The study of the evolution of organizations has been accorded a boost through substantial growth in the evolution theory. Numerous anthologists have linked their theories with classical field studies. However, this is said to be a very important compilation. It is the mandate of every organization to evolve in order to find its existence in the modern society. Consequently, organizations that evolve the most are depicted to gain competitive advantage. Devoid of evolution, the organization will surrender to a signal of resourceful demolition of its wealth. In order to thrive in the modern competitive market, many organizations have set strategies that direct them on the precedent course of action. Many studies have come to a conclusion that strategically competent organizations have the capability to develop competitive advantage when compared with other organizations (Hite and Hesterly 275-286). Numerous organizations are faced with a number of challenges and achievements as highlighted below.
The Evolution of an Organization
The constancy required by the organization to succeed and the uniqueness needed to renovate itself in order to prevent certain demolition is a central part in the understanding of organization evolution. Evolution in organizations is brought about by a number of perspectives. A systemic-traditional view is a case whereby an organization changes due to its own will. The new change is accelerated by some agents. Changes in an organization may occur in result of impacts from the surrounding. This may be due to the selection criteria employed or the location of the organization. The firmness of an organization and alteration result depending on the temperament of compound schemes, compound receptive procedures and their natural self- organization traits, according to Darwinian Theory of evolution. Organizational evolution follows some processes that aim to improve its normal functions. When the set policies are not fulfilled, failure or dissolution of the organization is likely to be witnessed (Hite and Hesterly 275-286).
Organizational life cycle is the specific level brought about by the company’s progress in the competent market. Research has shown that organizations go through a number of stages, which include the start up stage, growth, maturity and decline. It is a common condition of majority of organizations to decline and revive after several corrections. As it was already mentioned, each level of the organization is faced by a number of challenges and achievements. The stages are perceived as of development to the life of the organization. They are chronological, collective, looming, irreversible, and accompanied by a wide range of activities and structures (Hite and Hesterly 275-286).
When an organization reaches the maturity stage, the stages become more spherical, leading to revival, and conceivably to decline. This evolution is brought about by three authorities in the organization’s structure. Initially, the management of an organization becomes more complicated as the size increases and additional stakeholders step in. Secondly, the increased size of the organization predicts the employment of complicated organizational structures, information dispensation strengths, and decision-creation techniques. Lastly, organizations rotate amid creative stages and conventional ones. This indicates renewal of organizational proficiencies and the ones that develop through effectiveness (Short, Payne and Ketchen 1053-1079).
The requirements, chances and forces found in and out of the organization, differ depending on the stage in the life cycle of the organization. For instance, threats in the startup stage differ from those found in the maturity stage while ecological changes exercise force for alterations on the firm. Majority of organizations move from one phase to the other due to misalignment of the organizational requirements of the surrounding. Therefore, the organization may find it difficult to adapt to fundamental effectiveness or potential existence. Consequently, diverse levels of organizations require alterations in the firm’s objectives, policies, decision-making processes, expertise, ethnicity and management (Short, Payne and Ketchen 1053-1079).
Recent research indicates that organizations with increased levels of technology score better in their activities than other firms. An organization that uses automaton in its operations is seen to grow at a faster rate compared to organizations without machinery. The rapid progress is depicted from the start up stage to maturity within a shorter duration. At the same time, organizations tend to develop structures that reflect the current stage of the market they are operating in. For example, firms in a mature market are likely to be in a mature stage of growth. Each evolutionary stage of the organization represents a steady period of development for the organization, known as evolutionary phase. The phase reaches a point where alteration is required, resulting in innovatory or disaster period.
In the startup stage, firms experience a very straightforward organizational structure with authority being the central point of all processes. The objective at this level is to provide unique products which enable the firm to thrive in the new competitive market. The fact that the firm is new in the marketplace makes it employ trial and error methods while changing products and services in an effort to find the best solution. However, major and recurrent commodity and service innovations are involved. The new firm faces some special challenges as it is product- focused and may have little or no knowledge of auction and marketing. The existing firms push the company through a narrowed way of innovation; hence it is advisable to avoid direct confrontation with the strong competitors. This is achieved through finding unfilled gaps and defending the gaps through extended innovation (Simon 131-142).
Startup organizations mostly deal with a single customer and end up producing a single product. Due to this, startup organizations face a simple managerial task. This enables them to gain experience of running the firm and capability of producing diverse products. An intuitive mode of management prevails in this evolutional stage (Simon 131-142). For example, the manager formulates the main decisions of the firm based on his or her opinion. This is one of the main challenges of the startup stage. This may not work well with the operations of the firm, leading to an inadequate output.
