A very useful model of organizational growth has been developed by Larry E.
Direction centralized to the new, top managers Autonomy Crisis As the company grows further, centralized management is inappropriate.
Lower level managers come to possess better knowledge of the marketplace but are unable to react quickly. The second revolution comes from a demand for greater autonomy.
Thus, the solution to the first phase becomes the crisis for the second phase. The solution to this crisis is to push decision responsibility to lower levels. Managers who fail to do so will see their companies passed by quicker organizations.
Phase 3 — Delegation This phase is characterized by: Greater responsibility in the plant and field marketing managers Use of profit sharing and bonuses for incentives Top managers manage by exception Management becomes active in acquisitions Communication from the top is infrequent Control Crisis Field operations become diversified and inefficiencies creep into the system.
Top management lose control over planning, money, technology, and manpower. Parochialism in field operations characterize this new revolution.
Management must solve it by bringing in special coordination techniques. Phase 4 — Coordination This phase is characterized by: Decentralized units are merged into product groups Formal planning procedures are established and reviewed Staff is hired at headquarters to initiate company-wide programs Capital expenditures are reviewed and distributed across the organization Return-on-Capital becomes the criteria for measuring field operations Certain technical functions, such as data processing, are centralized Stock options and profit sharing are used to encourage identity with the firm Red Tape Crisis A lack of confidence gradually builds betwen the line and staff, and between headquarters and the field.
Systems begin to outlive their usefulness and field managers begin to resent formalized control by staff managers who do not understand the local markets. The organization has become unwieldy and everyone resents the bureaucratic system that has evolved.
A new crisis is underway. Phase 5 — Collaboration This phase is characterized by: Focus on solving problems through team action Teams are formed from across functions Headquarters staff are reduced and reassigned to teams which consult with field units A matrix organization structure often develops Formal systems are simplified and combined Conferences of key managers are held frequently Educational programs are utilized to train managers Real-time information systems are used in decision making Economic rewards are geared to team performance Experiments in new practices are encouraged The?
He also cites the Chinese practice of requiring executives to spend time in lower-level jobs. This is interesting in light of the increased contact that our western and Pacific industrial complexes have with the Chinese. Implications of History There are specific management actions that characterize each growth phase.
These actions are also the solutions which ended each preceding revolutionary period. They are shown in the following table:The growth phases model of Larry E.
Greiner suggests that organizations go through 5 (6) stages of growth and need appropriate strategies and structures to cope. It is a descriptive framework that can be used to understand why certain management styles, organizational structures and coordination mechanisms work, and why some don't work at.
Discussion. The Greiner model is often shown as linear plot of time vs.
business size, with jagged crises at regular points along the line. The duration and growth in size of each phase can in practice be highly variable and will depend both on the market and the ability of the organization to adapt and evolve.
Studying the Relevance of Larry Greiner’s Developmental Phases to the Future Stability of Maple Lodge Farms Maple Lodge Farms, a family-owned business awarded the prestige of being one of Canada’s 50 best managed companies, has attained success by employing a number of .
Relevance of Larry Greiner's Developmental Phases to the Future Stability of Maple Lodge Farms Studying the Relevance of Larry Greiner’s Developmental Phases to the Future Stability of Maple Lodge Farms Maple Lodge Farms, a family-owned business awarded the prestige of being one of Canada’s 50 best managed companies, has attained success by.
Larry E. Greiner A small research company chooses too complicated and formalized an organization developmental phases, each evolutionary period creates its own revolution.
For instance, centralized practices eventually lead to demands for decentralization. Moreover, the.
Greiner’s Model of Organizational Growth – Phases of Organizational Growth and Crisis All organizations pass through various stages of growth and at each stage the organization is required to solve some specific problems.