Organizational complexity indicates the degree of horizontal, vertical, and spatial differentiation. As organizational complexity increases, so does the difficulty of coordinating activities and the requirement for information processing.

Key measures are the number of hierarchical levels, the number of locations of operation, and the skill level of employees at each level.

• Horizontal differentiation relates to the specialization within an organization
• Vertical differentiation relates to the number of hierarchical levels in an organization
• Spatial differentiation relates to the geographic dispersion of activities within the organization>

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Medtronic case: Complexity