ORGANIZATIONAL SIZE AND FORMALIZATION

ended multidimensional set of criteria, will

encourage a broadening of the scope of
search for relevant criterion variables. Past
studies have tended to focus too narrowly
upon variables derived from traditional accounting practice or from functional social
theory, or on narrowly partisan "goals" attributed to organizations. A conception of
organizational effectiveness based upon organizational characteristics and up>on resource-acquisition in the most general sense
will encourage the treatment as criteria of
many variables previously regarded as byproducts or incidental phenomena in organizational functioning.
2. Past comparative studies of organizations have, in general, been of two kinds:
(1) Comparison of organizations differing
markedly in their characteristics, e.g. prisons and factories, so that issues of relative
effectiveness were deemed irrelevant and uninteresting as well as impractical; and (2)
comparisons among organizations of a similar type, so that they could be compared on
like variables and measurement units. The
conception we offer provides the possibility
of making accessible for study the large
middle range of comparisons involving organizations that have only limited similarities such that they compete with respect to
some but not all of their relevant and crucial
resources.

903

3. Case studies of single organizations

will be aided by the provision of a conceptual
basis for treating a more inclusive and more
realistic range of variables that bear on the
effectiveness of the organization.
4. The meaning of some familiar variables will need to be reassessed and in some
cases changed. For example, distributed
profit, a favorite variable for the comparative assessment of business organizations,
will be more widely recognized as a cost of
organizational activity and not as an unequivocal sign of success or goal achievement.
Some managers have already adopted this
view. Similarly, growth in size, usually interpreted as a sign of organizational achievement, can now be better seen as a variable
whose meaning is tied closely to environmental factors and to the position of the organization with respect to certain other variables; the conception we have presented
highlights the idea that growth in size is not
in itself an unmitigated good, even though it
may mean greater effectiveness under some
conditions. In a similar fashion, it will be
seen as necessary that the judgment of the
meaning of each criterion variable rests not
upon an absolute value judgment or a universal conceptual meaning, but rather upon
the joint consideration of an extensive integrated set of organizational performance and
activity variables.

ORGANIZATIONAL SIZE, COMPLEXITY, AND

FORMALIZATION
J. EUGENE HAAS

H. HALL

University of Colorado

University of Minnesota
NORMAN J. JOHNSON

University of Pittsburgh
The relationships between organizational size and several measures of complexity and formalizaiion are examined using data from 75 organizations. The findings suggest that there is at
best only a weak relationship between size and structural characteristics. It is suggested that
size should not be taken as an indicator of organizational structure. Size may be important,
however, as a factor in morale and in interorganizational relations.

^1 THE relationship between organizational

I size and organizational structure has
been a persistent subject in the literature. However, interest in this area, which

has been expressed at both the inferential

and empirical levels, has not resulted in a
definitive set of propositions or findings. The
present study, based on data from 75 or-

904

AMERICAN SOCIOLOGICAL REVIEW

ganizations, examines the relationships between the size factor and measures of organizational complexity and formalization.,^
SIZE

It is commonly noted that the size of an

organization somehow "makes a difference"
in other structural characteristics. Caplow,^
and Grusky,^ among others, have assumed
that large organizations are, by definition,
more complex and formalized than small organizations, while Blau and Scott ^ and
Zelditch and Hopkins have argued that size
may not be such a critical factor. At the
same time, these latter authors appear not
to question the relationship between size and
other structural components. In short, there
is agreement that size affects structure, but
there is no agreement on the relative importance of size vis-d-vis other aspects of
organizational structure.
Empirical studies using size as a major
variable also have come to rather contradictory conclusions. For example, Chapin,^ and
Tsouderos'^ suggest that increased size is
related to an increased degree of bureaucratis is a revision of a paper presented at the
meetings of the American Sociological Association,
Chicago, Illinois, August, 1965. The study is part
of a larger study designed to develop an empirically
derived taxonomy of organizations. The initial research was supported by the United States Air
Force under Contract AF 49 (638)-447, Grant No.
AF-AFOSR-41-63, and Grant No. AF-AFOSR-4163A, monitored by the AF Office of Scientific Research of the Office of Aerospace Research.
2 Theodore Caplow, "Organizational Size," Administrative Science Quarterly, 1 (March, 1957),
pp. 484-505; and Theodore Caplow, Principles of
Organization, New York: Harcourt, Brace and
World, 1965, pp. 25-28.
'Oscar Grusky, "Corporate Size, Bureaucratization, and Managerial Succession," American Journal
of Sociology, 67 (November, 1961), p. 269.
* Peter M. Blau and W. Richard Scott, Formal
Organizations, San Francisco: Chandler Publishing
Co., 1962, p. 7.
5 Morris Zelditch, Jr., and Terrence K. Hopkins,
"Laboratory Experiments with Organizations," in
Amitai Etzioni, Complex Organizations, New York:
Holt, Rinehart and Winston, Inc., 1961, p. 470.
F. Stuart Chapin, "The Growth of Bureaucracy: An Hypothesis," American Sociological Review, 16 (December, 1951), pp. 835-836.
^ John E. Tsouderos, "Organizational Change in
Terms of a Series of Selected Variables," American
Sociological Review, 20 (April, 1955), pp. 206-210.