It is not unusual to find a single organizer in the startup stage being technical contrary to the numerous founders in well established organizations. The leaders engage in resolution and provision of possible solutions to the clients. In the case of a single manager, the solution to the many complications that arise may not be achieved easily with the employment of solitary skills. The employment of the casual and overlapping configuration has a likelihood of imposing the weight to the developmental staff; with time, it begins to sparingly fill in auction, vending, management, and the rest of the operations (Hite and Hesterly 275-286).
Victory in this evolutional level can be gained through looking for a sustainable market that will increase the income of the specified firm. The link could be either direct or indirect means of financing. Another achievement of the organization is brought by the development through creativity and focus. These two areas develop enhanced leadership skills, thereby leading to predictable future success. As client policies develop in the business phase, the prominence of administration consideration to significant sales compel preparation matters such as the task of advertising associates, magnitude, organization, and resource distribution, also develop. While the mentioned decisions occur in each phase of the organization, the decisions that acquire greater attention are those that have a higher impact, significant scope of error, and are certainly difficult to address efficiently, given the client policy pursued by the firm and the challenges faced throughout the phase (Hite and Hesterly 275-286).
Mistakes with unforeseen prolonged negative effects are easy to correct even without experience and vision. Upcoming firms can develop a selling organization based on small scale operations due to the little revenues. This will give them the idea of being cost-focused in order to excel in the competent market. Alternatively, startup firms can benefit from the established companies through joint association with them. This action will help to access financial resources and sales proficiency. On the other hand, startup businesses can reduce expenses and minimize dangers through employment of marketing affiliates to promote their commodities and services instead of forming their own marketing organizations (Simon 131-142). The use of external associates is practiced in situations where relative plans have tactical advantage. When the associates are used, considerable foresight is administered to find out if the primary plan is utilized or is of the partners’ suitability.
Research conducted on organizational configurations showed that startup businesses are faced with insufficient funding, hence are unable to increase sales. This condition brings about future uncertainties for such firms (Short, Payne and Ketchen1053-1079). Successful startup companies will expand even when succumbed to future disbeliefs. In perfecting this incidence, they will involve more sales persons in their line of activities in order to produce enhanced outcomes. It is not a mandate for firms with huge amounts of incomes to prevail. This indicates that startup companies can utilize small funds to produce significant work. This idea will be the best way to achieve the greatest return from the sales force savings and, therefore, they will afford to expand and have a quickened success.
Sales force structure is very important during startup, although it typically gets less attention at other stages of evolution in organization. Majority of the sales forces encompass little numbers of generalist salespersons who auction a narrowed product line to an inadequate number of target selling sector. It has been noted that sales force structure issues do not become important unless the primary invention line is wide and multifarious, or the number of objected markets is huge or assorted. The sales force structure can prove to be effective later in the commerce phase when innovative commodities, markets, and additional auctioning operations are introduced to the sales practice (Short, Payne and Ketchen1053-1079).
The Growth Stage
The emphasis in the growth stage is on product development and primary product diversification. In this phase, product lines are widened, which results in an additional assortment of products for specified markets. Efforts are dedicated to producing goods aimed at fresh markets while less strain is placed on the main or impressive product creations. The market structure begins to play a role, with administrators identifying certain subgroups of clients, and to create little product or service advancements in order to serve them accordingly. The original strategy is abandoned as wide markets are dealt with. To achieve increased profits, the company needs to get additional funding in order to meet the desires of the incoming clients and defend the service opportunity. This evolutionary stage forms a strong basis for the firm, since many chances are available to reach success. With the help of focused management, the biggest challenge of finance would be a small deal (Simon 131-142).
In this stage, authority is distributed among the new managers and directors. These leaders act in the visionary sector of the organization and prevent possible declines, hence ensuring a well established future for the organization. The growth stage is the determinant of whether the firm will reach the maturity stage or not. If several areas are not adjusted, then it would be impossible for the firm to make the following step. However, since the firm has a good number of clients, it is possible that with the huge amounts of sales, it will be able to get sufficient finances that will aid in the growth of other segments (Simon 131-142).
