Growth Phases model
(Greiner)

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Adjusting the strategy and structure of organizations while they develop. Explanation of Growth Phases of Greiner. ('72)

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What is the Growth Phases model? Description

The growth phases model of Larry E. 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 why some don't work at certain phases in the development of an organization. The 1972 Growth Phases model of Greiner describes five phases of organizational development and growth:

Growth through creativity. Start-up company, entrepreneurial, informal communication, hard work and low earnings. Ending by a leadership crisis.
Growth through direction. Sustained growth, functional organization structure, accounting, capital management, incentives, budgets, standardized processes. Ending by an autonomy crisis.
Growth through delegation. 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. Compare: Centralization and Decentralization.
Growth 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.
Growth through collaboration. 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 an internal growth crisis.

More recently Greiner added a sixth phase to his Growth Phases model:

Growth through extra-organizational solutions (mergers, holdings, networks of organizations)

Book: Larry E. Greiner - Power and Organization Development -

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Recent User Comments

    			 
  			   Dr.P.L.Narasimhan - India
  	       
  		     Add Learning and Innovation
  	  		 "There must be one more step - Learning and Innovation - which will generate internal growth and will be similar to the other growth curves."
  			   
    	  		 0

    			 
              - India
  	       
  		     Input parameters for each phase of growth?
  	  		 "Thinking about each phase of growth, what are the required parameters to be mandatorily considered as inputs to make the growth phase an absolute success?"
  			   
    	  		 2

    			 
  			   Robson Chiambiro - UAE
  	       
  		     Limitations of the model by Greiner
  	  		 "Given that the model has been shown in a continuous single line against time suggests that all the levels are at a higher level after each level. Instead I suggest that there need to be 5 or 6 lines representing the phases from start as the organisation grows. I think the model should be a multi-linear model showing the level of organisational development against time. This will clearly show the changes of the phases as time moves on. The use of one line shows as if the following phase is already developed by the end of the previous phase."
  			   
    	  		 1

    			 
  			   Anita - Netherlands
  	       
  		     Greiner Five Phases of growth
  	  		 "1. The Five(six) Phases of growth is a measure of influence of age and size on the organizational structure. The cycle may not necessarily be followed step wise as suggested.

2. Reading the Greiner Curve and interpreting it with strategic relatedness, gives further and a somewhat diagnostic insight into the Administrative Format of a business. The analysis provides clues to where the organisation is, whether the organisations objective and strategy are in consonance with the design, if  there is a possibility for restructuring and if yes what is the scope and expanse of such engineering.

3. I also evaluate the model as a lead indicator of probable Leadership needs as opposed to management style alone."
  			   
    	  		 5

    			 
  			   Germaine - US
  	       
  		     Organizational Death... A Taboo?
  	  		 "Another approach is to take a broader and cyclic view and see an organization as a human or organism going through a full Organizational Life Cycle. Organizational Life Cycles typically describe the following 6 phases or stages: 1. Birth (introduction, founding) 2. Growth 3. Maturity (formalization) 4. Renewal (revitalization) 5. Decline 6. Death.

A problem with all models is the death stage, which seems hard to define for organizations (unlike biological death).

Interestingly, by focusing on the growth stages only, Greiner entirely leaves out the Birth AND the Decline AND the Death stages (1, 5 and 6).

Organizational death is not a very popular concept..."
  			   
    	  		 9

Best User Comments

    			   
    			     Emmanuel - Tanzania
  	         
  				   Growth of Communities
  				   "Does this apply to community organizations as well, or are these growth phases only specified for business organizations?"
    			   
        	  		 24

    			   
    			     Dr.Duraipandi Mavoothu - India
  	         
  				   Length of Greiner Phases
  				   "Is there any typical time frame for each Phase?"
    			   
        	  		 10

    			   
    			     George - Canada
  	         
  				   Is a crisis a must for growth?
  				   "It is typical for Greiner's thinking that the growth phases are seperated from each other by organizational crises. Without a crisis a firm can not enter the next stage. Personally, I doubt if this is always the case?"
    			   
        	  		 4

    			   
    			     Eddie - UK
  	         
  				   Leadership style in Greiner phase 6?
  				   "What Leadership style is needed for the newly added 6th phase?"
    			   
        	  		 -1

    			   
    			     Cris - Romania
  	         
  				   Greiner after phase 6
  				   "I wonder what's beyond phase 6? Should't the entire Greiner Curve go further with "ex-organizations" split up (divide, sell) or just reinvent the organization? Maybe it's a circle (with a dotted line unifying the ends) and not just a linear growth?"
    			   
        	  		 -6

    			   
    			     Pete - France
  	         
  				   Greiner vs. Mintzberg?
  				   "What's the main difference with Mintzbergs model?"
    			   
