Document Type
Article
Publication Date
2018
Abstract
Prior literature is ambivalent about whether organizational complexity has positive or negative effects on firm performance. Using rich data on global service providers, we explore this ambivalence by disentangling performance consequences of different types of organizational complexity. We show that complexity arising from the coordination of different services and operations negatively influences profit margins through increased coordination costs, whereas complexity coming from the sophistication of particular services may positively influence margins through informational advantages. We also investigate the moderating effects of process commoditization and client-specific investments. Our findings point to critical performance dilemmas facing global service providers in a highly competitive industry, and they help better differentiate performance effects of complexity at different organizational levels.
Recommended Citation
Larsen, M.M., Manning, S., Pedersen, T. 2018. “The Ambivalent Effect of Complexity on Firm Performance: A Study in the Global Service Provider Industry”. Long Range Planning (forthcoming).
Publisher
Long Range Planning
Included in
Business Administration, Management, and Operations Commons, Entrepreneurial and Small Business Operations Commons, International Business Commons, Operations and Supply Chain Management Commons, Strategic Management Policy Commons