Developing A Business PDF

Developing a Business
Strategy
Paul Newton
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2 DEVELOPING A BUSINESS STRATEGY
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DEVELOPING A BUSINESS STRATEGY 3
Preface
This eBook describes the top five contemporary organizational development
techniques and models. You can use these to aid you in your contribution to
the strategy process of your organization.
It describes following techniques and models:
 The EPG Model
 The Greiner Curve
 Adizes’ Corporate Lifecycle
 Deming’s Five Diseases of Management
 The Pyramid of Organizational Development
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Table of Contents
Preface 3
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Introduction 5
The EPG Model 7
The Greiner Curve 13
Adizes’ Corporate Lifecycle 19
Deming’s Five Diseases of Management 25
The Pyramid of Organizational Development 31
Other Free Resources 37
References 38
Introduction
This eBook describes five of the most popular organizational development
techniques and models. You can use these to aid you in your contribution to
the strategy process of your organization.
You can use these as part of your decision-making and involvement in the
organizational development strategy process.
1. The EPG Model
Maintaining the focus and direction of international organizations

is especially fraught as there is a tendency to take on too much.
The EPG model allows the organization to remain focused on its
core values and culture so that it thrives. It helps to align the
‘strategic profile’ of the organization with what it’s trying to
accomplish, trouble will likely be soon to follow.
This strategy tool assesses an organization from the different
principles – Ethnocentrism, Polycentrism and Geocentrism.
2. The Greiner Curve
Challenges and crises are inevitable over time as organizations

adapt in order to expand and thrive. The Greiner Curve is divided
into six phases along its growth path and enables organizations
to handle the challenges in a productive and positive manner as
they occur. Organizations that are not aware of this strategy tool
can find themselves stopped in their tracks at any one of the
points along the growth curve.
3. Adizes’ Corporate Lifecycle
Organizations move through a lifecycle that whilst unpredictable

does have certain characteristics that are shared from company
to company. Dr. Ichak Adizes defined the 10 unique stages in the
lifecycle of a corporation.
The ‘Prime’ is the ideal stage that every organization needs to

strive for and aim to remain in it for as long as possible.
4. Deming’s Five Diseases of Management
Professor Deming recognized some of the most-common

problems that threaten an organization and referred to them as
‘the Five Diseases of Management’. They are lack of constancy
of purpose, emphasis on short-term profits, annual rating of
performance, mobility of management and the use of visible
figures only. His strategy tool helps an organization identify its
own ‘state of health’ in relation to each of these ‘diseases’ and
assess the extent of threat it represents to the organization.
5. The Pyramid of Organizational Development
Successful organizations are structured in a way that facilitates

their growth and development. The Pyramid of Organizational
Development is a strategy tool that helps prevent poor structure
being created or perpetuated. It has six areas market, products
and services, resources management, operational systems,
management systems and corporate culture.
The most successful organizations are continually reviewing their

operational processes and strategies to ensure the development of their
organization ensures success.
Each of the techniques and methodologies discussed in this eBook serve to
provide the data and information management needed as part of strategic
development for an organization.
The EPG Model

It can be difficult for any organization to maintain its focus and direction, but
that is especially true of firms that do business on an international level.
When an organization grows to the point of having operations in more than
one country, it will always run the risk of going off in too many different
directions to be successful.
Instead of moving in directions that are not going to allow the business to
ultimately reach its desired destination, it is important that the organization
remain focused on its core values and culture in order to thrive.
Helps retain its

focus on
•Maintaining focus
& direction is •Core values and
•using the EPG culture to
harder for model when ensure
defining their
stratgegy
International
Success
Organizations
It is against that backdrop that the EPG model comes into focus. This is an
important business model which can be used to help organizations who
compete on an international level ensure that they are working toward the
right goals and objectives.
If the ‘strategic profile’ of the company is out of line with what they are trying
to accomplish, trouble will likely be soon to follow. Fortunately, using this
model can be a quick and easy way to bring things back into line.
The ‘EPG’ in the title of this model stands for the following –
 Ethnocentrism
 Polycentrism
 Geocentrism
Knowing where your organization lies under these three headers is

important, whether you happen to find your company under just one or
perhaps a combination of two or three.
EPG
Geocentrism Model
Polycentrism Ethnocentrism
In the content below, we will take a quick look at each of the three to
determine how they influence the way a company can compete in global
markets.
Ethnocentrism
The idea behind ethnocentrism is the concept that the organization is going
to default to the thinking, traditions, and more of its home country. For
instance, if a company is based in the United Kingdom and has leadership
from the U.K., that background is going to shape its decision-making.
Even if there are plenty of branch offices in locations around the world, the
company will default back to the ways of doing business in the U.K.
because that is what they know best.
There are both positives and negatives to running an organization in an

ethnocentric manner. On the plus side, running the business this way can
keep things simple. As noted earlier, it is not easy to run a business that is
operating around the globe, as there will always be the potential to get off-
track in terms of goals and the overall direction of the business.
By sticking with an ethnocentric approach, you should be able to keep

everyone moving in the same direction – even if they don’t necessarily
always agree with the decision making or strategy coming from the home
office.
EPG Model Organizations Decisions made