ization. Hall, on the other hand, found that

size was not a major factor in determining
the degree of bureaucratization in organizations. Despite the limited scope of these
studies, they do begin to suggest that some
assumptions about size must be systematically investigated before the fact that an
organization is "large" can be taken as an
indicator of other important structural characteristics.
The growing number of investigations of
the relative size of the supportive or administrative component of organizations provides additional evidence that the present
state of knowledge about size is inconclusive. While the relative size of the administrative component is not central to this
study, the nature of the findings in this area
is indicative of the problems associated with
the utilization of size as a major analytic
variable. Terrien and Mills ^ suggest that
the administrative component increases disproportionately in size as organizational size
increases. Anderson and Warkov ^^ and Bendix,^i on the other hand, found that larger
organizations contained a smaller proportion of pyersonnel engaged in administration.
Recent studies by Hawley, et al.,^^ and
Haas, et al.,^^ suggest that this relationship
may be curvilinear, with the administrative
component at first increasing disproportionately in size and then decreasing with further organizational growth. It should he
noted that the administrative component has
8 Richard H. Hall, "Bureaucracy and Small Organizations," Sodology and Sodal Research, 48
(October, 1963), pp. 38-46.
F. C. Terrien and D. C. MOls, "The Effect of
Changing Size upon the Internal Structure of an
Organization," American Sociological Review, 20
(February, 1955), pp. 11-14.
" T . R. Anderson and S. Warkov, "Organizational Size and Functional Complexity: A Study oi
Administration in Hospitals," American Sociological Review, 26 (February, 1961), pp. 23-28.
11 Reinhard Bendix, Work and Authority in
Industry, New York: John Wiley, 1956, Table I
p. 222.
12 Amos Hawley, Walter Boland, and Margaret
Boland, "Population Size and Administration m
Institutions of Higher Education," American Sociological Review, 30 (April, 1965), pp. 252-255.
"Eugene Haas, Richard HaU, and Norman
Johnson, "The Size of the Supportive Component
in Organizations: A Multi-organizational Analysis,
Social Forces, 42 (October, 1963), pp. 9-17.

ORGANIZATIONAL SIZE AND FORMALIZATION

been defined somewhat differently in each
of these studies.
Regardless of the exact nature of this relationship, the studies noted share a number
of characteristics which are part of the problem confronting research on organizations in
general. First, many studies include one or
only a few organizations as the "sample."
This obviously limits the study to inferences
in regard to size, since comparisons within
the same research context and across organizational types are not available. A second factor is that those studies which have
included a larger number of organizations
have typically concentrated on only one
type of organization, such as mental hospitals, manufacturing firms, or school districts. If the size factor is important in its
relationships to other organizational phenomena, this importance should be demonstrable in a large sample of varjdng types of
organizations.
Determination of organizational size for
this study was quite simple. The total number of paid employees in an organization
was taken as an accurate measure of size.
In cases where all or most of the organizations' members were either part-time or
voluntary workers, a technique was devised
to convert these members to "full-time
equivalent" members.^* This standardized
measure was used for all organizations.

