Application of the concept of complexity to production institutions and management raises many interesting issues of which this chapter deals with three: The first is the extent to which managers are changing their organizations to deal with the structurally more complex business environment. The next focuses on the heterogeneity of the structure of enterprises and establishments, especially the changing relative importance of the largest units, that is, “big business.” The final issue deals with that type of structural complexity manifested by the separation of ownership and control, and the implications of this phenomenon on enterprise profits and remuneration of managers.

If skills of the labor force and the level of technology are increasing, if the legal framework, the scope of markets, and other phenomena affecting decision making within enterprises are becoming more complicated, how does management adjust to such an evolution of the economic environment? I outline several basic strategies for dealing with this increasing structural complexity and then present the results of my own survey of Chief Financial Officers and Directors of large corporations to explore these matters. The results show that managers are deeply concerned and are pursuing three distinct strategies to face these problems.

If the sizes of establishments and enterprises are becoming more heterogeneous, government policy makers would have a greater informational burden and would face increasingly difficult problems in dealing with this more variegated universe of productive units.