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A Longitudinal Study of the Corporate Life Cycle

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Author Info

  • Danny Miller

    (Ecole des Hautes Etudes Commerciales and Faculty of Management, McGill University, Montreal, Quebec, Canada H3A 1G5)

  • Peter H. Friesen

    (Ecole des Hautes Etudes Commerciales and Faculty of Management, McGill University, Montreal, Quebec, Canada H3A 1G5)

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    Abstract

    A review of recent literature on the corporate life cycle disclosed five common stages: birth, growth, maturity, revival, and decline. Theorists predicted that each stage would manifest integral complementarities among variables of environment ("situation"), strategy, structure and decision making methods; that organizational growth and increasing environmental complexity would cause each stage to exhibit certain significant differences from all other stages along these four classes of variables; and that organizations tend to move in a linear progression through the five stages, proceeding sequentially from birth to decline. These contentions were tested by this study. A sample of 161 periods of history from 36 firms were classified into the five life cycle stages using a few attributes deemed central to each. Analyses of variance were performed on 54 variables of strategy, structure, environment and decision making style. The results seemed to support the prevalence of complementarities among variables within each stage and the predicted inter-stage differences. They did not, however, show that organizations went through the stages in the same sequence.

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    File URL: http://dx.doi.org/10.1287/mnsc.30.10.1161
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 30 (1984)
    Issue (Month): 10 (October)
    Pages: 1161-1183

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    Handle: RePEc:inm:ormnsc:v:30:y:1984:i:10:p:1161-1183

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    Related research

    Keywords: organizational life cycle; corporate strategy; evolution of strategy; structure and environment;

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    Cited by:
    1. Ferreira, João & Leitão, João & Garrido Azevedo, Susana, 2007. "Configuration of Logistics Activities across Life-Cycle of the Firms and Performance: Proposal of a Conceptual Model," MPRA Paper 1362, University Library of Munich, Germany.
    2. Alperovych, Yan & Hübner, Georges, 2011. "Explaining returns on venture capital backed companies: Evidence from Belgium," Research in International Business and Finance, Elsevier, vol. 25(3), pages 277-295, September.
    3. Hanna Silvola, 2008. "Design of MACS in growth and revival stages of the organizational life-cycle," Qualitative Research in Accounting & Management, Emerald Group Publishing, vol. 5(1), pages 27-47, April.
    4. Cheng, Hsiang-Lin & Yu, Chow-Ming Joseph, 2008. "Institutional pressures and initiation of internationalization: Evidence from Taiwanese small- and medium-sized enterprises," International Business Review, Elsevier, vol. 17(3), pages 331-348, June.
    5. Mascarenhas, Briance, 1995. "International industry evolution patterns," International Business Review, Elsevier, vol. 4(2), pages 233-246, June.
    6. Carlo Bagnoli & Marco Vedovato, 2014. "The impact of knowledge management and strategy configuration coherence on SME performance," Journal of Management and Governance, Springer, vol. 18(2), pages 615-647, May.
    7. Cader, Hanas A. & Leatherman, John C., 2008. "Geography of Employment and Establishment Dynamics in Information Technology and E-Commerce Industries," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 38(1).
    8. Koberg, Christine S. & Uhlenbruck, Nikolaus & Sarason, Yolanda, 1996. "Facilitators of organizational innovation: The role of life-cycle stage," Journal of Business Venturing, Elsevier, vol. 11(2), pages 133-149, March.
    9. Reeves, Terrie C. & Duncan, W. Jack & Ginter, Peter M., 2003. "Strategic configurations in health services organizations," Journal of Business Research, Elsevier, vol. 56(1), pages 31-43, January.
    10. Liu, Sandra S. & Luo, Xueming & Shi, Yi-Zheng, 2003. "Market-oriented organizations in an emerging economy: A study of missing links," Journal of Business Research, Elsevier, vol. 56(6), pages 481-491, June.
    11. Durand, Rodolphe & Coeurderoy, Regis, 2001. "Age, order of entry, strategic orientation, and organizational performance," Journal of Business Venturing, Elsevier, vol. 16(5), pages 471-494, September.
    12. Kuzmin, Evgeny, 2013. "Cyclicity of stability in economy," MPRA Paper 51241, University Library of Munich, Germany.
    13. Thomas O'Connor & Julie Byrne, 2013. "Governance and the corporate life-cycle," Economics, Finance and Accounting Department Working Paper Series n248-13.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    14. Coeurderoy, Regis & Durand, Rodolphe, 2004. "Leveraging the advantage of early entry: proprietary technologies versus cost leadership," Journal of Business Research, Elsevier, vol. 57(6), pages 583-590, June.
    15. Coad, Alex & Daunfeldt, Sven-Olov & Johansson, Dan & Wennberg, Karl, 2011. "Who do High-growth Firms Employ, and Who do they Hire?," Ratio Working Papers 169, The Ratio Institute.
    16. Noweski, Michael, 2008. "Ausreifung von Politikfeldern - Metapher oder Theorie?," Discussion Papers, Research Group Public Health SP I 2008-304, Social Science Research Center Berlin (WZB).
    17. Davila, Tony, 2005. "An exploratory study on the emergence of management control systems: formalizing human resources in small growing firms," Accounting, Organizations and Society, Elsevier, vol. 30(3), pages 223-248, April.
    18. Moores, Ken & Yuen, Susana, 2001. "Management accounting systems and organizational configuration: a life-cycle perspective," Accounting, Organizations and Society, Elsevier, vol. 26(4-5), pages 351-389.
    19. Ayres, Robert U., 2004. "On the life cycle metaphor: where ecology and economics diverge," Ecological Economics, Elsevier, vol. 48(4), pages 425-438, April.
    20. Heijltjes,Marielle & Witteloostuijn,Arjen, 1996. "Configurations of market environments, competitive strategies, manufacturing technologies and human resource management policies : a two-industry and two-country analysis of fit," Research Memorandum 005, Maastricht University, Netherlands Institute of Business Organization and Strategy Research (NIBOR).
    21. Finbarr Livesey, 2012. "Rationales for Industrial Policy Based on Industry Maturity," Journal of Industry, Competition and Trade, Springer, vol. 12(3), pages 349-363, September.
    22. Feng-Hsu Liu & Hung-Tai Tsou & Lu-Jui Chen, 2013. "The impact of OEM supplier initiatives on buyer competence development: The moderating roles of collaborative relationship and competitive environment," Asia Pacific Journal of Management, Springer, vol. 30(4), pages 1285-1303, December.
    23. Daniela Cristofoli & Angelo Ditillo & Mariannunziata Liguori & Mariafrancesca Sicilia & Ileana Steccolini, 2010. "Do environmental and task characteristics matter in the control of externalized local public services?: Unveiling the relevance of party characteristics and citizens' offstage voice," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 23(3), pages 350-372, March.
    24. Czinkota, Michael R. & Grossman, David A. & Javalgi, Rajshekhar (Raj) G. & Nugent, Nicholas, 2009. "Foreign market entry mode of service firms: The case of U.S. MBA programs," Journal of World Business, Elsevier, vol. 44(3), pages 274-286, July.
    25. WestIII, G. Page & Meyer, G. Dale, 1998. "To agree or not to agree? consensus and performance in new ventures," Journal of Business Venturing, Elsevier, vol. 13(5), pages 395-422, September.

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