Analysis of Management Entropy Based on the Law of Enterprise Lifecycle

Abstract

According to Darwin's theory of evolution, life continuously evolves through natural selection and adaptation to the environment. Similarly, businesses evolve by continually adjusting and optimizing their structures and functions in the face of market competition and environmental changes. Therefore, businesses can be seen as organic entities with lifecycles similar to those of living organisms. In general, the lifecycle of a business can be divided into five stages: the founding stage, growth stage, maturity stage, decline stage, and extinction stage. Each stage has its specific internal and external environmental conditions, along with corresponding opportunities and risks. To survive and thrive in each of these stages, businesses need to formulate appropriate strategies and measures based on their specific circumstances.This article will analyze the issue of managerial entropy that businesses face at different stages from the perspective of the laws governing the business lifecycle. Managerial entropy refers to the disordered state that arises within a business due to factors such as information asymmetry, poor communication, and coordination challenges, leading to reduced efficiency, resource waste, and decreased innovation capacity. Managerial entropy is one of the critical factors influencing the survival and development of businesses and deserves close attention. The article will propose solutions tailored to the managerial entropy issues at each stage, aiming to help businesses reduce the impact of managerial entropy and extend their lifecycles.