 2004; Miller, 1992; Siggelkow,
2002). In approaching the seven integrative devices analytically, we believe that a
configurational approach (Doty, Glick, & Huber, 1993; Miles & Snow, 1978;
Miller, 1986, 1992; Van de Ven, Ganco, & Hinings, 2013) works best.
Authority and the Other Devices

In many ways, all the devices other than authority seem to replace the need for
authority. Conversely, if authority can successfully be used to address the inter-
dependencies, it seems unnecessary to spend any additional organizational effort
on incentive alignment, lateral structures, or socialization. Of course, it could be
that while integration is achieved by referral to authority, the other methods are
used ceremonially, or their implementation arises from the institutional environ-
ment (DiMaggio & Powell, 1983; Meyer & Rowan, 1977). In the heyday of the
Total Quality Management movement in the 1990s, for instance, companies felt
the urge to implement cross-functional structures, whether it made strategic
sense or not (Dean & Snell, 1996). We acknowledge the institutional aspects of
organization design as an empirical fact, but consider them outside the scope of
our approach to organizations.
Suppose the efforts at implementing both authority and other devices indeed
constitute a rational attempt. In our view, the approaches are incompatible in
the sense that simultaneous implementation of, say, both referrals to vertical
hierarchy and lateral structural devices is inconsistent: a given integration chal-
lenge can be addressed either in the vertical or the horizontal dimension of the
organization, but not both, because the use of one precludes the use of the other.
At the same time, in the case where no other device is useful, authority is always
a device of last resort. For example, use of liaison personnel Program
Coordinators is common at universities. However, the task of the liaison per-
sonnel is often challenging in that it consists of collecting relevant information
from the different subunits that provide content for the degree program. When
the faculty do not see the point in sharing their time and expertise with the liai-
son personnel, the liaison personnel are unable to effectively address the interde-
pendence problem. The only way to solve the problem may be by resorting to
authority. In sum, we propose:
P4: The use of authority is incompatible with the other integrative devices,
but is useful as a last resort.
This proposition resonates with Leavitt’s (2005, pp. 103104) argument
about the utility of authority in modern hierarchies: exercising authority is
always an option but Leavitt prescribed it as a last resort. Here, it is important
to make the distinction between hierarchy as a description of an organization
and authority as an integrative device. Hierarchies are ubiquitous: every organi-
zation has a vertical dimension, manifested by the fact that just about all organi-
zational members in all formal organizations are accountable to a
superordinate. But the extent to which authority (command or direct order) is
used to address interdependencies and to integrate the organization is an alto-

gether different issue.
The use of authority as a way of resolving the integration challenge seems
only appropriate if the superordinate has sufficient knowledge to make the deci-
sion without involving the subordinates who are affected by the interdependence
(Galbraith, 1974, 1977). This situation might arise under conditions of pooled
interdependence, when the subordinates may not even be aware of how and why
they are interdependent. Sequential and reciprocal interdependencies tend to be
more salient. Therefore, we propose:
P5: The use of authority is appropriate for pooled interdependence but
not for sequential and reciprocal interdependence.
Formalization and Socialization: The Devices That Stabilize

Formalization and socialization are similar in that they both promote stability
in the organization. Formalization promotes routinization of organizational

activities and thus creates an organization in which behaviors are standardized
and predictable (Hannan & Freeman, 1984; March & Simon, 1958). Such rou-
tinization can obviously extend also to attempts to address subunit interdepen-
dencies and thus seek integration. The Stage-Gate Model of innovation is a
good example of a formalized product development process. Contrary to popu-
lar belief, there is typically sufficient repetitiveness in many processes we tend to
consider “nonroutine,” such as engineering and R&D (Adler, Mandelbaum,
Nguyen, & Schwerer, 1995). Importantly, routines are meant to address recur-
ring interdependencies.
Socialization into an organizational culture has a similar function. If socializa-
tion efforts are successful and an organizational culture emerges, is maintained,
and reproduced, organizations become stable and predictable (Hannan &
Freeman, 1984). Once this common base has developed, it becomes self-reinfor-
cing: it likely becomes the basis of personnel recruitment, retention, and promo-
tion, for instance (Kanter, 1977). These processes are fueled by well-known
social-psychological processes of in-group bias and homophily (Ibarra, 1992;
Ouchi, 1980), both of which act as filtering mechanisms that favor those who fit
the organizational culture. Organizationally, the outcome is comparable to the
effect of formalization: stable and predictable ways of thinking and acting. This
can be conducive to addressing subunit interdependencies as well.
We propose that since both formalization and socialization promote stability,
they can have a mutually reinforcing, complementary (Milgrom & Roberts,
1995) integrative effect. Formalization centers on standardizing behaviors and
socialization can complement this by helping organizational members under-
stand the importance of routinization. An important part of the socialization of
routinization is that organizational members understand that formalization is
ultimately an organizational arrangement that enables organizational members
instead of coercing or constraining them. In this context, Adler and Borys
(1996) wrote about enabling and coercive bureaucracies. In sum, we propose:
P6: Socialization moderates the effect of formalization. If members view

