p




 p 
p 
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= Life cycle stage in which organization
develop value creation skills and
competence that allow them to acquire
additional recourses.
= Allows division of labor and specialization
and thus develop a competitive advantage.
= Eg: Microsoft
= InstitutionalTheory
]
     



= Ôr. Larry E. Greiner
= Institutional model involves imitation of
successful organizations.
= Both the companies face similar kind of
strategic and structural problems.
= Case- page no: 325.
§   
= Age of the Organization
= Size of the Organization
= Stages of Evolution
= Stages of Revolution
= Growth Rate of the Industry
O
  


= Most obvious and essential dimension for

any model.
= The same organizational practices are not
maintained throughout a long life span.

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à   

= Rroblems tend to change with increased
employees and sales revenue.
= Coordination and communication becomes more
difficult.
= New functions emerge.
= Structural hierarchy increases.
= Jobs become more interrelated.
= Formalized processes - for control

a 
 
  
 
 
 


  
  

 
  à  


LARGE SMALL

Economies of scale Responsive, flexible

Global reach Regional reach
Vertical hierarchy Flat structure
Mechanistic Organic
Complex Simple
Stable market Niche finding
à
  

= Also known as evolutionary periods.

= As organizations grow, different
evolutionary periods emerge.
= Growth will usually continue at a steady
pace until a i
i stage is reached.
à
   

= Revolution: stages of crisis.

= Here practices become outdated.
= Companies that do not change will fold
or cease to grow.
= Often solutions for one crisis become a
major problem in the next crisis.

     

= Business growth is determined by

market environment of its industry.
§   


-. Creativity
2. Ôirection
3. Ôelegation
4. Coordination
5. Collaboration

= @ithin each phase - comes a time of reckoning of a

crisis of some sort
= Organizational priorities ² different in each phase
-  
= The birth stage of an organization.
= The founders are usually technically or
entrepreneurially oriented.
= Communication is frequent and informal.
= Long hours of work are rewarded with modest
salaries and the promise of ownership benefits.
= Norms and values more important than hierarchy
and structure.
= Innovation and entrepreneurship go hand in hand.
Eg: Compaq
 Eventual Rroblems:
= Entrepreneurs only involved in getting
the organization off the ground and
provide high quality products to
customer thereby ignore cost .
= Additional functions must be
implemented.
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i

 
 i
w  
= Functional organizational structure.
= Ôifferent departments are designed.
= Formal communication results as hierarchy
and employees increase.
= Increased efficiency.
= Systems need to be set up for inventory
control, accounting, order processing
= V
 i

i 

 Eventual Rroblems:
= ´Crisis of Autonomy.µ
= Impersonal environment.
= Lower-level employees often possess more
knowledge about markets and machinery
than management.
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i
  


 i.
= V 
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V


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"V
ë  

= Ôelegate authority to lower level managers and
divisions.
= Link their control over organizational activities to a
reward structure that recognizes their contribution
= Balance between management and entrepreneurship.
= Greater empowerment of managers -Greater
responsibility given to lower management.
= Rrofit centers and bonuses are used to motivate
employees.
= Rroduct team structure.
= V
#
$ 
Eventual Rroblems:
= ´Crisis of Control.µ
= Ôivisions try to achieve their own goals not
company·s.
= Lower-level management begins running their
own show without coordinating with the rest of
the organization.

*  


 

i.
D  
= Balance between centralized control from
top and decentralized control at the
functional level.
= Top management take the responsibility.
= Formation of product groups: i 

# 
%
Îdecentralized units are
grouped together).
= Each group is treated like an investment
center.
= Top managers are hired to initiate company-
wide control programs.
Eventual Rroblems :
= ´Red Tape Crisisµ: Rrocedures take
precedence over problem solving
= Formal planning procedures - Everything is
a procedure.
= Company become too large and complex to
manage formally.
= Conflict between the line and staff

Ú  

i
 i i

i.µ
§  
= Matrix structure to handle the right teams
for right problems.
= Social control and self-discipline replace
formal control.
= Formal control systems are simplified.
= Conferences are held weekly.
= Rewards are geared for team performance.

  

= ünow where you are in the developmental sequence.
= Recognize the limited range of options.
= Be able to persuade ideas to other managers.
= Be able to activate change Îüaizen).
= Realize that solutions breed new problems.