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Portions of this paper were presented at the 16th Annual Meeting of the American Institute for Decision Sciences, Toronto, November 1984. The author would like to thank Doug Baker, Joe Cheng, Dick Daft, Linda Pike, Al Schick, and three anonymous ASQ reviewers for their helpful comments and suggestions on earlier drafts of the paper. I am also indebted to Peter Blau for his guidance in the original research on which this paper is based. Address all correspondence to: William McKinley, Department of Management and Systems, Washington State University, Pullman, WA 99164-4726. Recent research has investigated administrative-component changes during organizational growth and decline but has given little attention to whether decline might alter relationships that exist during growth periods between the administrative component and other predictors of it. This study examines the moderating effect of organizational decline on the relationship between technical and structural complexity and administrative intensity. Based on a theoretical discussion of the different conditions present during organizational growth and decline, it is hypothesized that the greater the tendency toward decline, the less positive the relationship between technical and structural complexity and administrative intensity. Results from a study of manufacturing organizations support the hypothesis and suggest that the frequently replicated positive relationship between internal complexity and administrative intensity may be contingent on whether the organizations examined are growing or declining. The results are consistent with the emerging view that different factors determine administrative-component levels during growth and decline and also suggest that decline may be a force for weakening linkages between internal context and structure.
William McKinley (Sun,) studied this question.