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Management: perspective and practice
Management: perspective and practice

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2.3.3 Size and life cycle

Most people would agree that an organisation’s size fundamentally affects how it operates and what it is like as a place of work. In small organisations informality often rules. There is little division of labour and few rules and regulations. There is frequently a sense that procedures for budgeting and managing performance are made up in an ad hoc way, and there is little specialisation at either the professional or the administrative level. Often the manager has a multiplicity of roles and essentially has to do everything that is not in anyone else’s job description (if such a thing exists!). In contrast, larger organisations typically feature an extensive division of labour, large professional staffs, numerous rules, regulations and internal systems for control, rewards and innovation.

Size is to some extent a function of the age of an organisation. Work by Daft (1994) suggested that there are four stages in an organisational life cycle: birth, youth, midlife and maturity.

At birth an organisation is entrepreneurial, often having a founder with a strong sense of ownership, who may find it difficult to delegate tasks to others. The organisation will probably be small, with processes of integration depending as much on force of personality as on any formal system.

In its youth stage the organisation and the number of employees grow. The owner has to delegate some authority to others (although there may be an inner circle of trusted colleagues). Formalisation of systems and procedures starts to emerge and so does the division of labour.

At midlife the organisation may be quite large, more formal in its systems and division of labour, and have manuals of procedures and agreed policies. There will be more support staff and problems of integration. There may be some loss of flexibility and creative capacity.

In maturity the organisation may be set in its ways, with large systems and procedures in place, and it may be in danger of stagnation. Decision making may be slow and centralised, and special task forces or teams may be required to overcome any obstacles. There may also be discussions about downsizing.

Few organisations follow this pattern exactly, but you may be able to identify, for example, restructuring programmes in your organisation that are symptomatic of moves between these stages.

Stop and reflect

At what stage in the life cycle is your organisation? What impact does this have on your job?

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Up to this point, some of the factors that shape organisations have been highlighted, but even though this illustrates quite a lot of complexity and some sources of difference – it is only part of the picture. As indicated at the beginning, even given these factors, people in the same organisation will still argue about what the organisation is like and why it exists. The other key influences that shape thinking about organisations are the ideas we have about organisations and the way we conceptualise them.