organizational life cycle  

The organizational life cycle is the life cycle of an organization from its creation to its termination. It also refers to the expected sequence of advancements experienced by an organization, as opposed to a randomized occurrence of events. The relevance of a biological life cycle relating to the growth of an organization, was discovered by organizational researchers many years ago.

Generally, there are five stages to an organization's life cycle

Stage 1: Existence : Commonly known as the birth or entrepreneurial stage, “existence” signifies the start of an organization’s expansion. The main importance is centered around the acknowledgement of having an adequate number of customers to keep the organization or business active.

Stage 2: Survival : At this stage, organizations look to pursue growth,  establish a framework and develop their capabilities. There is a focus on regularly setting targets for the organization, with the main aim being to generate sufficient revenue for survival and expansion.  Some organizations enjoy adequate growth to be able to enter the next stage, whilst others are unsuccessful in achieving this and consequently fail to survive.

Stage 3: Maturity : This stage signifies the organization entering a more formal hierarchy of management (hierarchical organization). A frequent problem encountered at this stage would be those associated with “Red Tape”. Organizations look to safeguard their growth as opposed to focusing on expansion. Top and middle level management specialize in different tasks, such as plaing and routine work respectively.

Stage 4: Renewal : Organizations experience a renewal in their structure of management, from a hierarchical to a matrix style, which encourages creativity and flexibility.

Stage 5: Decline : This stage initiates the death of an organization. The decline is identified by the focus on political agenda and authority within an organization, whereby individuals start to become preoccupied with personal objectives, instead of focusing on the objectives of the organization itself. This slowly destroys the functionality and feasibility of the entire organization.

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