Approach Choose to at Home Office
Good - all move in same

direction
Think traditionally
Ethnocentric when making
Bad - because
decisions often not suited to
non-home markets
On the downside, it can be hard to properly grow the business in other

nations when making decisions based on how things are done at home.
Since most decisions are based on the line of thinking that applies to the
home market, those choices might not be entirely relevant in other places.
Also, if local branches are not trusted to make decisions in a manner that
they see fit, those employees may look for other opportunities where they
will be more valued as an asset to the business.
Polycentrism
In contrast to ethnocentrism, polycentrism defaults to the strategies,
methods, and techniques of the host country when it comes to decision
making for the organization.
Instead of looking back to the country of origin for the business when
making choices, an organization working with a polycentric approach will put
more trust in the people working in the various countries in which they
operate. Rather than taking a ‘one-size-fits-all’ approach to decision-making
and management, there will be more diversity in the company based on how
each individual country should be handled.

Approach Choose to locally
Good - local office

more engaged
Making
decisions rest
Polycentric with host Bad - potential
country duplication or
resources & skills
As is usually the case, there are positives and negatives to be seen with this
pattern. On the plus side, the local offices around the world tend to be more
engaged and more satisfied with their work since they are valued and
trusted. Sales are often boosted as a result, since the company remains in
touch with local trends, cultures, and more.
On the downside, however, there is a concern regarding duplication, which

can cause costs to rise. Putting more emphasis on the local offices will
create a situation in which those offices are doing the same work that is
being done in other parts of the world – causing costs to rise unnecessarily.
Also, the experience and knowledge that is possessed by the home country
office may go to waste, since the emphasis will be placed on locals in
branch offices.
Geocentrism
The final element within this model is geocentrism, which is the approach
taken by organizations trying to use a ‘world view’ in order to run their
business. In many ways, this is an approach that falls somewhere between
the first two that we have covered.
A geocentric organization will not default to either, the customs and

traditions of their home country or the host country. Rather, this kind of
organization will focus only on what they think is best for the needs of the
organization and its customers.
To the greatest extent possible, nationalities are largely ignored in this

system, with the company being run as a global enterprise rather than a
large corporation, which is deeply rooted in one specific nation.

Approach Choose to at Home Office
Good - aim to operate as

cohesive unit
Focus solely on
whats best for the
Geocentric organization & its Bad - higher travel
customers costs & skills
investment
Unification is the ultimate goal of a geocentric operation. The company does

not want to have divisions within its ranks based on nationality. Instead, they
want to operate as a cohesive unit, just as a company would that is
operating in just one country.
While there can be drawbacks to this plan in terms of travel costs and
educational investments, there are also benefits in the form of a better
global outlook and an elevated level of goods and services.
The right way to approach running a business on an international scale is

going to depend on the business at hand, the people involved, and plans for
the future. Each of the three options included in this model can be
successful in the right circumstance, and each can fail in the wrong
situation. For your own organization, it will be important to think through

these options before moving in the direction that best fits your needs.
Key Points
- The EPG model is a framework for a firm to better pinpoint its
strategic profile in terms of international business strategy.
- The model states that a multinational organization holds one of
three orientations at any point in time:
- Ethocentric orientation is where the organization’s senior
management believes that nationals from the organization’s home
country are more capable to drive international activities forward
than non-native employees.
- Polycentric orientation assumes that host country cultures are
different making a centralized approach unfeasible.
- In Geocentric orientation nationalities are largely ignored, with the
company being run as a global enterprise rather than a large
corporation, which is deeply rooted in one specific nation.
- The model suggests that most multinationals start out with an
ethnocentric view, evolve to polycentrism and finally adopt
geocentrism.
- The EPG Model provides insight in how far an organization has
internationalized.
The Greiner Curve

