Corporate Life Cycles and the Evolution of Management — Part I

Corporations, like products, go through various stages of development from birth to maturity to decline. Although there is conceptual agreement among management theoreticians and practitioners that corporations go through life cycles, there is little agreement as to the nature and characteristics of the cycles. Researchers such as Chandler, Scott, Thain, Lippett and Schmidt, and Greiner have proposed models of corporate development describing the changes an organisation faces as it evolves, what the changes mean, and the implications of these changes for management philosophy, planning and control systems. These models are different in their conceptualisations of the corporate life cycle but they all communicate the same theme: to be successful, organisations must be able to adapt rapidly to significant environmental changes. The critical relationships among corporate life cycles, management style, and planning and control systems are a logical extension of this theme. A corporation's business strategy, structure, goals and methods of operating usually differ markedly in each stage of the cycle; the organisation must be managed by executives with the skills to cope with the demands of each stage of corporate development.