California Management Review

Abstract

Average organizational size has declined sharply over the last thirty years in the American economy. This article documents this trend and examines a number of factors that may have produced it, including downsizing, sector shifting, and resource partitioning. It concludes that most of the decline in average firm size is attributable to the shift from manufacturing to services. This development presents important new challenges to management that vary according to the growth patterns of each industry.

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