Environmental complexity was defined as characterizing the number of environmental variables and their interdependence. Low organizational complexity indicates that only a few variables describe the environment while high complexity indicates that the environment has many important variables to consider. VJIMPGDM.

What factors impact environmental complexity?

External Environment Further key elements include customers and suppliers, competitors, cultural factors, and the types of regulatory frameworks or governmental influences on the organization. The greater the number of external forces, the greater the complexity of the external environment.

Why does environmental complexity lead to organizational complexity?

The environment creates opportunities and limits for a company’s structure and subsequently, its strategy. Increased uncertainty in the environment leads to higher organization variations in the structure in order for an organization to be innovatively efficient.