Sub-System Design

A sub-system is a single department of work unit headed by a manager and representing a smaller part of a larger organisation. A comprehensive approach to organisational design provides appropriate structures for each subsystem in an organisation and a proper coordination among them.

As already pointed out, organisation structure must be compatible with the strategic factors in environment and context. Even within an organisation, differences among subsystems will emerge as each subunit tries to position itself best to meet the special demands of its 'sub-environment'. A sub-environment is relatively certain if there is clear information regarding it, cause and effect relationships are known, and the time span of clear feed back is short. 

Now  you will be introduced to the two basic elements of subsystem design, namely, differentiation and integration. 

Differentiation 

"Differentiation" is a term used to represent the degree of difference that exists among the structures and managerial orientations of various departments or other subsystems of an organisation. Differentiation occurs in four basic dimensions - structure, time orientation, interpersonal orientation, and goal orientation. 

Formality of Structure 

A manager from a mechanistic unit may will be bound by rigid rules and procedures that limit his or her discretion in inter unit negotiations. This could be quite frustrating for some one from a more organic unit who is used to flexible problem solving and is willing to make an on-the-spot decision. Formality of structure tends to be greater in such departments as manufacturing and finance. Long-range planning (LRP) units tend to have fewer rigid rules-and set procedures. 

Time Orientation 

Sub units that have relatively immediate feedback, than do sub units that may not get feedback for months or years, such as Research and Development. 

Inter-personal Orientation 

To the extent that patterns of communication, decision-making, and social interaction vary from one unit to the next, it may be harder for personnel from different sub-systems to work together. For instance, manufacturing people tend to be concerned with"tasks"; while sales and marketing people tend to be concerned with "relationships". 

Goal Orientation 

When goal differences exist, it is harder for managers from different subunits to agree on solutions to common problems. For example, production managers tend to be "cost conscious"; while marketing managers are "volume conscious". 

Different industries also have varying amounts of differentiation. For instance, the "container manufacturing organisations" have little need for differentiation since they exist in a relatively certain environment with a stable and known technology. On the other hand, the "plastics organisations" exist in a relatively uncertain, high technology environment. 

Integration 

The problem is that increased differentiation creates a need for increased coordination. Besides this, coordination becomes more difficult as differentiation increases. 

"Integration" represents the level of coordination achieved among subsystems in an organisation. A high degree of differentiation indicates that members in different sub-units view problems differently and that conflicts arise about how best to handle situations. When subsystem differentiation is low, an organisation can rely on integrating mechanisms more common to a mechanistic structure like rules and procedures, and hierarchical referral (referring a problem upward to a common supervisor). In the case of high differentiation, more elaborate means for achieving effective lateral (horizontal) relations such as cross-functional teams or task forces and eventually a matrix structure can be used.