ADVANTAGES OF SCALE IN ORGANIZATIONS

IMPLEMENTATION STAGE: Restructure and reengineering

The growth of the Organization Stages of the organizational life cycle The stages of organizational decline
as a result of growth and
environmental risks.

BIG COMPANIES SMALL COMPANIES

CAUSES OF DECLINE
Economy of Scale Flexibility

Global reach. Compete on a Reaction capacity Vulnerability Environmental Organizational

global scale Decline or Atrophy
Flat, organic structure
Competition
Invest in new technology,
Stimulates innovation and
control distribution channels
commitment
Stages
Remain economically healthy
It allows to serve market
Having power in the market niches
1. BLINDNESS: Problem: External or internal changes not detected. How to avoid it: Effective
tracking, timely information.
2. LACK OF ACTION: Problem: Deny the signs of poor performance. How to Avoid it: Recognize and
SYSTEMS AND PROCEDURES ARE NEEDED FOR GUIDANCE AND TO take action through greater participation, decentralization
CONTROL THE INEFFICIENCIES THEY COULD BRING TO INNOVATE. 3. DEFECTIVE ACTION Problem: Bad performance indicators cannot be overlooked. Solution:
Important Changes (Reduction of personnel) communicate the staff.
4. CRISIS Problem: The Company goes into a state of panic, chaos. Solution: Reorganization. Senior
managers are replaced and there are revolutionary changes in structure, strategy, culture.
Combine the resources and scope of a large company with the Severe reduction of personnel.
simplicity and flexibility of a small company. ADEQUATELY 5. DISSOLUTION Problem: Loss of market and reputation. Irreversible decline. Solution: Close with
order and reduce trauma
REDESIGN THE STRUCTURE.
2020-02

ENTREPRENEURIAL STAGE:
Feature: Not bureaucratic
Structure: Informal, one
person
Products or Services: One
single
Reward and control systems:
Personal, Paternalistic.
Innovation: By the owner-
manager
Goal: Survival
Upper management style:
Individualist – business like.
Interpret the needs of the
organization and respond
adjusting what is necessary, so
that the company is in the right
stage.
COLLECTIVITY STAGE: FORMALIZATION STAGE: ELABORATION STAGE:
Feature: Pre bureaucratic Feature: Bureaucratic Feature: Very Bureaucratic
Structure: Mostly informal, Structure: Formal procedures, Structure: Teamwork within the
some procedures. division of labor, add new bureaucracy, mentality of a small
Products or Services: A specialties. company.
product / service with some Products or Services: Product or Products or Services: Multiple
variations. service lines. lines of products or services.
Reward and control systems: Reward and control systems: Reward and control systems:
Personnel, contribution to Impersonal, formalized systems. Extensive adjusted to the product
success. Innovation: By a separate and the department.
Innovation: By employees innovation group. Innovation: By an
and managers. Goal: Internal Stability, market institutionalized department of
Goal: Growth expansion. research and development.
Upper management style: Upper management style: Goal: Reputation, complete
Charismatic, providing Delegation with control. organization.
guidance. Upper management style: Team
approach, attack on bureaucracy
2020-02