        	  		 -8

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                      ● Hans Holmquist (Sweden)
                      
                    All Talk About Innovation
                    "Interesting response. I find that most big organizations talk about innovation as the key strategy for the future. Mostly because the industry is changing rapidly and a new approach is needed to compete. There are probably more reasons. Anyway, I always thought that innovation is an attempt to move left on the Greiner curve - which is difficult (especially considering McKinsey 7S model). But how do large organizations actually become more innovative? Isn't it so that all aspects of the organizations (influence by innovation/agility/learning) to achieve the strategy?"

                     
                      ● Stan Heard (USA)
                      
                    Parameters of growth phase success
                    "The growth phase is a success when it creates the crisis that must be solved by going to the next phase. Each phase sets up the crisis that ends it."

● Charlie (USA)	Greiner's Growth Curve is accurate	"This model is amazingly accurate in terms of growth stages and the change drivers that trigger decisions for companies and organizations, particularly since it was developed in the early 1970's. My experience is that organizations encounter thresholds during growth that require changes in management models to successfully pass through, like a shift from "family-managed" to "professionally-managed". Of interest to me is how to retain the drive and creativity of Start-ups as a company grows. I've seen this happen in larger companies and attribute most of it to enlightened leadership that breaks down silos and encourages certain amounts of risk-taking."
● Dr.P.L.Narasimhan (India)	Growth in Delegation and Coordination Phases	"The growth in steps 3 & 4 - delegation, coordination and direction will be flat and horizontal since the efforts will be to concentrate on maintaining the efficiency in the growth stage when the organization becomes big."
● Francis Lenne (France)	End in crisis	"After the 6th step, we now can add: "Ending by a “failure in ethics and confidence” crisis, needing a public management solution." ... Come back to basic."
● Frances (USA)	Greiner 6 phases	"You should know throughout the course of the implementation or process of the phases whether or not a business is working or if you have the right stakeholders for the company/business to gel without having to wait for the failure. I would panic if we had "failed ethics or confidence" as Francis mentioned. I would stop and measure the progress along the way....."

● JC (Sinagpore)	Not sure	"Not sure about any taboo ... anything with a beginning shall have an ending. As a natural phenomenon, there doesn't have to be any significant issue on the death of organizations. Strictly business sense will be the "costs and benefits" of each stage and the ultimate gain of the entire cycle."
● Jimk (USA)	Cycles	"Enron had a long tail on its last phase. The back side of the "bell curve" can be rather sharp. The S&L crisis pointed that out. Many times the company doesn't die but should. Rather it gets broken up, sold off and then shattered into unrecognizable pieces through M&A, etc."
● (Australia)	Death Myth	"I think Germaine needs to read Griener's original article, and the follow up article HBR. The Greiner model is like human maturity. It is a quasi-psychological analogue. There's no "death" in that cycle. The Dali Lama for example suggests we reincarnate and continue to mature. OK reincarnation is a bit left field -- Is it really? Look at Edison Electric - GEC - GE; BHP - BHP Billiton. Organisations mature to different stages. Death is not part of the model it is a physical state, or a crisis as correctly pointed out. Cheers... Will"
● Mamta Wasan (India)	Human Resources	"Very interesting model. Would be interesting to know what kind of leadership traits exist at each level. How can each stage's stengths be maximised and what can HR professionals do to better handle each stage"

                       
                        ● Germaine (USA)
                        
                      Growth Stages of Virtual Organizations
                      "Good question. My answer would be: YES. I think even virtual organizations are going through similar growth stages, although often quicker than traditional ones."

                       
                        ● Annetol Griskov (Holland)
                        
                      Nooo
                      "You can not put a time frame on it. In most cases a company will stick to a crisis and will never overcome it. Look at many small companies. Why do they not grow any further? Because they do not overcome the crisis of leadership and direction.

"

● Aditi (India)	Crisis and Growth	"Not necessarily..."
● Annetol Griskov (Holland)	Crisis	"It should not be a crisis. But it will become a crisis if you do not pay attention to the growth 'problem'. If you are not aware of the situation and act on it, it will become a problem."
● (USA)	Crisis	""Crisis" in the model means "change" rather than a typical definition of "problem"."

	● Maikel (NL)	Leadership in 6th fase	"Example of Leadership in phase 6: managers from different business units try to reach the same goal: continue the business. But at the same time they try to reach their own unique goals (opportunities en circumstances) for their business unit. The crisis in phase 6 should be: clash of the managers; the goal of 1 or certain managers, is dominating the other managers with their goals."
	● DD Gupta (India)	Growth Fundament	"Growth considering alliances with others is the best option. One has to trust on other for exponential growth. No single can do much. As we say: one and one is eleven not two."

	● DC (USA)	After Greiner phase 6	"I agree its a perpetual cycle where you can no longer get true organic growth without an injection of entrepreneurship, innovation and creativity - which takes you back to phase one and you do it all over again. You then have a staircase of inflection points that represent the end (or beginning) of a cycle."
	● Karl (China)	Phase 7 in Growth Model	"Basicly, I agree with the model. What will happen in the phase 7, the 3 big car companies may give the answer to us in the near future."