09 - OBIIFinal...

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1 OB II Final Chapter 9: Organizational Size, Life Cycle, and Decline Organization Size: Is Bigger Better? P RESSURES   FOR  G ROWTH o Companies strive for growth of all sizes and resources needed to compete on a  global scale, to invest in new technology, control distribution channels and guarantee  access to markets o Some firms must grow to remain economically healthy, rather than being stagnate o Stability might mean that customers may not have their demands fully met or that  competitors will increase market share at the expense of your company o Greater size = greater power and revenues o Also offers vibrant and exciting place for employment and can give many challenges  and opportunities for advancement  D ILEMMAS   OF  L ARGE  S IZE o Large Large organizations have the resources to be a supportive economic and  social force in difficult times Huge economies of scale and resources are needed for success Easier to recover from disasters, giving employees a sense of security and  belonging in uncertainty They are often standardized, mechanistically run and have complex  functional specialties Can stabilize a market and employees can join an organization that can  provide longevity, raises and promotions o Small
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1 OB II Final Chapter 9: Organizational Size, Life Cycle, and Decline Very responsive and flexible in fast changing global markets Regional reach to local markets at expected performance levels for  satisfaction Flat structure and organic, free-flowing management style that encourages  entrepreneurship and innovation commitment, employees identify with company’s mission o Big Company/Small Company Hybrid Small companies can become victims to their own success (growing large)  shifting to a mechanistic structure emphasizing vertical hierarchies and  spawning ‘organization men’ rather than entrepreneurs Big companies become committed to their existing products and technologies  and have a hard time supporting innovation in the future Increasing IT and decentralizing of authority allows for companies to act both  large and small, achieving advantages of each Organizational Life Cycle Stages of Life Cycle Development
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1 OB II Final Chapter 9: Organizational Size, Life Cycle, and Decline 1. Entrepreneurial Stage o Emphasis on creating a product or service and survival in marketplace o Founders devote time to production and marketing; it is informal and non  bureaucratic o Growth is based on new products or service; control based on owners  supervision o Crisis: need for leadership- entrepreneurs must either adjust structure for 
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This note was uploaded on 12/08/2011 for the course BUS 272 taught by Professor Echo during the Spring '11 term at Simon Fraser.

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09 - OBIIFinal...

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