Organisational Life Cycle and Business Strategies - Research Proposal Example

Organisational Life Cycle and Business Strategies

Table of Contents

Introduction4

Aim of the research4

Objective of the research4

Research Question5

Literature Review5

Various Stages of Organisational Lifecycle5

Methodology7

Findings8

Determining the relationship between business startegy and organisational life8

Analysing how the business startegies can determine the organisational life cycle in the long run10

Future Strategies for the organisation10

Conclusion11

Reference List12

• Introduction

The Organisational Life Cycle represents the operational phase of an organisation, starting from its origin to its decline. Knowledge of the various stages of an organisation helps in comprehending the stages where the growth is maximum. Also it helps in understanding at which stage the business startegy needs to be altered for maximum profit generation and for the business to survive in the long run. Also, analysing the organisational life cycle helps in understanding the effectiveness of the organisation (Pheleps et al, 2007).

Organisation at any stage is impacted by the external and the internal environment.A detailed understanding of the organisational life cycle helps in realising the factors that are affecting these stages, which in turn help in improving the performance of the business (Matyusz, Dementer and Szigetvari, 2012). This research will help in understanding how the organisation funtions during all these stages and achieves its goals in the long run.

• • Aim of the research

The aim of this paper is to analyse the life cycle of an onganisation funtional in the retail sector in the UK.

• • Objective of the research

The objectives of the paper is to :

• To determine the relationship between business strategies and organisational life
• To examine how business strategies can determine organisational life in the long run
• To recommend business strategies to facilitate sustainable organisational life

The industry of interest for the research purpose is the retail industry in UK.

• • Research Question

The research question for this paper is how different business strategies affect different stages of organisational life cycle.

• Literature Review
  • Various Stages of Organisational Lifecycle

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The organisational life cycle includes the following stages:

• Start Up/ Birth stage: This is the stage where the organisation is just being established. The business strategies are formed at this stage, which require proper planning and understanding of the functions of the business. It demands creativity and requires a lot of commitment from the founder’s side (Kolb, 2005; Langford and Retik, 2012) .
• Growth Stage: At this stage, the main focus is on the growth of sales and the product diversification. The product line is broadened at this stage, due to which it may achieve profitability (Langforrd and Retik, 2012).
• Maturity: Here the sales of an organisation reaches stability.The focus at this stage is primarily on cost control and analysis. The innovation level starts falling at this stage and development takes place only to sustain the product.
• Revival Stage: This stage is optional. At this stage the organisation focusses on diversification. Here the organisation tries to achieve speedy growth through more focus on innovation, diversification and aquisition (Cunliffe and Luhman, 2012).
• Decline/ Death: At this stage is characterised by declining profitability and sales.The profitability drops at this stage, due to changes in the external environment and lack of the company’s focus on innovation.

The organisational life cycle is important to analyse the organisational effectievness too.

The organisational effectiveness is assessed by two models

Natural system model: The companies which are more flexible, fall under this category.These companies emphasize more on control and integration (Draft et al, 2010).

Rational model:

The rational model focuses more on achieving the goals of the organisation (Draft, Murphy and Willmott, 2010).

There is a very common belief among the experts that generally an organisation does not grow in size but it simply matures in the course of time.. Phelps, Adams and Bessant (2007) in their review clearly mentioned that the process of growth associated with any organisation is more or less linear, deterministic, invariant and sequential. There are number of authors who still believe that changes in the life cycle of any organisation generally takes place after an organisation faces a critical situation. Authors mention this particular phase as a struggle or tipping point (Phelps Adams and Bessant, 2007; Kolb, 2005).

The effectiveness of any organisation is also associated with various life cycle stages that the organisation is going through. Organisational effectiveness is one of the core aspects associated with the study of organisational effectiveness. There are four major models associated with the characteristics of effectiveness criteria ,which are, rational goal model, internal process model, human relation model and open system model (Griffin, 2007).

• Methodology

Data type:

Primary and secondary data will be used for the research.

The primary data will be qualitative, which is non numeric in nature. All these open ended questions will be asked to the managers of different comapnies in the retail sector, which they will be free to answer in their own words.

Data collection process :

The Primary data here will be collected by conducting interviews with the managers in a few companies from the retail industry of UK Market.

