Organizational Life Cycles

Prof. Stephen Block

 Organizational Life Cycles

 Griener’s 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
 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 co-
workers?

 Fight stress by exercising, taking vacations

getting involved in non-work activities.