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.

KEYWORDS:

• Task complexity
• organizational performance
• budget agencies

Disclosure statement¹³

No potential conflict of interest was reported by the author(s)

Supplementary material

Supplemental data for this article can be accessed at https://doi.org/10.1080/14719037.2022.2116093

Notes

1. We use the terms “task” and “function” interchangeably.

2. A few tasks, including pre-audit and data processing, are omitted due to a significant number of missing values in the NASBO survey data.

3. For the thirteen tasks shown in Table 1, we treat the few missing values as zero.

4. This results in a similar measure parallel to Blau’s (1970) index that has been widely used to measure functional diversity.

5. See Table A1 in the appendix for more details on variable definitions and data sources.

6. The results, available upon requests, are robust without taking the natural log.

7. See appendix 3 for a detailed discussion of the control variables.

8. In the model of general fund balance, tax revenues are scaled by own-source general revenues.

9. The results are robust with controlling for alternative fiscal institutional variables such as balanced budget requirements or tax and expenditure limits.

10. To visualize the relationship between agency size and task complexity, we provide a scatter plot in Figure A2 of the appendix. In the scatter plot, we find a fairly even distribution of all possible combinations of agency size and task complexity in the data. We find high task complexity for both large and small agency sizes, and there seem to be no discernable associations between task complexity and agency size. Nonetheless, we do find less observations for the combination of relatively high task complexity and a very small agency size, indicating that there needs a critical mass of skilled employees to perform complex tasks.

11. For the thirteen tasks shown in Table 1, we treat the few missing values as zero.

12. As an additional check, we also adopt an alternative framework to categorize the tasks of state budget agencies by four groups of functions instead of three. Regression results based on this operationalization of task complexity are consistent with those in Tables 3 and 4. The results are available upon request.

13. Please either add a first footnote or an endnote to state that: The authors made equal contributions to the research. Their names are alphabetically ordered.

Additional information

Notes on contributors

Jia Chen

Jia Chen is an associate professor in the School of Public Economics and Administration at the Shanghai University of Finance and Economics. He received a Ph.D. from the Department of Political Science, the University of Colorado, Boulder. His research focuses on political economy and has been published in Political Research Quarterly, Studies in Comparative and International Development, Canadian Journal of Political Science, Japanese Journal of Political Science, and others. He can be reached at [email protected].

Yuan Yang

Yuan Yang is a lecturer in the Department of Business Administration in the School of Economics and Management at Tongji University in China. She received her Ph.D. in Consumer Behaviour from Purdue University, Indiana, USA. Her research focuses on consumer behaviour, international marketing, and business ethics. She has published in Asian Business & Management, Journal of Business Ethics, and Problems of Post-Communism. She can be reached at [email protected].

Jinhai Yu

Jinhai Yu is an assistant professor in the School of Public Policy, University of Connecticut. He received a Ph.D. from the Martin School of Public Policy and Administration, University of Kentucky. His research focuses on budgeting politics and debt policy. He has published in Public Management Review, Public Administration Review, National Tax Journal, Public Performance and Management Review, and others. He can be reached at [email protected].