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Managing Organizations Life Cycles

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Managing Organizations Life Cycles

Organizations: Managing Life Cycles

Early theories and empirical studies have identified various organizational life cycles. Many authors who have addressed the topic of developmental phases have presented different models. As a result, when researching this topic one will find differentiations between the numbers of phases within an organization’s life span. Some models identify three stages, others four or more. However, regardless of the number of life cycles, what we know is that these cycles are: “sequential in nature; occur as a hierarchical progression that is not easily reversed; and involve a broad range of organizational activities and structures” (Gupta & Chin, 1994, p. 270). The following will examine four fundamental organizational life cycles (start-up, growth, maturity, and decline) and the types of common challenges managers face during the various phases.

Phase 1: Start-Up

In the start-up cycle an organization will typically have substantial limitations. For example, organizations during this phase will often have limited operational budgets, infrastructure and manpower. The internal structure will be comprised of a few members, if not just the founder in some cases. This non-bureaucratic environment contributes to other challenges which include: highly controlled decisions and information, as well as placing the overall ownership in the hands of one or few individuals. The decision-making process is placed in the hands of the one(s) who are focused on the development and existence of the organization (Lester, Parnell & Carraher, 2003). During this phase the organization will attempt to secure a competitive place in the marketplace through the use of long hours, informal structure and information, and centralization. Other challenges deal with the organization’s focus on production and quality (Beverland & Lockshin, 2001) while operating with limited resources. These are just a few challenges management must consider during the start-up cycle. Nonetheless, managers must work hard toward the implementation of business strategies which will enable the organization to progress into the next phase. For instance, although the organization may have limited resources (i.e., operational budget and staffing) these should not be perceived as limiting factors impacting the organization’s ability to move into the growth phase. Management will need to develop a plan that allows for adequate staffing and do so by thoroughly assessing the essential needs of the organization at that specific time. Some options to consider could include part-time versus full-time staff, as well as determining which operations would be incorporated in-house or outsourced. It is not uncommon for organizations in this phase to hire within their own social circles as a means of meeting budgetary constraints (Leung, 2003).

Simulation- Start-up: In the Managing Life Cycles Influences in an Organization simulation, one of the key challenges during the start-up phase included a limited budget as well as limited operational resources. Key decisions to consider involved: fulfilling the organization’s immediate staffing needs while considering the allotted budget. Another concept to consider during the decision process is the organization’s values and client profiles, and how the decisions made could potentially affect the operations and services of the facility.

Phase 2: Growth

During the growth cycle the organization will begin to focus on “gaining an adequate return on their investment” (Beverland & Lockshin, 2001, p. 357). By this phase the organization has been able to effectively infiltrate the marketplace and have grown in size and operational complexities. There is more focus on establishing policies and procedures, and operational guidelines that would generate greater internal stability and organizational structure (Gupta & Chin, 1994).

In this phase, managers or founders who were tightly managing every aspect of the organization’s direction during the start-up phase will need to begin identifying clear goals and responsibilities for other members, as well as delegating such accordingly. This may prove to be a challenging transitional phase in some cases. During this cycle management will be challenged with coming up with innovative strategies in order to steadily grow and avoid unexpected stagnation (Von Krogh & Cusumano, 2001). By this time, management would have also identified a clear vision for the organization, which can be utilized as a foundation for continued growth.

Simulation-Growth: In this phase Little Village Retirement Home was provided with ample funds allowing for expansion considerations. Investing in an independent living facility and taking into consideration the specific needs

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