Page 62 - (DK) The Business Book

60 THE GREINER CURVE

manager takes responsibility for free. All businesses, of all sizes,
direction, mid-level supervisors or and regardless of growth aspirations,
managers act more as functional will face uncertainties and
specialists, but after a while they challenges. It does mean, however,
begin to demand more freedom that the business will avoid the
to make decisions, leading to the One can choose to requirements of the next stage:
second crisis: “autonomy.” This crisis go back towards safety or “growth through coordination.”
can be solved by freeing the mid- forward towards growth. During this fourth stage,
level managers from bureaucracy Abraham Maslow increasing centralization is
and allowing the company to US psychologist (1908–70) common. By this time the company
achieve “growth through delegation” may be relatively large, with
—Greiner’s third stage of growth. operations controlled through a
Unburdened by the need to manage head office. The company may
day-to-day issues, senior appoint executives with experience
management can shift its attention of managing large, diverse
to strategy and long-term growth. businesses and introduce standard
entrepreneurs start a small company operating procedures.
Stay small or grow? to escape the stresses, politics, and However, the introduction of
At this point a start-up faces office-bound purgatory of corporate standard policies eventually leads
perhaps the biggest crisis of all: a life and so, for them, it may make to the next crisis: a “red-tape
crisis of control. The founders or sense to limit growth at this stage. crisis,” in which increasing
senior management may find it Other entrepreneurs—such as bureaucracy stifles operations,
hard to give up responsibility for Virgin chief, Richard Branson—are and growth falters as a result.
decision making, even to trusted enthused by the early phases in the
boards. When this happens, the life of a new business, but become A return to informality
founder may decide to remain bored as the bureaucratic demands Paradoxically, the fifth stage,
small—in essence, to limit growth increase. Branson likes to guide a “growth through collaboration,”
to the extent of their own control. business through its start-up phase requires, in part, a return to the
Such decisions are laudable. Not then hand it over to professional earlier days of flexibility. Systems
all companies can be global and all- managers, so he can move on to allow greater spontaneity,
conquering, and in fact, small- and new, more exciting, projects. teamwork is introduced, and matrix
medium-sized enterprises dominate Choosing to remain small does not (network) structures are used to
the business landscape. Some mean that a business will be crisis- recapture the collaborative nature
of a start-up—in other words, the
Larry Greiner Organizations Grow”, is regarded organization tries to operate like a
as an all-time classic. Greiner lean, creative company once again.
Larry Greiner is a professor of has acted as a consultant to Once this has been attained,
management and organization companies and government the next crisis relates to the limits
at the University of Southern agencies in the US and abroad, of internal growth. Under pressure
California, US. He received a BA such as Coca-Cola, Merck, from shareholders to continually
degree from the University of Andersen Consulting, Times improve returns, further growth
Kansas, and an MBA and Mirror Company, and KinderCare. can only be achieved by developing
doctorate from Harvard partnerships with complementary
Business School. Key works organizations. By this sixth stage
Greiner is the author of a company is already big, possibly
numerous publications on the 1972 “Evolution and Revolution very big. “Growth through
growth and development of as Organizations Grow” alliances” therefore suggests that
organizations, management 1998 Power and Organization
consulting, and strategic Development expansion will continue through
change. His 1972 article, 1999 New CEOs and Strategic mergers, outsourcing, or joint
“Evolution and Revolution as Change, Across Industries ventures—the company needs
to look beyond its own internal