Transcript BA 152 Life Cycles, Size, and Decline
Life Cycles, Size, and Decline
BA 152
Industry Life Cycles Industry Evolution – Entry strategies – Survival Strategies Specialist Generalist
Entry Strategies Entering the market early – – –
Entry Strategies Entering the market later – – – –
Survival Strategies
Specialists
– – – – – Concentrate skills in a single niche Develop core competencies Can provide better customer service and superior products, but Trouble if the niche disappears or others enter.
Generalists
– – – – Spread skills across many niches Providing greater brand recognition Can succeed when environment is uncertain, If risk is spread across a number of niches
Organizational Life Cycle Stages of Life Cycle Development – Pre-Birth Stage first idea commitment and early planning implementation
Organizational Characteristics During the Life Cycle ENTREPRENEURIAL STAGE: – Personal control systems – Innovation by owner/manager – Goal: – Management style: – Crisis:
Organizational Characteristics During the Life Cycle COLLECTIVITY STAGE: – Personal rewards aimed at individuals who contribute to organizational success – Innovation from employees and managers – Goal: – Management style: – Crisis:
Organization Size: Is Bigger Better?
Pressures for Growth – – – –
Size and Structural Characteristics As Organizations get bigger: • Complexity • Centralization • Formalization • Flexibilty
Large Vs. Small: How can you be both?
Organizational Characteristics During the Life Cycle FORMALIZATION STAGE: – Impersonal rewards through formalized systems – Innovation from separate innovative groups – Goal: – Management style: – Crisis:
Organizational Characteristics During the Life Cycle ELABORATION STAGE: – Extensive rewards tailored to product and department success – Innovation by institutionalized R & D – Goal: – Management style: – Crisis:
Organization Life Cycle
Large Streamlining Development of Teamwork Continued maturity Creativity Addition of Internal Systems Provision of Clear Direction Crisis: Need for delegation with control Crisis: Too much red tape Decline Crisis: Need for revitalization Small Crisis: Need for Leadership Entrepreneurial Collectivity Formalization Elaboration ?????????
Organizational Decline and Downsizing: The Causes Organizational Atrophy – Loss of ability to respond to changing environment – Inefficient, bureaucratic, fat, and happy Organizational Vulnerability – – – Loss of resources Loss of market share Loss of legitimacy Environmental decline – – Stagnating economy Flat/shrinking market – Increased competition
Stages of Decline
Successful Organizational Performance Blinded Inaction Faulty Action Crisis Dissolution
Managing the Downsizing Implementation approaches must be a function of the severity and speed of decline.
Implementation issues to consider – – – – Consider voluntary programs with incentives (but be careful - who might leave?) Over communicate surprise.” “The best surprise is no Allow employees to leave with dignity Assist those leaving – – Use ceremonies to reduce anger/confusion Remember those who stay!
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Case: Sunflower, Inc.