Why Do Organizations Grow? What Types of Major Crisis Is an Organization Likely to Encounter as It Grows?

Published: 2021-06-29 06:56:17
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Category: Business

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Organization grows to describe and develop the applicable changes in the environment and provide better understanding to improve the business. The development and growth of the business provide basic principles for understanding the perspectives of the organization. Due to the understanding and continuous changes in interdependence of size, strategies, and functions, the organization is forced to grow. Various proposed models in the organization for performing a business regulate the growth of the company. Organization grows to provide sustainability in the small business and maintain the growth in the economy with the rapid changes in the demand and supply. According to Jones (2010), organizational growth is the life cycle state where value-creatiion skills and competences are developed. Growth allos a firm to increase its division of labor and speciality to gain a competitive advantage. An organization that can acquire resources is able to generate surplus resournces that allow it to grow, develop, and sustain amongst its rival companies. Growth allows organiation to develop core competences that can satisfy the needs of its customers and stakeholders.
The major types of crisis that an organization likely to encounter during growth period are crisis of leadership, crisis of autonomy, crisis of control, and crisis of red tape. At each stage a specific organizational prolem can cause a crisis that must be solved so a firm can advance to the next level. Firms can not grow if a leadership lacks organizational skills to develop strategy and structure. Crisis of autonomy arises when employees in departments like R&D, design, and marketing become frustrated by their lack of control over the new product development and innovation according to Jones (2010). If this is not resolved, organization limits its ability to grow and prosper. When managers from functional managers or corporate-level compete with divisional managers, crisis of control occurrs. Therefore, lower-level managers should have increased power and contrl of organizational resources to avoid such scenario. Finally, organizations need to minimize the number of rules, procedures, and bureacracy to increase organizational effectiveness and increase productivity. A few other crisis, which generally happens in the organizations due to growth, are faced in assessing the new technologies, approaches, and market for maintaining the growth. The decline in the growth of profit is considered as one of the most important crisis, which generally happens in the organizations. When the business of a company grows, it faces various crisis from its competitors and other external factors making it difficult to face the competition in many instances. Additional challenges are The growth of the organization needs lot of attention, capital, and other necessary resources to sustain the growth within the market. In addition, organizations should not be afraid to imitate the goals, structure, and

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