the organization as an enabling bureaucracy, the moderating effect is posi-
tive; if members view it as a coercive bureaucracy, the effect is negative.
Structures and Incentives

In the context of organizational integration, both lateral structures and incentives
are geared toward directing subunit attention to the interdependence. Lateral
structures such as cross-functional teams or liaison personnel are aimed at facili-
tating the communication between the interdependent subunits; they are essen-
tially about providing the organizational platform where communication can
occur. The objective of collective-level incentives is to complement this by direct-
ing subunit attention to the interdependence, effectively encouraging communica-
tion between the interdependent subunits. Structures and incentives are
complementary in the sense that when the organizational members’ attention is
directed at the common problem of subunit interdependence, the communication

that occurs in the lateral structures is likely more effective. In sum, we propose:
P7: Incentives moderate the effect of structural devices: with collective-
level incentives, lateral structures are more effective.
Enabling Relationships
Finally, in addition to incompatibility, substitutability, and complementarity,
we identified a fourth distinct form of relationships among the integrative
devices: one device may enable the use of another. This is distinct from a com-
plementary relationship in that when two devices are complements, the presence
of one strengthens the impact of the other (Milgrom & Roberts, 1995). But
when two devices are in an enabling relationship, one is a necessary condition
for the other. We identify two important enabling relationships. The first is the
case of lateral structures enabling communication. Without proper organiza-
tional platforms, communication between interdependent subunits is likely not
to occur. This underscores the notion that organizational integration is ulti-
mately an organizational task that involves more than just communication. The
organization must be properly structured for the relevant communication
regarding subunit interdependencies to be possible. We thus propose:
P8a: Lateral structures enable communication across the interdependent
subunits.
The second enabling mechanism follows from the first. When a lateral struc-
ture has enabled communication across subunits, the communication can also
generate social bonds among the participants to accept a set of common values.
Through cross-functional communication that takes place specifically within
cross-functional structures, organizational members can develop a common
understanding of how the interdependence affects their work. Social bonds that
are built serendipitously are likely not geared toward the interdependence, or
even task-related issues. In contrast, the communication that occurs within the
lateral structures is specifically designed to focus on the interdependence, and
Table 1. Summary of the Integrative Devices and Internal and External Fit.
Device External Fit Internal Fit
Pooled Sequential Reciprocal [1] [2] [3] [4] [5] [6] [7]
[1] Authority Last resort Ineffective Ineffective

[2] Formalization Effective Effective Effective I
[3] Cross-unit structure Unnecessary Unnecessary Effective I
[4] Collective incentives Unnecessary Effective Effective I M
[5] Communication Effective Effective Effective I E
[6] Multi-skilling Unnecessary Unnecessary Effective I S
[7] Socialization Effective Effective Ineffective I M E
Notes: I ¼ incompatible; M ¼ moderating relationship; E ¼ enabling relationship; S ¼ substitutes.

