Convenience

organizational life cycle
.
39
The first stage is the birth of the
organization. The second stage, youth, is characterized by growth and the expansion of
organizational resources. Midlife is a period of gradual growth evolving eventually into
stability. Finally, maturity is a period of stability, perhaps eventually evolving into
decline. Firms like Netflix and Starbucks, for instance, are still in their youth stage;
Halliburton and Chevron are in midlife; and Ford and Boeing are in maturity. (A key
challenge for managers, of course, is to avoid allowing a mature organization to begin
to decline. Hence, they must be alert for opportunities to reenergize the organization
with new products and new markets.)
Managers must confront a number of organization design issues as the organization
progresses through these stages. In general, as an organization passes from one stage to
the next, it becomes bigger, more mechanistic, and more decentralized. It also becomes
differentiation
Extent to which the
organization is
broken down into
subunits
integration
Degree to which the
various subunits
must work together
in a coordinated
fashion
organizational size
Total number of full-
time or full-
time–equivalent
employees
organizational life
cycle
Progression through
which organizations
evolve as they grow
and mature
176
Part 3:
Organizing
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more specialized, devotes more attention to planning, and takes on an increasingly large
staff component. Finally, coordination demands increase, formalization increases, organi-
zational units become geographically more dispersed, and control systems become more
extensive. Thus, an organization’s size and design are clearly linked, and this link is
dynamic because of the organizational life cycle.
40
BASIC FORMS OF ORGANIZATION DESIGN
Because technology, environment, size, and life cycle can all influence organization
design, it should come as no surprise that organizations adopt many different kinds of
designs. Most designs, however, fall into one of four basic categories. Others are hybrids
based on two or more of the basic forms.