The "natural" size of a company is determined by the relationship between transaction costs and the costs of organization. See this seminal paper for a fuller e

The "natural" size of a company is determined by the relationship between transaction costs and the costs of organization. See this seminal paper for a fuller exploration of the topic: http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0335.1937.tb00002.x/full http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0335.1937.... I would not be surprised, though, if there is a sudden increase in organizational costs above a certain threshold due to the limitations of human social capacities.