Evolution Of Business

Evolution and Revolution as Organisations Grow

17th October 2006

* Five phases of development - calm period ending in management crisis.

* Problems rooted in history (past decisions). Organisations are too forward looking and overlook where it has been and where it is now.

* Inability of management to understand development problems can result in the company remaining static.

* Evolution - prolonged periods of growth.

* Revolution - substantial confusion and disturbance.

* Management's solution will determine if the next stage is reached.

* Market opportunities determine a company's strategy and hence its structure.

* From an analysis of recent studies, five key dimensions emerge as essential for building a model of organization development:

* Age of the organization - Management problems and principles are

rooted in time.

* Size of the organization - change markedly as the number of

employees and sales volume increase.

* Stages of evolution - The term evolution seems appropriate for describing these quieter periods.

* Stages of revolution - Smooth evolution is not inevitable; upheaval of management practices. Companies fail that can't change.

* Growth rate of the industry - related to market.

* Each phase is both an effect of the previous cause and a cause for the next

phase.

Phase 1 - Creativity

* Create product and market

* Communication frequent, long hours and modest salaries

* Management acts as customers react - market determines control

* Volumes increase and so does management responsibilities.

Phase 2 - Direction

* Period of sustained growth

* Formal Structure and process is implemented

* Becomes inappropriate and lower levels feel restricted

* Delegation to lower level managers who are not used to it. As a result,

many companies flounder

Phase 3 - Delegation

* Decentralised structure

* Greater amount