90S

The importance of complexity as a variable in organizational analyses has been

stressed by Zelditch and Hopkins who note:
"Large size, in our view, is not in itself a
critical characteristic of organizations.
Rather what appears to be important here
is complexity, which is often indicated by
size but is quite distinct from it." ^^ Blau
and Scott also suggest the centrality of complexity when they comment: "Since formal
organizations are often very large and com-

plex, some authors refer to them as 'largescale' or as 'complex' organizations." ^*

These authors then suggest that usage of
"complex" in naming a whole area of analysis (complex organizations) is misleading
because of the wide variations in complexity
which exist among organizations.
While there appears to be agreement that
the degree of complexity of an organization
is important in organizational analysis, there
is only a limited number of attempts to operationalize the concept. Hage has suggested
that, "The complexity, or specialization, in
an organization is measured by the number
of occupational specialties included and the
length of training required by each. The
greater the number of occupations and the
longer the period of training required, the
more complex the organization." ^"^ The emphasis on occupational types and the amount
of training required of these types suggest
that only one aspect of complexity, in this
case specialization, is considered in this approach. A broader view of the complexity
issue is offered by Pugh, Hickson, et al., in
their discussion of the components of organizational structure. While the term they
use is "configuration," their meaning appears to be closer to the more general issue
of structural complexity. They suggest that,
"Every work organization has an authority
structure. . . . The shape or configuration
of this structure may be compared in different organizations." ^^ Components of this
configuration (structural complexity) are
vertical and lateral spans of control, the criteria for segmentation and the number of
positions in various segments. These authors
also suggest that size is apt to be a major
determining factor of organizational structure.
In a similar vein, Kahn, Wolfe, et al., suggest that, "With increased size, the structure
of the organization becomes much more complex. The division of labor becomes more
differentiated and specialized; more levels

method involved determination of the

number of hours per year contributed to the organization by part-time and/or volunteer workers.
The total number of hours of the part-time workers
was divided by the number of hours a full-time
employee normally worked per year in order to
determine the number of full-time equivalent
workers in these groups.
"Zelditch and Hopkins, loc. dt.

i Blau and Scott, loc. dt.

i^Jerald Hage, "An Axiomatic Theory of Organizations," Administrative Science Quarterly, 10
(December, 1965), p. 294.
18 D. S. Pugh, D. J. Hickson, C. R. Hinings, K.
M. Macdonald, C. Turner, and T. Lupton, "A
Scheme for Organizational Analysis," Administrative Science Quarterly, 8 (December, 1963), p. 305.

COMPLEXITY

906

AMERICAN SOCIOLOGICAL REVIEW

of supervision are introduced to maintain

coordination and control; and more j)eople
become involved in organizational planning." i
These approaches to complexity suggest
that it is a structural condition which itself
contains a number of components. While
such discussions imply that structural complexity is related to complexity in interpersonal and intra-organizational relationships,
the concern here is simply structural complexity approached through multiple components or indicators. The definition of complexity, which appears to encompass the
considerations discussed above, is the degree
of internal segmentationthe number of
separate "parts" of the organization as reflected by the division of labor, number of
hierarchical levels, and the spatial dispersion of the organization. The indicators used
are:
A. Division of Labor-General
l.The number of distinct organizational goalsmultiple goals indicating a necessary division of labor
beyond that required by a single
goal.
2. Presence of more than one major
organizational activity.
B. Division of Labor-Specific
l.The number of major divisions or
departments (horizontal differentiation).
2. The most specialized department
(number of distinct subdivisions under major departmental headings).
3. Mean intradepartmental subdivision
(the total number of subdivisions
divided by the number of departments) .
C. Hierarchical Differentiation
1. Number of levels in the deepest single division.
2. The mean number of hierarchical
levels for the organization as a
whole (the sum of the number of
hierarchical levels within every department divided by the number of
departments).
" R o b e r t Kahn, Donald M. Wolfe, Robert P.
Quinn, J. Diedrick Snoek, and Robert A. Roaenfhni, Organizational Stress, New York: Wiley, 1964,
p. 75.

