LIFE CYCLE THEORY:Unit of Change, Mode of change, Organisation death

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Change Management MGMT625

LESSON #8

LIFE CYCLE THEORY

Life cycle theory

It is one of the most common explanation theories in change management literature. It is a

metaphor of organic growth to explain org. development in an org. entity from its initiation to its

termination. Entity may mean individual's job, a work group, a programme, strategy, product, or

overall organisation. Like individual organisations also have a life, mean age and stage, and

associated characteristics like birth, growth, maturity, decline and death exhibits certain traits at a

particular stage of their life. Now, if we apply theory in context of organizations in Pakistan, the

question is what is the average life of a typical organisation in Pakistan (be it public sector

organization or private sector). I believe multinational have evolved themselves as excellent high

performing organization because they have a perpetual life, and have over come through Product

Life Cycle (PLC), in case or Organization Life Cycle (OLC).

According to this theory, "Change is imminent; that is the developing entity has with in it an

underlying form, logic, program or code that regulates the process of change and moves the entity

from a given point of departure toward a subsequent end that is prefigured in the present state...

Similarly, to Ven & Poole, "External environmental events and processes can influence how the

entity expresses itself, but are always mediated by the immanent logic, rules, or programs that

govern the entity's development"

Characteristics of a Life Cycle Theory:

1. The progression (order + sequence) of change events in this model is a unitary sequence

(follows a single sequence of stage or phases) and is cumulative (earlier stage traits are

retained in later stages).

2. There is such a progression to the final end state which is pre-figured and requires a

specific historical sequence of events.

3. Each of these events contributes a piece to the final product, occurs in a prescribed order,

and sets the stage for the next. Each stage of development is seen as a necessary precursor

of succeeding stages.

The author referred to Nisbet who worked on the philosophy of developmentalism, and has

stated, "Organisation development is driven by some genetic code or pre-figured program

within the developing entity". Rogers is quoted to have posited five stages of innovation: need

recognition, research on problem, development of idea into useful form, commercialisation, and

diffusion and adoption".

Life cycle theories explain development in terms of institutional rules or programs that requires

developmental activities to progress in a prescribed sequence. For example in International

Business we talk of the specific application in context of product development and marketing

known as International Product Life Cycle (IPLC). This depicts how a product having birth in the

Western country like USA receives growth, goes international reaches maturity and eventually is

in a decline in subsequent stage, in the form of importing the same product from external

economies. Similarly Western business practices exhibit life cycle management model.

Unit of Change: Life cycle theories operate on a single entity, development as a function of

potentials immanent with the entity environment and other entities are considered secondary.

Mode of change: It is important to know the sequence of change events is prescribed by either

probabilistic or deterministic laws. There are two modes of change: prescribed mode and

constructive mode.

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Prescribed Mode: A prescribed mode of change channels the development of entities in a pre-

specified direction. Watzlawick termed this as first-order change, routinized or pre-established

programme. Variation is first-order change.

Constructive Mode: A constructive mode of change generates unprecedented novel forms, often

are discontinuous and unpredictable departures from the past. Watzlawick termed this as a second-

order change, as it breaks with the past basic assumption or framework.

So going by the traits of life cycle theory above we come to know that life cycle (and evolutionary)

theory operates in a prescribed modality. Let us now see some other examples of life cycle theory.

According to Hollman, organisational change such as MBO can be best understood by viewing

change as systematically moving through distinct developmental stages rather than as either an

evolutionary or revolutionary process. This developmental process consists of three phases or life

cycle: Missionary, Modification and Maturity

Missionary phase: When organisational member goes through MBO training programme

reads book or article or is in business education programme and tries to introduce the same

in his own organization with at least one high level sponsor in the organization (may be

politically driven as to seek legitimacy and credibility)

Modification Phase: After birth the problem of acceptance is there; primarily from three

sources: interpersonal (lack of support, hostility, learning new terminology, skills and

values, altering superior-subordinate relationships) organisational (authority-responsibility

pattern, budgetary allocations, training/procedural revision needed) & environmental

(government regulation or competitive pressure). Out of such pressures customised

version come out through negotiating and bargaining amongst multiple forces.

Maturity phase: When the change introduced becomes org. routine, or when the new

programme gets merged with the existing organization processes and loses its unique and

special status as management tool in organization process in budgetary allocation or

compensation mechanism. This is considered death phase change in one sense. It can fail as

well, and death can occur at any stage on missionary - maturity continuum.

Application:

1. Viable time-oriented framework used by organisation to diagnose, evaluate and adjust

new programme (like MBO)

2. Evolution of MNCs: How MNC evolves themselves? Sales agent, regular export,

franchise/license, Wholly Owned subsidiary)

3. Though many consider OLC as static and deterministic yet some consider strategic

choices at each stage can affect (shorten or prolong) the development, rate and direction

of OLC stage.

4. Introduction of new technology or application of new managerial concepts in an

organisation. For e.g. MBO can be examined in terms of its introduction, growth and

effectiveness in organization

Miller & Freisen (1984) came up with a similar model

1. Birth

2. Growth

3. Maturity

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4. Revival

Baird & Meshoulam (1988) described stages four stages in OLC of an international organization. It

is important to note that OLC for domestic firm is distinct from OLC for international firm

1. Organisation initiation

2. Functional growth

3. Controlled growth

4. Strategic Integration

Stage 1: Organisation Initiation

A typical start up organization survives on the basis of strong entrepreneurship skills and values.

Management and leadership are informal in nature, and managed on the basis of convenience.

Organization at this stage offers limited range of highly specialized products to restricted markets.

Management culture remains ethnocentric, and the objective is short term survival with in domestic

market.

Stage 2: Functional growth

Once organization maintains its existence it starts to look for diversification. Therefore firm looks

for new export markets. Informal ways of management is replaced by formalisation by focussing on

functional and technical specialization and production efficiency. Managerial confidence of a firm

begins to increase owing to dynamic growth.

Stage 3: Controlled Growth

The firms' overseas market moves into maturity phase, with its focus on efficient structure and

management practices. The firm now wants to control its overseas market through tight operations

so as to achieve economies in production and other functional areas.

Stage 4: Strategic Integration

The firm now seeks greater with local market through localisation and adaptation of resources.

Moreover synergy is sought to optimise in operations through network and interdependencies of

resources and responsibilities across subsidiaries. Ethnocentrisms is replaced by polycentricism and

geo-centricism resulting in increasing influence of foreigners and evolution of universal

management character

Organisation death or extinction is another important concept which needs attention. The death of

an organization occur when it value stability too much and avoid uncertainty and risk taking. This

means organization is unable to innovate, and incapacity to appraise their own performance. It

believes in stable programming and reluctant to deviate. All this happens when executives have

narrow and parochial view of external reality, and resistance for change is very high. Therefore

either it is organization's inability for adaptation or the hostility of environment leads the

organization for extinction. For example take the case of sick units in textile sector, the industry

booms under government supports and collapses with the withdrawal of concessions and subsidies.

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