Knowing when to redesign: Size, History, and Life-Cycle v Why do organizations grow? v What are the consequences of size? v How do organizations and industries evolve? v What are design consequences of organizational life-cycle?

Causes and Consequences of Organizational Growth v Why do Organizations grow? Business Expectations ( Organizational Goals ) Executive Advancement Economic well-being and Survival v What happens when organizations get larger? Formalization: Rules, procedures, manuals Decentralization: Decision making authority Complexity: Expansion of departments and positions

Relative Distribution of Personnel in Large Vs. Small Organizations Small Large

Large Size and Bureaucracy: Good and Bad TYPES OF FORMALIZATION DEGREE OF FORMALIZATION EnablingCoercive Low High Organic Enabling Bureaucracy Autocratic Coercive Bureaucracy

Evolutionary Processes in Organizations Two Alternative Perspectives v Analysis of the industry as a whole v Analysis of individual organizations

Dynamics of Organizational Ecology Effects of Legitimacy & CompetitionLiability of Newness Carrying Capacity of the Environment Population Density Time 1 Age Likelihood of Failure

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

Greiner’s Model of Organizational Growth Organizational Size Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Age of the organization Leadership Crisis Autonomy Crisis Control Crisis Red tape Crisis CreativityDirectionDelegationCoordinationCollaboration

Horizontal coordination mechanisms Information carrying capacity Costs low high lowhigh sPaperwork sDirect contact sLiaison roles sTask force sFull time integrator sPermanent teams

Vertical coordination mechanisms Information carrying capacity Costs low high lowhigh sHierarchical referrals sRules, plans, SOPs sNew positions in hierarchy sVertical information systems

Organizational Characteristics New Organizational Realities Managing the Organization Managing the Environment NETWORKED FLAT FLEXIBLE DIVERSE GLOBAL Team structure Incentives/ careers Workforce management Conflict resolution Cross-border integration Alliances Boundaries Learning Stakeholders Local responsiveness