The growing complexity in the field of business management continues to pose a major challenge to organizations especially those that operate in global business environments. Due to the dynamic nature of the corporate environment, the factors that influence management at a global level equally tend to change with each passing day. In order to achieve successful management at a global level, there is the inevitable need to have a proper understanding of the various complexities that exist within a business set up (Acocella, 2010). This report shall therefore entail the details of an analysis of some of the impacts of business complexity on management at an international or global level.
The main research issue is an examination of the concept of business complexity. The other portion of this report shall outline the possible effects of these complexities on management both at a local and at an international level. Complexity in this context ought not to be treated from a literal point of view as it would then imply that operations within an organization get complicated and at times fail to proceed leading to failure. Business complexity in the context of the problem statement in this project has therefore been viewed as the tendency of a business to have various stakeholders, structures as well as information systems which are interconnected with one another. This therefore implies that each of the elements within an organization has an independent role towards the achievement of organizational goals and objective (Alvesson & Ka¨rreman, 2011). However, it would be worth to note that each of these organs are interconnected to form one complex system which in real sense governs the effective flow of processes within the organization. Despite the fact that business complexity serves as the backbone of an organization’s development, lack of proper management strategies may lead to challenges which may eventually have drastic effects on an organization especially in the global environment. The rising variations related to business complexity calls for strategic measures and counter strategies. While business complexity may be viewed to come with various challenges to a business organization, the various types of complexities can be harnessed to improve the general organizational performance. This is achievable through the establishment of efficient procedures. The need for an in-depth understanding of the concept of business complexity justifies the research topic (Al-Lamki, 2012). At the same time, obtaining a crucial strategic balance in business management in the presence of complexities would be crucial for upcoming managers. This therefore explains the value of this research topic. The findings from this process and the recommendations would be vital for managers and other stakeholders. This is because the findings and ideas discussed offer an effective insight on the strategies that can be applied to deal with the management challenges associated with business complexity in the global environment.
The main aims of this research process were:
To establish an in depth understanding of the concept of business complexities and the probable causes of such scenarios within an organization
To establish the correlation between organizational performance and a complex business environment.
To outline how stakeholders, organizational structure and information system influence the nature of complexity within an organization.
To highlight some of the possible mitigation strategies towards the management challenges associated with business complexity.
The research generally aims at describing business complexity not only in terms of the challenges it brings about but how business complexity can be harnessed to improve the overall organizational performance.
The research process was distinctly aimed at addressing the following questions:
What is the percentage impact of business complexity on organizational revenue in a span of 1 year?
What is the correlation between organizational performance and a complex business environment?
What is the percentage improvement in business performance when the challenges of business complexity are removed?
As highlighted by Chu (2011), business complexity may be associated with various definitions. However, the author describes complexity as the a specific information that would be required to fully document a company in relation to its organizational structure, products, services, tools, information systems, process, interfaces as well as procedures. The author’s profound description of the concept of business complexity enables a better understanding of the issue which would be crucial for the completion of this research. As noted by Chu, the various elements are intertwined and have a special relationship with each other hence the need for a holistic point of view when addressing each of them. For instance, the nature of the organizational structure has a distinct effect on the type of procedures, processes and interfaces implemented within the organization. This therefore implies that when putting in place the strategic plan for the enhancement of a proper organizational structure, there is an equal need to look at the possible impact of such a structure on other elements within the organizational system (Ashforth & Kreiner, 2009). The author points out selective attention as one of the causes of challenges associated with business complexity in an organization. When one item is addressed at the expense of other items which are equally vital for the business complex, there is the possibility of an imbalance within the managerial environment. This leads to impacts which do not only affect the organization within its local business environment but equally hinders its bid t explore and conquer the international market.
Waldrop (2012) in his article gives a keen description of some of the types of business complexity. Among these types is the example of imposed complexity. According to the author, imposed complexity is described as the set of regulations, procedures and requirements that are instrumental for the operation of a business. It is a fact worth noting that various factors influence business operations especially in the global environment. Some of these aspects include government policies and legal requirements meant to govern the establishment of international ventures. These regulations tend to vary from one country to another. The dynamic nature of business regulations may at times lead to complexities hence the need to find a level ground when establishing the management strategies in a global environment. The author therefore suggests a careful understanding of the trends in government policies and regulations in international environments. This allows managers within the organization to come up with strategies which when implemented will effectively counter the challenges associated with imposed complexity (Faleye, Kovacs & Venkateswaran, 2013).
