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Greiner Growth Model D.I.T Management Directors Shane Lawler - C14449968 Robert Marren - C14464318 Aidan Mc Elroy - C14539557 Kyle Fitzmaurice - C14378721 Patrick Lord - C14517993

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The Growth Model was originally introduced in 1972 by Larry Greiner consisting of five stages of growth, eventually updating it in 1998 by adding a sixth stage. The model is used to predict six stages and five crises that small/medium sized businesses may experience throughout growth. Each stage experiences stable growth until they enter crisis mode where the firm must look at organisational change to continue growing. Stage 1: Growth Through Creativity Leadership Crisis: Professional management is required, entrepreneurs will need to take on a new role. Stage 2: Growth Through Direction Autonomy Crisis: Delegation is needed, growing workload overwhelms persons in charge. Stage 3: Growth Through Delegation Control Crisis: Top down perspective of management must improve as organisation must work together. Stage 4: Growth Through Coordination and Monitoring Red Tape Crisis: New company culture and structure is needed. An organisation should be looking to change as the company’s environment begins to change itself, finding better suited competencies to gain a competitive advantage. (Evans, 2014) Stage 5: Growth Through Collaboration Internal Growth Crisis: Growth only possible through partnerships with similar businesses. Stage 6: Growth Through Extra-Organizational Solutions Growth continues through mergers, acquisitions and networking with other companies. When growth is only available through Mergers, acquisitions and alliances, tool 17 should be used to assure the creation of the most value during this stage. (Evans, 2014)

(Source: Evolution and Revolution as Organisations Grow by Larry Greiner)

Greiner (1998) readdressed his model for growth with updated studies that put forward five key dimensions that are essential for building a model of organisational development as follows: Age of an Organisation: Time influences managerial attitudes and employee behaviour becomes more predictable. It is harder to change when attitudes are outdated. Nokia is a prime example of a mature organisation that managerial and employees attitudes were predictable and outdated, leading to the demise of their growth when the smartphone entered the market.. (Alcacer, et al, 2014) Size of an Organisation: Solutions and answers change the larger an organisation becomes. However, growth in size leads to coordination and communication issues, departments must work together and managerial positions grow etc. Stages of Evolution: With organisations growing older and larger after a crisis, most companies experience four to eight years of growth without crises. Small changes are only needed to continue growth under the same management. Stages of Revolution: This is when management is uprooted in turbulent times between smooth periods of evolution. Change is needed to give the working place energy and increase competitive advantage.

Growth Rate of the Industry: Phases of evolution and revolution are intertwined with the markets industry. A rapidly expanding market requires a rapidly expanding organisation to avail of the possible revenue.

(Source: Evolution and Revolution as Organisations Grow by Larry Greiner) When using Greiner’s Growth Model it must be taken into consideration that it is a simplistic model. It does not take into account that the business world is considerably more complex than it suggests. Many solutions used during these phases can be more difficult to implement and will need sufficient resources and skills to enforce. Furthermore, solutions to each growth phase share a tendency to be the reasoning behind the next crisis. Finding solutions that will only be the cause of problems down the line are not complete solutions. Different aspects of the business are left out such as pricing, organisation structure, sources of finance, management style and market research (Scott and Bruce, 1987). Growth can also be a difficult aspect to gauge, as growth can move rapidly or slowly. The longer a phase lasts, the more difficult a crisis will be to avoid. Greiner’s tool appears quite similar to the product life cycle instrument in terms of the linear time pattern, as well as the size of the organization being adjacent to an increase in sales as seen in both tools on the y axis. However, the PLC shows maturity-shake out-decline, whereas Greiner’s model only shows growth stages (Patty, 2012). This raises awareness to the fact many companies will face issues post growth, outside the recommendations of Greiner’s model and the control of the company (Greiner, 1997). An example of such an external threat may be disruptive technologies in which they may need to go back to the drawing board of creativity, even at the latter stages of growth despite this being the first phase of the 6 phases.

Whilst Greiner’s model can be used alongside other tools as an indication, it must yet again be remembered for its in-dynamic simplicity. Nowadays the complexity of globalization and increasing technological capabilities, the pace of growth may be rapid within companies. This may create the need for integration between the “6” separate mentioned phases of the tool, stages 2-5 are interrelated and emphasis on correct direction with the correct delegation will lead to efficient co-ordination and collaboration. Furthermore, many large-scale companies such as PWC along with others such as Apple and Google are modernizing their organizational structure to tailor to millennial’s unique qualities (Higgins, 2013). Issues with the delegation, coordination & collaboration phases of predicted growth problems may need to be altered, for example formal management structures in the coordination phase (Walters, 2013). Alongside this, Mergers & Acquisitions (M&As) are becoming increasingly complex for successful integration, leading to high risk and uncertainty (Cartwright, 2002). There may be more feasible alternatives other than M&A’s. Product diversification which interrelates with Ansoff’s product matrix tool, or possibly, technological advancements which interrelates with the technological disruption tool, as a SMART alternative. In relation to this idea, it must be remembered that Innovation is only listed as phase 1, where as it is proven that creativity is necessary along all stages to gain competitive advantage (Hana, 2007). Innovation may be used for CSR to increase brand reputation, which is not mentioned in this model, however many MNC’s such as Tom’s and Patagonia continue growing and improving their brand reputation. M&As can be used in conjunction with other tools such as porter’s value chain & generic strategies giving an external analysis overview. This will aid in keeping things specific and narrow going ahead in relation to the product/service the company is offering in order to avoid confusion, whereas the Greiner’s model primarily focuses on potential issues during growth internally. A more complex & modernized Greiner’s model with the original framework incorporated into some of the ideas mentioned above such as technology & innovation may lead individuals and businesses along a more suitable and prepared path. Overall, it still adds in some regards as a useful framework to promote organic growth and prevent future crises.

References Greiner, L.E. (1997). Evolution and revolution as organizations grow. 1972. Harvard business review, 76(3), 55-60.

Mulder, P. (2013). Greiner Growth Model. Retrieved from https://www.toolshero.com/strategy/greiner-growth-model/ Walters, R(2013) Attracting and maintaining todays millennials: https://www.robertwalters.com/content/dam/robert-walters/corporate/news-andpr/files/whitepapers/attracting-and-retaining-millennials-UK.pdf Higgins, G (2013) Pwc- nextgen- a global next generation study London Business School: https://www.pwc.com/gx/en/hr-management-services/pdf/pwc-nextgen-study-2013.pdf Cartwright, S (2002) Why do so many Merger’s and acquisitions fail? – Q Finance report: http://www.financepractitioner.com/mergers-and-acquisitions-best-practice/why-mergers-failand-how-to-prevent-it?page=1 Hana, U (2007) - Competitive Advantage Achievement through Innovation and Knowledge: http://www.cjournal.cz/files/127.pdf Theweek.co.uk. (2014, October 23). Nokia's demise: the highs and lows of a once-mighty brand. Retrieved from http://www.theweek.co.uk/business/60983/nokias-demise-the-highs-and-lows-ofa-once-mighty-brand Greiner, L. E. (1998, May & june). Evolution and Revolution as Organizations Grow. Retrieved from https://hbr.org/1998/05/evolution-and-revolution-as-organizations-grow Scott, M., & Bruce, R. (1987). Five Stages of Growth in Small Business [Abstract]. Long Range Planning, , 20(3), 45-52. Retrieved from http://citeseerx.ist.psu.edu/viewdoc/download? doi=10.1.1.462.4083&rep=rep1&type=pdf...