The varying degrees of uncertainty in the three major parts of the organization’s environment (market factors, techno- economic factors, and scientific factors) meant that personnel at different levels within each department dealing with these different factors had the knowledge necessary to help make joint decisions on innovation issues with other departments. We found in interviewing top executives about environmental conditions that, given the relative stability of techno-economic factors, a high-level production manager (e.g., plant manager) knew enough to consider joint departmental decisions from the production viewpoint. On the other hand, the great uncertainty about scientific facts and their application meant that only the scientists working on particular problems or their immediate supervisors (e.g., group leaders) had the detailed knowledge necessary to contribute to the resolution of problems with other departments. The market knowledge needed for making joint decisions was less certain than the techno- economic information, but more certain than the scientific knowledge. This meant that managers nearer the middle of the sales department hierarchy (e.g., product sales managers or product marketing managers) were the ones with the necessary knowledge to attempt integration and to work at resolving interdepartmental conflict.
In addition to these representatives of the basic functional departments, each organization, as we indicated in the previous chapter, had established a department that had as one of its major responsibilities the integration of the activities of the basic departments. While this was the assigned responsibility, our observations led us quickly to conclude that the primary activity in bringing about integration was helping to resolve conflicts among the different functional points of view. Given the uncertainty about both the market and the scientific phases, and given the fact that the effective integrator had to know something about all facets of the environment, the top managers we interviewed indicated that the integrators generally had to be at the lower management levels in order to have the knowledge required to carry out the detailed integrating activity that the environment demanded.
This is not to say that the top echelons of management in the research, sales, and integrating departments were not supposed to be involved in integration. Rather, the uncertainty and complexity of the market and scientific aspects of the environment limited the extent to which these upper managers could get involved in detailed decision making. Their job was to provide integration at a broader level of policies and strategies.
In all six organizations we found that the managers at the required level in each department had been assigned the formal responsibility for integrating their departments’ efforts with those of other units around product and process changes. If this had not been so, we might have immediately had one obvious clue why some organizations were more effective than others at resolving conflict to achieve both differentiation and integration. But while the assignment of responsibility met the requirements of the environment, what actually went on in some organizations differed from what was formally desig-nated. This is a point we will pursue in some detail. Now we wish simply to state that formal responsibility for integration (and thus for the resolution of conflict) was assigned at the required level within each functional department and the coordinating departments.
The men to whom these responsibilities were assigned were plant managers from production, scientists and group leaders from research, and product sales and marketing managers from sales, as well as the assigned integrators. In four organizations a rather complex network of cross-functional teams or committees had been formally established to provide a setting for these managers to carry out joint decision making around a particular product or group of products. In the other two, even though no formal teams had been set up, there were frequent meetings of integrators and functional managers, either in groups or in pairs, to achieve integrated efforts.
While all these managers were supposed to be involved to some extent in resolving interdepartmental conflict, we came to recognize that the integrators were the most active. This was a major part of their assigned work. They were presumably on the payroll largely because of their ability to do it, while the various functional managers were paid chiefly for their specialized knowledge and skills. As we thought about the factors that could be related to conflict resolution in these organizations, we realized that one important set of determinants would revolve around the behavior of the integrators, while another might be related to the behavior of both the integrators and the functional specialists. In examining the six determinants of conflict resolution, we shall focus first on three factors that influenced the integrators as they attempted to facilitate the resolution of interdepartmental disputes and then upon the factors that seemed to be related to the behavior of all the managers involved.
Source: Lawrence Paul R., Lorsch Jay W. (1967), Organization and Environment: Managing Differentiation and Integration, Harvard Business School.