Abstract for: Dynamic Behavioral Model Uncovers Conditions for Administrative Bloat

Administrative bloat in organizations is a growing concern, impacting organizational efficiency, employee motivation and health. While explanations have attributed the growth of administrative costs to external regulatory requirements and bureaucrats' will to power, we propose a dynamic, quantitative model to show that administrative bloat can arise as a result of an organization's endogenous dynamics under well-meaning management heuristics. At the core of the model is the consideration that codified processes are often helpful when instituted but become obsolete as conditions change. The model studies how this obsolescence process interacts with managers' well-meaning decisions to give rise to the level of administrative costs and effectiveness in the organization. The model identifies conditions for a runaway bloat cycle, where administrative costs grow to the resource cap. The model reflects a best-case scenario, revealing that administrative bloat can occur even with well-intentioned management and without external regulatory pressures. The findings suggest that a balance between structured process management and flexible problem resolution is crucial to prevent administrative bloat.