The response to the business problems of phase two is delegation. This has the advantage of
decentralising decision-making. The person at the top of the management tree gets further
away from the bottom and relies more and more on systems and bureaucracy. The managers
needs to delegate, requiring less of a hands on approach and more of a people person and
manipulator style of leadership.
During the fourth phase, the addition of internal systems and procedures helps to co-ordinate
the activities and use the resources optimally. Management reward emphasises profit share and
stock options that focus on both short and long term growth. However, the increased complexity
can lead to a crisis of red tape as the procedures inhibit useful action.