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Study notes

Greiner's Growth Model

  • Levels: A Level
  • Exam boards: AQA

Greiner's Growth Model suggests that there are five crises that businesses may experience as they grow.

The phases of the Greiner Growth Model are explained in this short revision video and in the study notes underneath.

Greiner's Growth Model
Greiner's Growth Model

The five predicted crises of growth according to the model are:

Growth Phase: Direction - Crisis of Leadership

  • Informal communication starts to fail
  • Business now too big for leader to get involved in everything

Growth Phase: Delegation - Crisis of Autonomy

  • Business now has functional management
  • But founder / leader still struggling to let go

Growth Phase: Coordination - Crisis of Control

  • More formal management structures in place
  • But new layers of hierarchy needed to keep control

Growth Phase: Collaboration - Crisis of Red Tape

  • A dangerous growth in organisational bureaucracy
  • Slowing decision-making & missing external changes

Growth Phase: Alliances - Crisis of Growth

  • Growth slowing as business runs out of ideas
  • Alliances are sought (including new business owners)

Key Messages from Greiner's Growth Model

What can we learn about the challenges of growing a business if, for a moment, we assume that Greiner's Growth Model is valid?

  • Growth is hard
  • Growth poses many management and leadership challenges (crises)
  • Leadership and organisational structure have to evolve to reflect the growth of a business
  • Businesses that don’t adjust as they grow will experience lower growth than those that do

Criticisms of Greiner's Growth Model

  • Like most models – it is simplistic
  • Not every business will suffer crises as it grows – many adapt easily without suffering any obvious panics or crises
  • The model doesn’t really take account of the pace of growth, particularly in an increasingly dynamic external environment

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