C721 Task 1 Change Need Diagnosis Example

Nineteen Stores, One Person Deciding Everything: Using the Organizational Life Cycle Model to Diagnose Why a Composite Family Bakery Chain Must Change

Student Name

School of Business, Western Governors University

C721: Change Management, Task 1

Course Instructor

Month Day, Year

Nineteen Stores, One Person Deciding Everything: Using the Organizational Life Cycle Model to Diagnose Why a Composite Family Bakery Chain Must Change

The Company

Hartley's Bakery, a composite family business, was founded 26 years ago by Ruth Hartley in a small storefront in Columbus, Ohio. Known for its breads and seasonal pastries, it grew slowly to three stores over its first 15 years, then rapidly to 19 stores across central Ohio in the past 11 years, with 410 employees and a central production kitchen. Ruth remains owner and chief executive; her son manages production and her daughter handles marketing. Revenue has grown every year, but problems have multiplied. On-time delivery from the central kitchen to stores has fallen to 81%, customer complaints about inconsistent products have tripled in two years, store manager turnover reached 45% last year, and two stores opened in the past three years have never been profitable. Ruth still approves every hire above hourly level, every menu change and every purchase over $2,000.

The Organizational Life Cycle Model

The organizational life cycle model holds that organizations move through predictable stages as they grow, each with its own characteristics and its own challenges. In a widely cited synthesis, Quinn and Cameron (1983) described four stages: an entrepreneurial stage, marked by creativity, a founder's vision and informal management; a collectivity stage, marked by high cohesion, commitment and informal communication; a formalization and control stage, marked by rules, procedures, efficiency and stability; and an elaboration of structure stage, marked by decentralization, adaptation and renewal. Their evidence suggested that the criteria by which an organization's effectiveness is judged shift from stage to stage.

Greiner's (1998) related model emphasizes the crises that end each stage. Growth through creativity ends in a crisis of leadership, when the founder can no longer manage a larger organization informally; growth through direction ends in a crisis of autonomy, when managers lower in the organization need authority to act; and later stages bring crises of control and of red tape. Organizations that recognize their crisis can move to the next stage; those that do not tend to stall.

Where Hartley's Is in the Life Cycle

Hartley's shows the characteristics of a company that has grown past the collectivity stage without moving into formalization. The evidence is specific. Decision-making remains informal and centralized in the founder, typical of the entrepreneurial and collectivity stages. Communication depends on personal relationships: store managers call Ruth or her son directly, and many procedures exist only in the heads of long-time employees. There are few written standards for products, no formal training program for new store managers and no system for monitoring store performance beyond weekly sales totals. These structures worked well with three stores, where Ruth could see every loaf and talk to every manager. With 19 stores, they no longer do.

The company is in the crisis the models predict at this point. In Greiner's terms, it faces a crisis of leadership and is approaching a crisis of autonomy: the founder's direct control is becoming a bottleneck, and store managers lack the authority and information to solve problems themselves.

Evidence Linking the Problems to the Stage

Each of Hartley's problems traces to the gap between its size and its stage. Late deliveries result from a production kitchen run by the founder's son without formal scheduling, forecasting or coordination with stores; orders are placed by phone and text. Inconsistent products result from recipes and quality standards that are not written down or trained consistently. Store manager turnover results from managers being hired quickly, given little training and no authority, and then held responsible for problems they cannot control. The unprofitable new stores were opened based on the founder's instinct about neighborhoods rather than market analysis, which served the company well when growth was slow but now carries larger risks. None of these problems is caused by poor effort or bad intentions. They are signs that the structures of an earlier stage are straining under the demands of a larger organization.

Why Change Is Needed

The life cycle model makes clear that Hartley's cannot solve its problems by working harder in the same way. Continuing to rely on the founder's personal oversight will make the bottleneck worse as the company grows, and the effectiveness criteria appropriate to its size, such as consistency, efficiency and coordinated control, cannot be met without formal systems. If the company does not move into the formalization stage, it risks the stall the models describe: declining quality, rising costs and the loss of the reputation that built the business.

What the Diagnosis Points To

The diagnosis points to changes associated with the formalization and control stage, introduced carefully so that the company's culture of craft and care survives. First, document recipes, quality standards and core procedures, and train every store to them. Second, install basic systems: an ordering and production scheduling system linking stores and kitchen, and a monthly store performance report covering sales, costs, waste and customer complaints. Third, build a management layer: hire or promote an operations director and district managers who oversee groups of stores, with authority to make decisions within set limits. Fourth, delegate: raise Ruth's approval threshold for purchases and hiring, and let store managers make routine decisions. Fifth, use market analysis for future store openings.

The model also warns of the next crisis. Formalization can bring excessive rules and rigidity, so Hartley's should build in channels for store staff to suggest improvements and should review procedures regularly. The change will also meet resistance from long-time employees who value direct access to the founder and see new rules as a loss of the family feeling. A 60-year review of research on change recipients found that reactions depend heavily on factors such as participation, communication and trust in management (Oreg et al., 2011), so involving experienced bakers in writing the standards they will follow is both practical and wise.

Conclusion

Hartley's Bakery has outgrown the informal, founder-centered way it is run. The organizational life cycle model explains its late deliveries, inconsistent products, manager turnover and struggling new stores as symptoms of a company caught between stages, facing a crisis of leadership. Moving into formalization, with documented standards, basic systems, a management layer and delegated authority, is the change the diagnosis requires, carried out in a way that preserves the craft and care that made Hartley's successful.

References

Greiner, L. E. (1998). Evolution and revolution as organizations grow. Harvard Business Review, 76(3), 55-68.

Quinn, R. E., & Cameron, K. (1983). Organizational life cycles and shifting criteria of effectiveness: Some preliminary evidence. Management Science, 29(1), 33-51. https://doi.org/10.1287/mnsc.29.1.33

Oreg, S., Vakola, M., & Armenakis, A. (2011). Change recipients' reactions to organizational change: A 60-year review of quantitative studies. The Journal of Applied Behavioral Science, 47(4), 461-524. https://doi.org/10.1177/0021886310396550