can lead to the creation of a culture of integration where recognizing and addres-
sing subunit interdependencies and their resolution becomes a universally under-
stood and accepted premise. We thus propose:
P8b: Communication within lateral structures enables socialization that
focuses attention on the interdependence and the integration problem and
can create a culture of integration within the organization.
The propositions are summarized in Table 1.
CONCLUSION
In this chapter, we have addressed one of the foundational questions in organi-
zation design: How can those in charge of designing an organization ensure ade-
quate organizational integration? Addressing the question requires a critical re-
evaluation of the key concepts and a broadening of the theoretical scope of
inquiry. As to the former, we found that the very definition of integration
requires elaboration. Are we interested in the integration of what we do, how we
think, or who we are? These are all discussed in the literature on organizations
as the de facto facets of integration. The early theories that focused on organiza-
tional structure tended to emphasize integrating behaviors and task execution.
Accordingly, the focus was on extrinsic motivation, incentives, and organiza-
tional structures, and empirical work was done primarily in industrial contexts.
But the more recent work has focused on the intellectual and the social aspects
of integration, and has incorporated all kinds of organizations; organizations
are much more than just a set of behaviors (Van de Ven et al., 2013).
Another concept that required considerable re-evaluation was the notion of
interdependence. In our view, pooled interdependence in particular has been
misunderstood. Pooling independent contributions may appear as a compara-
tively simple task on the surface. But pooling independent contributions in an
organization where subunits and the broader organization support one another
is much more complex, because the subunit interdependencies may not be read-
ily salient for organizational members. The integration challenges of pooled
interdependence must not be underestimated. Sequential and reciprocal interde-
pendencies are certainly not easy to manage, but they are typically conspicuous
to organizational members and, consequently, may elicit autonomous integra-
tion efforts from the members of the interdependent subunits. As to the differ-
ence between the latter two, reciprocal is often considered the more complex of
the two, because it may require the use of more time and resource-consuming
integrative devices. At the same time, we suggest that because reciprocal interde-
pendence is bilateral, reciprocally interdependent subunits may not suffer from
the kinds of power imbalances that sequentially interdependent subunits may
suffer. Reciprocally interdependent subunits do not have an incentive to with-
hold private information, for example.
The second aspect, broadening the scope of integration, was motivated by
the observation that published research and theories approach the integration
challenges as a theoretical problem, not a practical problem. Theoretical pro-

blems are comparatively simpler than practical problems and can be addressed
using parsimonious theories. But organization design and organizational inte-
gration are practical, not paradigmatic problems; if we want our inquiry to
match organizational realities, we must adopt a broad-based approach
(Dunbar & Starbuck, 2006; Van de Ven et al., 2013). In our attempt at a broad-
based perspective, in addition to recognizing the multiple facets of integration,
we have also considered a full set of integrative devices that have their intellec-
tual roots in different theories. This theoretical heterogeneity notwithstanding,
we found that these devices can be discussed and theorized jointly, because they
are ultimately aimed at similar ends. We also found that theories can also be
complementary: structural devices (structural contingency theory) and incentives
(organization economics), for instance, can be complementary in directing atten-
tion to the critical interdependencies and stimulating discussion and joint
problem-solving efforts. It is also important to identify the potential redundan-
cies and incompatibilities among the integrative devices. In the last part of our
theorizing, we have examined some rudimentary configurational issues associ-
ated with choosing the combination of integrative devices.
We close our discussion by examining some of the avenues for future research
on integration. First, we believe the propositions offered in this chapter lend
themselves to empirical inquiry. Empirical work on organization design in partic-
ular has involved operationalizing many of the concepts in the propositions,
including interdependence and various integrative devices (Aiken & Hage, 1968;
Van de Ven et al., 1976). Applying the survey method and psychometric measure-
ment lay an effective foundation for an empirical appraisal of our propositions.
Second, in terms of theoretical extensions, we would benefit from a simulta-
neous examination of interdependencies of multiple types. In our theoretical
analysis, we have focused on theorizing one type of interdependence at a time,
but as Adler (1995) showed, organizational subunits are interdependent in more
complex ways: some parts of the process may involve sequential interdepen-
dence, others reciprocal. Of course, organizational subunits must also execute
multiple tasks simultaneously, which means they may have to address multiple
interdependencies of different types in their daily activities.
In a similar vein, other task characteristics aside from interdependence should
be incorporated. A more complete theory of organizational integration obvi-
ously extends beyond interdependence to incorporate other aspects of both the
task environment and the organization’s environment more broadly. But
because interdependence is fundamental, it serves as a useful starting point if
subunits are not interdependent, there is no need to integrate them. We sug-
gested that task uncertainty relates more to questions of flexibility and adapt-
ability, not of integration. But concepts such as organizational slack may be
relevant: managing a reciprocal interdependence relationship in the absence of
slack may require a different approach at integration than a reciprocal interde-
pendence where subunits have time to engage in joint problem solving. In gen-
eral, slack resources reduce the intensity of the interdependence (Galbraith,
1974; March & Simon, 1958).

