Gives the brief about the organizational management and what are stages of growth and decline. Also how to make the reforms in the structure of organization in the changing envirorment. makes aware of how to direct the organization.

1. ORGANIZATIONAL MANAGEMENT
GROWTH EVOLUTION AND DECLINE
Prepared by:
Ram Naresh Kumar V (201121004)
Dilip Karnavat (201513003)

2. Introduction
• It is very interesting to study how Organizations and Businesses grow,
evolve, change, mature and also decline over a period of time.
• Organizations are very similar to living entities that respond, react and
evolve in relation to the external and internal environment that
surrounds them.
• The survival and growth is entirely dependent upon the continuous
exchange of the external and internal environment that keeps
happening all the time.
• History tells us of how trade became the key driving factor that pushed
the throne of England to colonize the world.

3. Introduction
• Post World War II, we see the industrial revolution changing the face
of people’s life.
• From agriculture and trade, the advanced economies moved on to
focusing on mass production and distribution.
• With introduction of computer and internet technology, the
manufacturing and accounting processes and procedures underwent
changes.
• Structure of ownership too has changed from individual and family
ownership to share holder and holding based investor ship.

4. Sources of Change
• Change is inevitable
• Most common forces for change include: New competitors,
innovations in technology, new company leadership, evolving
attitudes toward work
• Two sources of change:
• External
• Internal

5. External Source of Change
• Originate in environment
• Examples:
• Customers
• Prevailing economic climate
• Labor force
• Legal environment
• Legislation

6. Internal Sources of Change
• Exist within the organization itself
• Examples:
• Shifts in workers’ attitudes towards their supervisor or benefits
packages
• Decline in productivity
• Changes in key personnel (whose goals and values influence large
populations of the organization)

7. Organizational Growth and
Decline
• Organizational change often follows an evolutionary pattern of
gradual growth and decline
• Larry Greiner contends that every organization has an ideal structure
that corresponds to its stage in the growth process

8. Stages of Growth Crisis
• Each new stage is preceded by a period of transition called a growth
crisis
• These stages include:
• Growth through creativity
• Growth through direction
• Growth through delegation
• Growth through coordination
• Continued growth through collaboration

10. Growth through Creativity
• First stage
• At birth, organizations are loose in structure and informal
• Creative energies will help to carry organization through its birth
process
• With growth, nature of problems changes

11. Growth through Direction
• Second stage
• Formalization is introduced by professional managers
• Bureaucratization occurs in departments to manage organization
• Specialized divisions are created

12. Growth through Delegation
• Third stage
• The crisis of autonomy is overcome by delegating
greater decision-making power to middle- and
lower-level managers, with top level managers
focusing on long-range, strategic planning
• A crisis of control

13. Growth through Coordination
• Fourth stage
• The crisis is resolved via greater coordination between departments
• Consultants may be hired to assess the extent of coordination
needed and to suggest ways of improving efficiency and reducing
redundancy
• The crisis of red tape

14. Continued Growth through
Collaboration
• Fifth stage
• Simplification of programs, and reliance on self-control and social
norms eventually solve crisis of red tape
• Goal is to teach managers how to cope with the organization’s
structure without giving in to impulse to create additional structure,
to collaborate

16. Implications for growth phases
• There are certain implications for managers in organizations with regards
to the phases of growth:
• Recognizing one's position in the course of expansion:
• Top tier managers should be aware of their organization's current stage, to
be able to execute relevant solutions to the type of crisis faced.
• Managers should also not be tempted to surpass their current phase due
to eagerness.
• This is because there may be vital experiences from each phase to be
learned, that will be required to tackle future phases.

17. Recognizing the restricted variety of solutions:
• It becomes clear in each phase of revolution that there are only a
specific number of solutions that can be applied.
• Managers should avoid repeating solutions, as this will prevent the
evolution of a new phase of growth.
• It is also important to note that evolution is not a mechanical event,
and organizations must actively seek out new solutions to the current
crisis that are also suitable for the next stage of growth.

18. Recognizing that solutions result in crisis:
• Managers should realize that past actions are factors of future
consequences.
• This would help managers in formulating solutions to cope with the
crisis that develops in the future.

19. Organizational decline
• Organizational decline means a prolonged decrease in the number of
personnel in an organization
• Another term aligned with organizational decline is downsizing
• It mean a slimming down of the organization by reducing the number of vertical
levels
• Organizational decline occurs when companies
• experiences continuous reduction in resources and revenue over a substantial
period of time
• don't anticipate, recognize, neutralize or adapt to the internal or external
pressures that threaten their survival

20. Reasons for decline
• Quantitative reasons of decline
• Reduced workforce
• Reduced market share
• Reduced profit or share price
• Qualitative reasons of decline
• Fierce competition
• Lack of Customers
• Obsolete technology
• Economic downfall
• Organizational atrophy

21. A Model of decline stages

22. Blinded stage
• In this stage, the organization fails to recognize any of the internal or
external changes that may threaten its survival
• This blindness may be due to a simple lack of awareness about
changes or an inability to understand their significance
• The initial signs of decline are usually very much visible and known to
the bottom of the organizational pyramid, but the information fails to
propagate upwards to its leaders.

23. Inaction stage
• In this stage, organizational performance problems become more
visible, management may recognize the need to change, but still fail
to take action
• The manager may be waiting to see if the problems correct
themselves (or)
• They may find it difficult to change the practices and policies that
previously led to success (or)
• They wrongly assume that they can easily correct the problems, so
they don't feel the situation is urgent

24. Faulty action stage
• In this stage, the organization is clearly on its downfall and pressure to
take corrective action is very high
• Due to high pressure, the decision makers tends to make quick, risky
and often fault decision, that further accelerates the decline
• This further reduces the confidence in leadership
• Many talented employees might end up leaving the organization in
anticipation of its fall

25. Crisis stage
• The organization reaches a crisis stage when all prior actions have
failed and it becomes obvious that without any major change, its
survival is questionable.
• All the stakeholders, have lost faith in it.

26. Dissolution stage
• This is the last stage of its demise and is irreversible;
• It is marked by
• depletion of its finance,
• diminished market for its products and
• exodus of its talented employees.

27. Potential Managerial Problems When
Organizations decline
• Increased conflict
• Increased politicking
• Increased resistance to change
• Loss of top management credibility
• Change in work-force composition
• Increased voluntary turnover
• Decaying employee motivation

28. References:
• http://www.managementstudyguide.com/growth-and-evolution-of-
organizations.htm
• https://hbr.org/1998/05/evolution-and-revolution-as-organizations-
grow
• http://changingminds.org/disciplines/change_management/articles/
phases_growth.htm
• https://en.wikipedia.org/wiki/Organizational_life_cycle