Question

3. Discuss the following concepts in relation to entrepreneurship and business model innovation - Greiner Model of Growth Evolution

Answer 1

Greiner Growth Model

The Greiner’s model of organizational growth or the Greiner Business Growth Model is a marketable strategic management tool used in today’s modern businesses so as to make the right strategic decisions in the organization.

To entreprenuership and business model innovation the Greiner Model of Growth Evolution is related as follows:

1. Growth through creativity: In this initial stage of the Greiner Growth Model, the company is young and smaller in size. The organization is at this stage is informal and the employees are very loyal. The entrepreneur is externally oriented and he focuses to invests in new clients. As the organization is growing at fatser ratea and is becoming more complex, the entrepreneur fails to take stock of the situation which leadescto leadership crisis. Coordination and internal control can no longer be carried out by one person. There is a need for an improved structure.

2. Growth through direction: In this stage, functional managers are appointed as a result middle management is created that controls the primary processes. The entrepreneur keeps the cintrol over the central coordination. Because of continues growth, the coordination problems may become too big for the entrepreneur. Along with this, the middle managers need more autonomy.

3. Growth through delegation: In this phase of decentralization, the entrepreneur delegates their important tasks to their middle management which helps in complition of task on time with perfection. With the delegation, the middle managers are responsible for the achievement of  tactical and operational objectives. With separate product groups and individual managers a division structure is also created reuslting in the more divisional managers, the more difficulty for the management board to coordinate all such divisions that operate independently. There is a risk of a management crisis. There are a good chance that the divisional managers plot their own course too much  which may lead the company in a negative way and could break up.

4. Growth through coordination and control: In the this phase of the Model, more light is put on the coordination between the various units. In large diversified organizations the various staff departments take up a strong position from the headquarters from which the divisional managers are managed. A red tape crisis in the company may arise when the staff departments holds too much power but o the other hand there is too little scope for the divisional managers

5. Growth through cooperation: In the this phase of the Greiner Growth Model, cooperation between line and staff departments is targeted and this creates a break-up of the hierarchical coordination forms such as a matrix structure or a project organization. By the mutual contact between employees via all kinds of consultation groups the characterisation of this phase takes place. There is less formalization and standardization. If the frequent consultations constitutes a pitfall, the consultation crisis may arise. There is every chance for the decline in supervision and control. This could result in windinup of the organizations, unless they develop through external alliances.

6. Growth through alliances: In this phase, their is the requirement of only good external contacts and alliances within the organization. These can be found in mergers, extensive networks and alliances. As the organization focus more on alliances as compared to its own core-business, there are a good chances that an identity crisis will arise itself. The organization is completely taken over by someother businesses resulting in the ending up of ‘old’ situation.