Abstract
Life-cycle literature suggests that business organizations evolve in consistent and predictable manners, implying that organizational structures and strategies evolve as firms move through growth stages. The sustainable growth of firms involves successful transitions between growth stages through managing different types of organizational growing pains and maintaining sustainable competitive positions, suggesting shifts in the strategic orientation of the firms as the firms grow. Based on this approach, this study proposes a holistic framework to account for linkages between determinants of a firm’s growing pains and key areas of organizational development, based on a synthesis of qualitative and quantitative findings. From statistical analyses, Korean firms are found to have proceeded through distinct stages of growing pains as they reached organizational sizes as follows: 20, 100, 300, and 500 million USD in sales revenue. Furthermore, qualitative findings suggest that business strategies evolve to deal with different types of growing pains in life-cycle stages from the systemization of management system to the revitalization process. Our results expect to provide extensive knowledge on the role of strategic management to deal with firm’s growing pains, considering both internal and external factors governing organizations. Furthermore, this study expects to provide an insightful and practical framework for managing organizational growing pains and transitions required to build sustainably successful organizations.
Highlights
Organizational life-cycle models suggest that the development of any business organization tends to follow predictable patterns [1,2]
This suggests shifts in the strategic orientation of the firms as the firms grow. It is important for managers and founders of companies to understand the different aspects of the transitions over the life-cycle of business organizations in order to secure the sustainable growth of firms
Based on the findings drawn from the quantitative analysis, we have proposed a firm’s growth model focusing on the transition between growth stages and organizational growing pains
Summary
Organizational life-cycle models suggest that the development of any business organization tends to follow predictable patterns [1,2]. It refers to the expected sequences of advancements experienced by an organization, as opposed to a randomized occurrence of events Another assumption is that organizational structures in one stage are not same as those in other stages. Growing pains are problems that occur as a result of inadequate organizational development in relation to business size and the complexity of external environments at a given stage of growth. These growing pains are described as symptoms of organizational distress and indications of the need to change, if the organization wants to continue to operate successfully [14,19,20]. Organizational growing pains are signals about the necessity for strategic organizational development to ensure sustainable growth of business organizations
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