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 forcesnone

for coordination

Youth Stage Size medium Bureaucraticprebureaucratic 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 Bureaucraticbureaucratic 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 forcessome 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 forcesfrequent 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.