WHY PERCEIVED SIZE MATTERS FOR AGENCY TERMINATION

Published date01 March 2017
DOIhttp://doi.org/10.1111/padm.12299
Date01 March 2017
doi : 10. 1111/p adm .12299
WHY PERCEIVED SIZE MATTERS FOR AGENCY
TERMINATION
JACK CORBETT AND COSMO HOWARD
Agency size is generally assumed to be positively correlated with survival: the bigger an agency,
the less likely it is to be terminated. Yet, recent research nds a very small effect of size on sur-
vival. The reason, we argue, is that it only addresses size in terms of overall operating budget – what
this article calls objective size. By contrast, we use an interpretive historicist approach to show how
perceived size – the meanings and beliefs of key actors concerning an agency’s size – affects termi-
nation. Drawing on a case study of Australia’s independent aid agency, AusAID, which endureda
tumultuous history of cuts, reorganizations and rebirths, culminating in termination, we show how
perceptions of the agency’s size mattered. These ndings both support and extend recent research
showing that adaptation and reputation are critical to the survival of government agencies.
[T]he single most important reason why bureausso rarely die is that they are large, and all large organizations
have high survival rates size is the number one determinant of survival. (Anthony Downs 1967, p. 23)
INTRODUCTION
The question of whether, how and under what circumstances public organizations die
has troubled administrative scholars for more than half a century (Boin et al. 2010). Early
scholarship assumed that government organizations were effectively immortal, on the
grounds that government agencies are large, and large organizations do not die (Simon
1950; Downs 1967). This view stoked fears of inevitable and untrammelled bureaucratic
growth (Lowi 1969), and underpinned political campaigns against big government, which
found their expression in the new public management (NPM) and its programmes of
termination and/or privatization of large and inefcient government operations (Hood
1991).
These belt-tightening efforts have continued into the so-called ‘post-NPM era’, with
austerity programmes spurring new efforts to downsize, merge and terminate public sec-
tor organizations (Flinders and Skelcher 2012; Lodge and Hood 2012; Flinders et al. 2014;
Howard 2015; Wood2015). Throughout this period, scholars have undertaken increasingly
sophisticated empirical studies to determine the conditions that increase the probability
of agency termination. The objective size of an agency, dened in relationto its budget, is
sometimes included as a variable in these studies, with most nding that size has a very
small positive effect on survival (Lewis 2002; Carpenter and Lewis 2004; Berry et al. 2010;
Boin et al. 2010).
The modest size effect suggests that the traditional assumption that big agencies do not
die should be re-evaluated. In particular, we need a better understanding of the mecha-
nisms through which agency size affects survival chances. In this article we unpack these
mechanisms by investigating the trajectory of one agency – the Australian Agency for
International Development (AusAID) – over four decades. The case is signicant because
this agency faced a succession of abolition attempts, including a partial termination in
1976, followed by re-establishment and consolidation throughout the 1990s and 2000s,
Jack Corbett is at the Department of Politics & International Relations, University of Southampton, UK. Cosmo Howard
is at the School of Government and International Relations, Grifth University,Australia.
Public Administration Vol.95, No. 1, 2017 (196–213)
© 2016 John Wiley & Sons Ltd.
PERCEIVED SIZE IN AGENCY TERMINATION 197
before being fully terminated in 2013. Todo so we adopt Kaufman’s (1976, p. 28) denition
of organizational death in the public sector.
For Kaufman, an organization is dened as a group of public ofcials surrounded by an
‘uninterruptedly maintained’ boundary,which distinguishes insiders from outsiders. Ter-
mination occurs when this boundary is no longer perceptible. Crucially, in our empirical
case each attempt at termination was justied on the grounds that the agency had grown
too large. By investigating the multiple lives and deaths of one agency over time we are
able to show that in addition to objective size (budget, number of staff, etc.), perceived size
(the meanings and beliefs of external stakeholders in relation to the size of the agency)
also matters when explaining termination. In short, the meaning of ‘size’ is locally and
temporally contingent, susceptible to both synchronic and diachronic reinterpretation (cf.
Smullen 2010; Elston 2014; Papanastasiou 2016). In substantiating these claims this article
makes three contributions:
1. Theoretically: it problematizes one of public administration’s longest standing
assumptions –the bigger the agency the lower the risk of termination – by devel-
oping the concept of perceived size. In doing so we also add to recent work on the
importance of organizational adaptation (e.g. Boin et al. 2010) and reputation (Maor
2011; Boon and Verhoest 2014; Carpenter 2001, 2014);
2. Methodologically: it extends the small but growing body of interpretive scholarship
on agencies (e.g. Smullen 2010; Elston 2014). These studies address how discursive,
historical and geo-spatial contexts shape stakeholders’ attitudes towards agencies.
We add an explicit focus on how beliefs about organizational size inuence termina-
tion; and
3. Empirically: to show how perceived size has affected termination risk over time, we
provide an in-depth historical case study that draws on more than 50 interviews with
ministers and senior ofcials, as well as archival and public source material.
Tosubstantiate these claims we rst review existing work on organizational termination,
paying particular attention to the impact of agency size, to both situate our argument and
highlight the importance of our case. Then we introduce recent interpretive work on agen-
cies to demonstrate what this approach adds to the study of agency termination. Third,
we provide a discussion of the data we collected to undertake this analysis. In the fourth
section we present the ndings of this research by focusing on six distinct periods in the
‘life cycle’ of AusAID: inception; infanticide; recovery; consolidation; expansion; and ter-
mination. In the conclusion we return to the implications of our approach and ndings for
theories of organizational termination.
AGENCY TERMINATION AND THE ROLE OF SIZE: EXISTING RESEARCH
Scholars have been studying the factors that inuence organizational survival in the pub-
lic sector for more than half a century. Agency size was a key variable in early research
on termination, but it has received less attention in recent work. Existing research into the
relationship between size and agency survival is dened by its focus on organizational
budget what we call objective size. Herbert Simon’s pioneering contribution (1950,
pp. 117–18) suggested that large organizations are much more likely to survive, and
knowledge of this would motivate leaders to grow their organizations. Later, Anthony
Downs (1967) agreed that ‘large organizations have a better chance of survival than
Public Administration Vol.95, No. 1, 2017 (196–213)
© 2016 John Wiley& Sons Ltd.

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT