Corporate Lifecycles

The interrelationship of flexibility and controllability are the causes of growth and aging. "Problems" arise from the relative deficiency in either flexibility or self-control. Management's function is to lead the organization so that it can deal with bigger, more complex issues. 1. Courtship: The founder obtains commitment by selling the idea to himself and others. 2. Infancy: The company is born when some substantial risk is incurred. 3. Go-Go: Cash and activities begin to stabilize, there is some customer loyalty, and production problems are no longer a daily crisis. 4. Adolescence: Authority is delegated, the professional manager replaces the entrepreneur, and goals change from more is better to better is more. 5. Prime: Control and flexibility are balanced because the organization knows what it's doing, where it's going, and how to get there. 6. Stable: This is the first sign of aging. The company is strong but beginning to lose flexibility. 7. Aristocracy: The emphasis is on form over function. The organization is cash rich and a potential takeover target. 8. Early Bureaucracy: Prices can no longer be raised and acquisitions are no longer easily obtained. 9. Bureaucracy and Death: The company focuses inward. Death occurs when external forces are no longer committed to maintaining a life-support system.