ORGANIZATION SIZE

ASTON STUDY

• Size is the major determinant of structure• Forty-six organizations• Increased size is associated with greater

specialization and formalization• “An increased scale of operation increases

the frequency of recurrent events and the repetition of decisions,” which makes standardization preferable.

CHILD & MANSFIELD

• Organization size is related positively to specialization

• Organization size is related positively to formalization

• Organization size is related positively to vertical span

• Organization size is related negatively to centralization

CHILD & MANSFIELD, CONT’D

• “Larger organizations are more specialized, have more rules, more documentation, more extended hierarchies, and a greater decentralization of decision-making further down such hierarchies.”

• “…the impact of size on these dimensions expanded at a decreasing rate as size increased.”

MEYER STUDY

• Current documentation of the relationship between size and structure does not imply causation.

• Longitudinal study of 194 city, county, and state departments of finance over a five year period.

• “one cannot underestimate the impact of size on other characteristics of organizations

MEYER, CONT’D

• Relationship is uni-directional (size caused structure, but not reverse)

• The impact of other variables disappeared when size was controlled

CHRIS ARGYRIS

• Blau study sample unique – civil service, budget limitations, distinct geographical boundaries, predetermined staff sizes, and influenced primarily by regulations

• Managerial discretion in bureaus must follow traditional management theories regarding task specialization, unity of command, span of control, and so forth

MAYHEW & ASSOCIATES

• Computer simulation of differentiation possible for each level of organization

• Concluded Blau’s findings of a relationship between size and complexity were a mathematical certainty when equal probabilities were assigned to all possible structural combinations

ALDRICH STUDY

• Reanalyzed Aston group data

• Proposed alternate & equally plausible interpretations

• r.e.-technology causes structure, size is the result

ASTON REPLICATION

• Replication by some Aston group members with 14 of original sample

• Partial longitudinal study

• Size generally decreased over time

• Structure measure increased – counter to original findings

HALL & ASSOCIATES

• Studied 75 highly diverse organizations

• Size 6-9000+ employees

• Business, governmental, religious, educational, and penal organizations

• Result mixed – “neither complexity nor formalization can be implied from organizational size.”

HALL, CONT’D

• Sided with Aldrich – “structure causes size”

• Findings were very inconsistent, do not demonstrate conclusions.

GEERAERTS STUDY

• 142 small & medium-sized businesses• Size-structure relationship true for professionally-

managed organization, not for owner-managed firms

• Increases in size were associated with more horizontal differentiation, more formalization, and more delegation of decision-making only in firms controlled by professional managers

GENERAL CONCLUSIONS

• Size appears to impact complexity at a decreasing rate

• Size and formalization appear positively correlated

• Increases in size lead to decentralization, particularly in professionally-managed organizations

HOW BIG IS BIG?

• Any answer is only an approximation• Large organizations tend to have 2000 or more

employees• When an organization has 2000 employees,

additions in size have minimal impact on structure• A change in size will have its greatest impact on

structure when the organization is small

PARKINSON’S LAW

• Work expands so as to fill the time available for its completion

• There need be little or no relationship between the work to be done and the size of the staff to which it may be assigned

ADMINISTRATIVE COMPONENT

• There is evidence for a positive relationship between size and the size of the administrative component

• There is evidence for a negative relationship between size and the size of the administrative component

MORE ADMINISTRATIVE COMPONENT

• Most likely, a curvilinear relationship between size and the size of the administrative component.

• Increasingly large in small to medium organizations, and decreasingly large in large to very large organizations.

ADMINISTRATIVE COMPONENT CURVE

ADMINISTRATIVE COMPONENT, CONT’D

• There is a limit at which, even in large organizations, there will be a need for increasing administrative components.

• Varies greatly by industry or type of organization.

SIZE AND SATISFACTION

ORGANIZATION SIZE AND DESIGN

Smaller Organizations:

Less job specialization

Less standardization

More centralization

Larger Organizations:

More job specialization

More standardization

More centralization

INDUSTRY-SIZE MODEL

INDUSTRY TECHNOLOGY SIZE

ORGANIZATIONALSTRUCTURE