RA30WP 2018 LRP Ambivalent Effect of Complexity.pdf (360.03 kB)
The ambivalent effect of complexity on firm performance: a study of the global service provider industry
journal contribution
posted on 2023-06-09, 19:03 authored by Marcus M. Larsen, Stephan ManningStephan Manning, Torben PedersenPrior 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.
History
Publication status
- Published
File Version
- Accepted version
Journal
Long Range PlanningISSN
0024-6301Publisher
ElsevierExternal DOI
Issue
2Volume
52Page range
221-235Department affiliated with
- Strategy and Marketing Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2019-09-25First Open Access (FOA) Date
2020-02-22First Compliant Deposit (FCD) Date
2019-09-25Usage metrics
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