Life cycle theory

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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.

Change Management MGMT625

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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