Goodwin (2012) examines the aspect of industry complexity. The author argues that the processes, procedures, products and services offered by an organization constitute its industrial complexity. The type of product, for instance, plays a crucial role in determining the return on investment record by an organization over a given period of time. At the same time, the quality of these products and services are essential in determining the rate of customer satisfaction and retention. Since the customers highly define an organization’s market, they deserve to be addressed with the same efficiency that the products and services are treated. The changing nature of consumer preferences, tastes and orientation therefore implies that an organization must always be flexible enough to exercise product and service variation with the sole aim of meeting the consumer needs. These adjustments and transitions may at times come with financial implications to the business which can be noted as one of the challenges attached to industrial complexity (Golding & Gray, 2009).
Meyers (2010) effectively outlines the aspects that surround variety complexity as well as the issue of stakeholders. As noted by the author, the variety of products, brands and services in which an organization deals constitutes its variety complexity. The need to vary products is vital in enhancing a wide market base. In a global business environment, there are changing dynamics. For instance, as one moves from one nation to another, the reception of people towards particular products keep changing as well. While other brands, services and products are readily embraced, there are those that never manage a stable market in certain parts. Venturing in market segment characterized by poor consumer reception may come with a low return on investment to the organization. As a mitigation strategy, the author suggest the need for an in-depth understanding of the varying market trends to ensure that the organization’s variety of products and services adequately fits the consumers’ changing needs (Gomez-Mejia, & Robert, 2008). At the same time, the author points out the consumers as one of the key stakeholders for any business entity. As a result, the consumers’ needs deserve to be addressed as a way of enhancing an organization’s investment opportunities especially from a global point of view.
Mitchell (2011) outlines the aspect of design and accident complexity and the possible impacts of these forms of complexities on business management at a global level. Design complexity in this case is highlighted as the design of an organization in terms of its structure, products, services, systems and procedures. The nature of a design determines the level of an organization’s performance especially at a global level. The author then slips into describing design accident complexity as the tendency of a design to be so inefficient that its implementation fails to bring much reward to an organization. In line with these arguments, it can be noted that the design of an organization is a crucial determinant of the flow of processes. For instance, the organizational structure encourages a given set up of leadership which in turn impacts the procedures, processes and communication approaches used at the organization. The design ought to be aligned with the organization’s objectives in a bid to ensure that they remain as efficient and hence attract good return on international investment. Coming up with an appropriate design may at times be a challenge to an organization especially in cases where there are no skilled personnel to oversee the construction and implementation of these designs. This therefore culminates in the establishment of less efficient designs which when applied lead to losses instead of the much need gains. The authors suggest the need for adequate benchmarking to ensure the designs are embraced by an organization in its bid to explore the global market (Johnason, 2009).
The literature review above has provided a deep insight on some of the elements which perfectly define business complexity. By noting the different types of business complexities, it has been possible to deduce some of the management challenges which may arise as a result of the noted elements. The review has also revealed a number of mitigation strategies which can be implemented in a bid to achieve long lasting solutions to management challenges in a global environment especially the challenges that are linked to business complexity (Klerck, 2009).
The research data comprised a sample of companies listed by the corporate responsibility magazine in the 100 best corporate firms. The magazine does an annual ranking of the firms using the Russell 1000 index based on a number of elements which include philanthropy, employee relations, environment and climate change, human rights as well as finance just to mention but few. The data set also comprised additional firms not listed in the top 100 list but with reputable performance. The data was derived from the management structures of the firms and their annual reports between 2000 and 2017 indicating a span of 7 years (Bhagat & Bolton, 2008).
The research methodology employed the use of mixed methods. The strategy applied both qualitative and quantitative measures in enhancing data collection. With respect to the quantitative approaches, information was obtained mainly through the use of questionnaires and direct interviews. In order to achieve this, population sampling was done. From the exercise, a total of 20 firms from the top 100 list were registered for data collection. Most of the individual respondents were CEOs, managers and employees in the corporate entities. The participants were issued with the questionnaires and their responses obtained after a period of 2 weeks. For the individuals who could not be reached physically, the questionnaire was sent via email and the responses obtained through the same channel. 20 firms were also selected outside the top 100 and the same design followed for data collection.
In addition to the questionnaires, 10 individuals from different firms were selected and taken through direct interviews. The contents of the interviews were recorded and the data stored for analysis. This method was chosen because it enhances the validity and reliability of the information obtained (Knippenberg, 2010).
On qualitative measures, information was derived through the review of contextual literature. This process involved the careful sampling of texts containing discussions and arguments by other researchers on the same topic of research. The main points from each source were sampled and used to make the right data set for analysis (Faleye, 2007). The approach mainly depended on secondary sources which included; government records, census outcomes, organizational records as well as data which had been collected originally for other research.
