Thursday, April 24, 2014

Complexity and Differentiation

In the last byte, we discussed about spacial differentiation. In today's byte, we look at the the different differentiation in combination. 

Horizontal, Vertical and Spacial Differentiation indicates the amount of width, height and breadth an organizational structure needs. A lot of distribution on any one of these dimensions doesnt necessarily mean that it is distributed on all other dimensions as well. 
As an example Imagine an university - one could find a very great horizontal differentiation, but relatively little vertical differentiation. On the other hand, consider the case of a large company like Coca-Cola: It would have a great level on all three dimensions.
What one needs to remember is that the more structurally differentiated the organization is, the more complex it would be.
We have used the term "complexity" a  lot. Complexity refers to the number of activities, subunits or subsystems with the organization. It has been suggested that organization's complexity should mirror the complexity of the environment.
As the complexity of an organization increases, its need for mechanisms to link and coordinate the different parts of the organization increases phenomenally. Failure to coordinate effectively could lead the orientation towards the organization goal to disappear
With the need for linkage and coordination establish, we shall next move towards understanding integration.

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