Involves location, specifically the sites of an organization's units, whether they are in one place or spread across several areas. An independent community pharmacy may have only one location with its operations centralized in a particular area. A large health system or chain pharmacy operation may have multiple units in different locations around a city, state, or the entire region of the country. This can also occur when an organization has different departments located in different areas. A pharmaceutical manufacturer may have its research and development departments in one city or state and the sales and marketing divisions in another area of the country or the world. Coordination is key among these units especially as an organization grows and differentiates. Spatial differentiation is also related to the degree of horizontal and vertical differentiation and the complexity of an organization.
