Organizational Life Cycles

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Organizational Life Cycles
Prof. Stephen Block
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Organizational Life Cycles

• Grieners Five Stages of Growth
• (From Harvard Business Review, July-August,
  1972.)

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Phase 1

• Evolutionary Stage Growth Through Creativity
• Revolutionary Stage Crisis of Leadership

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Phase 1

• Growth Through Creativity - This stage is
  dominated by the founders of the organization,
  and the emphasis is on creating both a market and
  product. These founders are usually technically
  or entrepreneurially oriented. Management
  activities are avoided. But as the organization
  grows, management problems cannot be handled
  through informal communication. This leads to
• Revolutionary Stage Crisis of Leadership

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Phase 1

• Revolutionary Stage Crisis of Leadership
• The question of who is going to lead the
  organization out of its state of confusion and
  solve management problems? The solution is to
  find a strong manager. This crisis leads to the
  next evolutionary period
• Growth Through Direction

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Phase 2

• Evolutionary Stage Growth Through Direction
• Revolutionary Stage Crisis of Autonomy

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Phase 2

• Evolutionary Stage Growth Through Direction
• During this stage, the new manager and key
  staff take the responsibility for establishing
  direction, while lower level supervisors are
  treated as functional specialists than autonomous
  decision-makers.
• The demands of lower-level managers for more
  autonomy eventually leads to the next
  revolutionary period
• Revolutionary Stage Crisis of Autonomy

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Phase 2

• Revolutionary Stage Crisis of Autonomy
• The solution to this crisis is usually greater
  delegation.

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Phase 3

• Evolutionary Stage Growth Through Delegation
• Revolutionary Stage Crisis of Control

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Phase 3

• Evolutionary Stage Growth Through Delegation
• When an organization gets to the growth stage
  of delegation, it usually begins to develop a
  decentralized organizational structure, which
  heightens motivation at lower levels of the
  organization. Eventually top managers sense they
  are losing control over a diversified field
  operation. This leads to
• Revolutionary Stage Crisis of Control

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Phase 3

• Revolutionary Stage Crisis of Control
• The crisis of control leads to a return to
  centralization. This creates resentment among
  those individuals who feel that their
  organizational freedoms are being constrained.
• Searching for an alternative usually leads to
• Evolutionary Stage Growth Through Coordination

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Phase 4

• Evolutionary Stage Growth Through Coordination
• Revolutionary Stage Crisis of Red Tape

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Phase 4

• Evolutionary Stage Growth Through Coordination
• This period is characterized by the use of
  formal systems for achieving greater coordination
  with top management as the organizational
  watchdogs. Most coordination systems get carried
  away and it leads to
• Revolutionary Stage Crisis of Red Tape

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Phase 4

• Revolutionary Stage Crisis of Red Tape
• This crisis most often occurs when the
  organization has become too large and complex to
  be managed through formal programs and rigid
  systems. To overcome the Red Tape mentality, the
  organization moves to the next stage
• Evolutionary Stage Growth Through Collaboration

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Phase 5

• Evolutionary Stage Growth Through Collaboration
• Revolutionary Stage Crisis of ?

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Phase 5

• Evolutionary Stage Growth Through Collaboration
• This stage emphasizes greater spontaneity in
  management action through teams and the skillful
  confrontation of interpersonal differences.
  Social control and self-discipline take over from
  formal control. The next revolutionary stage
  was not identified by Griener
• Revolutionary Stage Crisis of ?

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Phase 5

• Revolutionary Stage Crisis of ?
• Griener suggests that the next crisis will
  center on the psychological saturation of
  employees who have grown emotionally and
  physically exhausted by the intensity of teamwork
  and the heavy pressure for innovative solutions.

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Organizational Life Cycles

• Evolving Culture

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Birth Stage

• Size small
• Bureaucratic nonbureaucratic
• Division of Labor overlapping tasks
• Centralization one-person rule
• Formalization no written rules
• Administrative intensity no professional staff
• Internal Systems nonexistent
• Lateral teams, task forces none
• for coordination

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Youth Stage

• Size medium
• Bureaucratic prebureaucratic
• Division of Labor some departments
• Centralization two leaders rule
• Formalization few rules
• Administrative intensity increasing clerical
  maintenance
• Internal Systems crude budget
  information
• Lateral teams, task forces top leaders only
• for coordination

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Midlife Stage

• Size large
• Bureaucratic bureaucratic
• Division of Labor many departments
• Centralization two department heads
• Formalization policy procedures
• Administrative intensity increasing professional
  staff support
• Internal Systems control systems in place,
  budget, performance reports
• Lateral teams, task forces some use of
  integrators and for coordination
  task forces

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Maturity Stage

• Size very large
• Bureaucratic very bureaucratic
• Division of Labor extensive, with small jobs
  and many descriptions
• Centralization top management heavy
• Formalization extensive
• Administrative intensity large-multiple
  departments
• Internal Systems extensive planning, financial
  and personnel added
• Lateral teams, task forces frequent at lower
  levels to
• for coordination
  break down bureaucracy

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Preventing Premature Organizational Death
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Risk Factors

• Board and staff stagnation
• Reliance on a single funding source
• Failure to pay attention to the external
  environment

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Taking Action

• Avoid the we always did it this way syndrome
• Frequently ask Is there a better way to do
  this?
• Add new Board members

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Taking Action

• Pay attention to staff morale
• Pay attention to financial trends revenues,
  expenses available fund raising dollars.
• Have a strategic plan and monitor it daily.

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Taking Action

• Ask yourself whether you may be a problem for the
  organization. Are you challenged, are you having
  fun? Do you enjoy your co-workers?
• Fight stress by exercising, taking vacations
  getting involved in non-work activities.