Complexity Absorption and Performance: A Structural Analysis of Acute-Care Hospitals

Abstract

This study assesses the degree to which a complexity absorption response enhances performance in an industry increasingly described as highly complex: acute-care hospitals. Business-level strategy, organizational structure, and analytical comprehensiveness are viewed as mechanisms through which executives can increase internal complexity. A case is made that hospitals are well served to pursue a hybrid (or combination) strategy, employ an organic structure, and engage in a high degree of information acquisition and use. In keeping with a complexity absorption view, results indicate that these elements generally exhibit stronger associations with performance as dynamism increases.