What Ventures Fail to do:
Obtaining external financing
Internal financial management
Sales/Marketing
Developing products/services
Production/operations management
General management or Lack of management experience
Human resource management
"It could provide a road map, identifying critical organizational transitions and pitfalls the organization should seek to avoid as it grows in size and complexity. An accurate life cycle model could provide a timetable for adding levels of management, formalizing organizational procedures and systems, and revising organization priorities. It could help management know when to "let go" of cherished past strategies or practices that will only hinder future growth." Hanks (1990, p. 1)
The beginning of organizational development. The focus is on viability and identifying sufficient customers to support the organization's existence. Decision-making & ownership are in the hands of one or a few, & the environment is primarily unanalyzable. In this stage, organizations tend to enact or create their environments.
Seek to grow, develop a formalization of structure, and establish distinctive competencies. Goals are formulated primarily to generate enough revenue to continue operations and stay competitive. This stage provides alternatives: grow large and prosper, "hit and miss," earn marginal returns, and fail to generate sufficient revenue to survive. Analyzable
Formalization & control through the bureaucracy. Job descriptions, policies & procedures, & hierarchical reporting relationships are formal. Leaders seek to protect what they have created & focus on planning & strategy, leaving daily operations to middle managers. The goal is collaboration, innovation & creativity as decision-making is decentralized.
Customers' needs are placed above those of organizational members, & there is a desire to return to leaner times. With an inability to meet the external demands of former stages, leaders are concerned with personal goals rather than organizational goals, i.e., retirement. The desire for power & influence erodes viability & profit.
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