Organizational size and knowledge flow: a proposed theoretical link
Citation. Serenko, A., Bontis, N., & Hardie, T. (2007). Organizational size and knowledge flow: a proposed theoretical link. Journal of Intellectual Capital, 8(4), 610–627. https://doi.org/10.1108/14691930710830783
Summary. This conceptual paper proposes “Gita’s Rule”: as an organizational unit grows, internal knowledge flow and intra-unit knowledge sharing tend to diminish. Serenko, Bontis, and Hardie argue that the effect is not simple firm size but unit size and cross-unit knowledge-sharing requirements, with a proposed breaking point around 150 employees. The mechanism is structural and social: larger units require more formal structure, weaken interpersonal relationships and trust, reduce connective efficacy, and make communication less effective.
Key claims
- The paper argues that organizational unit size negatively affects internal knowledge flow because larger units make it harder for employees to know one another, trust one another, communicate frequently, and believe that shared knowledge will reach the right recipients.
- The proposed 150-person threshold is treated as a general breaking point drawn from social-channel-capacity arguments, anthropology, evolutionary psychology, and management examples such as W.L. Gore’s plant-size practice, not as an empirically estimated universal cutoff.
- The theory distinguishes overall organizational size from the size of organizational units and the need for knowledge sharing across units; a large organization may preserve knowledge flow by managing unit boundaries and cross-unit exchange rather than simply staying small.
- Connective efficacy is central to the theory: as unit size increases, employees may still believe their knowledge is valuable, but doubt that it will reach people who need and can use it.
- The paper frames knowledge flow as an organizational-design problem involving structure, trust, communication, and social networks, not only a knowledge-management-system or repository problem.
Evidence & limitations
- This is a peer-reviewed conceptual paper in Journal of Intellectual Capital; it develops propositions from prior literature rather than testing them with original data.
- The proposed 150-person breaking point is theoretically useful but should be treated cautiously because the paper does not estimate the threshold empirically across organizations, industries, or communication technologies.
- The paper predates contemporary GenAI and agentic knowledge tools, so its claims are best read as a baseline theory about human social-channel limits and pre-AI knowledge-management conditions.
- The ResearchGate-uploaded Drive PDF contains an added ResearchGate cover page; Crossref verifies the published article metadata and DOI, while the downloaded file hash records the archived PDF version.