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Adapting a concept from the biological sciences, organizational researchers have proposed a life cycle of organizational development from birth to death. Several distinct models have been postulated, ranging from three to ten stages. This paper proposes a five-stage model and tests it empirically to assess the specific stage of the life cycle of any organization. Results of a twenty-item scale that captures managers' perceptions of their firms' position in the life cycle are discussed. Knowledge of an organization's present position or stage of development can aid top managers in understanding the relationships between organizational life cycle, competitive strategy, and performance.
A number of researchers have proposed that organizations progress through various stages in a life eyele as they grow and develop (Dodge, Fullerton & Rohbins, 1994; Hanks, Watson, Jensen, & Chandler, 1993; Miller & Friesen, 1984; Mintzberg, 1984; Torbert, 1974). Not all agree on the activities associated with each stage, however. Although there arc differences in the existing models with regard to number of stages and activities within each stage (Hanks, 1990), there are commonalities as well. The present study adopts a five-stage approach consistent with the predominant research in the field, develops a scale to classify organizations, and examines relationships between organizational life cycle, competitive strategy, and performance.
Following a literature review, the scale development process is presented. A discussion of key findings, as well as conclusions and opportunities for future research, are also elaborated.
REVIEW OF THE LITERATURE
The adaptation of the biological concept of a life cycle by organizational researchers dates back several decades (Downs, 1967; Greiner, 1972; Penrose, 1952; Quinn & Cameron, 1983). The appeal of the life cycle is obvious, as organizations are born (Tichy, 1980), attempt to grow in different forms (Mintzberg, 1989), and eventually die (Kimberly & Miles, 1980). The theoretical notion of the life cycle is distinctly deterministic, an evolutionary perspective that has organizations passing inexorably from one stage to the next over time.
Several researchers have questioned this deterministic perspective through the study of ongoing organizations (Kimberly & Miles, 1980; Lester & Parnell, 1999; Lohdal & Mitchell, 1980; Miller & Friesen, 1984; Tichy, 1980). The results have revealed an opposite, or non-deterministic, life cycle of organizations (Miller & Friesen, 1984). The life cycle is more...