Organizational growth involves using resources to improve efficiency and productivity, which can boost employee morale. It is important for solving problems and analyzing processes more efficiently. While requiring time and money investments, organizational growth justifies the costs by helping chart a strong business course. There are four main strategies - market penetration, product development, market development, and diversification - ranging from staying in current markets to completely new products and markets. However, organizational growth can lead to employee resistance to change, turnover, and a deteriorating work climate if not managed carefully with employee involvement and a change management process.

1. Done by
Sivaraj G
II MSW(HRM)
MADRAS CHRISTIAN COLLEGE

2. ORGANIZATIONAL GROWTH
Organizational growth is defined as the use of organizational
resources to improve efficiency and productivity in the
workplace. An effective organization can also boost
employee morale because workers can feel more
empowered and valued when your company is well
structured.

3. IMPORTANCE OF ORGANIZATIONAL GROWTH
The importance of organizational growth also extends to how you solve
problems within your company as well as the ways in which you analyze a
process to find a more efficient way of doing it. Implementing organizational
growth requires an investment of time and money. But as you begin to
understand the importance of organizational growth as well as the role of
organizational growth in helping you chart a strong course for your business,
it will more than justify the costs.

4.  Market Penetration
 Product Development
 Market Development
 Diversification
ORGANIZATIONAL GROWTH STRATEGIES

5. Market Penetration
Growth through market penetration does not involve moving into new
markets or creating new products; it's an attempt to increase market
share using your current products or services. Carry out this strategy by
lowering the price of a product or service, or by increasing marketing
efforts to lure customers away from competitors.

6. Product Development
Product development means creating new products to serve the same
market. For example, a company that produces ice cream for institutional
buyers expands its line to include gelato and sorbet. The company can sell
these new products to existing customers and grow its business without
tapping new markets.

7. Market Development
Market development involves introducing your products or services to
new markets. You may want to enter a new city, state or even country. Or
you can target a market segment. For instance, a bakery that produces
breads for the consumer market could enter into the commercial market
by baking breads for restaurants and retailers.

8. Diversification
Diversification is the most radical form of growth. It involves creating a
totally new product for a completely new market. This is the riskiest
growth strategy because it's the most uncertain. Failure is a distinct
possibility, although the potential of a high payoff may be worth the risk
for companies with sufficient financial means.

9. IMPLICATIONS OF ORGANIZATIONAL GROWTH
 Employee Resistance to Change
 Employee Turnover
 Deteriorating Work Climate

10.  A changing organization should not ignore the human element. It is important to change business
activities within a company. If employees are not involved or are not willing to accept change, the
process is likely to fail.
 Employees resist change because they are afraid that to lose a job or have to take on additional
responsibilities that an employee is either unqualified or unequipped to handle.
 Using encouraging and inspiring techniques to implement change demonstrates to an employee
that she is not being forced to accept change, but is an integral part of the process. An employee
feels like a significant contributor in the work place environment when he is part of a successful
revolution.
Employee Resistance to Change

11.  After a major reorganization, businesses typically undergo some employee turnover. An employee
may feel that the environment is too unstable and might seek employment elsewhere where she feels
more secure.
 High employee turnover can severely affect an organization’s productivity due to loss of skilled
workers and the need to recruit and train new people. Sometimes the loss of resources can also result
in loss of business revenue as an employee may take key accounts with him.
 To abate employee resistance and turnover, an organization should initiate a deliberated change
management process that explains the significance and implications of the change and guides
employees afterward.
Employee Turnover

12.  Organizational changes that lead to ambiguity and job uncertainty create a declining work
environment, which can negatively affect the economic health of an organization.
 The most detrimental impact is mortality, which is a clear sign that a business transformation has
gone horribly wrong. An organization can die when change occurs too quickly or erratically.
 In a deteriorating environment, employees become self-preserving, less productive, unmotivated
and fearful. Avoiding ineffective changes and implementing positive ones will promote a
productive corporate culture and prevent organizational death.
Deteriorating Work Climate