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Organizational evolution

Organizational growth is propelled by reaction to crises. At start-up the firm is often organized around the owner, who tends to know more about customers and products than anyone else in the company (creative evolution). However, as the firm grows in size and complexity, and new products and markets are added, the organizational form breaks down and the owner must either sell up or allocate certain functional duties to specialized departments (directed evolution). Eventually, these departments seek greater autonomy and a more delegative style of leadership prevails, which generates more autonomy at lower levels (delegated evolution). As growth continues, senior management become concerned about the high levels of autonomy lower down in the organization and try to regain control by establishing better co-ordination between the various parts of the organization (coordinated evolution). Ultimately, these coordinated practices become institutionalized, and thus planning procedures become ritualized, and procedures seem to assume precedence over problem-solving. To redress the stifling effects of oppressive bureaucracy or ‘red tape’, the company strives towards a new phase of collaboration, with greater emphasis on teamwork, creativity and spontaneity (collaborative evolution). Clearly, each solution to an organizational development problem gives rise to the next evolutionary phase. Since the key to successful marketing is to have a suitable organizational structure, understanding this pattern of structural change can indicate in a useful way appropriate organizational and planning frameworks.

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