As illustrated in Figure 25.5 there are five phases in
organizational growth creativity, direction, delegation, coordination and
collaboration followed by a particular crisis and management problems.
1.Creativity Stage: Growth
through creativity is the first phase. This phase is dominated by the founders
of the organization and the emphasis is on creating both a product and a
market. Generally these founder are technically and entrepreneurially –
oriented and they absorb there mental and physical energies entirely in
producing and selling a product. However as the organization grows in size and
complexity, the need for greater efficiency cannot be achieved through informal
channels of communication. Thus many managerial problems occur which the
founders may not solve effectively either because they may not be suited for
the kind of job or they may nor be willing to handle such problems. Thus a
crisis of leadership emerges and the first revolutionary period begins. Such questions
as “who is going to lead the organization out of confusion and solve the
management problems confronting the
organization: who is acceptable to the founders and who can pull the
organization together arise”. In order to solve these problems a new evolutionary
phase – growth through direction – begins.
2.Direction stage: When leadership crisis leads to the founders
relinquishing some of their power to professional mangers, organizational
growth is achieved through direction. During this phase, the professional
mangers and key staff take most of the responsibility for instituting
direction, while lower level supervisors are treated more as functional
specialists then autonomous decision – making managers. Thus directive management
techniques enable the organization to grow, but they may become ineffective as
the organization becomes more complex and diverse. Since lower level
supervisors are most knowledgeable and demand more autonomy in decision –
making a new period of crisis – crisis for autonomy – begins. In order to
overcome this crisis, the third phase of growth – growth through delegation –
emerges.
3.Delegation stage: Resolution
of crisis for autonomy may be through powerful top mangers relinquishing some
of their authority and a certain amount of power equalization. When the
organization gets to the growth stage of delegation, it usually begins to
develop a decentralized organization structure which heightens motivation of
the lower levels. However with decentralization of authority to mangers, top
executives may sense that they are losing control over a highly diversified
operation. Field mangers want to run their won shows without coordinating
plans, money, technology or manpower with the rest of the organization and a
crisis of control emerges. This crisis can be dealt with the next evolutionary
phase – the coordination stage.
4.Coordination stage: The crisis
of control often results in a return to centralization, but his is now
inappropriate and creates resentment and hostility among those who have been
given freedom. Thus, instead of centralization, coordination becomes the more
effective method for overcoming crisis of control. The coordination phase is
characterized by the use of formal systems for achieving grater coordination
with top management as the watch dog. The new coordination systems prove useful
for achieving growth and more coordinated efforts by line mangers, but result
in a task of conflict between line and staff, between headquarters and field.
Line becomes resentful of staff: staff complains about un co – operative and
uninformed line mangers; and everyone gets bogged down in the bureaucratic
paper system. Procedure takes precedence over problem solving : the
organization become too large and complex to be managed through formal
programmes and rigid systems. Thus crisis of red –p tape begins. In order to
overcome the crisis of red tape, the organization must move to the new
evolutionary stage – the collaboration stage.
5.Collaboration stage: The
collaboration stage involves more flexible and behavioral approaches to the
problems of managing a large organization, Greiner observes that while the
coordination stage was managed through formal systems and procedures, the
collaboration stage emphasizes greater spontaneity in management action through
teams and skillful confrontation of interpersonal differences. Social control
and self discipline take over from formal control. Though Greiner is not
certain what will be the next crisis around the psychological saturation of
employees who grow emotionally and physically exhausted by the intensity of
team work and of the heavy pressure for innovation solutions.
Hersey and Blanchard, however, feel that to overcome and even to
avoid the various crises, mangers could attempt to move through the
evolutionary periods more consistently with the sequencing that situational
leadership theory would suggest – direction to coordination to collaboration to
delegation – rather than the ordering depicted by Greiner. Though there may be
controversy and is agreement over the sequencing arrangement of various actions
and styles, the growth clearly presents problems of adjustments for the
organizations. As organizations grow and evolve, thy change and present the
problems of management of change, and ultimately the organizations policies,
procedures, structure and so on, may have to change.
