Organizational Growth
ORGANIZATIONAL GROWTH
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Growth is something for which most companies, large or small, strive. Small firms want to get big, big firms want to get bigger. Organizational growth, however, means different things to different organizations. How, then, is growth defined? How is it achieved? How does a company survive it?
PHASES OF GROWTH
A number of scholars and management theorists have developed models of how organizations change and grow. One such model is that of Larry E. Greiner, a management and organization professor at the University of Southern California. In his 1998 Harvard Business Review article entitled "Evolution and Revolution as Organizations Grow," Greiner outlined five phases of growth punctuated by what he termed "revolutions" that shook up the status quo and ushered in the successive stage. Based on observations of historical company patterns, his phases were as follows:
1. Creative phase—when a company or subunit of a company is first formed, most attention and activity is focused on developing a product and reaching its market.
2. Direction phase—when the company begins to formalize business management methods and "professionalize" its practices, usually including centralizing power in the organization.
3. Delegation phase—when centralization proves too cumbersome for a large organization, it begins to delegate power and decision-making in various ways, such as by creating semi-autonomous business units/divisions and moving the reward/risk paradigm down to lower level managers and employees in general.
4. Coordination phase—when decentralization becomes seen as excessive or inefficient, management attempts to rein in the organization by merging or coordinating the activities of various fragmented parts of the company, demanding more accountability and creating unifying incentives such as profit sharing.
5. Collaboration phase—when central coordination efforts prove bureaucratic and inflexible,
_______________________________________
Growth is something for which most companies, large or small, strive. Small firms want to get big, big firms want to get bigger. Organizational growth, however, means different things to different organizations. How, then, is growth defined? How is it achieved? How does a company survive it?
PHASES OF GROWTH
A number of scholars and management theorists have developed models of how organizations change and grow. One such model is that of Larry E. Greiner, a management and organization professor at the University of Southern California. In his 1998 Harvard Business Review article entitled "Evolution and Revolution as Organizations Grow," Greiner outlined five phases of growth punctuated by what he termed "revolutions" that shook up the status quo and ushered in the successive stage. Based on observations of historical company patterns, his phases were as follows:
1. Creative phase—when a company or subunit of a company is first formed, most attention and activity is focused on developing a product and reaching its market.
2. Direction phase—when the company begins to formalize business management methods and "professionalize" its practices, usually including centralizing power in the organization.
3. Delegation phase—when centralization proves too cumbersome for a large organization, it begins to delegate power and decision-making in various ways, such as by creating semi-autonomous business units/divisions and moving the reward/risk paradigm down to lower level managers and employees in general.
4. Coordination phase—when decentralization becomes seen as excessive or inefficient, management attempts to rein in the organization by merging or coordinating the activities of various fragmented parts of the company, demanding more accountability and creating unifying incentives such as profit sharing.
5. Collaboration phase—when central coordination efforts prove bureaucratic and inflexible,