knowing when to redesign: size, history, and life-cycle v why do organizations grow? v what are the...
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Knowing when to redesign: Size, History, and Life-Cycle
Why do organizations grow?
What are the consequences of size?
How do organizations and industries evolve?
What are design consequences of organizational life-cycle?
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Causes and Consequences of Organizational Growth
Why do Organizations grow?• Business Expectations ( Organizational Goals )• Executive Advancement• Economic well-being and Survival
What happens when organizations get larger?• Formalization: Rules, procedures, manuals• Decentralization: Decision making authority• Complexity: Expansion of departments and
positions
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Relative Distribution of Personnel in Large Vs. Small Organizations
0.00%
25.00%
50.00%
75.00%
100.00%%
of Tot
al E
mplo
yees
Line EmployeesTop Management
Professional Staff
Clerical
Small Large
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Large Size and Bureaucracy: Good and Bad
TYPES OF FORMALIZATION
DEGREE OF FORMALIZATION
Enabling Coercive
Low
High
Organic
EnablingBureaucracy
Autocratic
CoerciveBureaucracy
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Evolutionary Processes in Organizations
Two Alternative Perspectives
Analysis of the industry as a whole
Analysis of individual organizations
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Dynamics of Organizational Ecology
Effects of Legitimacy & Competition Liability of Newness
Carrying Capacity of the Environment
PopulationDensity
Time
1
Age
Like
lihood o
f Fa
ilure
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Organizational Life Cycle
The Internal dynamics of growth
• 1. Entrepreneurial Stage: Growth through creativity crisis: Need for leadership
• 2. Collectivity Stage: provision of clear direction crisis: Need for delegation and control
• 3. Formalization Stage: Addition of internal systems crisis: Need to deal with red tape
• 4. Elaboration Stage: Development of teamwork crisis: Need for Revitalization
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Greiner’s Model of Organizational Growth
Org
aniz
ati
onal Siz
e
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Age of the organization
LeadershipCrisis
AutonomyCrisis
ControlCrisis
Red tapeCrisis
Creativity Direction DelegationCoordinationCollaboration
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Horizontal coordination mechanisms
Information carrying capacity
Costs
low
high
low high
Paperwork
Direct contact
Liaison roles
Task force
Full time integrator
Permanent teams
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Vertical coordination mechanisms
Information carrying capacity
Costs
low
high
low high
Hierarchical referrals
Rules, plans, SOPs
New positions in hierarchy
Vertical information systems
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OrganizationalCharacteristics
New Organizational Realities
Managing theOrganization
Managing theEnvironment
•NETWORKED
•FLAT
•FLEXIBLE
•DIVERSE
•GLOBAL
•Team structure
•Incentives/careers•Workforcemanagement•Conflictresolution•Cross-borderintegration
•Alliances
•Boundaries
•Learning
•Stakeholders
•Localresponsiveness