Peter Schott, Felix Horstmann and Freimut Bodendorf
33
1 INTRODUCTION
Modern industrial companies face an environment characterized by uncertainty and dynamics (Vrabic
2012). Thus, the basis of a company’s long-term success lies in the adaptability of its business processes. In
industrial practice, however, this desire for flexibility often leads to an increased company internal complexity
(Vrabic 2012). Pellissier (2012) states that both research and practice come to the conclusion that overly
complex companies cannot survive in the market over the long term. This basic statement is supported by
numerous other studies (e.g., Kim and Wilemon 2012; Axley and McMahon 2006). On the other hand, Axley
and McMahon (2006) see a certain degree of complexity as a positive and essential property of companies. They
explain that a system can achieve more flexibility with an increasing complexity of elements and relations,
which in turn increases the company’s ability to adapt to different environmental conditions. This leads to an
extended survivability of the company (Pellissier 2012; Isik 2010).
Owing to the fact that in industrial companies production greatly contributes to the value added, it can be
assumed that the complexity of production processes significantly influences the overall corporate complexity
(Kim and Wilemon 2012). Hence, it is necessary to tailor the application of complexity management methods to
the production specific initial situation. A thorough outline of existing complexity management methods is
lacking. As a consequence, complexity management poses a considerable challenge for companies (Pellisier
2012; Axley and McMahon 2006). Responsible managers (e.g., production managers) oftentimes lack
comprehensive knowledge about the entirety of available complexity management methods or solely rely on a
specific method they already applied in other application scenarios (Hickey and Davis 2004).
Therefore, this contribution addresses this gap and presents an approach that provides the possibility to
systematically integrate specific situational production contexts into the selection of appropriate management
methods. Like this, the approach expands the existing work in complexity research by a systematic linkage of
the area of application with the corresponding managerial solution space.
Consequently, the aim of this work is to design and develop an approach for the recommendation of
complexity management methods in form of a rated list of context-appropriate complexity management
methods. This results in the following research questions:
RQ1: Which complexity drivers exist in production-related fields of application?
RQ2: Which methods exist to effectively manage complexity?
RQ3: How can appropriate methods for a specific complexity issue be identified and recommended?
To answer these questions, first complexity drivers are identified and classified based on existing literature.
Subsequently, appropriate and well-tried complexity management methods are collected from literature. Based
on this groundwork, a scoring algorithm to provide users with context-appropriate management methods is
deduced. This bases on a quantified allocation of complexity drivers and appropriate methods by means of a
two-dimensional assignment matrix.
Finally, the evaluation of the presented recommendation approach by means of six semi-structured expert
interviews is briefly displayed. The contribution concludes with a discussion of impact and limitations and a
summarizing conclusion.
2 BACKGROUND
Companies are generally understood as complex systems (e.g., Holland 2006; Pellissier 2012; Suh 2005).
A company's complexity has numerous different drivers that can influence and reinforce each other. Literature
oftentimes differentiates between structural and functional complexity (Godfrey-Smith 1998). The structural
complexity is to be understood as an objective characteristic of a company. It includes exogenous complexity
(social complexity, market complexity) and endogenous complexity (correlated and autonomous corporate
complexity). The handling and management of complexity, however, always associates with the subjective
perception of internal and external business factors and subsumes functional complexity. Pellissier (2012)
considers a certain level of business complexity as a positive and vital capacity. A company therefore does not
necessarily reach its complexity optimum when it has the lowest possible complexity (Marti 2007, Kim and
Wilemon 2012). Ashby’s Law of Requisite Variety supports this hypothesis (Ashby 1970). He states that only
an equally strong internal system complexity can counter the complexity of the system environment (e.g., the
company environment) (Ashby 1970). Thus, it is clear that both a deficiency as well as an excess of complexity
impede the sustainable business success alike. Consequently, complexity can never be completely eliminated
without jeopardizing the company's existence.
A sizable number of researchers delve quantitative dimensions of complexity and especially focus on the
measurement of complexity (e.g., Smart et al. 2013, Isik 2010, ElMaraghy and Urbanic 2003, Vrabic 2012). In
this context, for example Smart et al. (2013) apply an information-theoretic view on dynamic and static
complexity measures and concentrate on the amount of information needs within manufacturing systems. Isik