Growth is seen as a great thing in business – and in many cases, it certainly
is. After all, if a business does not grow, it is destined to disappear in the
end. All businesses start work each day with the goal of growing toward a
better, and more profitable, tomorrow.
The Greiner
Curve
These need to To ensure growth
be anticipated continues
& managed
See crises &
challenges as
inevitable
However, there are tons of challenges that come along with growth,
meaning that each company has to be ready to adapt as they grow if they
are really going to thrive.
The idea behind the Greiner Curve is that there are inevitably going to be
challenges, or ‘crises’, that arise over time as an organization grows. These
crises are likely to pop up between periods of steady growth, and each one
will need to be handled properly if the growth is going to continue.
Phases of the Greiner Curve
1. Growth 2. Growth 3. Growth

through through through
creativity direction delegation
4. Growth 6. Growth
5. Growth
through through extra-
through
coordination & organizational
collaboration
monitoring solutions
It is possible to be stopped in your tracks at any one of the points along the
growth curve, so none of these steps should be taken lightly.
This curve model includes six total phases, and we have offered up a bit of
information about each phase in the content below.
Phase One – Growth Through Creativity

Most businesses start out with creativity, so that is a natural place to begin.
The founders of the business – whether it is just a single person, or a group
of people – had a vision for the company and they are starting to bring that
company to life. The staff of the business is usually small at this point in
time, so decision-making is easy and fairly obvious.
When phase one begins to draw to a close, the organization will find itself
facing a crisis of leadership.
Who is going to make decisions?

Is anyone currently onboard qualified to make important decisions
about the future of the business?
Locating proper leadership is frequently the first major crisis that is faced by
a growing company.
Phase Two – Growth Through Direction

Now that good leadership has been established, the company can continue
to grow – and the work that is done will usually become more formal in
nature.
Leadership
established
Systems
defined
Decisions
delegated
Growth through Direction

Rather than the chaos that exists at an entrepreneurial level, companies
that reach this stage will begin to lay out some defined systems that can be
followed in order to sustain growth going forward.
However, the company is likely now to reach a point where one person, or
even a team of people, cannot make all of the decisions that need to be
made. So, naturally, those decisions will have to be delegated out to various
department heads and other managers. The people who actually have
product or service knowledge will need to be given more control over their
individual units.
Phase Three – Growth Through Delegation

Growth again is spurred on now that the company has more decision
makers in place, but there is also risk at this point as well. The leadership
that had grown accustomed to making all of the decisions for the business
will now need to step back a bit to allow the managers at lower levels to do
their jobs.
Everyone is on the Growth

Leaders pass
'same page' &
down decisions &
working as a through
ensure Delegation
cohesive unit
This can be tough for some to do, however, and the result can be conflict
and confusion as to who is really in charge. With that in mind, the crisis that
usually pops up at this point is one of bringing everyone together in a
cohesive unit. The various divisions within the business that have been
created need to be on the same page, and so too does the top-level
management need to get together with those at lower levels.
Phase Four – Growth Through Coordination and Monitoring

Successfully moving through phase three and into phase four is a big step,
as companies who reach this point now have a lot of advantages working
for them.
With a well-organized structure in place and plenty of decision makers

empowered to make choices that positively affect the company, further
growth is often close at hand.
However, this is the point where some businesses go ‘over the top’ in
terms of structure and rules.
When there is too much red tape involved in getting anything done, growth
can be slowed. In the worst case, the company may even lose its way in
terms of what it does best and how it thrived originally.
Navigating past phase four is going to require some ‘clean-up’ of the

structure that has developed in earlier stages.
Phase Five – Growth Through Collaboration

Many organizations will never reach this stage – but those who do should
be in line for serious financial rewards. At this point the company is working
together nicely from one department and manager to the next, and there are
plenty of incentives to keep everyone happy.
Greiner Curve - 5. Growth through Collaboration
Interactions between
Will benefit from
Organization's who departments, divisions
considerable financial
reach this phase & managers are
remuneration as
cohesive
Of course, this successfully stage cannot continue to grow forever, as there

are limits to all businesses when they only stick with what it is they do in
house. Therefore, the last crisis on the curve is finding a way to grow
through creating partnerships.
Phase Six – Growth Through Extra-Organizational Solutions

Working with companies that offer complimentary products and services is
likely the only growth left for a business that has arrived at phase six.
Finding ways to work with other organizations so that the core of the original
business is not affected will be challenging, but potentially very rewarding.
Partnerships can have explosive potential, so the company will need to be
prepared for the possibility of rapid growth if a successfully partnership is

established.
•Phase 6
Core operations •Organization

must be unaffected needs to prepare
for explosive
Greiners potential of
Curve •Growth through resulting
seeking of
complimentary Rapid Growth
partners
Growth has always been, and will continue to be, a great thing for
businesses. However, it is also a dangerous thing, as should be clear by
reviewing the six phases above and the crises that can come along with
them.
If you would like to grow your organization over time, it is clear that there are
several hurdles, which will need to be cleared as that growth continues.
Using this model is a great way to understand the challenges that wait
ahead, so those challenges can be anticipated and safely navigated without
slowing the growth of the organization.
Key Points
- The idea behind the Greiner Curve is that there are inevitably
going to be challenges, or ‘crises’, that arise over time as an
organization grows.
- Greiner suggested that businesses underwent six distinct phases
as they grew, each precipitating a crisis at which a revolution in
thinking and approach was required to progress to the next stage.
Key Points conts.