D. Spatial Dispersion
1. The degree to which physical facilities are spatially dispersed.
2. The location (distance from the organizational headquarters) of spatially dispersed facilities.
3. The degree to which personnel are
spatially disp)ersed.
4. The location of spatially dispersed
personnel.
No assumpiton is made about the priority
of these indicators. While Hage considers the
division of labor or specialization to be the
key factor, the other indicators also appear
to be central to the complexity concept.
The measurement of these indicators will
be discussed below.
FORMALIZATION

The concept of organizational formalization has been rather explicitly defined and
utilized. Hage, and later Aiken and Hage,
have suggested that formalization "is measured by the proportion of codified jobs and
the range of variation that is tolerated
within the rules defining the jobs. The
higher the proportion of codified jobs and
the less the range of variation allowed, the
more formalized the organization." ^^ Pugh,
Hickson, et al., note that "formalization or
standardization . . . includes statements of
procedures, rules, roles, and operation of
procedures which deal with (a) decision
seeking (applications for capital, employment, and so on), (b) conveying of decisions and instructions (plans, minutes, requisitions and so on), and (c) conveying
of information, including feedback." ^^
As in the case of complexity, a series of
indicators is used to measure the degree of
formalization in the organizations examined
following the broader meaning of the concept used by Pugh, Hickson, et al. Here
again, no priority among the indicators is
assumed. The indicators of formalization
used in this study are:
20 Hage, op. dt., p. 295, and Michael Aiken and
Jerald Hage, "Organizational Alienation: A Comparative Analysis," American Sodologicd
Revtew,
31 (August, 1966), p. 499.
21 Pugh, et al., op. dt., pp. 303-304.

ORGANIZATIONAL SIZE AND FORMALIZATION

A. Roles
l.The degree to which the positions
in the organization are concretely
defined.
2. The presence or absence of written
job descriptions.
B. Authority Relations
LThe degree to which the authority
structure is formalized (clear definition of the hierarchy of authority).
2. The extent to which the authority
structure is formalized in writing.
C. Communications
L The degree of emphasis on written
communications.
2. The degree of emphasis on going
through established channels in the
communications process.
D. Norms and Sanctions
l.The number of written rules and
policies.
2. The degree to which penalties for
rule violation are clearly stipulated.
3. The extent to which penalties for
rule violation are codified in writing.
E. Procedures
1. The degree of formalization of orientation programs for new members
(systematic socialization for all new
entrants).
2. The degree of formalization of in-

907

service training programs for new

members (systematic and continuing socialization of new members).
METHODOLOGY

The present research includes organizations ranging in size from six members to
over 9,000 members. The organizations represent a wide range of types, such as educational, commercial, military, governmental,
manufacturing, religious, and penal organizations.
The list in Table 1 represents a selection,
rather than a sample, from the organizational universe. Selection was based, to a
degree, on the fact that purposeful inclusion
of certain types of organizations was desired and that budgetary and time factors
were of some consequence. A more central
point is that there is no clearly defined organizational universe from which such a
sample could have been drawn. Organizational research sampling necessarily has to
be purposeful and non-random.
Data were gathered by tape recorded interviews in the 75 organizations. In addition, supporting materials in the form of all
printed matter relevant to each organization
were examined, and the process of categorizing each of the organizations on each of

TABLE 1. ORGANIZATIONS INCLUDED IN STUDY

Organizational Type

Manufacturing Plant
State Penal Institution
Delinquent Reformatory
Retail Store
State or Area Church
Trade or Lobbying Assn.
University
Bank
Labor Union
Govt. Regulative Agency
Marketing Organization
Hotel-Motel
Restaurant
Public School System
Private Welfare Agency
Farm Cooperative
State Hospital
Radal-Ethnic-Religious Assn.
Newspaper
Television Station

8
6
4
3
3
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2

Organizational Type (N of 1)
County Political Party
City Recreation Department
Post Office
Public Utility
Fund Raising Agency
Railroad
Trucking Firm
Law Enforcement Agency
Municipal Airport
Public Transit Firm
Insurance Company
Private School
Church Congregation
Parochial Schol System
Medical Association
School for Mentally Retarded
Private Hospital
Quarry
Military Command
Private Country Club
Religious Order

908

AMERICAN SOCIOLOGICAL REVIEW

the variables was begun. The majority of

the categorizations were accomplished with
little difficulty. On variables such as size,
number of hierarchical levels, and the number and specificity of written rules and
policies, the range and distribution of the
data provided "natural" categories.
On variables such as the degree of emphasis on written communications or the
degree to which the authority structure is
formalized, the task of categorization was
more difficult. The research team itself decided upon the final classification. Where
the data from the original interviews were
insufficient for agreement on proper placement, additional organizational information
was obtained. The final categorizations represent the nature of the data and the judgments of the researchers.
The data were such that statistical analysis was limited to the use of Kendall's Tau

