Organizations expand when prestige is correlated to budget size

One of the factors that contributes to the growth of an organization is the perception that handling large amounts of money is an indication of importance. This is stated in Parkinson’s Law, explained by Conway in the context of understanding why Large systems tend to disintegrate during development:

Parkinson’s Law plays an important role in the over-assignment of design effort. As long as the manager’s prestige and power are tied to the size of his budget, he will be motivated to expand his organization.^[1]

#systems #cognition

See also:

• Perception is Reality
• Large systems tend to disintegrate during development