Research On The Organizational Structure Based On The Theory Of Corporate Lifecycles

Any enterprise has a developmental process which can be generated as growing from small and weak to large and strong, from a single product or service to a complex product or service. In the developmental process, an enterprise will go through different stages, and it is the stages it stands at can have a direct impact on their management style, thereby affecting a specific organizational structure change and its choices.The organizational structure of enterprises needs to match with its internal and external environmental characteristics, and the corporate lifecycles is one of the most important environmental factors. Enterprises would be faced with problems of its own stage in business purpose, tasks, behavior. Therefore, management on the organizational structure change must be in consistent with characteristics of the enterprises lifecycle's stages. Meanwhile, the enterprise life cycle gives time-weighted variables concerned with structure design. It will be helpful to broaden the scope on research for the factors affecting the organizational structure reform.Concerning the present researches on enterprises' life cycle and organizational structure, this paper mainly discuss:in order to better organize and manage the structural reform, it is necessary to have a deep understanding on the essence of the enterprises'life cycles, to analyses its decisive factors first. Then we can analyze the interrelationship between these factors and the enterprises' organizational structure reform. Finally we can come to feasible suggestions for an enterprise's organizational reform based on its lifecycle's stage.The theoretical basis of the present paper is the Theory of Corporate Lifecycles and the Theories of Organizational Structure. The content of this research is:firstly, author of this paper gives a review on the birth and development of the Theory of Enterprise Life Cycle, and explain that it is the interaction between the combination and of flexibility and controllability and the internal and external environmental factors in the developmental process. Based on the internal and external factors, an enterprise makes choices actively or passively. The description on the result of the flexibility and controllability is describing the enterprises life cycle's stages. The enterprises life cycle is decided by its flexibility and controllability. Secondly, based on the review for the Theory of Enterprise Life Cycle and the Theories of Organizational Structure from the perspective of flexibility and controllability, the present paper clarified the main affecting factors for organizational structure, such as complexity, degree of centralization and standardization. Then, the interrelationship between enterprises'organizational structure and its flexibility and controllability, which can clarify the mechanism of how the organizational structure reform functions on the reforming needs of enterprises at their own life cycle's stages and its feasibility. Finally, on the basis of this interrelationship, the characteristics of each stage and the corresponding demands for organizational structure reform, how to effectively adjust the organizational structure to fulfill these demands are analyzed.The main innovations of this paper lie in the in-depth analysis and proving for the inherent logical connection between the enterprises' life cycle and organizational structure. The existence of such a link bear with two meanings:on the one hand, changes of enterprises'life cycle's stages will affect the choice of organizational structure, namely enterprises'life cycle is an important contingency factor for the enterprise's organizational structure. On the other hand, organizational structure can also affect the development of the enterprises' life cycle. The main insufficient of this paper lies in:first, besides the enterprises' life cycle, other factors, such as corporate internal and external environment technologies, information, customer needs, value creation model, will also play important roles in the organizational structure reform.Second, the present paper briefly explored and analyzed how to make dynamic matching choice for the organizational structure concerning the enterprise's life cycle's stages, with the purpose of better manage enterprises' organizational structure reform. For the authors' limited theoretical understanding and the depth of this research, the review on the theoretical foundations are inadequate and the suggestions it proposed are in need of practical test.