Asghar Sohail Nizami

 The model helps to identify, anticipate and understand the

root cause of problems for a fast-growing business.
 Each growth phase has a period of evolution and stability
and ends with a revolutionary period of organisational
turmoil and change.
 Successful resolution of the revolutionary period is
essential to allow the business to move to the next phase.

 (The model was created by Larry Greiner in 1972 and

updated in 1998)
 Emphasis on creating a product and market
 Founders are in charge
 Technically orientated
 Focus on making and selling the product
 Communication is frequent & informal
 Hard work is rewarded by modest salaries &
promise of ownership benefits
 Crisis of Leadership
 Increasing complexity, founders struggle to both
run and manage the business, conflicts emerge on
new products / markets, lack of decisive direction
 Solution - Install a strong business manager to
pull the business together
 Capable business manager installed
 Functional organisation structure
 Accounting and capital management
 Incentives, budgets & work standards
 More formal communication & hierarchy
 Directive top down management
 Crisis of Autonomy
 Funnels energy into growth, increasing
complexity, top management unable to oversee
all operations, lower level managers feel tied
down despite their greater knowledge of markets
and products
 Solution - Delegation
 Decentralised Structure
 Operational & market level responsibility
 Profit centres & financial incentives
 Top management acting by exception
 Decision – making based on periodic reviews
 Rare and formal corporate communication,
supplemented by “field visits
 Crisis of Control
 Relative prosperity until top executives feel loss of
control.
 Managers acting more independently, running
own “parochial” campaigns.
 Management attempts to regain control and fail
due to scope of operations & markets.
 Solution – co-ordinate rather than control
 Merging of local units into product groups
 Thorough review of formal planning
 Supervision of co-ordination by corporate
staff
 Centralisation of support functions
 Corporate scrutiny of capital expenditure
 Accountability for return-on-investment at
product group level
 Motivation through lower-level profit sharing
 Crisis of Red Tape
 Resource use becomes more efficient, local
management look beyond local needs, growth
recommences.
 Product group managers have learnt to justify &
account for decisions and are rewarded on results.
 Watchdog mentality de-motivates middle
management so that rules and procedures are the
goal (not the means).
 Solution – increase market agility & people need
flexibility
 Team action for problem solving
 Cross functional task teams
 Matrix type organisational structure
 Simplification of control mechanisms
 Real-time information systems
 Team behaviour education programmes
 Decentralisation of support staff to consult
specific teams
 Team incentives
 Crisis of Internal Growth
 Only way to grow is through collaboration with
other organisations
 Solution - alliances
 Extra organisational solutions
 Mergers & acquisitions
 Creating holdings
 Managing a network of companies
 Crisis of Identity