Effective growth strategies are a result of trial and error as a company analyzes past business practices.
Less common is the discussion of the company evolution and characteristics at different stages, also known as the Organizational Life Cycle OLC. This article discusses the stages of the OLC and specifically how it relates to high tech product development and delivery organizations, from start-up through mature companies.
This is typically depicted as an S-curve tracking sales over the life of the product, as shown in Figure 1. In the Introduction stage, the firm seeks to build product awareness and develop a market for the product.
In the Growth stage, the firm seeks to build brand preference and increase market share. At Maturity, the primary objective is to defend market share while maximizing profit. During the Decline stage, the firm generally has three options: Publications on this topic set the number of stages organizations go through anywhere from three to ten, with most settling on a basic set of four or five.
A fifth stage, called Revival or Diversificationcan also occur between the Maturity or Decline stages.
Figure 2 illustrates this concept. Figure 2 - Organizational Life Cycle The stages are considered developmental in the life of the firm, much like a biological model, and are sequential, cumulative, imminent, not easily reversed, and involve a broad range of activities and structures.
Once at maturity, the stages can become more circular from Maturity to Revival and possibly to Decline. First, administration of the organization becomes more complex as the size increases and more stakeholders become involved.
Second, this increased complexity dictates the increased usage of more sophisticated organizational structures, information processing capabilities, and decision-making styles. Lastly, companies alternate between innovative phases and conservative ones - between stages that establish or renew organizational competences and those that exploit them through efficiencies.
The driver behind the OLC is that needs, opportunities and threats, both inside and outside the business, will predictably vary depending on the stage of development. For example, threats in the Start-up stage differ from those in the Maturity stage and changes in the environment exert pressure for change on the business.
Organizations move from one stage to another because the firm and the needs of the environment are so misaligned that the company needs to adapt for basic efficiency or possibly even survival.
High tech companies present a unique situation because they can progress through the stages at a fairly rapid rate — from Start-up to Maturity in only a few years. An interesting side note is that firms tend to develop to a structure that mirrors the stage of the market they are in — for example, firms in a mature market will tend to be in a Maturity stage of development.
A complementary view of this model is that each stage represents a stable period of growth for the company - an evolutionary phase - but will reach a point where change is required, leading to a revolutionary or crisis period.
Stages of the OLC The five stages of OLC illustrate changes in organizational structure and managerial processes as the business proceeds through developmental stages. Each stage is discussed, with specific emphasis on the product creation and delivery aspects of the stage.
Start-Up Stage At Start-up, firms exhibit a very simple organizational structure with authority centralized at the top of the hierarchy.
The main purpose during this stage is for the firm to establish its distinctive competences and generate some initial product-market success.Most models, however, hold to a view that the organizational life cycle is comprised of four or five stages that can be summarized simply as startup, growth, maturity, decline, and death (or revival).
There are five basic stages of organizational growth.
Along the way there are definitely skill and strategy needs. However, the challenge in each of these stages is to avoid slipping back into a lower stage.
In , psychology professor Bruce Tuckman developed his theory of the stages of group development. He remarked about how a group dynamic, whether that group is a business organization, non. Organizational Life Cycle Stages; Organizational Life Cycle Stages. there are many examples of nonprofit organizations with large budgets, a large number of staff and many non-monetary organizational assets that are ineffective.
For these reasons, the Life Cycle categories used in the Guide focus on an organization’s ability to achieve. The Four Stages of Business Growth. Posted on June 17, September 25, by FusePhase.
No two businesses are exactly alike, and that means the journey of every business will be different. However, no matter the type of business or industry, there are four common stages of growth that every business will face at some point in its operation.
The Four Stages of Business Growth. Posted on by FusePhase. No two businesses are exactly alike, and that means the journey of every business will be different. However, no matter the type of business or industry, there are four common stages of growth that every business will face at some point in its operation, each with its own set of.