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A Longitudinal Study of the Corporate Life Cycle

Author

Listed:
  • 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)

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.

Suggested Citation

  • Danny Miller & Peter H. Friesen, 1984. "A Longitudinal Study of the Corporate Life Cycle," Management Science, INFORMS, vol. 30(10), pages 1161-1183, October.
  • Handle: RePEc:inm:ormnsc:v:30:y:1984:i:10:p:1161-1183
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    File URL: http://dx.doi.org/10.1287/mnsc.30.10.1161
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