Does complexity belong inside the firm, or out?

This theoretical article presents evidence that companies choose to impose complexity on their customers, rather than comprehend system complexity internally. It argues that externalising complexity in this manner is fundamentally different from the externalisation of costs and risks as usually desc...

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Main Author: Fred Phillips
Format: Article
Language:English
Published: Taylor & Francis Group 2020-01-01
Series:Ekonomska Istraživanja
Subjects:
Online Access:http://dx.doi.org/10.1080/1331677X.2019.1625796
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spelling doaj-68525f782d2a435eaa961119fe6765872021-04-06T13:27:28ZengTaylor & Francis GroupEkonomska Istraživanja1331-677X1848-96642020-01-013312397240910.1080/1331677X.2019.16257961625796Does complexity belong inside the firm, or out?Fred Phillips0University of New MexicoThis theoretical article presents evidence that companies choose to impose complexity on their customers, rather than comprehend system complexity internally. It argues that externalising complexity in this manner is fundamentally different from the externalisation of costs and risks as usually described in the literature, because its impact is on the customer’s attention, rather than (just) on the customer’s wallet or health. Attention is a limited resource. Thus, exporting complexity should reduce the buyer base, leaving only the buyer segment that will tolerate the drain on their attention. It does not seem to be a tactic that is viable for the long run.http://dx.doi.org/10.1080/1331677X.2019.1625796complexityconsumer psychologyexternalities; marketing
collection DOAJ
language English
format Article
sources DOAJ
author Fred Phillips
spellingShingle Fred Phillips
Does complexity belong inside the firm, or out?
Ekonomska Istraživanja
complexity
consumer psychology
externalities; marketing
author_facet Fred Phillips
author_sort Fred Phillips
title Does complexity belong inside the firm, or out?
title_short Does complexity belong inside the firm, or out?
title_full Does complexity belong inside the firm, or out?
title_fullStr Does complexity belong inside the firm, or out?
title_full_unstemmed Does complexity belong inside the firm, or out?
title_sort does complexity belong inside the firm, or out?
publisher Taylor & Francis Group
series Ekonomska Istraživanja
issn 1331-677X
1848-9664
publishDate 2020-01-01
description This theoretical article presents evidence that companies choose to impose complexity on their customers, rather than comprehend system complexity internally. It argues that externalising complexity in this manner is fundamentally different from the externalisation of costs and risks as usually described in the literature, because its impact is on the customer’s attention, rather than (just) on the customer’s wallet or health. Attention is a limited resource. Thus, exporting complexity should reduce the buyer base, leaving only the buyer segment that will tolerate the drain on their attention. It does not seem to be a tactic that is viable for the long run.
topic complexity
consumer psychology
externalities; marketing
url http://dx.doi.org/10.1080/1331677X.2019.1625796
work_keys_str_mv AT fredphillips doescomplexitybelonginsidethefirmorout
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