On the relationship between organizational complexity and organizational structuration

This article represents a contribution to the conceptualization of organizational complexity. The first part of the article relates the concept of complexity to the production tasks of the organization by deriving measures of the complexity of production and planning tasks within the organization. This move allows us to analyze organizational activities in terms of the computational complexity of the tasks that the organization carries out. Drawing on concepts from theoretical computer science, the article introduces a taxonomy of production tasks based on their computational complexity and shows how to use the notion of computational complexity to analyze organizational phenomena such as vertical integration disintegration, the choice between markets and organizations as performers of particular production tasks, and the internal partitioning of organizational tasks and activities. The article then relates the complexity of the production function of the organization to the ways in which organizations structure themselves. It attempts to bring theorizing about organizational behavior based on complexity theory closer to the conceptual realm of “mainstream” organization theory and to make the concepts of complexity theory more useful to empirical examinations of firm dynamics and organizational behavior.