- Growth through creativity. During this phase business owners will
communicate with customers and react to their demands. This
phase is brought into crisis by the need for professional
management.
- Growth through direction. During this phase the new leadership
team will start to steer the business while a new tier of
management is put in to deal with specific functions of the
business. This phase ends with lower level management requiring
more autonomy and involvement in decision-making.
- Growth through delegation. This phase comes into crisis as the
executive feels like it is losing control over the lower tiers of
management.
- Growth through co-ordination. The necessary bureaucracy that
this phase entails leads to resentment from both higher and lower
tier management as procedure stifles creativity and autonomous
problem solving.
- Growth through collaboration. There are limits to all businesses
when they only stick with what it is they do in house. This phase
ends with a crisis of identity as further growth becomes possible
only through alliances with external organizations.
- Growth through Extra-Organizational Solutions. Finding ways to
work with other organizations so that the core of the original
business is not affected will be challenging, but potentially very
rewarding.
- Developing an understanding of why periods of growth can quickly
precipitate a crisis can give you an appreciation of why businesses
sometimes fail even when seeming outwardly to be successful.
Adizes’ Corporate Lifecycle

Much like people, corporations move through a lifecycle. Again like people,
these lifecycles are not perfectly predictable, although they do have certain
characteristics that are shared from company to company.
Corporate Lifecycle
Death Courtship
Bureaucracy Infancy
Recrimination Go-Go
Aristocracy Adolesence
Stability PRIME
As defined by Dr. Ichak Adizes, the lifecycle of a corporation can be broken

down into 10 unique stages. One of these stages – called Prime – is the
ideal stage, and the one that every company should be striving to land on
for as long as possible.
Below we have listed each of the 10 stages of the lifecycle, along with a
quick definition of what is seen at that stage.
Courtship
Just as with a budding relationship, the courtship stage occurs when an
individual or a group of people begin to toss around the idea of starting a
business.
Nothing has happened to this point, other than some ideas being
weighed.
Many would-be businesses never even make it out of this first stage, as the
potential owners decide that the idea is not worth pursuing.
Infancy
Once some form of risk is taken on, the company is actually formed and it
moves into the infancy stage. Today, this is commonly known as a ‘start-up’,
where business owners are doing everything and anything they can to get
the company off the ground.
Focus on making
Infancy Stage Start-up companies
goods & sales
Often, the basics of paperwork and organization are neglected at this point,
as the company is all about making products and closing sales. It is a
challenge to make it out of the infancy stage at all, so long hours and high-
stress are common.
Go-Go
When a company gets out of the very early stages of infancy but it still
keyed on sales above all else, it is said to be in the Go-Go stage. Usually
the founders of the business will still be making all of the decisions at this
point, which is both a positive and a negative.
Mistakes are common during the Go-Go stage, as the company is starting
to feel overconfident and continues to do everything possible to bring in
revenue.
Adolescence
This can be a period of difficult growth for a business, just as it can be for an
individual going through his or her teenage years. In the adolescent stage,
companies begin to take on the shape of mature businesses, but there are
still some of the issues of immaturity to deal with.
Conflict is common among the team, especially between those who have
been there from the beginning and those who are newly hired to make
decisions.
Prime
This is the ideal spot for a business to land, and companies who are
successfully occupying the prime stage are going to fight to hold onto it for
as long as possible.
Prime Stage of Corporate Lifecycle
Ideal stage for all organizations
Correct structure in place & operations are efficient
Innovation & development still exist
Now that they have an organized structure in place, the company is

operating efficiently but is still young enough to keep an eye toward
innovation and development.
At this stage, there may even be new businesses that develop from within
the organization, adding to the potential for future growth.
Stability
At this point, many companies start to lose track of a little bit of what made
them so successful earlier on. Instead of striving to do more and more,
complacency is common at this point in the lifecycle. The company is still
making money, but it may have lost track of the ambition it once had,
instead looking for shorter-term ways to bring in cash.
Aristocracy
Companies begin to be stuck in their ways and may start to fall behind the
times when they find themselves in the aristocracy stage. Things other than
running a successful business start to become more important, such as
image, and they may look to buy businesses rather than continuing to
innovate on their own.
Aristocracy Organization
becomes stuck in its Issues such as:
Phase of ways •Image
Corporate
•success takes a back •Acquisition
Lifecycle seat to
Red tape abounds in an aristocracy, and the company may soon find itself
on the decline if nothing changes in their culture and decision making
process.
Recrimination
With this stage, many companies decide that they want to find someone on
which to place blame for a problem, rather than simply looking for a solution
to that problem.
The culture within the organization is extremely unhealthy at this

