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As the number of participants increases, the channels of communication increase exponentially. As a result increase in the complexity decrease in the quality of communication (e.g., more misunderstanding).
To increase the number of participants, various aspects of communication need to be managed, such as the needs and desires of the various stakeholders, the form, nature, frequency, content, format, choice of technology, etc. of communication.
The forumla to calculate the number of communication channels (n = number of participants) is:
Number of communication channels = n * (n - 1) / 2
For example, for a team of 5 and a team of 12, the number of communication channels is 10 and 66, respectively.
The two-pizza team rule (proposed by Bezos, founder of Amazon) is about creating "teams that are no larger than can be fed by two pizzas" no matter the size of the company. The two-pizza rule for teams takes into account the number of communication channels to make collaboration and communication effective and easy.
The effectiveness of communication channels varies according to the amount of information they can convey, from unaddressed documents (the least) to face-to-face communication, which has the widest bandwidth of all communication types.
Agile teams prefer face-to-face communication because it is the cheapest, fastest, and most effective way to exchange information.