Organizational Life Cycles

Prof. Stephen Block

Organizational Life Cycles
Grieners Five Stages of Growth


(From Harvard Business Review, July-August, 1972.)
Phase 1
Evolutionary Stage: Growth Through Creativity


Revolutionary Stage: Crisis of Leadership
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
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
Phase 2
Evolutionary Stage: Growth Through Direction


Revolutionary Stage: Crisis of Autonomy
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
Phase 2
Revolutionary Stage: Crisis of Autonomy
The solution to this crisis is usually greater
delegation.
Phase 3
Evolutionary Stage: Growth Through Delegation


Revolutionary Stage: Crisis of Control
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


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

Phase 4
Evolutionary Stage: Growth Through Coordination


Revolutionary Stage: Crisis of Red Tape
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
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


Phase 5
Evolutionary Stage: Growth Through Collaboration


Revolutionary Stage: Crisis of ?
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 ?

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.

Organizational Life Cycles
Evolving Culture
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
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
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

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

Preventing Premature
Organizational Death
Risk Factors
Board and staff stagnation

Reliance on a single funding source

Failure to pay attention to the external
environment
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
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.


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.