point, with many disagreements and arguments taking place on a
daily basis.
The focus has completely shifted away from the good of the company, as
individuals fight to maintain their spot in what is most certainly a declining
organization.
Bureaucracy
It is possible that a company may die off before it even reaches this stage.
However, if the organization has survived to this point, the bureaucratic
nature of their operations will only continue to compound.
This is the kind of organization, which has lengthy manuals in place for all of
its systems, and employees are too busy trying to follow all of the rules to
actually innovate or deliver value to the business in some way.
Bureacracy Phase of Corporate Lifecycle
Level of bureacracy means
Staff to busy following all the rules, so
No innovation or value delivered
Innovation is a thing of the past, and it is very unlikely that the business will
survive much longer.
Death
Some businesses will die off in a hurry, while others will drift away slowly
until they are no longer sustainable. Either way, this is the natural and
obvious end of the corporate lifecycle.
If a company can no longer bring in the cash it needs to sustain operations,

the organization will become extinct in one manner or another. It is unlikely
that the business will be acquired at this point, because there likely isn’t
anything of value left to sell.
Organization's as best
aim to stay in Growth & Stability &
place to with
middle stages balance innovation profitability
of lifecycle
The obvious goal of any organization, when looking at this lifecycle, is to

remain in the healthy middle stages for as long as possible. It isn’t easy to
balance growth and innovation with stability and profitability, but that is the
challenge that awaits any business owner or manager as their company
moves through its life.
Landing in the Prime stage of this cycle is the goal at the start, and then
holding steady at that point remains the objective moving forward. It is never
easy to sustain success in any business, but understanding how the
lifecycle works can help you to watch out for risks and hazards to your
organization as time goes by.
Key Points
- Corporate lifecycles are not perfectly predictable, although they do
have certain characteristics that are shared from company to
company and undergo predictable and repetitive patterns of
behavior as they develop.
- How well management leads a healthy transition from one stage to
the next has an impact on the success or failure of the
organization.
- Changes in leadership and management are required because
methods that produce success in one stage can create failure in
subsequent stages.
- It is never easy to sustain success, but understanding how the
lifecycle works can help you to watch out for risks and hazards to
your organization as it moves from one stage to the next.
Deming’s Five Diseases of Management

Good management is at the heart of successful business. It is the
management team that is going to make the decisions, which will either
allow the company to thrive, or cause it to struggle, in the weeks, months,
and years ahead.
the
Company
Good Management Make decisions Allow to thrive
that
While there is more that goes into a company’s success than just good
management, it is key to have this ingredient in place at the top of the
organization. Good choices will lead to positive outcomes more often than
not, meaning the company can continue to grow and develop moving
forward.
Of course, it isn’t exactly easy to achieve successfully management within

an organization. Even experienced and talented managers can make poor
decisions or run into problems based on a number of factors.
In Deming’s Five Diseases of Management, some of the most-common

problems are identified and assessed.
Deming’s Five Diseases of Management
Lack of Constancy of Purpose

Emphasis on Short Term Profits
Annual Rating of Performance
Mobility of Management
Use of Visible Figures Only
Each of the five ‘diseases’ is listed below, along with a quick explanation of
how they are a threat to any organization.
Lack of Constancy of Purpose

One of the common mistakes made by management is not clearly
understanding exactly what it is they are in business for in the first place.
Without a clear purpose and goal for the future, short-term thinking tends to
get in the way of long term planning.
Management results in
1st Disease have no
•Lack of • clear purpose, or • short-term

constancy of • goal for future thinking
purpose
Many organizations never make it to the long term because they have
lacked the vision to plan for what that future would hold. Every organization
needs to have a very clear understanding of what it is trying to do and how it
is trying to do it in order to succeed over time.
When management is guided by the vision that is in place, they can make
wise decisions, which will benefit both the short and long term sufficiently.
Emphasis on Short Term Profits

This point fits nicely in with the previous point. When choices are made only
based on how to maximize short term profits – perhaps with the goal of
satisfying shareholders – the long term health of the company is
compromised.
Emphasis & prevents

on short- takes focus off company
improving quality building long-
term & products lasting
profits organization
Doing things like improving the quality of products, or offering better service,
don’t always show up in the quarterly reports on profit and loss. Therefore,
those investments that would be likely to help the company in the long run,
are frequently neglected, and the books are made to look as good as they
can look for right now.
The temporary profits might be nice, but they are no way to build a powerful
and long-lasting organization. In the end, the emphasis on short-term profits
is sure to become a drag on the business, and the profits that were once
realized will likely be lost.

