Size Does Not Matter in Organizational Design and Size Does Not Matter in Product Development

Although, at first glance, the two seem to be polar opposites, in reality, they are often present in organizations. One of these types is the mechanistic or “logical” organization where all action is done based upon a plan. Organic organizations, by contrast, focus their internal processes on building on relationships of understanding and care that arise from the individuals within the group.

Why This Is Important

These differences in the types of organization are important to consider because the effectiveness of both are highly dependent upon the strengths of their respective organizational structures. In a sense, the strengths of these organizational structures determine the overall effectiveness and the success of the mechanistic or logical organization. For example, an organization may choose to buy Spotify streams as part of their marketing strategy, but the different organizations’ structure determines who makes that decision. 

Many find it difficult to understand the differences between organic structures and the mechanistic ones especially when faced with organizational problems such as those associated with poor quality and/or timeliness. This is because mechanical and organic organizations are usually able to resolve issues and problems very quickly provided that the right steps and protocols are implemented. Thus, what are the differences between these two types?

Factors That Determine Organizational Behavior

Organic organizational behavior is determined by various factors. One of the key factors in determining organic structure is job specialization. The more specialized a division, the more specialized its decision-making process is likely to be. Job specialty is defined as the relative importance given to a division’s particular field of responsibility.

For example, departments in hospitals, schools, manufacturing corporations, etc., all have different job Specializations (e.g., Intensive Care Unit, Paediatric, Cardiology, etc.). A hospital has a centralized location meaning that all patients receive the same care, but with different Hospital staff and different doctors. Likewise, a school has a centralized location meaning that all students receive the same education, but with different teachers and different departments. Similarly, a manufacturing corporation has a centralized location meaning that all employees live in the same area (although it could have different locations within each location), but each employee has a different specialized area of responsibility.

Why Do We Care About Organizational Structure? 

Organizational specialists believe that human beings need to understand the relationship between the size of an entity (i.e., an organization) and how that organization is related to various human values such as efficiency, quality, and cost savings. Specifically, we are interested in understanding why organizations with larger size tend to be more efficient than those with smaller sizes. In addition, organizational specialists believe that the relationship between size and efficiency/quality may also explain why larger companies are perceived as having more employees and are generally perceived as having higher productivity than smaller businesses.

In contrast, we think that the relationship between size and efficiency/quality in relation to organizational structures is unlikely to account for the observed relationship between organizational sizes and operational productivity. Thus, we believe that the relationship between size and efficiency/quality relates to the extent of decentralized decision-making. In other words, if there is plenty of decentralized decision-making, then organizations with large sizes will probably be less efficient than those with smaller sizes because it would take too long to make a decision. However, even if the decision-makers do have enough expertise to reach an agreement, the problem still exists because it would take too long to conduct the required discussions. The result would be that decisions would not be made quickly and effectively. Therefore, we think that the main reason why organizational size matters and cannot be ignored in organizational decision-making is the presence of decentralized decision-making where a number of people are involved in the making of important decisions.

In contrast, the results of our simulation study indicate that while an organization’s size does play a significant role in the level of efficiency and quality attained, the nature of its specialization did not have a major effect on these outcomes. This outcome is contrary to the views of many people who think that the size of an organization determines its level of specialized expertise, job specialization, or, hence, efficiency and quality. This result is also contrary to those people who believe that highly specialized organizations have high levels of job specialization because their size requires more human capital. In other words, they think that human capital is the critical ingredient for achieving high levels of specialization in a business organization.


Since our focus was on the relationship between size and the level of specialization achieved, we also investigated the effect of organizational structure and job specialization on overall efficiency and quality. Overall, we found that there was a very small effect of size on efficiency and that there was a slight positive effect of size on quality. Specifically, the effect of organizational structure on efficiency was insignificant and of very minor importance when compared with the effect of job specialization. In other words, the increase in organizational size did not seem to play a major role on the level of specialization attained by the firm. This suggests that although size may play a role in the level of specialization attained by firms, the quality of the specialization attained is unrelated to size.


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