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Optimal Growth and Productivity in Organizations

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CONTRIBUTORS:
  Author Marasco, Joe (b. 1945, d. ----)
JOURNAL:
  The UMAP journal, 25(4), 357 - 374.
YEAR: 2004
PUB TYPE: Journal Article
SUBJECT(S): Models growth and productivity in organizations and examines ways to optimize for both.
DISCIPLINE: Mathematics
HTTP: http://www.comap.com/product/?idx=713
LANGUAGE: English
PUB ID: 103-411-870 (Last edited on 2005/01/24 16:28:09 US/Mountain)
SPONSOR(S):
 
ABSTRACT:
Healthy organizations have a tendency to grow over time. Plainly speaking, those that are successful in getting done what needs to get done are called upon to do more. Usually this translates into growth, as measured by the addition of new people to the team. A significant challenge facing any successful organization is how to stay successful as it grows. This is harder than it looks: The organization needs to continue to do well what it has been doing in the past, it needs to succeed at new challenges put before it, and it has to do both these things while assimilating new team members. Scaling become important; what was relatively easy to do when the team was small becomes more difficult as the team grows larger. But even in periods of zero growth, there are new hires and their associated challenges. Organizations that don’t acquire periodic introductions of “new blood” tend to stagnate and succumb to group-think; and there is always addition of team members just to offset attrition. So, although we specifically address growth, there are applications even in no-growth times. However, in the Silicon Valley and in software development, we have seen the opposite problem: Organizations have a variety of reasons to attempt excessive growth. Often management sees windows of opportunity that they perceive as transitory, the corresponding needs sometimes cannot be fulfilled by just adding on contractors or consultants—more organizational staff is essential. In an attempt to capitalize on a leadership situation or a beachhead established in a new market, organizations rush pell-mell to solidify their position through ultra-rapid growth; middle managers are asked to grow their organizations as fast as they can. The result is usually less than optimal. Certainly when growth rates exceed 50% a year, something very difficult is being attempted; we show why.
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