C as a measure of association.^^ While some

information appeared to be continuous, such
as size and number of departments, there
was no assurance that this sample represented the universe. Most of the data were
in the form of discrete categories. Where
necessary, categories were combined in order
to follow standard statistical procedures.
FINDINGS

In general, the findings of this study in

regard to size are similar to those of previous
research which utilized size as a major variable; that is, the relationships between size
and other structural components are inconsistent. As Tables 2 and 3 indicate, there is
a slight tendency for larger organizations to
22 For a discussion of this technique see Hubert
M. Blalock, Jr., Sodal Statistics, New York: McGraw-Hill, 1960, pp. 319-324.

TABLE 2. CoMPLExrry INDICATORS BY ORGAKEZATIONAL SIZE

Size

A. Division of LaborGeneral
1. Number of Goals
1
2
3 or more
Kendall's Tau C=.08
2. Presence of Second Major Activity
No second activity
Second activity present
KendaU'sTauC=.O4
B.

Division of LaborSpecific
1. Number of Major Divisions
(Horizontal Differentiation)
1-4
5-6
7 or more
Kendall's Tau C=.O2
2. Divisions within Most Specialized
Single Department
1-3 subdivisions
46 subdivisions
7 or more subdivisions
KendaU'sTauC=.27
3. Mean Number of Subdivisions per
Department
1 or 2 subdivisions
3 subdivisions
4 or more subdivisions
Kendall's Tau C=.35

Less than 100

(N=20)

100-999
(N=35)

1,000 or more
(N=20)

30%
45%
25%

29%
46%
25%

20%
45%
35%

65%
35%

69%
31%

70%
30%

30%
20%
50%

20%
37%
43%

25%
25%
50%

55%
20%
25%

23%
26%
51%

5%
45%
50%

70%
20%
10%

29%
29%
42%

20%
25%
55%

ORGANIZATIONAL SIZE AND FORMALIZATION

909

TABLE 2.Continued

Size

C. Hierarchial Differentiation
1. Number of Levels in Deepest
Single Division
two or three levels
four levels
five or more levels
Kendall's Tau C=.35
2. Mean Number of Levels for Organization as a Whole (Vertical
Differentiation)
two or three
four or more
Kendall's Tau C=.31
D. Spatial Dispersion
1. Dispersion of Physical Facilities
All in one location
Mostly in one location, some in field
Mostly in field (dispersed)
KendaU'sTauC=.14
2. Location of Physical Facilities
1 location
within dty or county
state-national-international
KendaU'sTauC=.23
3. Degree of Dispersion of Personnel
All in one location
Mostly at one location, some in field
Mostly in field (dispersed)
Kendall's Tau C=.06
4. Location of Personnel
1 location
within dty or county
state-national-international
KendaU's Tau C=.24

be both more complex and more formalized,

but on only a few variables does this relationship prove to be strong. On others, there
is little, if any, established relationship.
The complexity indicators related to size
fall within three major categories. The first
of these is sp>atial dispersion. This conclusion, in which both physical facilities and
personnel are considered, is congruent with
the suggestion of Anderson and Warkov ^^
that the relative size of the supportive component is also related to spatial dispersion.
On a common sense basis, such dispersion is
possible only for sufficiently large organizations. A decision to add dispersed facilities
require a secondary decision to add
"Anderson and Warkov, loc. dt.

Less than 100

(N=20)

100-999
(N=35)

1,000 or more
(N=20)

55%
35%
10%

14%
43%
43%

10%
40%
50%

90%
10%

60%
40%

50%
50%

45%
30%
25%

46%
37%
17%

25%
35%
40%

45%
35%
20%

46%
17%
37%

20%
20%
60%

35%
25%
40%

34%
34%
32%

16%
47%
37%

35%
40%
25%

34%
20%
46%

15%
15%
70%

more personnel, rather than the reverse. It

also appears that a very large or extensive
"market" for the organization's product or
service is necessary to support a very large
organization. Apparently, such an extensive
market is more easily or economically
reached through physical dispersion. Thus,
it could be argued diat both size and complexity are dependent upon available economic "input," and to the extent to which
such potential "input" is dispersed, large
organizations will also be more complex in
regard to physical dispersion.
A second set of significant relationships
is found in regard to the hierarchical differentiation. Although Woodward has noted
differences in the "width" of the span of

910

AMERICAN SOCIOLOGICAL REVIEW

TABLE 3. FORMAUZATION IMDICATCAS BY ORGANIZATIONAL SIZE

Size

A.

