organizational design

Definition

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 sub-division 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, through low differentiation and low integration. See also organizational structure.