This study examines the relationship between size and effectiveness of 97 US federal government organizations in combination with relevant mediating variables. The dependent variable, actual goal attainment, is considered as a measure of organizational effectiveness. The number of full-time employees and budget size, the independent variables, are considered as measures of organizational size. Mediating variables considered are goal ambiguity measures, the number of programs, the proportion of professionals in the organization, and institutional location (independent agencies versus agencies inside executive departments). The path analysis corroborates an inverted U-shaped relationship between the number of employees and organizational effectiveness. Furthermore, the relationship between budget size and organizational effectiveness is found to be negative and log-linear, and the relationship is partially mediated by target-specification ambiguity and timeline ambiguity.
More “fuel for the fire” in the debate about optimal organizational size!