Basic Challenges of organizational Design - Differentiation

8 important questions on Basic Challenges of organizational Design - Differentiation

Why does differentiation occur in an organization? Distinguish between vertical and horizontal differentiation.

Differentiation occurs when an organisation gets bigger and they have to divide the labor into different subunits because one or a few people no longer can control and perform all tasks in the organisation.

Horizontal: The different subunits the organisation is divided into -> Grouping of organisational tasks.

Vertical: The hierarchy in the organisation -> Distribution of authority

When does an organization need to use complex integrating mechanisms? Why?


When the communication and coordination between the subunits is not working properly. It is important for the subunits to know when and to whom they need to report to.

What factors determine the balance between centralization and decentralization, and between standardization and mutual adjustment?

The level of uncertainty in the society and the environment in which the organisation operates.
  • Higher grades + faster learning
  • Never study anything twice
  • 100% sure, 100% understanding
Discover Study Smart

What is centralisation? What are the advantages and disadvantages?

When the decisions are made by managers at the top of the hierarchy.

Advantage: Top managers are able coordinate organisational activities and keep the organisation focused on the goals

Disadvantage: Top managers can easily get overloaded with day-to-day issues when the organisation is too centralised.

What is decentralisation? What are the advantages and disadvantages?

When managers at all levels in the hierarchy can make important decisions about organisational resources and initiate new projects.

Advantage: Promotes flexibility and responsiveness -> Lower level managers are able to make on-the-spot decisions. Managers are able to demonstrate their personal skills and competences

Disadvantage: If too much authority is delegated to all levels it becomes hard to plan for the overall organisation. The organisation may lose control of the decision-making process.

What are the different types of integration mechanisms?

Hierarchy of authority
Direct contact
Liaison role
Task force
Team
Integrating role
Integrating department

What is standardisation? Why is it used?

Sets of rules and norms that are considered proper in a given situation. Is used to make people's actions routine and predictable.

What is mutual adjustment?

The ability to make a decision based on the current situation to the best of their judgement and not on the standardisation.

The question on the page originate from the summary of the following study material:

  • A unique study and practice tool
  • Never study anything twice again
  • Get the grades you hope for
  • 100% sure, 100% understanding
Remember faster, study better. Scientifically proven.
Trustpilot Logo