Managing Growth Phase

Dr. Harris Turino

Agenda

Growth Phase of Company

Look inside the internal of organization

Growth and Innovation

Growth and Diversification

Part I: Growth Phase of Company

Introduction
Growth is the biggest challenge for company.

When company grow, many parties enjoy prosperity. In the same time, company also faces higher complexity than before.
o o o o More More More More employees to be supervised and various problems to be managed formalization reduce flexibility competitive forces, etc.

In the certain level, this complexity triggers much problems that influence crisis.

Existence

Survival

Success

Take-off

Resource Maturity

Phase I: Existence
Start-up business that establishes through entrepreneurs creativity in identifying opportunity.

Organization Structure Management Style Formalization Focus:

: Simple, informal : Direct supervision, individual : Nonexistent minimal

o Make and sell products o Get more customers (market penetration)

Challenge:

o how to get enough customers and expand sales broader o how to generate enough money to cover cash demand

Crisis

: LEADERSHIP

Phase II: Survival

Young business that grow through direction Organization Structure Management Style Formalization Focus:
o Efficiency of operation o Build competitive position o how to generate enough cash to break even in the short-run (and economic of scale) o how to generate enough cash to stay in in the business, and finance future growth

: More functional : Supervised supervision, central : Minimal

Challenge:

Crisis

: AUTONOMY

Phase III: Success

Completely business entity that grow through delegation Organization Structure Management Style Formalization Focus:
o Market expansion o Product development

: Functional, more decentralized : Functional delegation : Basic and developing

Challenge:

o Disengagement of owner (delegate to professional), or head for growth o How to get resources to achieve faster growth

Crisis

: CONTROL

Phase IV: Take-Off

Corporation that grow through coordination among SBUs. Organization Structure Management Style Formalization Focus: : Divisional and decentralized : Watchdog : Many and maturing

o Consolidate the organization o Product development

Challenge:

o How to grow rapidly and how to finance it o How to overcome owners power syndrome

Crisis

: RED TAPE (BUREAUCRACY)

Phase V: Resource Maturity

Corporate entrepreneur that grow through collaboration. Organization Structure Management Style Formalization : Divisional, with team-based, matrix, and flatter. : Participative, mutual adjust. : Extensive

Focus:

o Problem solving and innovation o How to consolidate and control the financial gain brought on by rapid growth. o How to retain the advantage of small size (flexible and entrepreneurial spirit)

Challenge:

Crisis

: ??? (psychological saturation)

Existence

Survival

Success

Take-off

Resource Maturity

Success in Every Phase

Growth has two faces: prosperity and pain (crisis).
Solution for every crisis triggers the next crisis, and threaten the company existence. Not every company can follow the growth phase linearly. Some companies fail to continue to the next phase (fail to overcome crisis). They could be: o Back to the previous phase o Sell to other investors o Bankrupt (fold the operation)

Thank You