The simplest models of organizational growth take the concept of a ‘product or organizational life cycle’
From marketing and apply it to stages of an organisation’s development. Thus there is likely to be an
Initial stage of establishing the organization, followed by growth, stability and eventually decline This
Is illustrated in Figure 18.1
The organizational life cycle
Initially, a venture or entrepreneur acts as a catalyst and product champion during the birth and
early youth stages of organisational development. As the organization progresses to early maturity,
the entrepreneur will be supplemented or replaced by professional managers. These people are good
at running an established business and achieving further growth using their expertise in strategy,
organization and finance
However, the danger is that the successful organization becomes unwieldy or complacent in the maturity stage (see comments in Chapter I about the decline of excellent firms in the section evaluation the goal model of effectiveness) and the managers become overly bureaucratic. In other words, the departments and divisions within the firm become major barriers to effective communication and problem solving, and the use of fixed rules results in risk aversion and lack of innovation. Stagnation leads to decline, and(1984)suggests these Heracles managers (the term derives from the Greek hero Heracles , better known as Hercules ) fall into two types.
a) skilled seasoned veterans, who see a challenge and know exactly what they are doing (Lee Iacocca’s work in turning around Chrysler in the USA is given as an example);
b) those who do not know enough about the business to believe if can’t work here and turn it around by ignoring the normal rules (the turnaround of United Airlines by Ed Carlson is quoted to exemplify this).
The simplest models of organizational growth take the concept of a ‘product or organizational life cycle’From marketing and apply it to stages of an organisation’s development. Thus there is likely to be anInitial stage of establishing the organization, followed by growth, stability and eventually decline ThisIs illustrated in Figure 18.1 The organizational life cycle Initially, a venture or entrepreneur acts as a catalyst and product champion during the birth andearly youth stages of organisational development. As the organization progresses to early maturity,the entrepreneur will be supplemented or replaced by professional managers. These people are goodat running an established business and achieving further growth using their expertise in strategy,organization and financeHowever, the danger is that the successful organization becomes unwieldy or complacent in the maturity stage (see comments in Chapter I about the decline of excellent firms in the section evaluation the goal model of effectiveness) and the managers become overly bureaucratic. In other words, the departments and divisions within the firm become major barriers to effective communication and problem solving, and the use of fixed rules results in risk aversion and lack of innovation. Stagnation leads to decline, and(1984)suggests these Heracles managers (the term derives from the Greek hero Heracles , better known as Hercules ) fall into two types.a) skilled seasoned veterans, who see a challenge and know exactly what they are doing (Lee Iacocca’s work in turning around Chrysler in the USA is given as an example);b) those who do not know enough about the business to believe if can’t work here and turn it around by ignoring the normal rules (the turnaround of United Airlines by Ed Carlson is quoted to exemplify this).
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