The Organizational Life Cycle: Review and Future Agenda

Abstract

Purpose: The review summarizes major research that contributed to the organizational life cycle theory, discusses major issues and contradictions of the theory and offers additional assumptions about the organizational life cycle. Based on that, it attempts to offer a future research agenda for the theory.Methodology/Approach: The paper uses narrative review; the list of included life cycle models stems from previous summaries of the theory and subsequent snowball search through reference lists of individual reviewed papers.Findings: The theory is rich with various life cycle models that nevertheless converge on some major characteristics. Organizational life cycle can be described with classical five stages: (i) founding, (ii) growth, (iii) maturity, (iv) decline, and (v) revival. However, the stages do not necessarily follow in such an order, and therefore the research establishes likely paths in their development. Also, it appears that growth rate (relative to a market) and change in formalism are major factors distinguishing in the theory individual stages.Research Limitation/implication: Organizational life cycle theory is often neglected based on simplifying presumptions like determinism of organizational development. On the other hand, there is a growing evidence that factors stemming from particular life cycle stages alter organizational behavior and therefore should be considered in behavioral research on an organizational level.Originality/Value of paper: The paper represents up to date review of major theoretical models from the perspective of the current state of the field. Since the theory flourished in 70’s and 80’s it is inevitably limited in some aspects. The new review may spark renewed interest in implications stemming from the theory and enrich analytical tools of management scholars.

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