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STAGE 4: Next Level

At this point, one of three things happens: (1) the business plateaus, reaching its internal limitation to growth, (2) or the business declines and fails (3) or the company experiences a breakthrough by redefining its business strategies, structures and processes. It marks a crossroads, sometimes seeing the founder/entrepreneur moving on. If this stage is managed well, the company begins a new cycle on the growth curve: serving new opportunities for profitability.

If you believe your company or business is at this stage you may find some very helpful articles and videos with all sorts of advice in the Next Level section of this site. You may also like to hear from some other entrepeneurs telling their stories from Newstalk Podcasts or why not have your own say on the lively smallbusinesscan.com Forum


At this point, one of three things happens: (1) the business plateaus, reaching its internal limitation to growth, (2) or the business declines and fails (3) or the company experiences a breakthrough by redefining its business strategies, structures and processes. It marks a crossroads, sometimes seeing the founder/entrepreneur moving on. If this stage is managed well, the company begins a new cycle on the growth curve: serving new opportunities for profitability.

Following the decentralization in management/structures, top management must again focus on control. Control is affected through co-ordination: formation of product groups, review of formal planning, centralization of support functions, accountability for ROI at product group level and motivation through lower-level employee profit sharing. However, control can often lead to over co-ordination which results in the red-tape crisis.

Co-ordinated control is better replaced with collaboration: team action for problem solving, cross functional task teams, decentralised support staff, matrix structure to handle the right teams for right problems, social control, team behavior education programs and self-discipline replace formal control, formal control systems are simplified, advanced information systems and rewards are geared for team performance.

marketing & sales

  • Innovation, re-invention and succession planning for ‚ breakthrough‚ new growth
  • Internationalization, acquisition and divestment
  • Formation of product groups: Strategic Business Units (decentralized units are grouped together).

Management

  • Each product group is treated like an investment center.
  • Staff members are hired to initiate company-wide control programs.
  • Stock options and company-wide profit sharing are used to motivate employees.
  • Capital allocation decisions are carefully reviewed and analyzed
  • Growth of the headquarters – to review initiatives of the line managers

money

  • Funding innovation , reinvention and succession

motivation

  • Breakthrough
  • Profit sharing and share options

Eventual Problems

  • Red Tape Crisis‚ Procedures take precedence over problem solving
  • Formal planning procedures – Everything is a procedure.
  • Company becomes too large and complex to manage formally.
  • Conflict between the line and staff
  • Management must promote interpersonal collaboration

 

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