The approaches of data analysis involved the use of statistical methods as well as data visualization. Data visualization was mainly helpful during data collection through contextual review. The approach involved establishing the correlation between the various variables to obtain the specific trends. The trends in the arguments were then used to make tacit conclusions on the research topic (Stone, 2015). On the other hand, the collected data were addressed into tables and used to form graphs and charts which are easy to interpret and understand.
The research process followed the necessary ethical guidelines. The information obtained from the respondents was strictly used for the research process only. Any instances where the identity of respondents was to be disclosed was done based on their consent alone. The strategy was to ensure the confidentiality and privacy of information as an ethical measure.
The process of data collection revealed a number of trends which were in turn helpful in enhancing the completion of this research process. The results can be summarized below (Klerck, 2009)
|
Complexity Type |
Percentage of Impact on management and organizational performance |
|
Imposed complexity |
20% |
|
Industry complexity |
15% |
|
Variety Complexity |
15% |
|
Stakeholders |
20% |
|
Design complexity |
20% |
|
Accidental complexity |
10% |
The above data is a summary of the different forms of business complexity and the percentage rate at which they affect management strategies for organizations operating in a global environment. This information can be summarized in the pie chart below (Wood, 2014).
The research process allowed the deduction of crucial information regarding the research topic. Right from review of literature to data collection, a number of tacit arguments can be established with regard to the research issue. The research reveals the existence of various types of business complexity and their influence on the management approaches. First of all, imposed complexity concerns the regulations that are required for a business to operate. Meeting these standards and requirements may be a challenge to some organizations operating in the global environment (Ashmos & Huber, 2008). In line with industry complexity, it can be deduced from the research findings that the products and services in which an organization deals has a special link with the amount of return on international investment. The complexity in this case is determined by the nature of the product. In some cases, obtaining the right management strategies that match such complexities become a challenge to managers hence leading to losses and poor market performance. Variety complexity involves variation of products, services and brands in order to effectively meet the demands and needs of clients (Wood, 2014). To achieve this, an organization needs to have a good understanding of the corporate business environment and the varying trends. Such strategies are cumbersome and may at times be accompanied by a lot of cost implications.
The study also reveals that stakeholders form a crucial element within a business complex. The consumers are among the key stakeholders hence their needs deserve the most effective responses. Poor leadership skills and lack of trained personnel may at times hinder the achievement of this objective (Collings & Wood, 2009). Finally, the research study reveals design complexity as another crucial determinant of the flow of processes within an organization. This implies, to perform best in a global set up, there is need to establish the most effective designs. The right designs equally minimize the challenges that come with accidental complexity caused by inefficient design systems.
Despite the success of the research process, there were a number of limitations. To begin with, the process of data collection required extensive travel and need for communication with the various respondents. This exercise was not only time consuming but also required resources which were actually never adequate. Secondly, the unwillingness of some respondents to give their feedbacks regarding specific elements of the research acted as a hindrance in the researcher’s bid to obtain appropriate conclusions. The geographical distance made it hard to physically reach some of the respondents hence resorting to virtual measures. Such measures may at times lead to data sources that are not relieable.
Conclusion
The core objective of the study was to adequately highlight the concept of business complexity and its impacts on managerial approaches in a global environment. The research process outlined the various types of business complexity. Through a deep analysis of each of the components, it was possible to deduce the extent to which the variations the complex business environment influence managerial strategies and performance. Industry, design, accidental, imposed and variety complexities were discussed and their impacts outlined through discussion. In addition to determining the active role of stakeholders within a business complex, the study was also aimed at displaying a couple of mitigation strategies (Dubin, 2009). The outlined mitigation strategies included the use of extensive training and exposure on managerial skills to help the CEO and managers with the right counter measures. The other suggestion was a clear understanding of the dynamics of the business environment. This allows the business stakeholders to create an essential balance and ultimately minimize the negative impacts of business complexity. Based on the findings and discussions above, it can be stated categorically that the research process was successful since each of the stated objectives were adequately addressed.
In line with the findings of the research, the following recommendations can be outlined:
Managers ought to have a good understanding of the concepts surrounding business complexity
The variation of products and services to fit the needs of consumers should be done within the financial scope of the organization to minimize related costs.
There is need to identify the types of complexities and the extent of their impacts on organizational management and performance. The mitigation strategies can then be implemented in terms of priority.
To minimize the challenges associated with a complex business environment, there is need for organizations to have a thorough review and understanding of their respective business environments.
References
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