In restructuring environmental research organisations, smaller sites generally disappear and larger sites are created. These decisions are based on the economic principle, ‘economies of scale’, whereby the average cost of each unit produced falls as output increases. We show that this principle does not apply to the scientific performance of environmental research institutes, as productivity per scientist decreased with increasing size of a research site. The results are best explained by the principle ‘diseconomies of scale’, whereby powerful social factors limit the productivity of larger groupings. These findings should be considered when restructuring environmental science organisations to maximise their quality.