Organizational size and knowledge flow: a proposed theoretical link

Purpose – This paper seeks to present a theory clarifying the negative relationship between organizational unit size and knowledge flows referred to as Gita's Rule. Design/methodology/approach – This paper draws from the literature and develops a grounded theory. Various applications and propositions are suggested through this theoretical lens. Findings – It is suggested that, as the size of an organizational unit increases, the effectiveness of internal knowledge flows dramatically diminishes and the degree of intra‐organizational knowledge sharing decreases. Research limitations/implications – It is proposed that 150 employees represents a general breaking point, after which knowledge sharing reduces due largely to increased complexity in the formal structure, weaker interpersonal relationships and lower trust, decreased connective efficacy, and less effective communication. Practical implications – The research points to the key dimension of organizational size that must be considered when developing models and reviewing case studies. Originality/value – The research reported in this paper is among the first to explicitly tackle the issue of how knowledge flows are affected by organizational size. A theory is developed and several research propositions are introduced for future studies.