Describe the different stages that an organization goes through as stated in "Organizational Lifecycle Theory"
Entrepreneurial stage-is the starting phase of an organization and focuses on producing and selling the product but lack of leadership leads to leadership crisis. Leadership crisis is when growth brings changes to the organization and becomes more complex and leads to more oversight. This leads to collectivity stage, new management provides sense of direction and integrates branches through centralization but becomes overwhelming.
This leads to delegation stage, decentralized decision making solves the autonomy crisis but creates even stronger need to integrate. This leads to formalization stage, adds more control mechanism in order to integrate diverse activities leading to crisis of red tape. Application of formal rules and procedures in a universal and impersonal manner creating ineffective environment. This leads to collaboration stage, overcoming the red tape barrier and adopt a flexible versatile (simple) structure fostering teamwork and makes complex formal system simpler. Lastly the crisis of renewal, exhaustion of members in an organization due to a strong requirement for innovation and teamwork leading to new form or organization or its death.
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