Size is one of the variables that influences the choice of organizational structure. The best indicator of organization size is the total number of employees who work full, part time, or under contract. Size is used as a measure of the required information processing capacity. Larger organizations require greater information processing capacity than smaller organizations.

Determining the level of complexity required to coordinate the staff is important, so the total number of persons employed is requested, not the number of full time equivalents.

The greater the number of people, the larger is the organization. An organization with highly trained and skilled individuals tends to behave more like a larger organization than one with the same number of unskilled individuals. Thus, the employee number is factored up to reflect this difference, when the staff is highly trained.

The larger the organization, the more formalization is required.
Further, complexity increases with size and so does the degree of decentralization.
The education and skill level of the employees influence the effects of size on the organization.

The effect of size seems to be higher for a small organization than for large organizations, leading to a non-linear relation between size and structure.

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Medtronic case: Size