 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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