From a product line perspective, roles in this stage become differentiated. Each leader is entitled to progress his or her sector. This leads to a relative increase in the sales volume. The firm slowly gains stability due to increased operations and development. As a result of diversification and the consumer base, specialization begins to pop in. In order to sustain authority and direction of the business, more modernized methods of information sharing are required, which will lead to cross-cultural operations. The association will lead to competition and further improved product shape and quality. The biggest challenge is brought about by independence. The limited decentralization of authority coupled with less emphasis on major creation activities makes the organization increasingly less reactive to market alterations. The problem is brought in by the managers’ delayed delegation of duties. This leads to job frustration at a lower level and could possibly predict inadequate knowledge, leading to dissolution of the entire organization (Hite & Hesterly 275-286).
In order to avoid the possible complications and ensure stability, the competitive environment needs to be considered before initiating of any project. This will avoid breakdowns after the operations have kicked off. Hite and Hesterly point out that organizational performance and effectiveness matches with the organization’s structure, activities and the external environment (275-286). Therefore, organizations should make attempts to ensure that the external conditions are favorable. By doing this, the many hurdles will be reduced, making the development of the firm possible. In a manufacturing organization, tactical plan has been seen to provide expressive and logical energy. This provides the fit between the accessible and upcoming opportunities. The strategic plan identifies the trend where all participants thrive to work at a higher level.
When an organization reaches the maturity stage, it is said to have gained a lot of knowledge and generated huge amounts of income. The maturity stage is encompassed by stable sales levels in result of increased competition. The firm follows the set goals which aid in the smooth running of the organization’s activities. The business displays more concern for interior competence and installs additional control methods and procedures. The configurations are in a way similar to those established in the growth stage. Departmental, functionally based structures succeed as they keep on suiting the attentive product -market extent (Hite and Hesterly 275-286).
In this evolutional phase of the organization, the business is operated by specialized directors who are devoted to success of the enterprise. The business is somewhat centralized and little designation of power is conducted. This is made easier by the firmness of activities, a condition that calls for few leaders to govern. Businesses in the maturity stage are seen to be conservative with the level of creation declining and an additional organization structure being instituted. Information processing varies in certain ways (Simon 131-142). First, there is more stress on formal expense controls, finance accounts and routine procedures. The company implements schemes of coordination to facilitate operations from its numerous trade units to work jointly. However, harmonization tactics such as product collections, proper development procedures, and company staff turn out to be a practical scheme that causes interruption in management.
On the other hand, the maturity stage comprises of management activities that are less creative, less practical, and more threat reluctant compared with any other phase. The trend in this phase is to wait for competitors to formulate new products. Businesses in this stage, therefore, go on to imitate the products of the competitors. This places the firm at unstable level, with a likelihood of decline. Many studies have shown that firs after reaching the maturity stage fall easily. Such firms without good foundations as seen in our case often fall due to lack of innovation (Hite and Hesterly 275-286). Consequently, organizations need to produce unique products that lessen the chances of imitation and enable stabilization in the business segment. Due to crisis in the maturity stage, the firm may actually fall to the decline stage if realization does not occur.
The revival phase is optional and does not occur to all organizations. It only occurs in situations where firms realize the falling rate of their activities. When steps are taken to defend the firm, revival is thereby said to be practiced. Revival can affect any firm, be it in the mature or in the decline phase. This stage is very challenging, since the majority of the activities that were already initiated are repeated, although in an improved manner. The organization is entitled to pursue rapid growth through novelty, achievement, and diversification and this involves a deal of risk taking. Revival can also be challenging if it is not carried out well or the sales development is not reflected after the necessary procedures have been introduced (Simon 131-142).
To prevent future complications, firms should replace the management body with an active one in order to achieve the set goals. There should be an assembly aimed to analyze and provide solutions to the problems witnessed by the firm and those that have been a blockade to success.
The decline phase is whereby the sales and profitability of an organization decrease. It is normally followed by market stagnation. The decline in profits and stagnation are brought about by the exterior challenges and lack of novelty. For example, the principles carried out in the maturity stage often lead to the decline stage. A case where the level of innovativeness is low and firms imitate products of other competitors will definitely end in this phase. The level of output is very low and this calls for improved services. The decline stage can be avoided through self-innovation, devoid of imitation. Firms ought to learn to coordinate with competitive companies rather than reproduce their products. Through this, they will easily adapt to changes in the market, and hence be in the top line of success (Simon 131-142).
The evolution of an organization is a long process encompassed with many challenges and few achievements. However, the challenges can be minimized with the use of administration that has the necessary experience of running an organization. In the stages of evolution, firms have been seen to lack innovation and rely more on imitation. This puts the firm at risk of dissolution or declinations. Therefore, enterprises are encouraged to look for their own professionals that will help to predict when the company is running out of cash and to provide the route in case of complex situations.