Six Stages of Every Organization as It Matures

Approaches that worked effectively in the past start to fail when workloads grow tremendously, work overload may be a problem for specific organization and individuals. As their scope of authority grows, formerly competent managers begin to make mistakes. Under more significant strain, systems start to buckle.

While development is exciting when things are going well, it can be stressful when things go wrong. Furthermore, these issues might be detrimental (or even fatal) to the business.

Organizations that can rapidly grasp the core cause of many of the difficulties that a fast-growing firm is likely to face can foresee problems and address them with pre-prepared solutions. Here are six stages of every organization, throughout its maturity stage.

Phase 1: Developing Creativity

The company’s founders are hard at work producing new goods and expanding their market. Informal communication works well because there aren’t many employees. And long-hour workers are likely to be rewarded with profit sharing or stock options. However, more formal communication is required when the company grows, manufacturing expands, and cash is invested.

This phase culminates in a Leadership Crisis, necessitating expert management. The founders may adapt their approach to taking on this position, but it’s more likely that someone fresh will be hired.

Phase Two: Directional Growth

Growth continues in a world with more formal communications, budgets, and a concentration on discrete tasks like marketing and production. Incentive plans take the place of stock as a form of compensation.

However, there comes the point when there aren’t enough hours in the day for one person to handle all of them, and they can’t reasonably know as much about all of them as others further down the hierarchy.

This phase culminates in an Autonomy Crisis, necessitating the creation of new delegation-based institutions.

Phase 3: Delegation for Growth

The company continues to expand as mid-level managers are freed to react quickly to possibilities for new products or in new markets, with top management only monitoring and dealing with the significant concerns (perhaps starting to look at merger or acquisition opportunities). Many organizations suffer at this stage, as the manager whose directive approach addressed the difficulties after Phase 1 finds it difficult to let go. In contrast, mid-level managers struggle to adjust to their new leadership responsibilities.

Phase 4: Coordination and Monitoring for Growth

The formerly disjointed business units have been reorganized into product groups, or service practices, resulting in further growth. Investment funds are distributed centrally and controlled based on Return on Investment (ROI) rather than profits. Profit-sharing plans that are consistent with business goals are used to provide incentives. Work, on the other hand, may get drowned by increasing quantities of bureaucracy, suffocating growth.

This phase culminates in a Red-Tape Crisis, which necessitates the introduction of a new culture and organization.

Phase 5: Collaboration for Growth

Staff members organize and re-group flexibly to deliver projects in a matrix structure backed by sophisticated information technologies and team-based financial rewards, replacing the formal controls of stages 2-4 with good professional judgment.

This phase concludes with an Internal Growth Crisis: Only by forming relationships with complementary companies will the company expand further.

Phase 6: Extra-Organizational Solutions for Growth

Greiner’s sixth phase, which was just introduced, implies that growth may continue through mergers, outsourcing, networks, and other solutions involving other businesses.

The pace of growth will differ across and even within stages. The duration of each phase relies almost entirely on the rate of change of the market in which the company works. However, the longer a phase lasts, the more difficult it will be to shift.

Conclusion

It’s worth mentioning that organizations progress through these stages at varying rates. A major banking institution, for example, may process them considerably more slowly than a high-growth software firm. You may discover what type of learning is most essential and be prepared for what learnings will be needed shortly by determining what stage your company is in, later on, if you want to know more about the matureness of an organization you can take the help of MYOB assignment help and online essay writing help.