[2] The relevance of a biological life cycle relating to the growth of an organization, was discovered by organizational researchers many years ago.
[9] Comparisons between organisations and living organisms originated as early as 1890[10] by the economist Alfred Marshall who compared firms with trees in the forest, using the metaphor: "But here we may read a lesson from the young trees of the forest as they struggle upwards through the benumbing shade of their older rivals".
[11] Sixty years later, Kenneth Boulding presented the idea that organisations pass through a lifecycle similar to that of living organisms.
[12] Shortly after, Mason Haire was among the initial researchers[13] who suggested that organisations may adhere to a certain path of uniformity in their course of expansion.
As the organization expands from delegating more responsibilities to lower-level managers, top-tier directors start to lessen their involvement in the routine operations, reducing the communication between both levels.
[3] This eventually leads to a crisis of control, as lower-level managers become accustomed to working without the intrusion of top-level directors.
Educational courses are arranged for managers, to equip them with the skills of solving team disputes and to foster greater teamwork.
Complex and formal systems are also made simpler, and there is an increased emphasis on the communication between managers, to solve crucial problems.
However, Greiner predicted that the crisis might involve the exhaustion of members in an organization, due to a strong requirement for innovation and teamwork.
It is also important to note that evolution is not a mechanical event, and organizations must actively seek out new solutions to the current crisis that are also suitable for the next stage of growth.
[46] While Greiner's model is conceptually attractive, the central problem is that it is not possible to operationalise or apply it to specific organizations in practical situations.
The Seven stages of growth of a company's life cycle can be identified (all revenues in US dollars): These ranges are based upon manufacturing firms.