Price's Law states that half of the literature on a subject will be contributed by the square root of the total number of authors publishing in that area. In principle, it is similar to the Pareto theorem, which states that 80 percent of outcomes are produced by 20 percent of the actions.
Extrapolated to organizational output, Price’s Law suggests 10 percent of people produce half the outcomes, while 90 percent produce the other half.
And remember it is a square root or power law function: the disparities grow larger with scale. The percentage of people producing half the value actually decreases with scale. The Pareto theorem, for example, is linear. It suggests 20 percent of actions produce 80 percent of value, at any scale.
Price’s Law is different. As population size grows, though the number of those contributing half the value grows, they grow at ever-decreasing rates in relation to the total number of associates.
That is one reason why very-large organizations contain so many people who are apparently not functioning at a high level.
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