Final answer:
In the context of differentiation strategies, organizations are more inclined to reward risk taking rather than focusing solely on quantitative goals or close monitoring. Stable environments favor Type I strategies that focus on efficiency, while unstable environments necessitate Type III strategies, where flexibility and innovation are vital.
Step-by-step explanation:
The hallmarks of organizations pursuing differentiation strategies typically include a focus on innovation, quality, and brand image rather than on efficiency and cost-cutting. Given the options provided, the characteristics that align with a differentiation strategy are likely to be less about clear quantitative goals and close monitoring, and more about fostering an environment where creativity and risk taking are rewarded. Therefore, the hallmarks of such a strategy would be rewards for risk taking. Option B (III only) would be the answer that best fits the concept of differentiation strategies within a business context.
Regarding the stable and unstable environments, organizations operating in stable environments often utilize a Type I strategy which involves efficiency and maintaining current operations because the predictability of the environment supports steady operations and incremental improvements. On the other hand, a Type III strategy is more common in unstable environments where there is less predictability and thus, a greater need for flexibility and innovation to rapidly respond to changing conditions.