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ORGANIZATION SIZE

ORGANIZATION SIZE. ASTON STUDY. Size is the major determinant of structure Forty-six organizations Increased size is associated with greater specialization and formalization

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ORGANIZATION SIZE

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  1. ORGANIZATION SIZE

  2. 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.

  3. 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

  4. 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.”

  5. 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

  6. MEYER, CONT’D • Relationship is uni-directional (size caused structure, but not reverse) • The impact of other variables disappeared when size was controlled

  7. 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

  8. 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

  9. ALDRICH STUDY • Reanalyzed Aston group data • Proposed alternate & equally plausible interpretations • r.e.-technology causes structure, size is the result

  10. 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

  11. 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.”

  12. HALL, CONT’D • Sided with Aldrich – “structure causes size” • Findings were very inconsistent, do not demonstrate conclusions.

  13. 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

  14. 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

  15. 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

  16. 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

  17. 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

  18. 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.

  19. ADMINISTRATIVE COMPONENT CURVE

  20. 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.

  21. SIZE AND SATISFACTION

  22. Smaller Organizations: Less job specialization Less standardization More centralization Larger Organizations: More job specialization More standardization More centralization ORGANIZATION SIZE AND DESIGN

  23. INDUSTRY-SIZE MODEL INDUSTRY TECHNOLOGY SIZE ORGANIZATIONAL STRUCTURE

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