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Organization Size and Life Cycle: Impact on Control and Decline

This article explores the impact of organization size on control mechanisms, the stages of organizational life cycle, and strategies to bust bureaucracy. It also discusses the causes and implementation of downsizing in organizations facing decline.

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Organization Size and Life Cycle: Impact on Control and Decline

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  1. 0 Chapter Nine Organization Size, Life Cycle, and Decline

  2. Differences Between Large and Small Organizations 0

  3. Organization Size: Is Bigger Better? 0 • Pressures for Growth • Companies in all industries strive for growth to acquire the size and resources needed to compete globally • Size enables companies to take risks • Dilemmas of Large Size • Large organizations are able to get back to business more quickly following a disaster • Large companies are standardized, mechanistic and complex • Small companies are flexible and can be responsive

  4. Organizational Life Cycle 0

  5. Organization Characteristics During Four Stages of Life Cycle 0

  6. Weber’s Dimensions of Bureaucracy and Bases of Organizational Authority 0

  7. Size and Structural Control 0 • Formalization – rules, procedures, and written documentation • Centralization – level of hierarchy with authority to make decisions • Personnel Ratios – clerical and professional support staff ratios

  8. Percentage of Personnel Allocated to Administrative and Support Activities 0

  9. Bureaucracy in a Changing World 0 • Bureaucracy worked for the industrial age • The system no longer works for today’s challenges • Today bureaucracy leads to inefficiency • Organizations are creating temporary structures to respond to crisis

  10. Approaches to Busting Bureaucracy 0 • Cutting layers of hierarchy • Maintaining light headquarter staff • Empowering lower-level workers • The increasing professionalism of employees is attacking bureaucracy

  11. Bureaucracy versus Other Forms of Control 0 Bureaucracy • Rules, standards, hierarchy, legitimate authority Market • Prices, competition, exchange relationship Clan • Tradition, shared values and beliefs, trust

  12. Organizational Decline 0 The decrease of an organization’s resources is caused by: • Organizational atrophy • Vulnerability • Environmental decline or competition Downsizing refers to intentionally reducing the size of a company’s workforce

  13. A Model of Decline Stages 0

  14. Downsizing Implementation 0 • Communicate more, not less • Provide assistance to displaced workers • Help the survivors thrive

  15. Design Essentials 0 • Organizations experience pressures to grow • Organizations evolve through the stages of the life-cycle • Larger organizations usually adopt bureaucratic characteristics • All organizations require systems for control • Many organizations experience decline

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