Size, Formalization and Centralization

Formalization is often measured by the extent by which formal job definitions and procedural specifications govern activities in organizations (Scott p. 261). Most studies support the belief that bigger organizations are more formalized (Blau and Shoenherr 1971, Pugh et al 1969).

Interestingly, both Blau and Shoenherr and the Aston group (Pugh et al 1969) found that size was actually negatively correlated with centralization. Blau and Schoenherr attempt to explain this contradictory result by arguing that centralization and formalization may be viewed as alternative control mechanisms -- more formalized arrangements permit more decentralized decision making (because formal procedures reduce discretion of subordinates).

Blau and Shoenherr (1971) argue that size is the most important "condition affecting the structure of organizations" (in Scott p. 264), though it's hard to accept this general conclusion based on their studies. The work by the Aston group is a little better (Pugh, et. al 1969). They measured random samples of 46 organizations (replicated by Child in 1972). But they are difficult to read and compare. They found through factor analysis three main attributes -- structuring of activities, concentration of authority, and line control of work flow as key attribute of bureaucracy. Size was ultimately correlated with structuring of activities but not the other two. Technology was modestly correlated with all three, but later the relationship was downplayed.