English

Organization Design for Complex Worlds

Theoretical Economics 2026-07-18 v1

Abstract

I study the role of \emph{horizontal complexity} -- defined as the variation in actions that similar tasks require -- in organization design. A continuum of workers each choose an action to adapt to a local state that follows a Gaussian process across locations. Headquarters can group workers into \emph{teams}, simplifying the attention problem it faces in coordinating across the organization, at the cost of inhibiting adaptation. Tools from spectral theory identify how horizontal complexity affects team size: roughly speaking, variation left unresolved by headquarters expands teams, while variation concentrated along dimensions that headquarters absorbs through attention shrinks them.

Cite

@article{arxiv.2607.16640,
  title  = {Organization Design for Complex Worlds},
  author = {Jonathan Libgober},
  journal= {arXiv preprint arXiv:2607.16640},
  year   = {2026}
}