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Life cycle of the Organisation
Submitted by : Sukhdeep kaurSubmitted to : Prof. Perfait
mpelo
MAIN POINTS
Maturity
Decline
Death of the Organisation
What is organization?
A social unit of people systematically
structured and managed to meet a need
or to pursue collective goal on a continuing basis . All
organizations have a management structure that determines the
relationship between functions and positions and subdivides and
delegate roles ,responsibilities,and authority to carry out defined
tasks.
Organization types
Non profit organisations
Profitable organnisations basically non profit organizatios are
charity ans service organisations and profitable orgaisation main
goal is money eg compaies restaurants etc
Organization structure
There are normally 4 type of structuresTall
Flat
Hierarchical
Centralized and decentralized
Tall structure
Advantages and Disadvantages
Advantagesemployees can be closely supervised.
clear management structure.
DisadvantagesFreedom of employees restricted
Decision making could be slowed down
High management costs because managers are generally paid more
than subordinates
Flat structure
Positive and negative points
Positive pointsGood communication between managers and
workers
Good team work
Easier decision making
Less costs
Negative pointsFunction of each department/person could be
blurred and merge into the job roles of others.
structure limited to small organizations such as partnerships,
co-operatives and some private limited companies
Hierarchical Organisation
Advantages and disadvantages
AdvantagesAuthority and responsibility and clearly defined
There are specialists managers and the hierarchical environment
encourages the effective use of specialist managers
Employees very loyal to their department within the
organization
DisadvantagesThe organization can respond slowly to changing
customer needs and the market within which the organization on
operates.
Departments can make decisions which benefit them rather than
the business as a whole especially if there is Inter-departmental
rivalry
Centralized and Decentralized Organization
Advantages Senior managers enjoy greater control over the
organization
The use of standardized procedures can results in cost
savings.
The organization can benefit from the decision making of
experienced senior managers.
Organization maturity
Organization maturity depend upon People
Process
Technology
Measurementand all these processes have 5 levels described in
step by step
people
Level 1:performed :in this success is directly related with
their relationship with other workers
Level 2:managed:success depends upon individuals and management
system .workers are trained
Level 3;project groups work together .training is planned and
provided according to their roles
Level 4:predictable : strong sense of team work exist within the
organizational
Level 5:A strong sense of teamwork exists across the
organization.
Everyone is involved in process improvement.
processes
Level 1: Few stable processes exist or are used.
Level 2 :Documented and stable estimating, planning, and
commitment processes are at the project level.
Level 3 :Integrated management and engineering processes are
used across the organization.
Level 4 :Processes are quantitatively understood and
stabilized.
Level 5 :Processes are continuously and systematically
improved.
technology
Level 1:The introduction of new technology is risky.
Level 2 :Technology supports established, stable activities.
Level 3 : New technologies are evaluated on a qualitative
basis.
Level 4 :New technologies are evaluated on a qualitative
basis.
Level 5:New technologies are proactively pursued
measurement
Level 1 :Data collection and analysis are ad hoc.
Level 2:Planning and management data is used by individual
projects.
Level 3 :Data is collected and used in all defined
processes.
Data is systematically shared across projects Level 4:Data
definition and collection are standardized across the organization
Data is used to understand the process qualitatively and stabilize
it.
Level 5 ;Data is used to evaluate and select process
improvements.
Key Factors that Contribute to Decline
Age of the organization: Older, more established firms may rely
on legacy practices
Size of the organization: Large firms with many vertical levels
can have trouble adapting
Financial success and past performance: Past success can lead to
desire to follow same path in hopes of future success
Ownership and equity structure: Is there accountability at all
times to outside agents?
Environmental influences: External shocks
Ability to learn and discern patterns: Lack of learning
organization culture
Certainty/uncertainty: Effectiveness of change management
Leadership: Young & inexperienced without desire to
learn
Organizational decline occurs when a firm fails to manage crises
in the growth stage or fails to adapt to pressures. Regardless of
the time or cause, the decline stage decreases the ability to
attract resources. Banks hesitate to lend money to a troubled
company and talented employees choose successful, secure
organizations. An organizations decline may result from too much
growth. Some organizations, such as Gm, grow past the point of
effectiveness.
Signs of potential problems include too many employees, slow
decision-making,increased conflict among subunits, and reduced
profits. An effective top-management team with good information can
thwart decline and return to growth. Managers must have information
to take timely corrective action. An organization may use its
resources more effectively and not pursue continued growth
Dissolution Results in Organizational Death As organizational
death occurs, people understand that further actions are useless.
The organization cuts ties to stakeholders and transfers resources
to other organizations. Within the organization, formal closing
services occur to help members focus on new roles outside the
organization
Managerial Implications: Organizational Decline To prevent
decline, managers should analyze the environment, structure, and
sources of inertia. The founder must always put organizational
survival and stakeholders first and allow for new leadership
Organizational Decline and Death
Companies do not move to more organic structures until they face
the problems ofincreased costs and reduced quality. Many large
companies downsize before adoptingorganic structures. Greiners
model suggests that organizations grow throughcollaboration until a
new, unknown crisis arises. For some organizations, the next
stagein the life cycle is decline rather than growth
Organizational Decline and Death
Companies do not move to more organic structures until they face
the problems ofincreased costs and reduced quality. Many large
companies downsize before adoptingorganic structures. Greiners
model suggests that organizations grow throughcollaboration until a
new, unknown crisis arises. For some organizations, the next
stagein the life cycle is decline rather than growth
Thank you for Ur attention
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