Roles
1. Concreteness of Positional Descriptions
Low
Medium
High
KendaU'sTauC=.12
2. Presence of Written Job Descriptions
None
Present only at some levels
Present throughout organization
Kendall's TauC=.01

B. Authority Relations
1. Degree of Formalization of Authority
Structure
Low or medium
High
Kendall's TauC=.25
2. Codification of Authority Structure
in Writing
Not codified
Codified
KendaU'sTauC=.O8
C.

D.

E.

Communications
1. Degree of Emphasis on Written
Communications
Low
Medium
High
Kendall's TauC=.05
2. Emphasis on Using Established
Communications Channels
Low
Medium
High
Kendall's TauC=.13
Norms and Sanctions
1. Number of Written Rules and Policies
Less than 12
More than 12
Kendall's TauC=.08
2. Penalties for Rule Violation
Clearly Stipulated
No
Yes (for at least some members)
Kendall's TauC=.14
3. Stipulation of Penalties for Rule
Violation in Writing
No
Yes (for at least some members)
Kendall's TauC=.22
Procedures
1. Formalization of Orientation
Program for New Members
(Only Programs for All New Members
Included; N = 5 7 )
No Program or Low Formalization
High Formalization
Kendall's Tau C = ^ 6

Less than 100

(N=20)

100-^99
(N=35)

More than 1,000

(N=20)

45%
35%
20%

17%
46%
37%

55%

35%
40%
25%

26%
23%
51%

20%
50%
30%

58%
42%

32%
68%

26%
74%

58%
42%

26%
74%

47%
53%

35%
55%
10%

17%

57%
26%

30%
55%
15%

35%
25%
40%

23%
37%
40%

15%
30%
55%

32%
68%

17%
83%

21%
79%

65%
35%

44%
56%

47%
53%

70%
30%

50%
50%

42%
58%

83%
17%

63%
37%

50%

20%
25%

rr\(yf
5O70

ORGANIZATIONAL SIZE AND FORMALIZATION

911

TABLE 3. Continued

Size

2. Fonnalization of In-service Training

Program for New Members (Only
Programs for All New Members
Included; N = 3 6 )
No program or low f onnalization
High fonnalization
Kendall's Tau Cr=.26

control according to the technological stages

of industry,2* the generally accepted principle of limiting the number of subordinates
supervised by one person seems to be operative here. More hierarchical levels are found
in larger organizations.
The third set of significant relationships
is in the area of intradepartmental specialization or the specific division of labor.
While the number of divisions is not related
to size, this form of internal differentiation
is. Performance of the major organizational
activities plus such prerequisites as accounting and personnel management apparently
are accomplished by departmentalization regardless of organizational size.^^ Further
specialization may take place within the
existing departmental structure as the organization grows in size.
In general, the relationships between size
and the complexity indicators appear to be
limited to a few factors. Even in those relationships found to be statistically significant,
enough deviant cases exist to cast serious
doubts on the assumption that large organizations are necessarily more complex than
small organizations.
The same general conclusion can be
reached in regard to the formalization indicators as demuonstrated in Table 3. Relatively strong relationships exist between size
and the formalization of the authority structure (B-1), the stipulation of penalties for
rule violation in writing (D-3), and orientation and in-service training procedures (E-1
and E-2). A general association does exist
to the extent that larger organizations tend

Less than 100

(N=20)

100-999
(N=35)

More than 1,000

(N=20)

