Consider an organization you know well. Using the descriptions in Illustration 2.8 and Table 2.1 , position the organization on the graph in Figure 2.4 .

Table 2.1

Figure 2.4

Transcribed Image Text:

Illustration 2.8 A typical life cycle pattern 1 The entrepreneurial stage In this first (often entrepreneurial) stage, the primary task is to provide a service or make a product. Survival is the key strategy. Organizational culture is fashioned by the founding entrepreneur. It may be a new organization, a new subsidiary or part of an established, larger organization. Success brings growth and the need to recruit more staff. Staff need managing and the question of future organizational strategy becomes more complex. The alternatives are to limit growth and remain small (but risk competitiveness), or to grow and recruit professional managers. 2 The collective stage The organization begins to 'take shape'. Departments and functions begin to be defined and the division of labour is the dominant theme. The professional managers recruited tend to be strong leaders who share the same vision as the founders. Further growth brings the need for management control and delegation. The organization has begun to establish its position; internal tasks are allocated along with responsibility and autonomy to carry them out. 3 The formalization stage Systems of communication and control become more formal. There is a need to differentiate between the tasks of management - to make strategic decisions and to implement policy - and those of lower-level managers, who are expected to carry out and oversee operational decisions. Bureaucratization occurs as systems of coordination and control emerge, including salary structures, reward and incentive schemes, levels in the hierarchy, reporting relationships and formalized areas of discretion and autonomy for lower-level managers. The organization continues to grow, but burdened by the process of bureaucratization the need for the structure to be 'freed up' becomes pressing. 4 The elaboration stage This is the stage of strategic change. The organization may have reached a plateau in its growth curve and may even show the first stages of decline in performance. Managers used to handling bureaucratic structures and processes usually have to learn new skills to achieve change, such as team work, self-assessment and problem confrontation. This stage may also include the rapid turnover and replacement of senior managers. Source: Based on Greiner, L.E. (1972), 'Evolution and revolution as organizations grow", Harvard Business Review, July-August, 50, pp. 37-46.