BU398 Chapter : Ch9 - Organization Size, Life Cycle, and Decline
Document Summary
Executives believe that firms must grow to stay economically healthy; to stop growing is to stagnate. Growing companies can be new and exciting places to work, attracting talented employees. Huge amounts of resources, economies of scale, global reach, vertical hierarchy, standardized, mechanistic, complex, stable market, employee longevity. Responsive and flexible in fast changing environment, regional reach, flat structure encouraging innovation, organic, simple, niche finding, entrepreneurs, personal involvement of employees increasing motivation and commitment. Stages of life cycle development: entrepreneurial stage start up of the organization; emphasis on creating a product or service and surviving in the marketplace. Crisis: need for leadership: collectivity stage organization grows and develops a more elaborated design; departments are established and there is a division of labor; few formal system of communication start to appear. Crisis: need for delegation with control: formalization stage organization becomes more bureaucratic. Crisis: need to deal with too much red tape: elaboration stage organization becomes more flexible in its design.
