Question

Change takes place in organizations at the various stages of the organization lifecycle. Discuss the various stages of the organizational lifecycle and the implication of change management to the management unit of the organization.

Answer 1

Organizational life cycle- The organizations go through the different stages from the time of its inception. As the organization grows, its culture changes. There are four stages in an organizational life cycle, namely-

1. Birth- Organizations are formed by individuals (entrepreneurs). There is a greater chance of failure of organizations in this stage because they need to face the liability of new organizations. Or they might not be aware of the changes in the new environment. They recognize opportunities and make optimum utilization of resources and competency to generate value (revenue and growth). The implication of the change management in this phase is to a large extent because frequent changes need to be made in order to establish the company in this birth stage.
2. Growth-In this phase, the organization goes through five important steps and in each step the organization ends up in a crisis. The organization should be able to resolve the crisis in each stage to go through the next step. The 5 different steps are: creativity, direction, delegation, coordination and collaboration. In all of these steps, the organization needs to effectively handle the change management because it is vital for the success of the change. Change is inevitable in each step and the management needs to be prepared to accept and make the changes.
3. Decline- Companies move to this stage until the company produces poor quality and increases its pricing. There are instances when many companies downsize their large companies before they implement new structures. This requires effective change management by the leadership team. Change is constant and the management needs to think of innovative ways to revive their companies.
4. Death- This stage occurs when a firm is unable to handle the crisis in the growth phase or unable to handle the pressure in the growth phase. This stage reduces to attract resources. For example, the banks would refuse to lend money to revive the companies. Even too much growth would result in death of an organization. The implication of change is inevitable at this stage. The management unit of the organization should be able to bring changes in the organization to avoid the organization to moving to this stage by implementing changes in the organization.

Conclusion- Change is essential in the various stages of the organizational lifecycle and the management should be able to accept the change and implement them effectively in the organization.