04 Handout 1 - Greiner’s Model of Organization Growth

This were developed in the early 1970s before information technology (IT) increased cross- and inter-organizational communication possibilities.

It is when the organization experiences a long period of growth where no major disturbances occur in organization practice.

It occurs when there is substantial turmoil in organizational life.

In this phase, the organization is staffed by its founders, who subsequently recruit employees as the company grows. It has a simple structure, with power resting with the founders, and where control and decision-making are achieved through informal communication.

In this phase, the organization develops a functional structure to support increased turnover in established and new product areas. The senior management team now becomes responsible for the direction of the company. At the same time, those below it assume responsibility for controlling the functional tasks of production, distribution, and marketing.

In this phase, the organization can survive by developing an organizational structure that pushes some elements of strategic decision-making down the organization. This gives rise to a structure that retains functional elements while allowing the formation of autonomous units.