EXHIBIT 8.1 LARGE SMALL Differences between Large and Small Organizations Source: Based on John A. Byrne, "Is Your Company Too Big?" BusinessWeek (March 27, 1989), 84-94; and Lawler, III, E.E. (1997) "Rethinking Organization Size," Organiza- tional Dynamics 26, 2, 24-35. Economies of scale Responsive, flexible Global reach Regional reach Vertical hierarchy, mechanistic Flat structure, organic Complex Simple Stable market Niche-finding Employee longevity, raises, and promotions EntrepreneursChapter 8: Organization Size, Life Cycle, and Decline | 301 EXHIBIT 8.2 Large Development of teamwork Streamlining, Organizational Life small-company Cycle thinking Source: Adapted from Robert Continued E. Quinn and Kim Cameron, Addition of internal systems maturity " Organizational Life Cycles and Shifting Criteria of Effect Decline tiveness: Some Preliminary Evidence," Management Sci- ence 29 (1983), 33-51; and Provision of clear direction Larry E. Greiner, "Evolution SIZE and Revolution as Organiza- Crisis: tions Grow," Harvard Busi- Need for revitalization Creativity ness Review 50 (July-August 1972), 37-46. Crisis: Need to deal Crisis: with too much Need for Crisis: red tape delegation Need for with control leadership Small 1. 2. 3. 4. Entrepreneurial Collectivity Formalization Elaboration Stage Stage Stage Stage ORGANIZATION STAGES OF DEVELOPMENTEXHIBIT 8.3 Organization Characteristics during Four Stages of the Life Cycle 1 . 2. 3. 4. ENTREPRENEURIAL COLLECTIVITY FORMALIZATION ELABORATION CHARACTERISTIC NONBUREAUCRATIC PRE-BUREAUCRATIC BUREAUCRATIC VERY BUREAUCRATIC Structure Informal, one-person Mostly informal, some Formal procedures, Teamwork within show procedures division of labour, new bureaucracy, small- specialties added company thinking Products or Single product or Major product or service, Line of products or Multiple product or services service with variations services service lines Reward and Personal, paternalistic Personal, contribution to Impersonal, formalized Extensive, tailored control systems success systems to product and department Innovation By owner-manager By employees and managers By separate innovation By institutionalized R&D group department Goal Survival Growth Internal stability, market Reputation, complete expansion organization Top management Individualistic, Charismatic, direction-giving Delegation with control Team approach, attack style entrepreneurial bureaucracy Source: Adapted from Larry E. Greiner, "Evolution and Revolution as Organizations Grow," Harvard Business Review 50 (July-August 1972), 37-46; G. L. Lippitt and W. H. Schmidt, "Crises in a Developing Organization," Harvard Business Review 45 (November-December 1967), 102-112; B. R. Scott, "The Industrial State: Old Myths and New Realities," Harvard Business Review 51 (March-April 1973), 133-148; Robert E. Quinn and Kim Cameron, "Organiza- tional Life Cycles and Shifting Criteria of Effectiveness," Management Science 29 (1983), 33-51.EXHIBIT 8.8 Stages of Decline and the Widening Perfor- mance Gap Good Source: William Weitzel and Ellen Jonsson, "Decline in Information Successful Organizational Performance Organizations: A Literature Integration and Extension," Prompt Administrative Science Action Correct Quarterly 34 (March 1989), Action 99-109. Reprinted by permis- sion of SAGE Publications. Effective Reorganization Declining Organizational Performance No choices Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Blinded Inaction Faulty Action Crisis Dissolution Decline Begins Dissolution Successful Organizational Performance Appropriate Organizational Response Declining Organizational Performance