Annual ratings of the staff that works underneath the upper management
tend to have a devastating effect on an organization. For one thing, the
employees within the company come to fear these reviews, and that fear
can negatively impact their work throughout the year.
Instead of making decisions and taking actions that are best for the
company, employees are forced to look out for their own self-interests by
going things that will review well when the time comes.
Third Disease of Management
Staff come to fear these reviews. So they
Work outside teams to ensure they get

Make decisions based on self-interest
the recognition for their efforts
Negatively impacting their performance & the company's
Perhaps the biggest negative affect of the annual rating system is the loss
of teamwork that is experienced. People are rarely encouraged to work
together under this kind of system, for fear that someone else is going to get
credit for the work that they have done.
Motivation through fear of the annual review is a lousy way to get people to
work hard, and they will rarely work for the common good as a result. Again,
this is another management mistake that values short-term thinking over the
long-term benefit of the organization. Short-term actions might look good on
a review, but they likely aren’t going to take the company to new heights
moving forward.
Mobility of Management
Consistency among the management team is something that is highly
desirable, but sadly, is frequently hard to find. For companies that have
trouble with management, it is very likely that the management team has not
been working within the company for long.
Mobility of To have been

Management with the
requires organization for
Managers sufficient time
To be rewarded
To have a deep
for long-term &
understanding
short-term
of the business
achievements
Making smart decisions requires a deep understanding of the business that

cannot be gained through textbooks or case studies. The organizations who
receive the best results from their management team tend to be those who
keep managers around for as long as possible, and those who don’t reward
those managers only for short term progress.
Again, this is another place where annual reviews and other similar systems
can create trouble. A poor review may cause an otherwise talented and
experienced manager to look for another job – meaning the company will
lose all of their knowledge when they walk out the door.
Use of Visible Figures Only

The last ‘disease’ on the list relates to basing the decisions within the
company only on measurable statistics. If it can’t be seen on a balance
sheet, or in a stock price, it is often ignored – and this is a mistake.
MANAGEMENT On measurable
Decisions
DISEASE - Use are solely
statistics e.g P&L
of Visisble statement, stock
based
Figures Only price etc.
Yet again, it is a mistake that is based on the short term rather than the long
term. Choosing to operation in a way that only serves the needs of the profit
and loss statement might make ownership or shareholders happy for now,
but that happiness will fade down the line.
Some things that aren’t measurable, such as positive customer service, can
create long term benefits that might not be seen in the here and now.
Avoiding the five diseases listed above is not going to be easy, but it is
important for the health and success of the organization in the long term. An
experienced management team will understand the need to keep an eye on
the long-term future rather than simply the short-term results that show up
on things like quarterly reports.
Can be beaten
Diseases of
management
Vision & focus on the future
Consistent management combined with
With a combination of a steady management team and an eye for the future
of the business, it is possible to steer clear of these pitfalls on the way to a
prosperous outcome.
Key Points
- In Deming’s Five Diseases of Management, some of the most-
common problems are identified and assessed.
- Lack of Constancy of Purpose – One of the common mistakes
made by management is not clearly understanding exactly what it
is they are in business for in the first place.
- Emphasis on Short Term Profits – When choices are made only
based on how to maximize short-term profits the long-term health
of the company is compromised.
- Annual Rating of Performance – Instead of making decisions and
taking actions that are best for the company, employees are
forced to look out for their own self-interests by going things that
will review well when the time comes.
- Mobility of Management – The organizations who receive the best
results from their management team tend to be those who keep
managers around for as long as possible, and those who don’t
reward those managers only for short term progress.
- Use of Visible Figures Only – Some things that aren’t measurable,
such as positive customer service, can create long term benefits
that might not be seen in the here and now.
- An experienced management team will understand the need to
keep an eye on the long-term future rather than simply the short-
term results that show up on things like quarterly reports.
The Pyramid of Organizational Development

