Organizational Life Cycle Research Articles

The use and success of activity-based management practices at different organisational life cycle stages

This study examines the association between organisational life cycle (OLC) stages and the use and success of activity-based management (ABM) practices. The results reveal that maturity and revival stage business units use each level of ABM to a greater extent than those in the birth, growth and decline stages. In addition, while the level of ABM success does not differ across OLC stages, ABM success is dependent upon business units using each ABM practice to the greatest extent. The findings provide managers with an insight into the appropriateness of using ABM practices at different OLC stages.

The control dynamics of outsourcing involving an early-stage firm

Firms in the early stage of their organisational lifecycle experience challenges that shape the adoption of management controls. They are also recognised for their use of outsourcing. However, the accounting research has provided limited insight on how these control challenges and inter-organisational control concerns interact to influence the adoption of specific controls within an outsourcing relationship involving an early-stage firm. Exploration of this gap provides a key motivation for this paper. Contrary to existing management control and organisational science literature, we find a strong preference for new or enhanced action controls. Conversely, we find low levels of interest in result controls by managers within the buyer but not the supplier firm. These preferences influence inter-organisational control adoption within the frame of an incomplete outsourcing contract that emphasises flexibility in terms of relationship exit. Within the limits of a case study methodology, we argue that adoption of inter-organisational controls is shaped by tensions between the control challenges of early-stage firms, the control preferences of managers within these firms and inter-organisational control concerns. These findings have theoretical implications, expanding the Davila et al. [2009. Reasons for management control systems adoption: insights from product development systems choice by early-stage entrepreneurial companies. Accounting, Organizations and Society, 34 (3–4), 322–347] framework and the Merchant [1985. Control in Business Organizations. Boston, MA: Pitman] control typology into an ESF inter-organisational control context.

Management control systems from an organisational life cycle perspective: The role of input, behaviour and output controls

AbstractThis study examines the association between the use of three types of controls (input, behaviour and output) and Miller and Friesen's organisational life cycle (OLC) stages (birth, growth, maturity, revival and decline). Data were collected by a survey questionnaire from a random sample of 1,000 General Managers in Australian manufacturing business units. The results indicate that the extent of use of different controls is associated with OLC stages. Specifically, both behaviour and input controls were found to be used to a significantly greater extent than output controls in both the birth stage and the growth stage, while all three types of controls were used to a similar level in the maturity and revival stages. An examination of the extent of use of controls across OLC stages revealed that each type of control was used to a significantly greater extent in the growth and revival stages than the birth and maturity stages. The study contributes to the literature by linking management control system studies to OLC studies. Most importantly, the study assists Australian manufacturing business units in identifying the appropriate use of controls both in and across OLC stages.

10.4.2 On an Appropriate Set of Characteristics for the Structure of Upper‐level Standards When Used to Establish Business Environments

AbstractThe establishment of business environments has been greatly enhanced through the development of upper‐level standards that provide ‘strategic tools and guidelines…They ensure that business operations are as efficient as possible, increase productivity and help companies access new markets‘. (ISO 2012). Once a suitable upper‐level standard is adopted by an organisation, its processes, activities, and tasks must be mapped (or allocated) into the organisation's life cycle stages, procedures, and roles so that subsequent planning can occur, resources can be allocated, and work conducted. Organisations may also wish to claim (or will often be obliged to show) conformance to a particular standard. In many cases, however, this mapping is only able to be demonstrated in general terms, so that upper‐level standards are not always used as comprehensively as they are intended. In order to facilitate the establishment of business environments, this paper addresses what is required for an upper‐level standard to be mappable and then proposes characteristics for the structure of such standards that would enable them to be more readily mappable into a business environment. The Stakeholder Requirements Definition process of ISO/IEC 15288 is used as an example to illustrate how structuring a standard against such characteristics might improve the ability to establish business environments.

Survival or Failure within the Organisational Life Cycle. What Lessons for Managers?

This article seeks to provide its readers with useful insights about what key factors towards survival (or failure) can be associated with different stages of the organisational life cycle. In particular, the article aims to explain how the empirical developments from ‘organisational adaptation’ literature can be useful, especially to the practice of management, for gaining fruitful recommendations about the investigated research question. The article has been specifically designed to fit the audience of the Journal of General Management. In fact, it mostly focuses on the managerial implications demonstrated by a number of real world examples (e.g. Ryanair, Zalando, Gucci and Google) currently associated with the discussed literature.

