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 Bureaucratic Division of Labor Centralization Formalization Administrative intensity Internal Systems Lateral teams, task forces
for coordination

small nonbureaucratic overlapping tasks one-person rule no written rules no professional staff nonexistent none

Youth Stage

Size Bureaucratic Division of Labor Centralization Formalization Administrative intensity

Internal Systems
Lateral teams, task forces

medium prebureaucratic some departments two leaders rule few rules increasing clerical & maintenance crude budget & information top leaders only

for coordination

Midlife Stage

Size Bureaucratic Division of Labor Centralization Formalization Administrative intensity

Internal Systems
Lateral teams, task forces for coordination

large bureaucratic many departments two department heads policy & procedures increasing professional & staff support control systems in place, budget, performance reports some use of integrators and task forces

Maturity Stage

Size Bureaucratic Division of Labor

Centralization Formalization Administrative intensity Internal Systems

Lateral teams, task forces for coordination

very large very bureaucratic extensive, with small jobs and many descriptions top management heavy extensive large-multiple departments extensive planning, financial and personnel added frequent at lower levels to 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 coworkers?
Fight stress by exercising, taking vacations getting involved in non-work activities.