organizational design

The manner in which a management achieves the right combination of differentiation and integration of the organization's operations, in response to the level of uncertainty in its external environment.

Differentiation refers to the subdivision of functional or departmental units, each concentrating on a particular aspect of the organization's operations. Integration refers to the linking of differentiated units to achieve unity of effort in working toward organization's goals. In times of high uncertainty, greater organizational effectiveness is achieved through high differentiation coupled with high integration. In times of low uncertainty, low differentiation and low integration are more effective. See also organizational structure.