ABSTRACT
Complexity is recognized by economists and management scholars as a key factor limiting the growth and profitability of large firms. Yet indicators suggest that the level of complexity continues to increase in many organizations. There has been a tendency to view internal complexity as an inevitable result of external complexity, rather than investigating the role of managerial choices. Inappropriate organizational designs may result in unnecessary complexity. Complexity may be defined as interdependencies (between functions or goals, and between elements in a work process). To reduce complexity, one needs to minimize coupling (conflict) between different functions or goals and to minimize co-ordination costs.
