Is the purpose of life development

Corporate life cycle

1. definition: Life cycle models describe the course of corporate development using a biological analogy. They assume that companies follow a quasi-biological development pattern of sequential phases of growth, maturity and age. At least five specific approaches to life cycle models can be distinguished according to their research perspectives: (1) market development models, (2) metamorphosis models, (3) crisis models, (4) structural change models and (5) behavior change models.

2. Models: a) Market development models is based on the assumption of a synchronous development of the product life cycle and the company life cycle. The company's life cycle in terms of sales, turnover and profit develops in parallel with the market for this product. With the market saturation, the demand for this product falls, sales can only be stabilized by discounts and thus at the expense of margins and profit. Microeconomic models are implicitly based on this approach, whereby an ideal typical one-product company is assumed to be the basis for various microeconomic theories of corporate development. In the case of multi-product companies, on the other hand, the predictability of market development models decreases, since the development of the company depends on the life cycle of several markets. Multi-product companies grow continuously when they anticipate expiring product or technology cycles - i.e. declining market growth - through new developments.
b) Metamorphosis models describe the development of a company as a sequence of development stages, each of which is differentiated by the structural characteristics of the organization. These models describe the development of the company from the perspective of organizational development and less from the perspective of overall company development.
c) Crisis models assume that companies have to overcome phase-specific control crises in the course of their development so that they can continue to grow. Due to the growth in sales, companies are reaching the limits of their structure. If this is not synchronized with company growth, control crises arise. Thus, crisis models are similar to metamorphosis models in their focus on structural features of organizations. However, they differ from these in their determinism: companies have to overcome specific crises (e.g. start-up crisis, growth crisis, etc.) as they go through different phases of life in order to continue growing. Just like the metamorphosis models, the crisis models are more focused on the structural features of organizations and less on the interaction between market and company in the life cycle.
d) Structural change models are based on a sequence of development phases that differ in terms of organizational structures and management systems, but also describe the corporate development deterministically. On the one hand, they resemble the deterministic metamorphosis models that postulate a compelling sequence of phases. On the other hand, these models contain - similar to the crisis models - deterministic assumptions about the fact that certain structural changes for future growth are essential for the company's success. In this respect, these models are - in contrast to other models - normative rather than descriptive.
e) Behavior change models are purely behavioral models that assume that the management or the entrepreneur will use his skills or his behavior e.g. B. in the area of ‚Äč‚Äčleadership style and decision-making behavior must be adapted to the requirements of a company so that the company can continue to grow. In this respect, these models can be found in the field of business psychology and organizational theory, although the interaction between the market and the company is more a topic here than in other model approaches.

3. rating: Life cycle models are essentially descriptive models that represent the ideal-typical development of companies. Its insightful value lies in the simplification of complex interactions between companies and the market and the resulting structural changes in the context of long-term company development and the recommendations derived from this for management practice, particularly with regard to the development of processes and organization of the company.