Human resource management practices in mid‐sized enterprises

PurposeThe purpose of this paper is to examine the similarities and differences in human resource (HR) practices between large and mid‐sized organizations.Design/methodology/approachWith organization life cycle as the theoretical base, this study collects data on HR practices from a sample of mid‐sized firms in one western state and compares the results to a previously published study of HR practices in much larger firms. Mid‐sized firms are defined as having between 300 and 3,000 employees (mean=1,205); the average number of employees in the large firm sample was 30,700.FindingsWhile there are some similarities in HR practices, it appears that HR organizations in large firms are more targeted at strategic business issues and have achieved a greater degree of outsourcing and/or information technology application for the routine, file maintenance aspects of HR work. On the other hand, HR informants in mid‐sized firms are more operationally focused, appear to be more satisfied with the skills and knowledge of their significantly smaller HR staffs, and give their HR organizations higher ratings on performance along multiple dimensions.Research limitations/implicationsLimitations to the present study include the use of a single informant and a limited sample of mid‐sized firms (n=32). However, the study suggests numerous possibilities for future research, including expansion of the sample both in size and geographic scope, the collection of measures of performance for comparison with those of HR satisfaction, and fuller development of a set of expectations for HR focus dependent on the size and rate of growth of the organization.Originality/valueThe HR practices of large and small (less than 500 employees) firms have been studied in the past. This paper fills a gap in organization life cycle theory by examining HR practices in mid‐sized firms, suggesting in particular that the drive to refocus HR on strategic issues in large firms may be inappropriate in enterprises with 300 to 3,000 employees.

Companies Life Cycle Stages and Capital Structure in Emerging Markets: Evidence from Iran

Purpose – The current research examines the effect of life cycle stages on capital structure of listed companies in Tehran Stock Exchange. Research design, data, methodology – By aid of 685 year‐company data, which collected from financial statements of companies during 2006‐2012, first, the companies, are classified into three groups including companies in growth, maturity and decline stages. After removing the companies, which were not in accordance with life cycle model, 86 companies were selected to test two main hypotheses of the research. Results – The results show that the capital structure of the sample companies is different in various life cycle stages. More investigation by LSD test also revealed that the total debt to total assets ratio means of the companies in growth stages were significantly different from those companies in maturity stages and those in growth stages had high level of debt to assets ratio. Conclusions – The result showed the average amount of the working capital for companies in three stages are significantly different and due to high level of operation of the companies in maturity and decline stages, these companies held high amount of working capital than those in the growth stages.

"Diverging Paths: Social, Human, and Intellectual Capital Across Organizational Life Cycle Stages"

While scholars and practitioners alike posit that acquiring the right mix of organizational capital can help achieve and sustain a firm’s competitive advantage, we have little understanding of the type of capital that best fits the various stages of an organization’s life cycle and the effects on firm success. Employing life cycle theory, which suggests that organizations will progress along a prescribed path as the firm reacts to endogenous and exogenous changes, we propose that a diverse selection of organizational capital, including social, human, and intellectual capital, is needed at different organizational stages to enhance a firm’s competitive position and to achieve its strategic goals. We build a framework that considers each stage as an intersection of dynamic life cycle characteristics and environmental factors that drive distinctive organizational capital needs. Our framework reveals that some stages will have substantial similarity in organizational capital needs, but as the organization pro...

"Changing with the Times: An Integrated View of Legitimacy, Logics and New Venture Lifecycles"

New ventures need to be perceived as legitimate to acquire resources. To be perceived as legitimate, entrepreneurs must adapt their ventures to meet the norms and standards of different audiences. As an entrepreneurial venture evolves through different organizational lifecycle stages, so audiences from various institutional settings evaluate it by applying different institutional logics. We conceptually investigate how the cognitive and sociopolitical legitimacy of a technology venture is linked with the institutional logic of critical resources providers’ at each lifecycle stage. This framework provides a basis to describe the legitimacy risks and challenges confronting entrepreneurial firms as they transition from one organizational lifecycle stage to the next. Additionally, we identify the organizational attributes that enable a venture to successfully overcome the legitimacy risks and challenges associated with such transitions.

Relação entre o ciclo de vida organizacional e o planejamento em empresas metalúrgicas do município de Brusque-SC

This paper aims examine the relationship between the stages of organizational life cycle and the process of companies planning. To determine the stage of life cycle it was used the model proposed by Miller and Friesen (1994). The descriptive survey, developed through an accessibility sample, with quantitative analysis, was conducted with 30 companies from metallurgical sector of city of Brusque/SC. In data analysis were used descriptive statistic techniques (mean), discriminant analysis and correlation. The results indicate that the most researched companies are located in the birth and decay phases. The planning artifacts most used are strategies, longterm goals, internal scenarios and investments plans (strategic planning), investment plans in fixed assets (budget) and monitoring cash flow (budget control). We conclude that there is a relation between the life cycle stages and the level of planning used by companies. However, the planning artifacts are used differently, depending of company development stage

