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Module Code: HRM502

Module Title: Organisational Life Cycle Management


Module Leader: Dr. Sandhya Iya
E-mail: sandhyaiya.ms.mc.@msruas.ac.in

Session 5: Organisational Life Cycle

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Session Objectives
At the end of this session, students will be able to:

Describe organisational life cycle and its phases


Discuss organisational learning and learning
organisation
Explain entrepreneurship and intrapreneurship

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Session Contents
Organisational life cycle

Organisational learning
Learning organisation

Entrepreneurship and Intrapreneurship

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Organisational Life Cycle

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Organisational Life Cycle (OLC)

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Five Phases of OLC


Start up (Birth)
Growth
Divided into early growth (fast growth) and maturity phase
(slow growth or no growth)
Maturity often leads to
Decline: when in decline, either
Renewal (or)
Death

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Five Phases of OLC Contd.


Each

of

these

phases

presents

different

management and leadership challenges that one


must deal with

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

The Start-Up Phase

Getting ready is the secret of success.


Henry Ford

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

The Growth Phase


Increased revenue
New products and services
Improved operations and processes
More employees hired, etc
However, dependent on market conditions
OD interventions necessitated to stem the decline

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

The Decline Phase


Early symptoms could be:
Declining market share
Disappearing profit margins
Increasing debt burden

Proactive leadership required to read signs early

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Renewal/Death
OD an important tool to prevent death
Training to inject new knowledge and skills
Transformational leaders can bring about change in
culture e.g. Lee Iacoccas turnaround of Chrysler
Corporation

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Features at Each Stage of OLC


Birth
Size

small

Youth

Midlife

medium

large

Bureaucratic Non-bureaucratic

Prebureaucratic

bureaucratic

Division of
labor

some
departments

overlapping tasks

Centralization one-person rule

two leaders
rule

Formalization no written rules

few rules

Maturity
very large

very
bureaucratic
extensive, with
many
small jobs and
departments many
descriptions
two
topdepartment management
heads
heavy
policy and
procedures
extensive
manuals
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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Features at Each Stage of OLC Contd.


Increasing
Secretary, no Increasing
Administrative
professional
professional clerical and
intensity
and staff
staff
maintenance
support

Internal
systems

nonexistent

Lateral teams,
tasks forces
none
for
coordination

control
crude budget
systems in
and
place; budget,
information
performance,
system
reports, etc..

top leaders
only

L arge-multiple
departments
extensive -planning,
financial, and
personnel
added

frequent at
some use of
lower levels to
integrators and
break down
task forces
bureaucracy
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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Organisational Learning

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Organisational Learning
The process of "detection and correction of errors
(Argyris)
An ecological system that facilitates or hinders
individual learning

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Learning Organisation
A group of people continually enhancing their
capacity to create what they want to create (Senge)
Relevant due to increased
uncertainty in environment

complexity

and

Major contributor to competitive advantage

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Creativity and Innovation

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Creativity, Innovation, Invention


Creativity is the capability or act of conceiving
something original or unusual
The process of idea generation
Innovation is the implementation of something
new
Applicable to every aspect of business
May be incremental or radical

Invention is the creation of something that has


never been made before and is the product of
some unique insight
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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Entrepreneurship and Intrapreneurship


Entrepreneurship

Intrapreneurship

Is the willingness and


ability of an individual to
seek
out investment
opportunities, establish,
and run an enterprise
successfully

The
practice
of
entrepreneurship
by
employees within an
organisation; looking out
for opportunities which
profit the organisation

The process of creating


value by using resources
to exploit an opportunity

A significant method for


companies to reinvent
themselves and improve
performance
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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Summary
Organisations go through five phases of a life cycle
The phases are birth (start up), growth (maturity),
decline, renewal, (or) death
Each of these phases presents different management
and leadership challenges
According to Argyris, organisational learning is the
process of detection and correction of errors
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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Summary
According to Senge, a learning organisation is A
group of people continually enhancing their capacity
to create what they want to create
Major contributor to competitive advantage

Creativity is the process of idea generation


Innovation is the implementation of something new

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences

Summary
Entrepreneurship is the ability of an individual to
seek out investment opportunities, establish, and
run an enterprise successfully
Intrapreneurship is the practice of entrepreneurship
by employees within an organisation

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Faculty of Management and Commerce

M. S. Ramaiah University of Applied Sciences