Cross-coupling effect of strategy, structure, personnel and culture in life cycle theory logic

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 1. Description of Life Cycle Stages

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 adhocracy, 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 consequence of these changes.

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.