How come all companies evolve this way?

by admin

The answer lies in the Greiner Model. The following is a description about how it works and what it means for everybody in a comapny who wonders why things seem to be stagnant adn don’t move forward.

To begin, it is important to review the background of the founder of the Greiner model, Larry E. Greiner himself. Searching through the Internet (http://www.uwf.edu/mcd/vitae/greiner.shtml) one can summarize professor Greiner’s professional career.

Dr. Larry Greiner is a professor of Management and organization in the Marshall School of Business at the University of Southern California. He is also the Academic Director of the USC Executive MBA program. He holds a D.B.A and M.B.A degrees from HArvard Business School, adn a BA form the University of Kansas.

Black& White International (2005) claims that:“All businesses move through phases as they grow - like a child moving through to adulthood it is an incremental process and subject to a multitude of ‘crisis’! (crisis literally translated from Chinese means - dangerous opportunity). The inability to recognize the Phase in which a business is in and manage through the crisis is probably the single most important reason why businesses fail. Each phase calls for a different approach. Sometimes strong leadership other times a more consultative approach. Some phases require more systems and procedures others more cooperation between staff. Many founders run the business in exactly the same way it started, ending up with a big small company rather than a small big company.” (blackwhite-international, 2005)

The Star Group and Mardon Century Experts, Inc (mardon-y2k, year) supports the argument of a structured growth by stating that Larry Greiner’s 1972 Havard Business Review article, “Evolution and Revolution as Organizations Grow”, is as relevant today as it was originally. His article outlined the stages, management crisis, and general solutions that a company goes through from its inception to maturity. In the 1972 timeframe, most companies were growing for two to three years, and then decaying for one to two years. The transition times between each of the Greiner growth phases were lengthy and, in most cases, orderly. Being nearly thirty years old, the Greiner’s model might seem irrelevant today. Technology has altered the business world since 1972 and as a result of this, companies such as INTERNET and E-Commerce, will move through the phases in a much shorter time than they would have done back then. What is still true though, is that a company moves through the five phases regardless of time frames. The problems and solutions still tend to change in-line with Greiner’s model as the number of employees, customers, and sales volume increase. What is needed today is the ability to move to the mature, centerless organization model in the shortest time.

Figure 1