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CROSS-COUPLING EFFECT OF STRATEGY, STRUCTURE, PERSONNEL AND CULTURE IN LIFE CYCLE THEORY LOGIC
L.A. Gorshkova, doctor of economics, professor
V.A. Poplavskaya, candidate of economic sciences, associate professor Nizhny Novgorod national research state university N. I. Lobachevsky (Russia, Nizhny Novgorod)
Abstract. Relevance and inadequate elaboration of the company development theory and methodology in view of cyclicity of company functioning, and urgent practical importance of activities for reorganization of domestic business entities have predetermined the line of the authors' research. A procedure of the management system development has been elaborated using the life cycle theory and making provision for interdependence of the basic components of a company, its internal and external environment. The reorganization process according to this procedure includes diagnostic, identification, realization and monitoring phases implemented by means of a broad range of methods.
Keywords: company, life cycle theory, models, procedure, methods, strategy, structure, personnel, organizational culture.
Under current conditions of strategic uncertainties, scantiness of resources and increased competition, the management of business entities faces the necessity of continuous searching for adequate management instruments. The most important condition for adaptability of a business entity includes analysis of the level and stage of its development, understanding of functioning cyclicity, in light of the life cycle of manufactured products, exploited technologies, the infrastructure, individual business processes and the company in general.
The heart of the company life cycle (CLC) theory was developed at the end of the previous century by I. Adizes, one of the world's leading specialists in improvement of company performance through comprehensive reorganization, now a scientific program adviser of the Institute of Business Administration of the Academy of National Economy under the Government of the Russian Federation [1]. In the context of his CLC theory [2], Professor I. Adizes considers companies as living bodies that carry out their activities getting through similar stages of the life cycle demonstrating predictable and recurrent behavior patterns at each of them. The author of the theory distinguishes nine stages and provides detailed characteristics of each of them declaring that a company's success is defined by the ability of managers to control transition from one stage to
another.
This theory has proven its practical relevance in many industrialized countries of the world. As far as Russia is concerned, due to the extended period of functioning under the controlled economy, relatively short life cycles of the majority of currently existing companies, the significant number of state-owned enterprises, mechanical transfer of the CLC methodology to Russia is not reasonable, which is confirmed by Doctor I. Adizes [3].
It is the authors' opinion that the practicality of the theory basic postulates is possible on condition of its modernization, in particular, reduction of the number of the life cycle stages and identification of the key interconnected components of the company management system subject to be modified.
The authors of the different model use different terms to designate phases or stages of company development [4]. Their number in different models ranges from three to ten. Sharing the opinion of most researchers using analogy with living bod-ies,it is proposed to differentiate four CLC stages in the context of a company: babyhood, growth, maturity and aging, and as the main components of the management system: strategy, structure, culture and managerial personnel of the company. Brief description of these stages through the management system components is given in Table.
Table . Description of Life Cycle Stages
Company Basic Components Life Cycle Stage
Babyhood Growth Maturity Aging
Strategy "take up one's own niche" gain a foothold on the market and expand into new markets stable position on the market; following formulated plans and ability to foresee things useless attempts to "survive"; inability for changes and development
Structure headed by a manager-owner; the structure is patriarchal internal - mechanistic; expanding external boundaries; creating a network of new "infant companies" internal - organic; maintaining the balance between expansion of external boundaries and their compaction bureaucratic
Culture strong leader exerting an influence on shaping general organizational culture; frequentandinefficientcommunications emphasis on external manifestations of culture common mission and vision sensation; respect for opinions of colleagues; corporate events, cooperative leisure activities; external attributes developed creative spirit lost; there are changes in influence allocation: the management prospers, but average executives are in the middle distance; increased attachment to the past
Personnel personnel principal motivation is enthusiasm; they work hard and intensively in all-hands mode for small remuneration; spontaneous decision-making and information transfer techniques; surplus amount of priorities; readiness for risks strong entrepreneurial spirit and motivation; team creation; continuous training; search for talented vigorous employees; readiness for justified risks team work for obtaining set goals; clear delineation of powers; no turnover of employees; acceptable risk level entrepreneurial spirit exhausted; formalism in relationships; private interests prevail to the prejudice of company goals; drain of talented employees; personnel disengages from work and becomes indifferent; no incentive; indisposition for risks
Controlobject plenty of frequent and significant innovations; business processes are inefficient; production increase continuous innovations; intensive growth of production volumes; setting up control smart innovations; change of accents: from development at all hazards to performance incoordination; stable production volumes; efficientcontrol low level of innovations or their absence; decline of production; decrease in competitive ability, lack of attractive projects and developments; consumers are relegated to the background; drain of customers; senseless control
The procedure proposed by the authors [5] makes it possible to consider interdependence of the life cycle stages and the basic components of the corporate management system. The cyclic procedure includes diagnostic, identification, realization and monitoring phases and is based on the range of methods described in detail in
a work by one of the authors of this research.
