Page 44 - DMGT520_ORGANIZATION_CHANGE_AND_DEVELOPMENT

Unit 3: Models of Change

3.2.5 Organisational Growth Model Notes

Our discussions in this unit have focused on changing or working on problems in organisation
that are already established. How different are the issues in new or emerging organisation?
A developmental theory developed by Larry E. Greiner (Griener, 1972) is helpful in examining
growing organisations.

Greiner argues that growing organisations move through five relatively calm periods of
evolution, each of which ends with a period of crisis and revolution. According to Greiner, “each
evolutionary period is characterized by the dominant management style used to achieve growth,
while each revolutionary period is characterized by the dominant managerial problem that
must be solved before growth will continue.”
As illustrated in Figure 3.6, the first stage of organisational growth is called creativity. The
founders of the organisation dominate this stage, and the emphasis is on creating both a product
and a market. These “founder” are usually technically or entrepreneurially oriented, and they
disdain management activities; their physical and mental energies are absorbed entirely in
making and selling a new product.” But as the organisation grows, management problems
occur that cannot be handled through informal communication and dedication. “Thus the founders
find themselves burdened with unwanted management responsibilities … and the conflicts
between the harried leaders grow intense.”
It is at this point that the crisis of leadership occurs and the first revolutionary period begins.
“Who is going to lead the organisation out of confusion and solve the management problems
confronting the organisation?” The solution is to locate and install a strong manager, “who is
acceptable to the founders and who can pull the organisation together. “This leads to the next
evolutionary period – growth through direction.

During this phase the new manager and the key staff “take most of the responsibility for
instituting direction, while lower level supervisors are treated more as functional specialist
than autonomous decision-making managers”. As lower level managers demand more autonomy,
this eventually leads to the next revolutionary period – the crisis of autonomy. The solution to
this crisis is usually delegation.
When an organisation gets to the growth stage of delegation it usually begins to develop a
decentralized organisation structure, which heightens motivation at the lower levels. Yet,
eventually the next issue begins to evolve as top managers, “sense that they are losing control
over a highly diversified field operation — freedom breeds a parochial attitude.”
The crisis of control often results in a return to centralization, which is now inappropriate and
creates resentments and hostility among those who had been given freedom. A more effective
solution tends to initiate the next evolutionary period – the coordination stage. This period is
characterized by the use of formal systems for achieving greater coordination with top
management as the “watch-dog” Yet most coordination systems eventually get carried away
and result in the next revolutionary period – the crisis of red tape. This crisis often occurs when,
“the organisation has become too large and complex to be managed through formal programs
and rigid systems.”
It the crisis of red tape is to be overcome, the organisation must move to the next evolutionary
period – to phase of collaboration. While the coordination phase was managed through formal
systems and procedures, the collaboration phase “emphasizes greater spontaneity in management
actions through teams and skillful confirmation of interpersonal difference. Social control and
self discipline takes over the formal control.”

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