Greiner’s development model

7.5 Greiner’s development model

Greiner’s model of company development (Figure 7.1) is of interest because it seeks to explain the stages of company growth as generalised phenomena. If a company is to grow successfully then, according to Greiner, it must pass through the five stages of growth followed by a defined crisis. He also

The growth of business in the audiovisual industry

PHASE 4 PHASE 5 organisation

Size of PHASE 1

PHASE 2

PHASE 3

Large 5: Crisis of?

Evolution stages Revolution stages

4: Crisis of RED TAPE

5: Growth through COLLABORATION

3: Crisis of CONTROL

4: Growth through COORDINATION

2: Crisis of AUTONOMY

3: Growth through DELEGATION

1: Crisis of LEADERSHIP

2: Growth through DIRECTION

Small

1: Growth through CREATIVITY

Young Mature Age of organisation

Figure 7.1 Greiner’s model of company development 6 . (©Harvard Business School Publishing 1972. Reprinted by kind permission.)

suggests that ‘A company’s past has clues for management that are critical to future success’ 6 .

The five stages of growth with their associated points of crisis are:

1 Creativity followed by a crisis of leadership

2 Direction followed by a crisis of autonomy

3 Delegation followed by a crisis of control

4 Co-ordination followed by a crisis of red tape

5 Collaboration followed by a crisis of ? (the unknown). The two elements of growth and crisis form a stage in the organisation’s life.

Greiner also suggested that specific elements of management organisational practices are present during each phase. Those of phase 1 and 2 are reproduced in Table 7.2 as they characterise the management behaviour of the owner or manager of the VSIPH.

There is evidence to suggest that the VSIPH oscillates between these two first phases of a company’s growth. The audiovisual company that has no

Managing in the Media

Table 7.2 Business behaviour of small enterprises

Phase 1 Phase 2

Management focus Make and sell Efficiency of operations Organisational structure

Informal Centralised and functional Top management

Individualistic and entrepreneur Directive Control system

Market results Standards and cost centres Management reward

Ownership Salaries and merit increases emphasis

(©Harvard Business School Publishing 1972. Reprinted by kind permission.)

current commission functions as in Phase 1. When there is work, a more defined structure comes into play and the company progresses to Phase 2. The problem for the company owner (and entrepreneur) is that the skills needed to acquire and complete the contract stage of a commission are often very different to those that are needed to manage the production phase.

Here are a few further commentaries from company owners 7 :

Periods (of no work) where we are effectively forced to ‘hibernate’. Small core staff . . . who employ others as and when needed by

production. When there is work, a more defined structure comes into play. Production teams with overlapping responsibility.

While the first commission is in progress and going into production, the company owner/manager has to seek new projects. If the contract is complete and the company has not secured another commission, the company falls back to the Phase 1 mode of operation. The team created to produce the programme is lost, and so are the shared skills that may differentiate the company from the competition. The cycle then repeats itself. This pattern of work shows itself with freelance staff as well as small businesses. The successful company is one that can look to the future and develop strategies that can cope with the almost destructive crises that will impact on the firm. As Ralph Stacey points out, ‘. . . creativity is closely related

to destruction’ 8 .

The growth of business in the audiovisual industry