Life cycle of an organization

Organizations go through different phases of growth. The first challenge for executives who wish to grow their organizations is to understand what phase of the organizational life cycle one is in. Experts divide the organizational life cycle into five phases. Each of these phases present different management and leadership challenges that one must deal with.

First, the entrepreneurs are thinking about the business, writing a business plan, looking for outside funds. It is start-up or birth. Then, they declare themselves open for business and begin to grow and develop. In the growth phase, one expects to see sales grow each year, revenues climb, new services and products developed, more employees hired and so on. The reality, however, is much different since a company can have both good and bad years depending on market conditions. And many organizations will not grow either unless there is in place a rigorous program of transformational leadership development.

In organizations that have been around for a few years, a very interesting thing happens—dry rot sets in. That's why many companies have different types of programs relating to organizational development in place. The growth phase is sometimes divided into an early growth phase (fast growth) and maturity phase (slow growth or no growth). However, maturity often leads to decline. If one can detect the symptoms of decline early, one can more easily deal with it. Some of the more obvious signs being: declining sales, relative to competitors; disappearing profit margins; and debt loads, which continue to grow year after year. However, by the time the accountants figure out that the organization is in trouble, it's often too late.

Decline doesn't have to continue, however. When in decline, an organization will either undergo renewal or death and bankruptcy. External experts have focused on the importance of organizational development as a way of preventing decline or reducing its affects. One way to reverse dry rot is through the use of training as a way of injecting new knowledge and skills. One can also put in place a rigorous program to change and transform the organization's culture. This assumes, though, that one has enough transformational leaders to challenge the status quo. Without the right type of leadership, the organization will likely spiral down to bankruptcy.

As many as 80% of business failures occur due to factors within the executive's control. Even firms close to bankruptcy can overcome tremendous adversity to nurse themselves back to financial health. In some cases, failure means being acquired and merged into a larger organization. In other cases, it occurs when an organization elects or is forced into bankruptcy. This does not signify the organization ceases to exist since it can limp along for many years by going in and out of bankruptcy court.

Find in texts above words or phrases with the following meanings.

1. to not have something that you need, or not have enough of it…

2. to make money available to someone in order to invest or to buy something such as a company …

3. to give someone a particular job or make them responsible for a particular person or thing …

4. to give someone more control over their own life or situation …

5. to improve something by adding excitement, interest etc to it …

6. to advance in a faltering manner …

7. capable of influencing or inspiring large numbers of people …

8. a person who is skilled or proficient in something …

9. hardship …

10. decline, moral degeneration …