The first phase, diagnostic, consisting of modules for diagnosing control object and subject potentials, the company life cycle stage and its external environment, allows for identification of the current state of a business entity.
The identification phase, which includes modules for selecting directions for the company development [6] and determining specific values of the management system components, enables to identify critical points hampering or supporting the functioning of a business entity and bring organizational components in line with each other.
In the context of each of the corporate management system components, one of its possible types is identified: for strategy, this includes growth, stabilization or reduction; for culture, this includes adhocra-cy, market, clan or bureaucracy as well as state and strength; for structure, this includes autonomy, expansion, balanced state or compaction; for managerial personnel, this includes enthusiast, attainder, defender or bureaucrat.
The third phase, realization phase, consists of three modules: diagnostics of possible antagonism of personnel, organizational reassignment and reorganization success rate control, and is designed for immediate effecting organizational reassignment [7].
The monitoring phase implies implementation of two modules; it is required for tracking changes in the internal and external environments of a company and assessing the situation formed in conse-
With a view to ensuring cyclicity of activities, the procedure, depending on the situation assessment results, incorporates a possibility of returning to the diagnostic phase or going on with monitoring, i.e. the procedure is not of one-time but of regular nature since its usage is essential at any stage of the company life cycle.
This procedure may also be applied where reorganization is needed in response for introducing a new production or management technology having special characteristics and requirements for the organizational environment. In particular, the authors' article features a possibility of adapting the above procedure to the organizational reassignment due to introduction of new management technologies in terms of activity monitoring systems for the industrial plants [8].
The use of the concept proposed by the authors gives an insight into what stage of the life cycle a company carries out its activities at, and makes it possible to evaluate the potential and its individual components, identify the basic components of the management system subject to be modified, select and introduce effective methods for systemic changes, create an efficient organizational structure to maintain and implement the designated modifications.
quence of these changes.
References
1. Adizes I., Organizational passages: Diagnosing and treating life cycle problems in organization // Organizational Dynamics, 1979. Vol. 9. P. 3-25.
2. Adizes I., Managing corporate lifecycles. - Paramus N.J.: Prentice Hall, 1999, - 460.
3. Press Release: Dr. Adizes with Dmitry Medvedev and Herman Gref at the Sochi Forum in Russia. 25.09.2012. www.adizes.institute.publications
4. Shirokova G., Organisational life-cycle: The characteristics of developmental stages in Russian companies created from scratch // Journal for East European Management Studies, 2009. Vol. 14, №1. Pp. 65-85.
5. Горшкова Л.А., Поплавская В.А. Методика развития системы управления организацией на разных стадиях ее жизненного цикла // Экономический анализ: теория и практика. - 2010. - № 34. - С. 2-7.
6. Горшкова Л.А., Поплавская В.А. Выбор направления развития промышленных предприятий в соответствии с реализуемой ими стадией жизненного цикла // Вестник Нижегородского университета им. Н.И. Лобачевского. № 4. Ч. 1. - 2010. -С 214-219.
7. Горшкова Л.А., Поплавская В.А. Организационное развитие крупного промышленного предприятия с учетом интересов стейкхолдеров // Менеджмент и бизнес-администрирование. - 2017. - №. 3. - С. 123-131.
8. Gorshkova L.A., Sovik L.E. and Poplavskaya V.A. Methodology of organizational changes during the implementation of business-activity monitoring // International Journal of Business and Social Science. - 2013. - № 4(2). - P. 104-110.
ВЗАИМОВЛИЯНИЕ СТРАТЕГИИ, СТРУКТУРЫ, ПЕРСОНАЛА И КУЛЬТУРЫ В ЛОГИКЕ ТЕОРИИ ЖИЗНЕННЫХ ЦИКЛОВ
Л.А. Горшкова, д-р экон. наук, профессор В.А. Поплавская, канд. экон. наук, доцент
Нижегородского государственного университета им. Н.И. Лобачевского (Россия, г. Нижний Новгород)
Аннотация. Актуальность и недостаточная проработанность теории и методологии развития компании с учетом цикличности функционирования компании, а также неотложная практическая значимость деятельности по реорганизации отечественных хозяйствующих субъектов предопределили направление исследований авторов. Разработана процедура развития системы менеджмента с использованием теории жизненного цикла, предусматривающая взаимозависимость основных компонентов компании, ее внутренней и внешней среды. Процесс реорганизации в соответствии с этой процедурой включает этапы диагностики, идентификации, реализации и мониторинга, осуществляемые с помощью широкого спектра методов.
Ключевые слова: компания, теория жизненного цикла, модели, процедуры, методы, стратегия, структура, персонал, организационная культура.
