Organizational Life Cycles

Prof. Stephen Block

Organizational Life Cycles

Grieners 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 Systemsnonexistent
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 Systemscrude budget &
information
Lateral teams, task forces
top leaders only
for coordination

Midlife Stage

Size
large
Bureaucratic
bureaucratic
Division of Labor
many departments
Centralization two department heads
Formalization policy & procedures
Administrative intensity
increasing professional &
staff support
Internal Systemscontrol systems in place,
budget, performance reports
Lateral teams, task forces
some 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 Systemsextensive planning, financial
and personnel added
Lateral teams, task forces
frequent 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.