In closing, we wish to revisit the common assumption in the organization
design literature that organizations are rationally designed. Our inquiry has
indeed adopted a rational perspective in that we assume that organizations are
deliberately designed to complete various tasks: organization design is about
designing the organization. But as any theory that seeks to be relevant for prac-
tice, it is crucial to recognize that the rationality of the designer is always bounded
(Van de Ven et al., 2013). In organization design, bounded rationality stems from
the fact that every attempt at design will result in both intended and unintended
consequences. The literature on failed incentive programs alone is massive (Kerr,
1975), and examples of unsuccessful organizational redesign efforts abound
(Goold & Campbell, 2002b). An effective way of incorporating bounded rational-
ity is to acknowledge and theorize the existence and the consequences of unin-
tended consequences. At the same time, unintended consequences are largely
matters of empirical analysis in that they can be uncovered only through attempts
at changing the system one is trying to understand. But this opens up the possibil-
ity of not only learning to design but also to learn from designing: “[b]ecause
designers nearly always misunderstand to some degree, they should view their
efforts as experiments that might not turn out as predicted, and they should pay
careful attention to the outcomes of these experiments” (Dunbar & Starbuck,
2006, p. 176). Echoing this sentiment, we suggest that future research should
incorporate how designers examine the outcomes of their design efforts, whether
their interpretation of the outcomes changes the way they perceive interdependen-
cies, and how these perceptions ultimately affect redesign efforts. This approach
resonates with the adage often attributed to Kurt Lewin (Starbuck & Nyström,
1981): “if you want to understand a system, try to change it.”
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Organization Design

Toward a Theory of Organizational Integration

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tural contingency theory, organization economics, and organizational culture.

interdependencies, there would be no need for organizational integration.

ORGANIZATIONAL INTEGRATION: KEY CONCEPTS

How do organizations become integrated? What exactly requires integration in

necessary, minimal condition: whereas one would certainly want undergraduate

integrate the organization extend beyond what we do to how we think (cf.

organizations. The foundation of cultural integration is the idea that organiza-

ularized (Schilling, 2000) so as to make the subtasks organizationally independent

TOWARD A COMPREHENSIVE TYPOLOGY OF

1967a; Woodward, 1965).

To clarify, when authority is examined as an integrative device, a top-down

processes of inclusion (e.g., Feldman & Khademian, 2000) invite members of

are efﬁcient to manufacture as well can be addressed (Clark & Wheelwright,

knowing where the relevant organization-level information is stored and how it

appropriate ways of thinking and behaving. However, even though we speak of

THEORIZING INTEGRATIVE DEVICES: FEASIBILITY

(3) Reciprocal interdependence: subunits must add their contributions to the

previous semester are likely to be intrinsically motivated to bring the issue up

desirable to use two devices speciﬁcally because they are complementary or

is often supported by at least some degree of formalization in the form of perfor-

dized” (Thompson, 1967, p. 34).

integrative device will be more effective. In sum, we propose a complementary

sufﬁcient in eliciting the requisite communication (e.g., Harrigan, 1984).

interdependence. Cohen and Levinthal’s absorptive capacity is closely related to

the ways in which integrative devices can be substitutable, complementary, or per-

Authority and the Other Devices

used to address interdependencies and to integrate the organization is an alto-

Formalization and Socialization: The Devices That Stabilize

in the organization. Formalization promotes routinization of organizational

P6: Socialization moderates the effect of formalization. If members view

Structures and Incentives

directed at the common problem of subunit interdependence, the communication

[1] Authority Last resort Ineffective Ineffective

Notes: I ¼ incompatible; M ¼ moderating relationship; E ¼ enabling relationship; S ¼ substitutes.

challenges as a theoretical problem, not a practical problem. Theoretical pro-

1974; March & Simon, 1958).

Miller, D. (1992). Environmental ﬁt versus internal ﬁt. Organization Science, 3, 159178.

Sociology, 24, 124.

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