Organizational stages of growth
Abstract -150
Organizations are marked by particular experiences and characteristics as the organization grows, revolve and evolve from one stage to the other. All processes work smoothly as the business start its level of growth (Recklies,2001). However, as the organization grows, its structures and processes become inappropriate and inadequate. Organizational and staff management procedures become unacceptable. Few organizations would initiate processes and structures for change until a controllable and unacceptable situation is met. Such crisis forms the need for change to another level of growth. This article will investigate four general stages of evolution or growth of businesses from start-up to maturity stage.
Introduction-150
The organizational structures and processes changes with every change in the level of growth. New communication and leadership patterns also change with organizational growth. The extent of these changes is informed by either increase in revenue collection or increment in the number of employees. Generally, five stages, related to particular characteristics of the organization are gone through for businesses to grow and attain maturity (Recklies,2001). The first four stages are the most crucial in the organization’s life cycle. Every stage of growth, different crisis is experienced, which hinders speedy growth. Hence, learning and change processes are required. These processes of the evolvement of an organization need time, and hence, businesses can not achieve maturity within the shortest time of months or a year.
Discussion
Stage 1- 150
This stage is known as the creativity stage, and it is cultured by a typical creative start-up. Companies in this stage can include a retail store and new restaurants. At this stage, the founder does all managerial duties, directions and decision making. The owner is involved in all sections of the organization such as sales, marketing, production and bookkeeping (McCubbrey, 2009). The organization have a few employees who are either semi-competent or illiterate. The employees are well aware of each other and share information, experience and knowledge. Formal planning and organizational systems are either nonexistence or minimal. The main priority is to build an identity brand, develop appropriate services and products, and win customers’ trust and acceptance. At this stage, the organization experiences turbulence, self-doubt and chaotic. Businesses characterize the low-profit margin or losses at this stage due to high start-up capital required and low revenue. As the organization grows, mutual and informal efforts become increasingly difficult to maintain. Distinguishing important and nonimportant issues becomes a problem since structures that help in allocating duties, and responsibilities to individual employees are few or do not exist.
Stage 2- 150
The second stage is the direction stage, where the organization appropriately directs the tasks and specific duties of staff. Centralization of directives and control is a characteristic, with the founder carrying the whole burden of decision making, directives and control of all levels of the organization. The owner also assumes other roles of hiring and supervising employees, scheduling and preparation of payroll (McCubbrey, 2009). at this stage, there is a clear indication and demonstration that the business is a workable entity. Customers satisfaction with services and products is being achieved. However, revenue and expenses relationship remain the key problems rather than mere existence. The business is still simple and survival s the priority and the main goal (Recklies,2001). the developed structures and systems are still weak and minimal. Crisis of leadership in stage one prompts the owner to relinquish experienced managers some powers to help in giving directions for the growth of the business.
Stage 3- 150
The third stage is the delegation stage. Functions, authorities and tasks are delegated to intermediary supervisors to remove the autonomy crisis of work, experienced by the management in stage two of business development (McCubbrey, 2009). Organizational structures are developed at this stage that heightens the lower level’s motivation. Decentralization help in creating departments, their heads, and develop their dynamics. The organization decentralizes. Specific managers running different departments carry out operations and development of strategic plans for the organization (Recklies,2001). the owner’s presence at the company is still important, but he or she reasonably separated from the business, in that competent personals now do the management of the organization. At this stage, the owner needs to rise to financial and managerial challenges for the business to grow further. A crisis can arise where top managers realize a loss of control over the organization’s diversified operations, as field managers run their operations without coordination plans.
Stage 4- 150
The fourth stage of organization growth is the coordination stage. The crisis experienced in delegation stage can lead to coordination, to effectively control crisis. Formal systems are developed and coordinated by the top manager (Recklies,2001). The new coordination approach achieves more coordinated efforts by departmental managers and organizational growth. All sections and departments of the organization coordinate their tasks and project, to tune well with each other. However, coordination can give way to bureaucracy in an organization. For effectively coordination, the organization standardized practices for personals, describe jobs and controls company protocols. Moreover, policies and budgets estimates have to be formulated to guide the company.
Conclusion-150
Organizations incur enormous costs in the growth stages due to crisis the organization goes through. It is, therefore, important for managers to understand that shareholder value and business growth cannot be necessarily equal. That is because shareholder value is obtained from profit and not from revenue increase. It’s also important to understand healthy and sustainable business growth factors. These factors are such as organization’s ability to identify and focus of profitable principal businesses; organizations ability to realize and react quickly to emerging external environments; internal organizational processes that properly manage growth crisis efficiently or minimizes impacts; questioning, modifying and developing elements of the organization that are crucial for businesses’ core.
References
McCubbrey, D. J. (2009). Organizational stages of growth. In D. J. McCubbrey (Ed.), Business
Fundamentals (pp. 79–79). essay, Global Text.
Recklies Oliver. (2001) Managing Growth – 5 Phases of Growth. The manager.org. Retrieved from: https://www.themanager.org/Strategy/ManagingGrowthI.htm