Organizational Size and Social Capital in the Public Sector: Does Decentralization Matter?

Organization theory suggests that the strength of the ties between employees is likely to be weaker in large organizations, but that decentralization of decision-making can help to generate norms of collaboration, trust and shared mission. This paper explores the separate and combined effects of size and decentralization on perceptions of organizational social capital in central government agencies in Europe. The statistical results suggest that there is a negative relationship between organization size and organizational social capital and a contrasting positive relationship between decentralized decision-making and social capital. Further analysis revealed that decentralization of key decisions can overcome the internal social dysfunctions associated with being a big organization. Theoretical and practical implications are discussed.