The growth phases
of 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 don't work at certain phases in the
development of an organization. The 1972 model of Greiner describes five (six)
phases of organizational development and growth:
(start-up company, entrepreneurial, informal communication, hard
work and poor pay) [ending by a leadership crisis].
(sustained growth, functional organization structure, accounting,
capital management, incentives, budgets, standardized processes) [ending
by an autonomy crisis].
(decentralized organizational structure, operational and market level
responsibility, profit centers, financial incentives, decision making is
based on periodic reviews, top management acts by exception, formal
communication) [ending by a control crisis].
through coordination and monitoring
(formation of product groups, thorough review of formal planning,
centralization of support functions, corporate staff oversees
coordination, corporate capital expenditures, accountability for ROI at
product group level, motivation through lower-level profit sharing)
[ending by a red tape crisis].
(new evolutionary path, team action for problem solving,
cross-functional task teams, decentralized support staff, matrix
organization, simplified control mechanisms, team behavior education
programs, advanced information systems, team incentives) [ending by a
internal growth crisis].
added a sixth phase to his
growth phases model: • extra-organizational solutions (mergers, holdings, networks of
T I P : Here you can discuss and learn a lot more about typical company growth stages.
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