Task complexity, organizational size, and performance: an examination of the U.S. state budget agencies

Abstract

We examine the impact of one dimension of administrative task configuration, task complexity, on organizational performance of government agencies. While task complexity allows greater specialization and thus positive returns to productivity, it often increases inter-task coordination costs. We argue that one can improve performance by designing heterogeneous tasks in small agencies and homogeneous tasks in large ones. We find empirical support for this proposition using panel data on 13 tasks of state budget agencies and fiscal management performance between 1986 and 2008. This study helps understand the performance impact of task complexity, a significant yet overlooked feature of agency structure.

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