Investigating Relation between Complexity and Performance: A Case Study in Operations

In front of growing environmental complexity, companies need to identify a production configuration that is consistent with the assessed level of complexity and flexible enough to reach adequate level of performance. This paper investigates and then testes on a case study the relation between internal complexity and performance at operations level. The company of the case study is Alf Group Spa, an Italian leader of the furniture industry that implemented different production configurations in order to maximize performance facing external complexity. This paper finds that manufacturing complexity and performance are linked by an inverted U-shaped curve, and furthermore the optimal organisational configuration is located at an intermediate level of complexity.