Organizational Life Cycle and Innovation Among Entrepreneurial Enterprises


  • Donald L. Lester Middle Tennessee State University
  • John A. Parnell University of North Carolina at Pembroke
  • Michael L. Menefee Purdue University


Organizational life cycle has been studied for several decades by management researchers. Most efforts, however, have focused on relationships between a specific life cycle stage and another construct, such as organizational effectiveness, management priorities, organizational behavior, or competitive strategy. This study categorizes 107 organizations located in six contiguous counties in the southeastern United States into life cycle stages. Respondents were also asked to identify the importance of innovation and change in their industries, their perceived satisfaction with performance, and their perceived level of threats from the environment. Support was found for four of the five proposed life cycle stages, with none of the respondents indicating that their organizations were in the decline stage. Firms in Stage 1 (existence) and Stage 4 (renewal) reported high scores for innovation and change in their industries and a high level of satisfaction with performance. Stage 1 firms also reported the highest amount of perceived threat from the environment, in contrast to firms in Stage 3 (success) who reported the lowest.


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