Rule of 150 and Economies of Scale
The “Rule of 150″ (Mentioned in The Tipping Point) is the threory that the optimal number of people in a group is around 150. Above 150, the ability for a group to work together efficently starts to fall apart. When you get much over 150 people at your company- you will begin hiring people that are dedicated to reducing communication and political issues… because the individual people will not be able to handle the group dynamics for much over 150 people.
“Economies of Scale” is the gain in efficiency a group gains by growing ever larger (the larger the better) because common activites can be centrallized. But, as an organization grows larger, “political wrangling” for personal gain, coordination, and communication challenges start to erode the economies of scale efficiencies. A group of 150 can operate will a much smaller communication/ coordination overhead and supposedly helps the politcal aspect also.
Is ths modern large business optimized when it comes to group sizes and group-dynamics? It seems that a combination of these 2 concepts in the right manner for each orgaization could yield improvements in efficiency.
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