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Organizations: Managing Life Cycles
Early theories and empirical studies have identified various organizational life cycles. Many authors who have addressed the topic of developmental phases have presented different models. As a result, when researching this topic one will find differentiations between the numbers of phases within an organization's life span. Some models identify three stages, others four or more. However, regardless of the number of life cycles, what we know is that these cycles are: "sequential in nature; occur as a hierarchical progression that is not easily reversed; and involve a broad range of organizational activities and structures" (Gupta & Chin, 1994, p. 270). The following will examine four fundamental organizational life cycles (start-up, growth, maturity, and decline) and the types of common challenges managers face during the various phases.
Phase 1: Start-Up
In the start-up cycle an organization will typically have substantial limitations. For example, organizations during this phase will often have limited operational budgets, infrastructure and manpower. The internal structure will be comprised of a few members, if not just the founder in some cases. This non-bureaucratic environment contributes to other challenges which include: highly controlled decisions and information, as well as placing the overall ownership in the hands of one or few individuals. The decision-making process is placed in the hands of the one(s) who are focused on the development and existence of the organization (Lester, Parnell & Carraher, 2003). During this phase the organization will att ...