Developing an organization is no easy task. Well, more accurately,
developing a successful organization is no easy task. If you are going to
take your business toward the kind of success that you envisioned when
you first began operations, it is necessary to construct your company in a
way that facilitates growth and development.
Pyramid of Enables an
Organizational organization to
Development Model design its
Structure so that its Facilitate growth &

operations development
Many companies start out with a poor structure that is unable to take them
where they want to go – and they never manage to develop that structure
into something that will work for a growing business. With the help of the
Pyramid of Organizational Development, you just may be able to avoid that
fate.
There are six factors included within this pyramid model, each building on
the one below. Before we get into those six factors, we should touch briefly
on the ‘foundation’ which has been identified for the pyramid, which is the
mission and core strategy of the company.
Core
Strategy
Goals
Company
Mission Create the
foundation of
your Pyramid
Without starting from a point of a specific mission and set of goals, it will be
difficult to make decisions that further the organization moving forward.
Once a solid foundation is in place, the company can then begin to work on
creating a stable and long-lasting pyramid.
The content below will take a quick look at each of the six factors that are
going to come together to form this important pyramid model.
Market
Before an organization can really set about doing business, it has to identify
the existence of a market, which it can serve. In business, everything starts
with a market. There has to be a market of willing buyers that not only
exists, but exists in a large enough quantity to sustain the underlying
business.
You can make a great product, or offer a great service, but it isn’t going to
matter if the market is insufficient. Before getting too far into its operation, all
businesses need to do careful market research or they will only be wasting
time and money.
Corporate culture
Management systems
Operational systems
Resources management
Product & services to be offered
Identify market with sustainable number of buyers
Pyramid of Organizational Development
Products and Services

With that market located and defined, it will then be time to design and
create the products and/or services that are going to be sold to the market
in question.
It is important that the process works in this order, and not the other way
around. If the products and services are developed fully before the market is
identified, those products may not match what the market is demanding.
While there will certainly be some ideas for products or services that exist
right from the start, it is important to wait to develop those ideas until market
research is complete.
Market MUST be Developing

completed a product
Research prior to or service
Often, an organization will develop by first offering just one or two products
to a market to test the waters. If success is experienced, that product or
service line may begin to quickly expand, now that the market has proven it
is receptive to what is being offered.
Of course, success with one or two products doesn’t guarantee success

with future ventures, so it is important that the organization continues to
monitor the market and offer only goods that are likely to be well received.
Gains achieved in an early period of success can quickly be lost if future
ventures are not as lucrative.
Resources Management
As an organization grows, it is going to develop a collection of resources
that it has at its disposal. One of the keys to continuing to succeed is using
these resources in a way that maximizes their benefit in both the short and
long term.
These resources can come in a variety of different forms, including financial,

physical, and human. A good management team will understand how to
best put all of these resources to use in order to maximize the success of
the organization.
Operational Systems
Systems are important for any business, but they become especially
important as an organization grows. In a small organization, the same group
of people may handle most of the basic systems and functions.
However, as a company grows, that simply won’t be possible anymore.

There needs to be a defined set of processes in place in order to allow a
company to function properly on a day to day basis.
Properly monitored
Organization wide &
Set of processes
Need a defined
Operational
Systems
These operational systems show up throughout the company, from

accounting and shipping to marketing, hiring, and much more. When
systems are well defined and monitored, they can keep the business
running smoothly from day to day without interruption.
Management Systems
Every organization needs a strong management team. Management is
something that grows along with an organization, as bigger companies have
more decisions that need to be made than do smaller businesses. It is
imperative that an organization has a management team in place who is
capable of making smart decisions in a number of areas.
Specifically, the four crucial areas of management systems are planning,

structure, management development, and performance management. If any
of these four areas are left behind, there could be trouble waiting down the
road.
Management Systems
For four
Crucial Areas
Management Performance
Planning Structure
Development Management
Corporate Culture
At the top of the pyramid is corporate culture, which is what the company is
‘all about’.
What does the company believe in?

What does it stand for?
What is it trying to achieve?
Obviously, all businesses want to make money, so this point is about more
than that. The actions of the people who work within the company are going
to be influenced by the overall corporate culture as a whole, so this point is
crucial and it should be defined early on in the lifecycle of an organization.
No company can afford to skip over any of the levels of this pyramid while
building their operations. It is important to pay close attention to each level
to ensure that the organization has all of the systems and functions it needs
to continue operating smoothly day after day, year after year. It is not easy
to build a quality organization from the ground up, but the rewards can be
immense when one is successful in doing so.
Key Points
- The Pyramid of Organizational Development consists of six factors
that research has shown to be the key drivers of financial
performance and long-term organizational success.
- Market: There has to be a market of willing buyers that not only
exists, but also exists in a large enough quantity to sustain the
underlying business.
- Products and Services: These are appropriate to the
organization’s chosen market.
- Resource Management: This includes the acquisition and
development of people, equipment, facilities, and financial
resources required for current and future operations.
- Operational Systems: These are necessary for the organization to
function on a day-to-day basis.
- Management Systems: These include strategic planning,
organizational structure, leadership development, and
performance management systems.
- Corporate Culture: The organization’s values, beliefs, and norms
that influence the behavior of people in the company.
- The Pyramid of Organizational Development can be used to
identify an organization’s strengths and opportunities to improve.
Other Free Resources

