PECULIARITIES OF FORMATION OF THE ORGANIZATION’S DEVELOPMENT STRATEGY BASED ON THE LIFE CYCLE
Journal Title: Проблеми системного підходу в економіці - Year 2017, Vol 6, Issue 62
Abstract
In the course of its development, any organization develops in a certain pattern and passes a number of stages, the change of which is cyclical. Knowledge of the sequence of development of the organization allows us to see the general laws and peculiarities of each stage of the life cycle, to predict the future necessary changes, and to prepare the organization for them, thus contributing to its long and successful functioning. In the article, peculiarities of formation of the organization development strategy based on the life cycle are explored. The essence of the concept of “strategy” on the background of the set of definitions of this concept by the most generalized and, not so much formal and vector directions in the development of a strategy that helps to avoid frequent mistakes in the formulation of development strategies are defined by Henry Mintzberg and Richard Rumelt. The most comprehensive and widespread conception of the life cycle is developed by I.K. Adizes, who prefers to compare it with the process of human development and the following stages: “Courtship”, “Infancy”, “Go-Go”, “Adolescence”, “Prime”, “Stability”, “Aristocracy”, “Recrimination”, “Bureaucracy”, “Death”. Also, the article substantiates the need to take into account the specifics of the main stages of the life cycle during the strategy formation. The mechanism of strategy development taking into account the stages of the life cycle of the organization is determined, where business development strategies are divided into 4 groups: the strategy of concentrated growth – connected with the change of product and market; integrated growth strategy implies expansion of the firm by adding new structures; diversification strategy is a strategy for distributing activities to new areas; strategy of reduction – applied when the organization has no other way out, how to stop the loss-making production or change the scope of activities. The key directions of forming the development strategy at the stages of the organization’s life cycle are substantiated.
Authors and Affiliations
T. A. Kharchenko, A. I. Patlaichuk
Keywords
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