Managing Life Cycles In An Organization

Organizational Life Cycle, a model that compares the growth and development of an organization to the biological stages of human growth and development, was first alluded to in the mid-1900's. In 1983, Management Science published a summary of Organizational Life Cycle models by Quinn and Cameron where they stated, "changes that occur in organizations follow a predictable pattern that can be characterized by developmental stages. These stages are sequential in nature; occur as a hierarchical progression that is not easily reversed; and involve a broad range of organizational activities and structure." The main premise of the model is that the internal and external forces effecting organizations are different depending on the stage of the individual organization. In the simulation that was provided, these stages were categorized as start-up, growth, maturity and decline.

When an organization is first created it is categorized as being in the start-up stage. Using the biological comparison of the Organizational Life Cycle Model, this stage compares to the rapid growth seen in early childhood. An organization in this stage would be small and non-bureaucratic with decisions being made by individual leaders in a highly reactive way. At this stage, the business is often the result of one visionary leader or a small group of leaders. It is characterized by a lack of formal structure, rules, financial resources and coordination of tasks. A manager in a start-up organization would need to spend many hours involved in every aspect of the business. There are no other levels of management to delegate tasks to and no infrastructure to support smooth function of the business if the leader is absent. The key internal challenge for a manager in this environment is to make the most of limited resources - financial and human resources. The external challenges include finding a location, developing relationships with needed vendors, developing a client base and securing funding with the overall goal to become established in the chosen industry. In our simulation, the earliest tasks of the manager were to optimize available funds in order to provide the most basic of services. I chose to spend the available personnel funds to support two full-time nursing positions and a full-time recreational therapist. On a daily basis, these staff members would best meet the needs of our target clientele. The physician and dietitian could provide adequate support in a part-time capacity. I chose to outsource some of the services needed by the organization based on overall cost.

As a start-up organization gains success, many of the previous business and management strategies become problematic. "The very things that made the entrepreneur successful and created the business must change to meet new demands for shared decision making. This is counter-intuitive to the entrepreneur who must do more things in a way that is the opposite of what has made them successful." (McCaffrey, 2003) This stage is characterized by dramatic growth in financial and human resource availability. Client base is rapidly growing, but in a quick, uncontrolled way often without a comprehensive business plan. This rapid growth in employee numbers brings with it one of the greatest challenges of the growth stage - communication. The original leaders must give up full control and delegate some responsibility for decision making to lower level managers. The organization begins to have a crisis of communication because of the difficulty of clear communication between these new levels. The internal structures have not kept up with the needs of the growing organization. In this stage a manager must strive to communicate with a workforce that is usually overextended and feeling unappreciated. As in the simulation, the manager of a growth organization must find strategies to increase communication in all directions. I was only on target 50% of the time in the simulation, correctly identifying one out of two of the "best choice" strategies in each of the communication decisions. According to our simulation the best strategies for downward communication include establishing lines of communication and clarifying job expectations for each employee. Effective upward communication best includes an open-door policy and a written weekly communication. Interactive communication (communication among peers) includes the tasks of coordination and problem solving which are best accomplished by planned, frequent meetings.

As an organization reaches the maturity stage, growth slows and stabilizes. The task of this stage is to develop effective controls consisting of extensive formal networks and management structures to handle the large and very bureaucratic organization. "Strategic and financial controls are the two major types of internal controls used to support implementation of strategies in larger firms." (Liao, 2006) Managers strive for direction to handle increasingly complex issues of uncertainty, irregularity, cost controls and decentralized authority. "Properly designed organizational controls provide clear insights to employees regarding behaviors that enhance the firm's competitiveness and overall performance." (Liao, 2006) Companies in the maturity stage need leaders who are seeking opportunities for continued growth to avoid stagnation. In the simulation, I elected to