Stages of development of business organizations

There are four stages of development of each business organization. Each of these stages corresponds to certain management, business strategy, and tactics. However, in order to be able to define them correctly, you will need to accurately perceive and understand the nature and goals of the business organization. The manager discovers the opportunities, develops them, and believes that the success of their implementation is possible.

This confidence is often based on the uniqueness of the managerial idea, the strengths of the product that results from that idea, or some special knowledge and skills that the manager possesses. The above factors are crucial for the period of growth, stabilization, and value of the business organization. In these periods it is clear whether the goals and approaches are managerial or not and whether there is a correct transition from the managerial style of management of the organization to the correct management strategy and tactics.

Business development process

This process depends exclusively on the presence or absence of an entrepreneurial type of thinking and action.

The danger of the manager becoming a classic type of bureaucrat in the phase of business growth and stabilization is great. In many cases, success negatively affects a managerial desire for change, innovation, and development. And when the senior manager ceases to be an entrepreneur, then all partners, employees, and workers in it also do not apply managerial approaches in their work.

The transition from one phase of managerial development to another is not easy, but it is most difficult when moving from the phase of the initial development of the organization to the phase of applying managerial style in entrepreneurship. As Hofer and Chern say in their book The Transition to Professional Management: Among all the various possible transitions, perhaps one of the most difficult to implement and most important for organizational development is the transition from a sole proprietorship to a company organized and managed by the functionally organized professional management team.

There are several main factors hindering this transition:

  1. Extremely centralized management decision-making system;
  2. Excessive dependence in the organization on one or two individuals;
  3. Insufficient managerial knowledge and skills.

In order for a business organization to successfully make the transition from a sole proprietorship to an entrepreneurial company developing on the basis of managerial approaches, it is necessary to comply with the following two conditions:

First, the adaptively evolving business organization must retain some of the key managerial characteristics such as innovation and productivity.

Second, the manager must at all costs pass this spirit of innovation and creativity to the staff of the expanding company, while at the same time he or she will have to start applying some mandatory management approaches in their entrepreneurial activity. Or, in other words, the leader must become a manager and an administrator, but at the same time remain an entrepreneur to a sufficient degree.

Business questions to every senior manager

  • What are the questions an administrator asks about business?
  • What and how do I control?
  • What is the appropriate organizational structure in my markets?
  • How can I reduce the anti-competitive management of my business?
  • What are the corresponding business opportunities?
  • What are the issues that excite an entrepreneur?
  • Where are the untapped opportunities in business?
  • How do I capitalize on profits with these opportunities?
  • What resources do I need to succeed in business?
  • How do I control these resources?
  • What is the best structure for doing business?

Management and business approaches

Right here, where managerial and business entrepreneurial approaches are combined, some major contradictions in business appear:

  1. The bureaucratization of business against its decentralization;
  2. Influence of the unfavorable environment and the competition against the entrepreneurial strategy;
  3. The strategic requirements for quality, security, and innovation against the cost of the company product and financial management;
  4. Growth of entrepreneurial business against the way of decision making. Despite these contradictions, however, entrepreneurial business in most cases manages to apply managerial style and professionalism, without at the expense of the ability to apply entrepreneurial approaches.