ORGANIZATION LIFE

Organization Life



Organization Life

Introduction

Since organizations are in a continuous process of adaption, and organizations exhibit a unique set of characteristics in each developmental stage; having the ability to recognize an organization's particular stage of development would help the formulation of its strategies, identification of risk and opportunities and management of organizational change (Thain, 1969). For companies who are targets of takeovers, candidates for bankruptcies, and companies who aim at attaining superior corporate performance, the need to understand this evolutionary process is critical (Ouchi, 1981; peters and Waterman, 1982).

ORGANIZATIONAL LIFE

The organizational life cycle concept is not new. Since the early work of Haire (1959) in organizational analysis, the concept of modeling life cycle stages has been liked with various organizational processes. This includes identifying the general pattern of technological change that would seem to be evident over the life cycle of many complex products and their production processes (Abernathy, 1976); studying organizational cultures in the role of entrepreneurs during the creation of new organizations (Pettigrew, 1977; Pettigrew, 1979); analyzing newly developed venture organizations (Galbraith, 1982); and maintaining organizational effectiveness (Scanlan, 1980). The concept has also been applied in different settings. For example, in a publishing company (Hall, 1976), in a university (Levine, 1978a, b; Cyert, 1978; Cameron, Whetten and Kim, 1987; Cameron and Whetten, 1981) and in a hospital federation (D'Aunno and Zuckerman, 1987).

In general, organizational life cycle models assume that an organization goes through inception to growth, maturity and decline or redevelopment. During inception and early growth, the organization is a single product company (Scott, 1971); and is characterized by a "one man show" (Adizes, 1979; Thain, 1969; Scott, 1971), with the founder bearing the responsibility of managing all aspects of the company, including day-to-day operations. The organization has just come into existence and established its niche in the market place, usually through technological advances, innovation or entrepreneurship (Lyden, 1975; Greiner, 1972; Lorange and Nelson, 1987). The prime concern at this stage is to secure its financial resources in order to ensure its survival (Adizes, 1979; Kimberly, 1979). The way to achieve long term stability is through the use of long working hours (Greiner, 1972), informal communication and structure (Greiner, 1972; Torbert, 1974), centralization and personal leadership (Scott, 1971).

During the growth stage, rapid expansion takes place. The organization is now capable of producing more than one product (Scott, 1971). The need for planning is elevated as a result of the increased size and complexity of running the operation (Downs, 1967). More emphasis is placed upon establishing rules and procedures and maintaining stability of the organizational structure (Katz et al., 1978). At this point, it is imperative for the founder to be able to delegate responsibilities in order for the company to survive (Thain, 1969). In this stage, the organization is distinguished by a more formalized structure (Katz et al., 1978), focus on task performance (Torbert, 1974), functional specialization and departmentalization (Scott, 1971).

As the organization matures, the rules and procedures created have led to a rigid ...