The Free Management eBooks website offers you over 500 free resources
for your own professional development. Our eBooks, Checklists, and
Templates are designed to help you with the management issues you face
every day. They can be downloaded in PDF, Kindle, ePub, or Doc formats
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eBooks – Our free management eBooks cover everything from accounting

principles to business strategy. Each one has been written to provide you
with the practical skills you need to succeed as a management professional.
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have already been done by others many times in the past. Our management
templates will save you from wasting your valuable time re-inventing the
wheel.
Checklists – When you are working under pressure or doing a task for the
first time, it is easy to overlook something or forget to ask a key question.
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References
Mckeown, M. (2nd Ed. 2015) The Strategy Book: How to Think and Act
Strategically to Deliver Outstanding, FT Publishing International
Cadle, J., Paul, D. and Turner, P. (2010), Business Analysis Techniques, 72

Essential Tools for Success, BCS The Chartered Institute for IT.
Johnson, G., Whittington, R. and Scholes, K. (2009), Exploring Corporate

Strategy with MyStrategyLab, Financial Times/Prentice Hall.
Kotler, P., Keller, K.L., Brady, M., Goodman, M., and Hansen, T. (2009),
Marketing Management, Pearson Education.
McDonald, M. and Wilson, H. (2011), Marketing Plans: How to Prepare

Them, How to Use Them, 7th Edition, John Wiley.
Campbell, D., Edgar, D., Stonehouse G., (3rd Ed. 2011) Business Strategy:
An Introduction, Palgrave Macmillan
FT Series (1st Ed. 2013), FT Essential Guide to Developing a Business

Strategy: How to Use Strategic Planning to Start Up or Grow Your Business,
FT Publishing International
Aaker, DA., Damien McLoughlin, D., (1st Ed. 2011) Strategic Market
Management: Global Perspectives, John Wiley & Sons
Johnson, G., Whittington, R., Scholes, K., Angwin, D., RegnŽr, P., (10 th Ed.
2013) Exploring Strategy Text & Cases Pearson
Hooley, G., Nicoulaud, B., Piercy, N., (5th Ed. 2011) Marketing Strategy and
Competitive Positioning Financial Times/ Prentice Hall
The Economist, Kourdi, J., (3rd Ed. 2015) Business Strategy: A Guide to
Effective Decision-Making Economist
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Prepare Them, How to Profit from Them John Wiley & Sons
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Business Strategy McGraw Hill Higher Education
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Routledge

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You do not have any right to resell or give away part,

It describes following techniques and models:

 The EPG Model

 The Greiner Curve

 Adizes’ Corporate Lifecycle

 Deming’s Five Diseases of Management

 The Pyramid of Organizational Development

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The EPG Model 7

The Greiner Curve 13

Adizes’ Corporate Lifecycle 19

Deming’s Five Diseases of Management 25

The Pyramid of Organizational Development 31

Other Free Resources 37

1. The EPG Model

Maintaining the focus and direction of international organizations

2. The Greiner Curve

Challenges and crises are inevitable over time as organizations

3. Adizes’ Corporate Lifecycle

Organizations move through a lifecycle that whilst unpredictable

The ‘Prime’ is the ideal stage that every organization needs to

4. Deming’s Five Diseases of Management

Professor Deming recognized some of the most-common

5. The Pyramid of Organizational Development

Successful organizations are structured in a way that facilitates

The most successful organizations are continually reviewing their

The EPG Model

Helps retain its

Knowing where your organization lies under these three headers is

There are both positives and negatives to running an organization in an

By sticking with an ethnocentric approach, you should be able to keep

EPG Model Organizations Decisions made

Good - all move in same

On the downside, it can be hard to properly grow the business in other

EPG Model Organizations Decisions made

Good - local office

On the downside, however, there is a concern regarding duplication, which

A geocentric organization will not default to either, the customs and

To the greatest extent possible, nationalities are largely ignored in this

EPG Model Organizations Decisions made

Good - aim to operate as

Unification is the ultimate goal of a geocentric operation. The company does

The right way to approach running a business on an international scale is

situation. For your own organization, it will be important to think through

The Greiner Curve

Phases of the Greiner Curve

1. Growth 2. Growth 3. Growth

Phase One – Growth Through Creativity

Who is going to make decisions?

Phase Two – Growth Through Direction

Growth through Direction

Phase Three – Growth Through Delegation

Everyone is on the Growth

Phase Four – Growth Through Coordination and Monitoring

With a well-organized structure in place and plenty of decision makers

Navigating past phase four is going to require some ‘clean-up’ of the

Phase Five – Growth Through Collaboration

Greiner Curve - 5. Growth through Collaboration