Complexity in services: an interpretative framework

This paper explores the characteristics of service complexity. It identifies 76 potential factors that distinguish a complex from a simple service across the dimensions of: markets & products, technologies, production processes, administration & management, ecosystem. The paper introduces four different types of service complexity - identified based on the nature and the source of complexity - and uses these types to interpret and analyse the 76 potential dimensions of complexity. The paper proposes a detailed breakdown of the meaning of complexity in services, specifically targeted at supporting the development of tools and methodologies that managers can use to measure and manipulate the complexity embodied by their service businesses.
June 2012

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Abstract
Drawing on a systematic review of literature, this paper analyses the characteristics of service complexity. In particular, the paper proposes an interpretative framework that maps the potential factors that make a service complex, and provides a general taxonomy to distinguish the characteristics of the complexity in a service.
Introduction
Defining and understanding complexity has long been of interest to scholars from a wide range of disciplines. Although the term has been used to mean different things in different circumstances, the notion of complexity has been seized upon by looking for common properties among diverse kinds of systems, including physical, biological, and social systems. In relatively recent times, complexity thinking and complexity research have started to be applied also to management science (Robertson, 2004). It has indeed become almost commonplace to observe that increasing levels of complexity are being incorporated into organisations. The process is seen as a main challenge by managers and researchers, and is described as involving corporate as well as governmental organisations (Keeney, 1979; Child et al., 1991). This paper focuses on the specific context of firms and management, and on the complexity that arises around a particular type of business activities: the provision of services.
There are three main reasons for this focus. First, the authors of this paper are actively studying the decision of many manufacturing firms to integrate increasing degrees of service contents into their offerings, the so-called ‘servitization of manufacturing’ trend. Service complexity is often cited in the field as a factor that importantly affects the rewards and challenges associated with the adoption of a servitization strategy (Gebauer et al., 2008; Benedettini and Neely, 2010;
Raddats and Easingwood, 2010); yet there is no clear definition of what a complex service is.
Authors have used their independently developed distinctions between simple and complex services, and very limited attempts have been made at either conceptually or empirically substantiating the proposed classifications. Second, definitions of complexity commonly used in the organisational domain are often tied into the concept of a system. The logic of complexity science is straightforwardly applied, which suggests that a system is complex when it consists of many parts that interact in ways that heavily influence the probabilities of later events, often resulting in emergent properties (e.g. Nunes Amaral and Uzzi, 2007; Sargut and Gunter McGrath,
2011). This perspective appears to the authors of this paper as being too narrow to capture the meaning of complexity in services. Clearly service systems can be very large and have emergent properties (e.g. metropolitan hospitals, public transport in large urban areas, provision of utilities). However, it must be considered that complexity in services can originate from many other sources than the service system. Third, the service-dominant (S-D) logic is becoming a mainstay in management research. Within the S-D logic, service