Controlling and reporting for strategy

Management Control is an academic journal devoted to the advancement of management control, management accounting and information systems knowledge. The journal provides a forum for the exchange of insights, knowledge and information based on both theoretical development and empirical evidence. Our mission to publish high quality research manuscripts goes on with this special issue of Management Control, including a selection of five papers presented at the 1 Workshop of the Management Control Journal “Controlling and reporting for strategy”, held in Pisa in February 2012. Drawing on the literature on accounting change and on the impacts of organizational life-cycle on management accounting systems, the first paper by Zoni, Dossi and Morelli discusses how the MAS change process differentiates through the organization lifecycle. The field study suggests that, to achieve successful MAS changes, the organization should focus on the design phase at the organizations’ birth and at its revival stages. In the growth, maturity and decline stages, the organization should instead focus on the implementation phase. The second article by Chiucchi, Gatti and Marasca investigates the relationship between MAS and ERP systems in a medium-sized firm. In a departure from prior research, the Authors also focus on the way MAS can influence the design, the implementation and the use of ERP systems. Interestingly, the paper found evidence of a bidirectional relationship between MAS and ERP systems.

Product Innovations and Performance of Audit Firms in Taiwan: Consideration of Life Cycles and Market Segments

This study investigates the relationship between product innovations and financial performance of Taiwanese audit firms in different market segments at varied life cycle stages. In terms of market segmentation, this study divides total samples into national, regional and local audit firms. Further, this study establishes three organisational life cycle stages for each sub-sample: young, adult and old stages. Based on a 16-year time series longitudinal data, this study validates the existence of life cycles in professional service organisations—audit firms. The significant findings are a positive association between product innovations and financial performance in all sub-samples at each life cycle stage. Furthermore, the extent of performance effects of product innovations varies for audit firms in different market segments at different life cycle stages. Findings obtained in this study contribute knowledge to business-related literatures and possess managerial implications to the practitioners.

Managing Sales Force Compensation

Sales force compensation is influenced by various factors of development and change occurring at the individual, product, organizational and environmental levels. Companies that adapt to changing circumstances are likely to be more successful. The sales compensation strategy should be realigned according to changes in those factors. When they are viewed from the life cycle perspective, it gives rise to career life cycle of sales employees, product life cycle, organizational life cycle and business life cycle. Compensation practices are being increasingly planned and managed in response to changing circumstances. Whereas in the past researchers focused almost exclusively on how changes in compensation practices affect employee performance or satisfaction, researchers are now beginnings to ask how organizational as well as environmental conditions shape compensation practices. This article discusses several factors affecting the design of sales compensation systems and proposes a life cycle and a business value–added framework for strategic compensation planning.

Mapping and Understanding Organizational Change: Ireland 1922–2010

Capturing, mapping, and understanding organizational change within bureaucracies is inherently problematic, and the paucity of empirical research in this area reflects the traditional reluctance of scholars to pursue this endeavor. In this article, drawing on the Irish case of organizational change, potential avenues for overcoming such challenges are presented. Drawing on the resources of a time-series database that captures and codes the life cycle of all Irish public organizations since independence, the article explores the evolution of the Irish administrative system since the independence of the state in 1922. These findings provide some pointers toward overcoming the challenges associated with studying change in Whitehall-type bureaucracies.

Analyzing Longitudinal Continuity and Change in Public Sector Organizations

This article provides the introduction to a special edition that presents for the first time a series of detailed country case studies concerned with the matter of organizational life cycles. Building on some recent scholarship, it begins by surveying the development of the field, before setting out some of the key methodological and theoretical issues and challenges involved in adopting a longitudinal perspective to the study of organizational change. It proposes that by capturing the variety of ways in which public sector organizations emerge, survive, and terminate, new perspectives on how administrative systems evolve can be presented and compared.

Hurdles in Tissue Engineering/Regenerative Medicine Product Commercialization: A Pilot Survey of Governmental Funding Agencies and the Financial Industry

