Size, Bureaucracy, and Differentiation
In the 1950's there were conflicting studies on the relation between size
and bureacratization. One difficulty in early studies was that they usually
combined all the clerks, technical, professional, and managerial into one
category "administration" and compared vs laborers. Later studies
showed that in general the proportion of managers tends to decrease with
size, but the proportion of technical and clerical people increases with
size (Blau and Schoenherr, 1971).
Organizational size is positively associated with structural differentiation
(levels, occupational categories (Blau and Shoenherr, 1971, Blau 1973, Pugh
et al 1969). Larger organizations are more complex, and besides increasing
the types of activities it increases the number of activities within each
Blau (1970) builds a theory to explain the impact of size. Large size increases
structure, which increases pressure for more administration to control and
coordinate the increased heterogeniety of work activities. But within subunits
increased size increases the number of similar activities, which reduces
the amount of adminstration required to coordinate them. Overall the effect
of size is to decrease the managerial component (Blau and Shoenherr, 1971),
though they tested their hypothesis with only one set of organizations.
It's probably strongly affected by the type of organization and differentiation
involved (Scott p. 261).
Note that differing environmental demands means that different subunits
may grow at different rates, requiring more coordination to compensate (Katz
and Kahn, 1978 p. 110). They reach two main conclusions from a survey
of the size literature:
1. As organizations grow in size the proportion of workers in direct production
decreases, but not as a monotonic function.
2. As organizations grow the % of people in managerial and supervisory
positions decreases, but at a decellerating rate. They also note that rates
are highly dependent on which organizational fields you are studying.