The faster the organization grows, the more severe the growing pains. Specifically, our research has found that high growing pains are statistically correlated to low financial results, and low growing pains are related to high financial results see Publications. Through our research and experience we have identified ten classic growing pains, shown below:. These growing pains are not only problems in themselves; they are an indication of a systemic problem requiring the development of a stronger infrastructure. Although "growing pains" are relatively common in the sense that they are observed in many companies — especially in rapidly growing organizations — they represent an early warning signal for management of impending difficulties and even the potential risk of failure.
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In a previous paper, Flamholtz proposed a framework for strategic organizational development. This framework included an organizational effectiveness model the six factor pyramid of organizational success , and a life cycle model seven key stages of organizational growth, which uses revenues as a surrogate measure of organizational size. The ultimate criterion of organizational success is the ability to continue to operate profitably, and therefore the ultimate measure of organizational success is financial performance.
It also provides evidence that there appear to be certain threshold levels of growing pains which might be used to predict which organizations will be profitable versus those which are likely to be unprofitable.
Although there has been research to test the overall relationship between the organizational effectiveness model and financial performance Flamholtz and Aksehirli, ; Flamholtz and Hua, , there has been no previous empirical research on the relationship between growing pains and financial performance, as reported in the present study.
Another question of interest in this study is: are there benchmark levels of growing pains which might be used to predict which organizations will be profitable versus those which are likely to be unprofitable? The current paper reports the results of a test of the hypothesized relationship between growing pains and financial performance within a US manufacturing firm, using a set of 15 relatively comparable divisions. The results of the analysis suggest that there is a statistically significant relationship between growing pains and financial performance.
The results suggest that there appears to be a maximum level of growing pains beyond which organizational financial health is at risk. These findings have potentially significant implications for management theory and practice.
European Management Journal. Advanced Search. Privacy Copyright. Skip to main content. Abstract In a previous paper, Flamholtz proposed a framework for strategic organizational development.
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Growing Pains: Transitioning from an Entrepreneurship to a Professionally Managed Firm
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Explore a preview version of Growing Pains, 5th Edition right now. Growing Pains is the definitive guide to the life cycle of an organization, and the optimization strategies that make the organization stronger. Whether growth is rapid, slow, or not occurring at all, this book provides a host of solid tools and recommendations for putting everything in order. Now in its fifth edition, this invaluable guide has been fully updated to reflect the current economic climate, and includes new case studies and chapters discussing nonprofit life cycle tools, leadership challenges and the "leadership molecule", and real-world applications of the frameworks presented.
Growing Pains, 5th Edition