Moving Luther Gulick to Asia: Span of Control and Performance in Korean Quasi-Governmental Organizations

Abstract

In the early era of the study of public management, Luther Gulick (1937) argued that span of control determines organizational performance. Theoretically, span of control has a non-linear relationship with performance as its marginal benefit diminishes due to transaction costs. Meier and Bohte (2000) revisited this argument and showed empirical evidence that an optimal span of control enhances organizational performance using hundreds school districts in the United States. However, it is necessary to expand the scope of study to examine whether Gulick’s theory can be generalizable to public service organizations in non-western countries. Using Korean quasi-governmental organizations, this study explores how span of control affects performance and whether the effect differs depending on structural levels and performance indicators (archival performance scores by the government and customer satisfaction). Four years pooled data for 101 Korean quasi-governmental organizations were analyzed using multivariate models. The findings show that a wider span of control at top-level management is positively associated with the government’s performance scores, but it is negatively associated at mid-level management. On the other hand, span of control has no significant relationship with customer satisfaction. The findings of this study contribute to the generalizability of Gulick’s theory in a new context, and highlight that the impact of span of control on performance can differ based on structural levels and who evaluates organizations.