Secondary data will be collected using outside sources such as journals,online libraries, websites, previous research reports etc. related to the same topic.

Sampling: The sample population for the reseach purpose includes the managers from 4 companies in the retail industry.

The type of sampling process used is non probablity sampling. Non probablity sampling is used here,as the sample size considered for the research is very small.

• Findings
  • Determining the relationship between business startegy and organisational life

According to the answers given by the respondents, it has been found that participating companies which are at the start up phase, will have thier business strategies projected in a way that will help in establishing the company in the market.The main focus of these companies is to create a proper busiiness plan that will help them in achieving their goals and survive in the long run. All their resources and business startegies are directed towards forming a strong market presence (Marchington, et al., 2005).

For the companies that are at the growth stage, their business strategies are directed towards achieving a rapid growth in sales. Also,considerable importance is given in developing the product line. Profitability is at the center point of all their business startegies.

The companies that are in the maturity stage,have their focus on sustaining the business. All their business startegies are focused on cost cutting. Focus shifts from developing the products to maintaining the sustainibility of the product.

For the companies in the revival stage, the business startegies are more focused on diversification. Exploring more opportunities in new markets and sustaining the sales are the at the center point of creating strategies. The main aim of the companies of this stage is to find different methods that will boost their sales.However, not all companies attain this stage.

The companies at the declining phase are more focused on staying in the competition. All their strategies are focused how to stay in the business or exit without encouring a heavy exit cost.

• • Analysing how the business startegies can determine the organisational life cycle in the long run

According to the responses of the managers, it is understood that the companies that are focused more on cost cutting strategies,will be achieving a more stable growth.These companies are also looking for inventory management and outsourcing some of their activities in order to reduce their operational costs. On the other hand, companies that are more focused on increasing the sales will achieve a higher market growth and market share. Those companies that are looking for market expansion, go for diversification strategies.Their focus is on entering new markets and with new products.

Companies that are mainly focused on exist startegies, planning their exit costs and finding alternatives, are the ones that are at the declining stage and looking forward to exit the business.

• • Future Strategies for the organisation

On the basis of the research done and the answers given by the managers, the following are the measures that can be taken to sustain a business in the long run:

• More focus should be given on the product development and diversification during the initial stages of the business.
• During the growth of the company, focus should be laid on increasing the sales and improving the market postion.
• During the middle stages of the business more focus should be given on maintaining stability in the market. Also new markets can be explored for more opportunities.
• The companies should try not making any heavy investments in the later stages of the business
• Conclusion

The analysis of the organisational life cycle provides a knowledge of the various stages that a business goes through before declining.It also gives an idea about the internal and external environment the business functions in, and how these factors affect the growth of the business. At every stage the business strategies should be focusing on the growth and sustainibility of the business. At the growth stage, the main focus should be to improve the product quality and to achieve high market share. During the later stages, focus should shift towards maintaining stability in the market. The focus should be more on reducing the operational costs of the business.

• Reference List

Cunliffe, A.L. and Luhman, J.T., 2012. Key Concepts in Organisation Theory. New York: SAGE Publication.

Draft, R.L., Murphy, J., and Willmott, H., 2010. Organisation Theory and Design. Boston: Cengage Learning.

Griffin, R., 2007. Fundamentals of Management. Boston: Cengage Learning.

Kolb, B.M., 2005. Marketing for Cultural Organisations: New Strategies for Attracting Audiences to Classical Music, Dance, Museums, Theatre & Opera. Boston: Cengage Learning EMEA.

Langford, D. and Retik, A., 2012. The Organisation and Management of Construction: Managing the construction enterprise. Abingdon: Routledge.

Marchington, M. and Wilkinson, A., 2005. Human Resource Management at Work: People Management and Development. CIPD Publishing.

Matyusz, Z., Dementer, K., and Szigetvari, C., 2012. The impact of external market factors on the Operational practices and performance of companies. Society and Economy, 34(1), pp. 73-93.

Phelps, R., Adams, R., and Bessant, J., 2007. Life cycles of growing organisations: A review with implications for knowledge and learning. International Journal of Management Reviews, 9(1) pp. 1-30.