There's a company mentioned in The Tipping Point whose founder surmised that the opitmum number was around 100. He kept all his locations as self sufficient entities of no more that 100 people.

The details escape me now, but some other hacker that has read Gladwell will no doubt fill in the blanks.

This seems to be pretty much the same thing as the ideological battle of communism v. capatilism during the 20th century.

Centralised command theoretically allows the avoidance of duplication of effort, and the sharing of knowledge over an increasingly large problem domain. The trouble is, as noted in the article and as discovered by the USSR, no-one has discovered a way to make internal communications sufficiently efficient to make it work. Large organisations have problems with teams working at cross-purposes, teams doubling up on effort, and in general just not benefitting from the fact that somewhere else in the large organisation, someone has already solved the problem that they are working on.