Where does firm size collide?

The scale of an organization treated as part of its context in technology-organization-environment and IT-adoption research, where size is expected to shape whether a firm takes up an innovation. The usual reasoning runs through resources: a larger firm has slack, specialists, and absorptive capacity, so it can afford and absorb new technology. Thong's 1999 Integrated Model of Information Systems Adoption in Small Businesses found that larger small businesses were the more likely adopters, consistent with that resource story. But the same scale can work the other way: Zhu, Kraemer, and Xu's 2006 study of e-business assimilation across countries placed size in the organizational context and found its pull was not constant across the stages of initiation, adoption, and routinization, where bureaucratic inertia can offset the resource advantage. Size enters these models as a driver, as a brake, and often merely as a control.[1][2]

Unit

An organization's scale as a predictor of adoption

Recovery means

Not applicable

Measured by

Number of employees or annual sales, entered as a driver or a control in adoption models

The scale of an organization as the long-studied correlate of how much it innovates, the oldest and most-replicated size relationship in organization theory. Damanpour's 1992 Organizational Size and Innovation pooled 20 studies and 36 correlations and reported a positive overall association between size and innovation, but showed it was far from a constant: the strength depended on the type of organization, the type and stage of innovation, and, tellingly, on how size and innovation were each measured. The headline that big organizations innovate more survives only inside those moderators, and the pooled figure is a summary of many studies that operationalized both terms in their own way.[3]

Unit

An organization's scale as a correlate of its innovation output

Recovery means

Not applicable

Measured by

Employees, usually log-transformed, correlated with counts of adopted or generated innovations

The scale of an organization as a measurement problem: what number should stand for how big a firm is. Kimberly's 1976 Organizational Size and the Structuralist Perspective reviewed the structuralist tradition that had made size a master variable and argued that the term hid several distinct facets, among them physical capacity, personnel, organizational inputs or outputs, and discretionary resources, each captured by a different indicator such as employees, assets, sales, or net worth. Those indicators do not move together, so a firm ranked large on one can be middling on another, and the common fix of logging a headcount just picks one facet and calls it size. The construct is only as clear as the proxy chosen for it, and the proxy is rarely defended.[4]

Unit

A chosen numeric proxy standing in for organizational scale

Recovery means

Not applicable

Measured by

Employees, sales, or assets, usually log-transformed, with low convergence across the proxies