In a recent paper in this Journal, Coates and Updegraff (C-U) have attempted to examine the hypothesis that there are economies of scale in the use of administrative personnel in organizations.' Their tests are based on data for 129 banks for 1969. They generally concluded that indivisibility of administrative input does not exist, at least for the organizations in their sample, and no such economies of scale are detected. The purpose of this comment is to indicate that C-U's findings should be seriously questioned for the following reasons: 1. The authors do not discuss the specification of their test equation and seem to confuse the concepts of economies of scale as employed by students of organizational behavior and economists. 2. The findings of studies utilizing more completely developed models contradict C-U's findings. 3. Even accepting the authors' specification, the appropriate interpretation of their evidence is consistent with the notion that indivisibilities in the use of administrative inputs exist.