"I have also observed that the adoption of formal bureaucratic processes in place of informal norms takes place around the point where a business crosses the Dunbar Number of about 150 employees."
Some observations:
Even when many things become officially formalized and bureaucratic, those de jure rules and procedures are a map that only bears slight resemblance to the actual territory. Actual practices and incentives deviate - sometimes quite substantially - from the picture one would get by taking the black letter rules at face value. New members of teams often need time to figure out the real deal. On the one hand, this state of affairs creates a lot of needed flexibility to bend and adapt in order to get things done without too many potential points of veto or having to make a federal case out of it. On the other hand, leaders can easily get so used to bending the rules that they take it for granted and become complacent about rubber-stamping whatever new official rules or policies come across their desk for approval. "Why scrutinize carefully? If it turns out to be a problem, we'll just bend informally like we always do." The predictable result is a premature and unwieldy accretion of often incoherent bureaucratization which - as soon as the culture of 'they are more like advisory guidelines, bend whenever you want' disappears with turnover or becomes otherwise untenable - traps the spider in its own web and gums up the works.
Where I work, the large organization does not have one character but two distinct ones.
On the one hand, there is a sub-Dunbar-sized inner circle and various cliques at or close to the executive / top staff officer level, and things in that circle often operate in a de facto sub-Dunbar manner. Discussions, decisions, and plans in that circle are extremely secretive and compartmentalized, with as many matters handled in a personal, relationship-based, confidential, face-to-face manner as possible. Whether their fellow insiders are worthy of it or not, things operate by necessity along the lines of "high trust equilibrium", that is, with mostly voluntary cooperation without mechanisms for monitoring, verification, or discipline. People out of this circle, even just below it, almost never have any good idea of what is being done or said or planned within it.
Outside the sub-Dunbar inner circle there is the vast super-Dunbar workforce. And, for any particular position in that workforce, one's experience of degree of formal regulation and bureaucratization seems to be correlated with one's overall distance in the hierarchy from the inner circle (in terms of status, rank, prestige, pay, skill-level, autonomy, decision-making power, etc.), the numbers of other people doing the same job, and the degree to which one is externally or internally-focused, that is, 'front-line', interacting with people and objects in the real world outside one's own organization, instead of processing, analyzing, and manipulating abstract ideas, numbers, words, and symbols.
Still, even though it's a spectrum with many levels and flavors of effective bureaucratization, there is a uniquely clear and stark discontinuity between the inner circle and everything else.
One interesting aspect of this dual-charactered organization, at least where I work, is that there is a severe amount of friction and impairment of communication, direction, guidance, and trust at the border between the two worlds, which in turn generates a lot of angst, drama, and general dysfunction. My impression is that elite managers still have not quite discovered how to lead, manage, and administer effectively in such organizationally discontinuous circumstances, or else, it simply takes a combination of great skill, experience, a highly beneficial incentive structure, and independence to avoid these issues.
One thing to note is that the example of finance traders and small teams is just one case where regulators, either within a form or outside it, contribute to the effective organization size. Payment card standards, safety for healthcare or avionics or autonomous vehicles, government security rules -- all of these impose hierarchies and separation of roles that might be theoretically suboptimal for a given project, but
It’s “The Church of Jesus Christ of Latter-day Saints.” You left out the important part.
"I have also observed that the adoption of formal bureaucratic processes in place of informal norms takes place around the point where a business crosses the Dunbar Number of about 150 employees."
Some observations:
Even when many things become officially formalized and bureaucratic, those de jure rules and procedures are a map that only bears slight resemblance to the actual territory. Actual practices and incentives deviate - sometimes quite substantially - from the picture one would get by taking the black letter rules at face value. New members of teams often need time to figure out the real deal. On the one hand, this state of affairs creates a lot of needed flexibility to bend and adapt in order to get things done without too many potential points of veto or having to make a federal case out of it. On the other hand, leaders can easily get so used to bending the rules that they take it for granted and become complacent about rubber-stamping whatever new official rules or policies come across their desk for approval. "Why scrutinize carefully? If it turns out to be a problem, we'll just bend informally like we always do." The predictable result is a premature and unwieldy accretion of often incoherent bureaucratization which - as soon as the culture of 'they are more like advisory guidelines, bend whenever you want' disappears with turnover or becomes otherwise untenable - traps the spider in its own web and gums up the works.
Where I work, the large organization does not have one character but two distinct ones.
On the one hand, there is a sub-Dunbar-sized inner circle and various cliques at or close to the executive / top staff officer level, and things in that circle often operate in a de facto sub-Dunbar manner. Discussions, decisions, and plans in that circle are extremely secretive and compartmentalized, with as many matters handled in a personal, relationship-based, confidential, face-to-face manner as possible. Whether their fellow insiders are worthy of it or not, things operate by necessity along the lines of "high trust equilibrium", that is, with mostly voluntary cooperation without mechanisms for monitoring, verification, or discipline. People out of this circle, even just below it, almost never have any good idea of what is being done or said or planned within it.
Outside the sub-Dunbar inner circle there is the vast super-Dunbar workforce. And, for any particular position in that workforce, one's experience of degree of formal regulation and bureaucratization seems to be correlated with one's overall distance in the hierarchy from the inner circle (in terms of status, rank, prestige, pay, skill-level, autonomy, decision-making power, etc.), the numbers of other people doing the same job, and the degree to which one is externally or internally-focused, that is, 'front-line', interacting with people and objects in the real world outside one's own organization, instead of processing, analyzing, and manipulating abstract ideas, numbers, words, and symbols.
Still, even though it's a spectrum with many levels and flavors of effective bureaucratization, there is a uniquely clear and stark discontinuity between the inner circle and everything else.
One interesting aspect of this dual-charactered organization, at least where I work, is that there is a severe amount of friction and impairment of communication, direction, guidance, and trust at the border between the two worlds, which in turn generates a lot of angst, drama, and general dysfunction. My impression is that elite managers still have not quite discovered how to lead, manage, and administer effectively in such organizationally discontinuous circumstances, or else, it simply takes a combination of great skill, experience, a highly beneficial incentive structure, and independence to avoid these issues.
“In contrast, Amazon tries to keep its software projects small enough so that they can be operated by two-pizza teams.”
What a clever heuristic. Also brings a whole new meaning to the phrase “one-man team”
One thing to note is that the example of finance traders and small teams is just one case where regulators, either within a form or outside it, contribute to the effective organization size. Payment card standards, safety for healthcare or avionics or autonomous vehicles, government security rules -- all of these impose hierarchies and separation of roles that might be theoretically suboptimal for a given project, but