Multiplying the Division of Labour: Functional Differentiation of the Next Key Variables in Management Research

In this article, we draw on theories of social differentiation to show that functional differentiation is not about the division of work and organization, but rather about a multiplication of horizons for decision‐making. We argue that a systematic management of functional differentiation makes organizations smarter and more flexible. We corroborate this claim by demonstrations of how a functional approach to functional differentiation facilitates the design of new or the further development of well‐established management tools and research agendas in fields such as entrepreneurship, strategy, and human resource management.