Evolution and revolution as organizations grow pdf

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The organizational life cycle is the life cycle of an organization from its creation to its termination. Subsequently, research has been done on the organizational life cycle for more than years [6] and can be found in various literature on organizations. Generally, there are five stages to an organization's life cycle [3].

Evolution and revolution as organizations grow

The organizational life cycle is the life cycle of an organization from its creation to its termination. Subsequently, research has been done on the organizational life cycle for more than years [6] and can be found in various literature on organizations.

Generally, there are five stages to an organization's life cycle [3]. According to Larry Greiner, there are 5 phases of growth in an organization, each indicated by an evolutionary and subsequently, a revolutionary phase. An evolutionary phase, refers to an extended duration of expansion enjoyed by the organization with no significant disruptions. Similarly, a revolutionary phase refers to a period of considerable disturbance within an organization. Creative expansion evolutionary phase leads to a leadership crisis revolutionary phase.

Initially, the organization enjoys expansion through the creativity and proactive nature of its founders. The founding members must either assume this role, or empower a competent manager to fulfill this if they are unable to.

Directional expansion evolutionary phase leads to a crisis of autonomy revolutionary phase. As the organization experiences expansion through directive leadership, a more structured and functional management system is adopted. Greater delegation of authority to managers of lower levels is required, although at the reluctance of top-tier managers who do not wish to have their authority diluted. Expansion through delegation evolutionary phase leads to a crisis of control revolutionary phase.

As the organization expands from delegating more responsibilities to lower-level managers, top-tier directors start to lessen their involvement in the routine operations, reducing the communication between both levels. This leads to a conflict of interest with the directors, who feel that they are losing control of the expanded organization. Expansion through coordination evolutionary phase leads to a crisis of red tape revolutionary phase. As an organization expands from improving its coordination, such as through product group formation and authorized planning systems, a bureaucratic system develops.

At this stage, the organization seeks to overcome the barrier of red tape through adopting a more flexible and versatile matrix structure matrix management.

Educational courses are arranged for managers, to equip them with the skills of solving team disputes and to foster greater teamwork. Complex and formal systems are also made simpler, and there is an increased emphasis on the communication between managers, to solve crucial problems. Although Greiner identified expansion through collaboration as the evolutionary phase, he did not specifically identify the succeeding crisis revolutionary phase , as there was little evidence due to most of the organizations still being in the collaboration phase.

However, Greiner predicted that the crisis might involve the exhaustion of members in an organization, due to a strong requirement for innovation and teamwork. There are certain implications for managers in organizations with regards to the phases of growth:.

Top-tier managers should be aware of their organization's current stage, to be able to execute relevant solutions to the type of crisis faced.

This is because there may be vital experiences from each phase to be learned, that will be required to tackle future phases. It becomes clear in each phase of revolution that there are only a specific number of solutions that can be applied. It is also important to note that evolution is not a mechanical event, and organizations must actively seek out new solutions to the current crisis that are also suitable for the next stage of growth.

Managers should realize that past actions are factors of future consequences. This would help managers in formulating solutions to cope with the crisis that develops in the future. While Greiner's model is conceptually attractive, the central problem is that it is not possible to operationalise or apply it to specific organizations in practical situations.

This is because the five phases are conceptual and can not be measured. An alternative model has been proposed by Flamholtz. The Seven stages of growth of a company's life cycle can be identified all revenues in US dollars :. These ranges are based upon manufacturing firms. An adjustment is made for the revenues of service and distribution firms.

Revenues of service firms are multiplied by a factor of 3 to be the equivalent of manufacturing firms, and Revenues of distribution firms are multiplied by a factor of 2 to be the equivalent of manufacturing firms. These adjustments are made to account for the difference in cost of goods sold by manufacturing firms vis a vis service and distribution firms.

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Evolution and Revolution as Organizations Grow

Historians and academics have observed that organizations, like living organisms, have life cycles. They are born established or formed , they grow and develop, they reach maturity, they begin to decline and age, and finally, in many cases, they die. Study of the organizational life cycle OLC has resulted in various predictive models. These models, which have been a subject of considerable academic discussion, are linked to the study of organizational growth and development. Organizations at any stage of the life cycle are impacted by external environmental circumstances as well as internal factors. We're all aware of the rise and fall of organizations and entire industries.

Change: evolution or revolution?

German Portal. About RMP. About themanager. Managing Growth — 5 Phases of Growth. We nea rly forgot what growth means in the last decade.

The influence of history on an organization is a powerful but often overlooked force. Managers, in their haste to build companies, frequently fail to ask such critical developmental questions as, Where has our organization been? Where is it now? Instead, when confronted with problems, managers fix their gaze outward on the environment and toward the future, as if more precise market projections will provide the organization with a new identity.

Evolution and revolution as organizations grow

Key executives of a retail store chain hold on to an Organizational structure long after it has served its purpose because the structure is the source of their power. The company eventually goes into bankruptcy. Many young managers subsequently leave the bank, competition moves in, and profits decline.