Stages of Organizational Growth

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Discuss which of the first four (4) stages of organizational growth presents the greatest single challenge and why.

The first four stages characterize the period from inception of a new venture to the attainment of organizational maturity. This period includes the development of an entrepreneurship through the stage when the firm becomes a professionally managed firm. Stage III professionalization would the greatest single challenge because an organization must never lose its entrepreneurial mind set or spirit, but it must begin to develop the infrastructure and professional management systems required to facilitate its future growth. This a delicate balancing act. If an entrepreneurship is carried to an extreme in large companies, it can result in chaos, and chaos ultimately leads to organizational difficulties and even bankruptcy. (Flamholtz & Randle, 2007)

The entrepreneurial personality can be a barrier to success at Stage III. Making the transition from an entrepreneurship to professional management involves more than just the development of operational and management systems. It requires a profound mind-set change on the part of people, especially the founders—the entrepreneurs. This transition may be a difficult task for entrepreneurs because they may fear of becoming “bureaucratic” and then confuse bureaucracy with systems. Some of this is deeply rooted in their personalities; they do want to be controlled by anyone or anything—not plans, not role descriptions, not policies, not procedures. Because they have been successful in launching a new venture without these things, they assume that they are not necessary and that they are, in fact, barriers to success. Without systems or plans or role definitions, the organization will definitely experience increasing confusion and chaos. (Flamholtz & Randle, 2007)

Reference
Flamholtz, E. G., & Randle,…...

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