Greiner Model

Organisational Growth Model (Greiner) - Bank

● Organisations tend to experience five specific
phases of evolution and revolution. These are
known as the “The Five Phases of Growth”.

● Based on qualitative data, gathered from interviews

conducted with personnel in TradeRight, we have
diagnosed that TradeRight has successfully
transitioned through phase 1 “Creativity” and phase
2 “Direction”.

● TradeRight is therefore currently experiencing the

TradeRight evolutionary phase of “Delegation”. However,
TradeRight should be aware of the impending

(Greiner 1998)
“crisis of control” that will inevitably occur.

Given that TradeRight operates in high growth industry, it should be cognisant of what phase the organisation is in as periods of evolution tend to be short.
Currently, TradeRight is experiencing evolution by delegation.
Organisational Growth Model (Greiner)
● TradeRight is a relatively young organisation as it
was only founded a decade ago.

● However, the size of the organisation has grown

quickly. TradeRight is now a large organisation.
As depicted previously, the number of employees
and sales volume have significantly increased over
the past five years.
Proposed
TradeRight
phase of
growth ● Furthermore, TradeRight operates in a high growth
industry. As such, TradeRight has experienced
many evolutions and revolutions in a short period

(Greiner 1998)
of time.

Whilst TradeRight is a large organisation, it is still quite young. It also operates in a high growth industry. This has led to TradeRight transitioning through the
phases of growth faster than other companies operating in a low/medium growth industry.
 TradeRight - Moving through the stages (1 of
2)
Phase 1: Creativity

● The founder of TradeRight, is entrepreneurially oriented.

● His focus was on the creation of the product and satisfying the market need.
● Small team so communication was informal and frequent.
● Customer centric culture created.
● Highly reactive to feedback in the market, the motto of “consider it done” dominates.

Phase 2: Direction
● Business managers are hired and the executive team is also built out.
● There is a greater focus on efficiency of operations (i.e. controlling costs via budgets and
forecasts).
● A unitary functional (“U-Form”) organisational structure was implemented.
● As headcount grows, a hierarchy formed resulting in more formal and impersonal
communication.
● Business processes were also formalised.
● Lower level employees were treated as functional specialists rather than autonomous decision
making managers.
(Greiner 1998) ● Style of management was more directive.
● A balance had to be struck between adaptability and efficiency.

The organisational practices within TradeRight altered, in order to successfully navigate through the first period of revolution and transition into phase 2. This
required that the organisational structure of TradeRight be amended.
 TradeRight - Moving through the stages (2 of 2)
Phase 3: Delegation

● The focus of management within TradeRight has shifted. Their focus is now on the
expansion of markets. In 2020, TradeRight entered into a number of new markets
including Russia, Mexico etc.
● The organisational structure moved from a U-Form structure to a multidivisional
structure, based on geographical locations (i.e. divided between US and EMEA regions).
● Quarterly bonuses were introduced in 2020.
● Individual objectives were assigned to all management and these are monitored by
KPIs.
● The strategic apex delegates more responsibility to middle management, and manages
by exception.

Next Revolution: Crisis of Control?

● Top level executives may feel they are losing control of the organisation. Often, they may
seek to regain control by reverting to a centralised structure. However, in order to
successfully navigate this revolution, the solution is coordination.
(Greiner 1998)

TradeRight becomes a decentralised organisation.

Expanded Greiner Model – Evolution & Revolution – Crossing Chasms
Greiner’s Five Phases of Growth – Example - Railway

● Greiner’s model is a dynamic appraisal of the

evolution of an organisation, but it assumes
‘punctuated equilibrium’ or periods of stability
punctuated by spurts of growth in discontinuous,
qualitatively distinct phases. It prescribes differing
management styles and structures for each phase of
growth.

● Much like a tanker, state-owned entities tend to turn

very slowly. Irish Rail has grown through the Phase
2 practices of direction and centralisation predicting
a crisis of autonomy.

● Evolution towards Phase 3 growth requires

competencies around managerial delegation and
coordinating mechanisms.

Greiner’s Five Phases of Growth (1972, 1998)