The Tissue Engineering and Regenerative Medicine International Society of the Americas (TERMIS-AM) Industry Committee conducted a semiquantitative opinion survey in 2010 to delineate potential hurdles to commercialization perceived by the TERMIS constituency groups that participate in the stream of technology commercialization (academia, start-up companies, development-stage companies, and established companies). A significant hurdle identified consistently by each group was access to capital for advancing potential technologies into development pathways leading to commercialization. A follow-on survey was developed by the TERMIS-AM Industry Committee to evaluate the financial industry's perspectives on investing in regenerative medical technologies. The survey, composed of 15 questions, was developed and provided to 37 investment organizations in one of three sectors (governmental, private, and public investors). The survey was anonymous and confidential with sector designation the only identifying feature of each respondent's organization. Approximately 80% of the survey was composed of respondents from the public (n=14) and private (n=15) sectors. Each respondent represents one investment organization with the potential of multiple participants participating to form the organization's response. The remaining organizations represented governmental agencies (n=8). Results from this survey indicate that a high percentage (<60%) of respondents (governmental, private, and public) were willing to invest >$2MM into regenerative medical companies at the different stages of a company's life cycle. Investors recognized major hurdles to this emerging industry, including regulatory pathway, clinical translation, and reimbursement of these new products. Investments in regenerative technologies have been cyclical over the past 10-15 years, but investors recognized a 1-5-year investment period before the exit via Merger and Acquisition (M&A). Investors considered musculoskeletal products and their top technology choice with companies in the clinical stage of development being the most preferred investment targets. All sectors indicated a limited interest in early-stage start-up companies potentially explaining why start-up companies have struggled to access to capital and investors based their investment on the stage of a company's life cycle, reflecting each sector's risk tolerance, exit strategy, time of holding an investment, and investment strategy priorities. Investors highlighted the limited number of regenerative medical companies that have achieved commercial status as a basis for why public investors have been approached by so few companies. Based on respondents to this survey, regenerative medical sponsors seeking capital from the financial industry must keep the explanation of their technology simple, since all sectors considered regenerative medical technology as difficult to evaluate. This survey's results indicate that under the current financial environment, many regenerative medical companies must consider codevelopment or even M&A as nondilutive means of raising capital. The overall summary for this survey highlights the highly varied goals and motivations for the various sectors of the government and financial industries.

Founding New Nonprofit Organizations

In this study, the authors explore how the dynamics associated with the founding of new nonprofit organizations, the characteristics of the founders, and the developmental life cycles of nonprofit organizations contribute to the seemingly fragmented landscape of the nonprofit sector. Based on data collected from interviews with 31 nonprofit organizations, we find that new nonprofits are being created by passionate, entrepreneurial individuals who hope to make a difference in the community. Although these organizations are typically small, with few staff members and small budgets, the extent to which they rely on volunteers and are connected to the broader community varies considerably. Moreover, many founders had little experience volunteering or working in the sector. The findings from this study have important implications for the professional development of nonprofit staff, leaders, and volunteers, and they shed new light on how we think about and describe the founders of nonprofit organizations.

Competitor analysis and accounting of social networking site service companies in China

PurposeThe purpose of this paper is to employ competitive analysis and accounting (CAA) spectrum to analyze the growth and development of social networking site (SNS) service industry in China. SNS service is a modern social cultural issue that affects communication channels and mannerisms.Design/methodology/approachThis paper mainly utilizes archival resources as company financial reports and newspaper clippings online to provide a business and social developmental context to the study. Competitor analysis and accounting framework and organizational life‐cycle stages are utilized.FindingsThe study illustrates competitive analysis and accounting in modern telecommunication business. It explores the perception of contemporary management accounting, and then raises an awareness of the relationship among accounting, business strategy, and social life.Research limitations/implicationsThis paper is based on two case studies; the findings may not be generalizable to other contemporary culture service companies. The cases have shown certain reasons why different CAA techniques are used by the companies in various stages of the organizational life cycle.Practical implicationsFirst, in their start‐up stage, both Tencent and Renren, two SNS service companies, engage in product development to obtain founding resources and acquire customers so as to enhance market share. Second, in their growth stage, the two companies engage in product financing through capital market. Tencent even further extends its business to trade financing.Originality/valueAccounting has attained an increased importance for SNS in the social media culture. Such connection is especially found in competitor analysis and accounting in different stages of the organizational life cycles as addressed in the study.

Зависимость инвестиционной активности компании от стадий корпоративного жизненного цикла

Авторы: Виктория Артуровна Черкасова НИУ ВШЭ vcherkasova@hse.ru&#x0D; Ирина Николаевна Смирнова НИУ ВШЭ&#x0D; В статье раскрывается влияние различных этапов жизненного цикла компании на ее инвестиционную активность. Для этого необходимо проследить динамику жизненного пути отдельной организации и найти новые подходы в управленческой политике компании. Статья содержит описание особенностей корпоративной инвестиционной политики для каждой стадии жизненного цикла, отдельно рассматривается фаза возрождения бизнеса. Представлена методологическая основа исследования, эмпирически протестированы построенные модели.

Internationalisation of innovative SMEs in the Hungarian medical precision instruments industry

Competitive and innovative Hungarian SMEs in the medical precision instruments sector can be characterised by continuous development, special knowledge and innovation activity. These are the main factors behind their high level of competitiveness and higher than average level of internationalisation. Certain companies could become leading firms in worldwide comparison in niche segments, and there are a few companies which internationalised early in the company life cycle and can be called ‘emerging born globals’. Thus post-communist economies can also be homes to such companies. This article analyses the motivation of internationalisation, the choice of foreign location and the main barriers to internationalisation for SMEs in this sector in Hungary, pointing out the similarities and differences between problems faced by smaller companies in former transition economies and in more developed economies.