The effect of organizational size on customer satisfaction: A conceptual model

For decades, researchers have argued that on one hand, "bigger is better" and on the other hand that "small is beautiful." In the 1970s and 1980s, growth and large size were considered natural and desirable; but in the 19905, small - or at least the ability to behave as a small company - is beautiful. Anecdotal evidence suggests that many large companies are undergoing massive reorganizations by forming groups of small companies or divisions within the overall organization. The reorganization is aimed at embracing a large-company/small-company hybrid that combines a large corporation's resources, market share and capital, with a small company's mindset of simplicity, flexibility and the ability to get closer to the customer. This pattern of organizational transformations suggests that organizational leaders believe that there is a connection between organizational size and customer service. However, this trend is not based on theoretical grounding or much empirical evidence. In fact, very little research has been done on the relationship between organizational size and customer satisfaction despite the attention that each of these subjects has received in their respective fields.