Post on 13-Dec-2015
Knowing when to redesign: Size, History, and Life-Cycle
Why do organizations grow?
What are the consequences of size?
How do organizations and industries evolve?
What are design consequences of organizational life-cycle?
Causes and Consequences of Organizational Growth
Why do Organizations grow?• Business Expectations ( Organizational Goals )• Executive Advancement• Economic well-being and Survival
What happens when organizations get larger?• Formalization: Rules, procedures, manuals• Decentralization: Decision making authority• Complexity: Expansion of departments and
positions
Relative Distribution of Personnel in Large Vs. Small Organizations
0.00%
25.00%
50.00%
75.00%
100.00%%
of Tot
al E
mplo
yees
Line EmployeesTop Management
Professional Staff
Clerical
Small Large
Large Size and Bureaucracy: Good and Bad
TYPES OF FORMALIZATION
DEGREE OF FORMALIZATION
Enabling Coercive
Low
High
Organic
EnablingBureaucracy
Autocratic
CoerciveBureaucracy
Evolutionary Processes in Organizations
Two Alternative Perspectives
Analysis of the industry as a whole
Analysis of individual organizations
Dynamics of Organizational Ecology
Effects of Legitimacy & Competition Liability of Newness
Carrying Capacity of the Environment
PopulationDensity
Time
1
Age
Like
lihood o
f Fa
ilure
Organizational Life Cycle
The Internal dynamics of growth
• 1. Entrepreneurial Stage: Growth through creativity crisis: Need for leadership
• 2. Collectivity Stage: provision of clear direction crisis: Need for delegation and control
• 3. Formalization Stage: Addition of internal systems crisis: Need to deal with red tape
• 4. Elaboration Stage: Development of teamwork crisis: Need for Revitalization
Greiner’s Model of Organizational Growth
Org
aniz
ati
onal Siz
e
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Age of the organization
LeadershipCrisis
AutonomyCrisis
ControlCrisis
Red tapeCrisis
Creativity Direction DelegationCoordinationCollaboration
Horizontal coordination mechanisms
Information carrying capacity
Costs
low
high
low high
Paperwork
Direct contact
Liaison roles
Task force
Full time integrator
Permanent teams
Vertical coordination mechanisms
Information carrying capacity
Costs
low
high
low high
Hierarchical referrals
Rules, plans, SOPs
New positions in hierarchy
Vertical information systems
OrganizationalCharacteristics
New Organizational Realities
Managing theOrganization
Managing theEnvironment
•NETWORKED
•FLAT
•FLEXIBLE
•DIVERSE
•GLOBAL
•Team structure
•Incentives/careers•Workforcemanagement•Conflictresolution•Cross-borderintegration
•Alliances
•Boundaries
•Learning
•Stakeholders
•Localresponsiveness