3. Consolidating

Between the phases two and three lies a turning point that often goes unrecognised for a while. A choice must be made between protecting what has been achieved up till now  (by doing it better and better), or continuing to act as an entrepreneur. Both are valid strategies, but they are incompatible.

A director involved in this situation might describe it as follows:

“My firm is doing exceedingly well. We easily made more than our business targets, and we’re ready for the next leap. Sales are good, production is speedy and we are well equipped to handle complicated deliveries now. However, there are a few things I’m not happy about. There are still some quality problems, leading to complaints and guarantees. I know this happened more often in the past, but in our present situation we cannot afford this. The market is more critical now, and the risk for claims has increased. We have a name to uphold.

I want to include ‘quality’ in the job descriptions of our managers, maybe attach a bonus….”

“How do the managers feel about this?

“Not too happy, especially as far as their own division is concerned. They’re used to turnover before all else, that’s what you score with around here. Checking time has to be detracted from production time, indirect hours are considered lost hours. But we do need to enhance quality, like it or not.”

“Are you actually willing to invest in that?”

“Well, we’re just not going to make it unless we do. However, we don’t have to go on and become a lot of  bureaucrats, do we?”

Here the move indicated is towards control, to retain security and profitability.

The aim is to perfect and control the production processes, products and services, in order to eliminate risks. The organization is geared to safeguard and expand the position that has been acquired.

In the organizational climate reliability and predictability through strict adherence to rules become dominant.

The business strategy focuses on quality and reliability through strict specifications for products and delivery.

Organizational structure is formal and based on quantitative job analysis, containing detailed job specifications and task descriptions. Output is made less contingent on individual actions or errors by strict functional division and supervision. Throughput is likewise strictly defined and monitored by implementing process control and quality systems.

In management line and staff are brought up to equal levels, often by matrix-like constructions in the organizational hierarchy.