Exam 9: Organization Size, Life Cycle, and Decline

In the collectivity stage, departments are established along with a hierarchy of authority, job assignments, and a beginning division of labor.

Organizations going through the life cycle:

Formalization refers to rules, procedures, and written documents that prescribe the rights and duties of employees.

Explain the patterns found in the study of personnel ratios for administrative, clerical, and professional support staff.

The bureaucratic control system was developed to maintain the efficiency and control benefits of bureaucracy yet prevent the problem of slow response to crises.

____ percent of businesses that make it past the first year still fail within five years because they can't make the transition from the entrepreneurial stage.

The elaboration stage involves the installation and use of rules, procedures, and control systems.

____ is the use of social characteristics, such as shared values, commitment, traditions, and beliefs, to control behavior.

Why would a large organization tend to be more formalized?

Large size enables companies to take risks that could ruin smaller firms, and scale is crucial to economic health in some industries.

Discuss the causes for organizational decline. List and define the stages of organizational decline.

Discuss how an organization can help smooth the downsizing process and ease tensions for employees who leave and remain.

As organizations become larger, greater centralization is necessary.

An e-commerce organization is in its sixth month of online operations selling academic regalia for graduation. The founders had long had their own personal web pages, and had stumbled upon an inexpensive source for the sewing of gowns. They invested all their savings and took out a loan in order to finance the inventory and equipment needed to go into business. By March of its first year of operations, an unexpectedly large number of orders reached the company. The founders devoted their full energies to getting product where it needed to be in time for graduation. At odd hours of day and night, they could be found doing anything from the job of the information systems specialist they had recently hired, to the job of the mail clerks. As this company grows and takes on related product lines, what would you expect to happen as they go through the stages of development?

Weber's prediction of the triumph of bureaucracy proved accurate.

Describe the differences between large and small organizations.

____ authority is based on devotion to the exemplary character or to the heroism of an individual person and the order defined by him or her.

Apple was in the ____ stage when it was created by Steve Jobs and Stephen Wozniak in Wozniak's parents' garage.

In the ____ stage, denial occurs despite signs of deteriorating performance.

Your rich uncle owns his own entrepreneurial business and is trying to decide how large it should become. He has asked you to tell him what is the optimum size for a business. Write your response to him.