Challenges to Growth

Challenges to Growth

BUS 435

Challenges to Growth

There is a total of seven stages of organizational growth. But I will determine which of the first four stages presents the biggest challenge. The first four stages are new venture, expansion, professionalism and consolidation. Only 50% of companies make it to stage two in organizational growth and then 50% of the first 50% make it to stage three (Flamholtz & Randle, 2016). Therefore, I believe stage two, expansion, will be one of the biggest challenges for a company. There are many issues that can arise when in this stage of growth and I will talk about then in this paper.

One of the biggest problems during the expansion stage is keep up with the growth of the company. Many of the company’s resources are stretched as far as possible trying to keep up. As the company grows the payroll list will have to grow too. Sometimes businesses try to keep the payroll as short as possible to try to save money but that can backfire.

Another issue some businesses run into are with their products. Since they do not have the correct staff, they can find themselves not having enough products for the sales they are making. If this happens it can cause some serious problems such as bad reviews, loss of customers, etc. A business will need to keep up with its growth in order to succeed. The entrepreneur that created the product find a difficult time to keep up with the rapid growth. They do not know how to handle all the operations that comes with the business. Sometimes they wind up selling their product to a different company because they can’t handle it.

Sometimes the initial product is not enough to get the company going. The product that was originally created the customers can lose interest or is not enough. The entrepreneur finds it difficult to come up with a new product. Competitors will come up with better products that will cause a lot of businesses to fail if they can’t keep up.

Its extremely important for an entrepreneur to know all aspects of a business prior to starting one. They need to know what to do if the company picks up rapid growth or if it starts the fail. Having a plan prior to something happening would be beneficial because some would start to panic and not be able to think straight. Stage two is a crucial stage in a business.

Reference

Flamholtz, E. G., & Randle, Y. (2016). Growing Pains: Building Sustainably Successful Organizations (5th ed.). Hoboken, NJ: John Wiley & Sons, Inc.