77%

47%
53%

50%
50%

23%

to be more formalized on the other indicators, even though the relationship is quite
weak.
The most immediate implication of these
findings is that neither complexity nor formalization can be implied from knowledge
of organizational size. A social scientist conducting research in a large organization
would do well to question the frequent assumption that the organization under study
is necessarily highly complex and formalized. If these two general factors are relevant
to the focus of his research, he will need to
examine empirically, for each organization,
the level of complexity and formalization
extant at the time. The ideal research procedure would be to have standardized measures of these phenomena to allow comparative research. At the minimum, the degrees
to which these phenomena are present should
be specified, at least nominally.
A second implication of these findings
lies in the area of sodal control. Increased
organizational formalization is a means of
controlling the behavior of the members of
the organization by limiting individual discretion. At least one aspect of complexity,
hierarchical differentiation, also is related to
social control in that multiple organizational
levels serve as a means of maintaining dose
supervision of subordinates. It seems rather
dear, on the basis of this evidence, that a
large organization does not necessarily have
to rely upon impersonal, formalized control
mechanisms. At the same time, the fact that
an organization is small cannot be taken as
evidence that a gemeinschafft sort of sodal
system is operating. An organization need
not turn to formalization if other control
''^* Joan Woodward, Management and Technology,
mechanisms are present. One such control
London: Her Majesty's Stationary Office, 1958.
Z6 W
^
mecba,msm is the level of professionalizatioii

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AMERICAN SOCIOLOGICAL REVIEW

of the work force, as Hage and Blau, et al.,

have suggested.^** The organizations with
more professionalized staffs probably exhibit
less formalization.
These findings suggest that size may be
rather irrelevant as a factor in determining
organizational structure. Blau, et al., have
indicated that structural differentiation is a
consequence of expanding size.^'^ Our study
suggests that it is relatively rare that the
two factors are even associated and thus the
temporal sequence or causality (expanding
size produces greater differentiation) posited
by Blau and colleagues is open to question.
In those cases where size and complexity
are associated, the sequence may well be
the reverse. If a decision is made to enlarge

the number of functions or activities carried

out in an organization, it then becomes necessary to add more members to staff the new
functional areas. Clearly, what are needed
are longitudinal studies which examine the
preconditions of staff increase as well as the
structural consequences of such increases.
While size and organizational structure
are not closely related, size is an important
variable in other kinds of analyses. The individual in a large organization might feel
"lost" in the great numbers of people. Organizational size also is an important variable in inter-organizational - relations since
size and organizational power are probably
positively related. Similarly, larger organizations probably have more financial resources.
Thus, organizational size should not be disHage, op. cit., p. 300, and Peter M. Blau, missed as a variable but should rather be
Wolf V. Heydebrand, and Robert E. Stauffer, "The utilized where it is likely to have more preStructure of Small Bureaucracies," American Sociodictive significance than it has for complexity
logical Review, 31 (April, 1966), p. 184.
and formalization.
2T Ibid., p. 185.

STRATIFICATION AND RISK-TAKING: A THEORY

TESTED ON AGRICULTURAL INNOVATION *
FRANK CANCIAN

Cornell University
The relationship between wealth and adoption of agricultural innovations is usually reported
to be positive. A theory which predicts that wealth has a negative relationship to adoption
in sfMfte cases is developed and is modified to predict that the relationship will have curvilinear
and negative parts at different points in the wealth-rank continuum. Hypotheses derived
from the theory are tested with data from seven studies of agricultural innovation. The
"middle class" (second from the top wealth guartile) is found to be more conservative than
. would be predicted if the relationship were positive and linear, and the relationship is found
to differ in earlier and later stages of the the adoption process. The theory is stated in general
terms and is potentially applicable to any situation involving stratification and risk-taking.

T is usually asserted that rich farmers

adopt new farming practices more readily
than do poor ones.^ The question of the
linearity or nonlinearity of the relationship

is normally left open, but in the absence of

detailed data to the contrary, the most common assumption is that the relationship is
approximately linearthe wealthier the

* Much of the work on this paper was done during the tenure of a Postdoctoral Foreign Area Fellowship in Latin American Studies. My own data
on Zinacantan were gathered during the summer of
196S under a grant from the Morrison Fund of
Stanford University, Previous work on Zinacantan
was done under the Havard Chiapas Project (Evon
Z. Vogt, Director) which is sponsored by NIMH
Grant MH-2100, and under NIMH Predoctoral

Fellowship MPH-lV,7l9. For comments and criticism during the course of preparation of the paper
I am indebted to Michael Burton, George Collier,
Paul Kay, A, Kimball Romney, Stuart Plattner,
Paul Young, and especially to my wife, Francesca
Cancian.
^ Everett M. Rogers, Diffusion of Innovations,
New York: The Free Press of Glencoe, 1962, pp.
175-176.