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why does differentiation occur in an organization

Businesses, much like individuals, develop in their own way and at their own pace. Several factors influence how a business develops, from the personality of its leaders to its chosen industry to the economic climate. The results can range from a structured, vertical hierarchy to a loose, horizontal free-form group. Businesses can develop from teams splitting off and pursuing their goals or from individuals coming together for a common cause. Differentiation occurs in large companies when different departments, sections or branch offices create their own corporate culture within the parent company's overall structure. For instance, the sales staff at a differentiated company will have a different approach to their tasks than the accounting department. Companies also can be differentiated based on product lines. A highly-differentiated brewery will have sections that brew pilseners, lagers and ales, each with its own production, accounting and marketing operations, while operating under the same corporate umbrella. Integration relates to how the different areas of the company coordinate their operations. A highly-integrated company has strong connections between departments and product lines, with each section working under a cohesive set of rules and strategies.

Integrated companies are highly vertical and hierarchical in nature. These companies operate from a "top-down" mindset, where the management dictates the structure of each department rather than allowing the individual departments to set their own agendas. One factor that determines whether a company practices differentiation or integration is how each department sorts its priorities. For instance, sales staff focus on bringing in revenue, while accountants place their attention on reducing costs, but both priorities contribute to increasing the company's profits. Another type of prioritization involves how departments handle time constraints. In a software company, the development staff work in terms of months or years, while the customer support staff must come up with solutions in hours or days. Communication methods also dictate whether a company employs a more differentiated or more integrated approach. As an example, sales staff deal primarily in face-to-face or telephone communications, while information technology workers depend on e-mail and text messages.

The marketing department may also use less formal language when communicating, where legal staffers are trained to parse every word for multiple meanings. When departments must work together, they must develop an integrated communication strategy to achieve their goals.
Why Does Differentiation occur in Organization?. When ever organization grows in large size from small one, the managers must decide how to control and coordinate the activities that are required for the organizations to achieve their goals. The principle design challenge is how to differentiate this division of labor to control easily and coordinate efficiently. The Differentiation: The differentiation is the process by which an organization allocates people and resources to organizational tasks This establishes the task and authority relationships that allow the organization to achieve its goals. The Division of labor: the degree of specialization in the organization In a simple organization, differentiation is low because the division of labor is low Individuals typically perform all organizational tasks In a complex organization, differentiation is high because the division of labor is high.

Example is Bob and Amanda restaurant business, how they managed from small restaurant to large scale. The Organizational Roles : The basic building blocks of differentiation are organizational role. The set of task-related behaviors required of a person by his or her position in an organization. As the division of labor increases, managers specialize in some roles and hire people to specialize in others. The specialization allows people to develop their individual abilities and knowledge within their specific role. The Organizational structure is based on a system of interlocking roles. Here I would like to explain some important role in the organizations. The authority who has the power to hold people accountable for their actions and to make decisions concerning the use of organizational resources. The authority has the ability to coordinate and motivate people to work in the organizationБs interests. The Function: a subunit composed of a group of people, working together,.

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