The Analysis of Kian Isatis Pars Company's Position in the Life Cycle

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The Analysis of Kian Isatis Pars Company's Position in the Life Cycle Special Issue INTERNATIONAL JOURNAL OF HUMANITIES AND March 2016 CULTURAL STUDIES ISSN 2356-5926 The analysis of Kian Isatis Pars Company’s position in the life cycle Majid Golestani Kermani Department of Management, Yazd Branch, Islamic Azad University, Yazd, Iran Shahnaz Nayebzadeh * Department of Management, Yazd Branch, Islamic Azad University, Yazd, Iran *Corresponding Author: [email protected] Abolfazl Davoudi Roknabadi Department of Textile Engineering, Yazd Branch, Islamic Azad University, Yazd, Iran Abstract The method of an organization life cycle determination is one of the applied models in relation to the organizational situation analysis. Life cycle stages are provided and crucial factors affecting a business unit performance. The present study aims to investigate Kian Isatis Pars Company’s position in its life cycle. The research method is applied in terms of purpose, descriptive from the practice perspective and a case study in terms of research type. Data were collected via a valid and reliable questionnaire. The population includes 90 managers and staff of Yazd Kian Isatis. 10 senior and middle managers of the company were selected as the sample. Descriptive analysis of the life cycle questionnaire answers (39 questions), were distributed among 10 managers, shows that Kian Isatis Pars Company is in the "evolution" stage of its life cycle. It also suggested that the system and organizational structure have been stabilized and there is a balance between flexibility and controllability; leadership and management has a prominent and highlighted role; as well as, the equation of responsibility and authority is established; human resources in this situation need to improve their expertise and knowledge; risk-taking and innovation are still acceptable; liquidity and earnings management are predictable and controllable, though, the company still needs financial stability and marketing emphasizes on an effective responsiveness capability to the customers' need. Keywords: life cycle, Isaac Adizes, life cycle curve, leadership, management. http://www.ijhcs.com/index.php/ijhcs/index Page 559 Special Issue INTERNATIONAL JOURNAL OF HUMANITIES AND March 2016 CULTURAL STUDIES ISSN 2356-5926 1. Introduction Today, producers and businesses are facing new challenges for the presence in the global economy. Due to the existence of large number of suppliers and their intense competition and increased consumer expectations for offering better quality and faster service, there is a lot of pressure on producers. These factors may have not previously existed. In these circumstances, corporations realized that they are not able to deal with all issues and on the other hand, besides considering the affairs and internal sources to manage and to monitor resources and related bodies outside the company are required. This is because of achieving competitive advantages to gain a greater share of the market (Deloy Esfahani et al., 2014). In fact, companies tend to increase customer satisfaction and to improve their business efficiency in order to achieve more competitive capability (Tan and Kannan, 2005). Given the current situation, to deal with problems and activities along with competitors institutions and companies have to adopt long-term policies and any company should develop a comprehensive program according to the perspective, mission, goals and conditions and indoor facilities as well as opportunities and threats of the external environment (Nazari, 2011). To develop products with higher performance companies are increasingly under clients' pressure. In this regard, successful companies using the resources, capabilities and core competencies in a strategic process attempt to create a unique and sustainable competitive position in the market (Jafarzadeh and Mokhtarzadeh, 2007, 96). One of the applied models in relation to the organizational situation analysis is the organization's determination method of the life cycle. According to this model, each product / service, industry or business has a cycle life. This means that it is born and introduced in a period of time, grows up, matures, and then reaches to the saturation stage and eventually becomes aged and declines. Life-cycle theory is applied in cases such as products, markets, services, technology and industry (Alizadeh et al., 2008, 2). Previous researchers have stated that life cycle stages are important factor affecting the performance of business units (Rezai and Samany, 2014, 89). Many researches on the life cycle of the organization / company have been done; though, companies of the electricity industry have less monitored their life course. Therefore, the present research aims to answer the question:At what stage of life cycle is Kian Isatis Pars Company? 2. Review of the literature 2.1 Companies' life cycle All living things, including plants, animals and humans follow the life curve or life cycle. These creatures are born, grow up, become old and eventually die. These living systems at any stage of their life cycle have certain behavior patterns in order to overcome the stage problems and difficulties associated with transition from one stage to another. Life cycle theory assumes that companies and economic firms like all organisms that are born, grow up and die have a life curve or cycle (Adizes, 2010). http://www.ijhcs.com/index.php/ijhcs/index Page 560 Special Issue INTERNATIONAL JOURNAL OF HUMANITIES AND March 2016 CULTURAL STUDIES ISSN 2356-5926 Implementation of biological life cycle model in economics and in a practical field is a relatively new phenomenon. Fueglistaller and Halter(2005) refer to Grabowski and Mueller(1975) who introduced the life-cycle theory in the 1970s. According to Fueglistaller and Halter, Korallus (1988) as well as Pumpin and Prange (1991), Rosenbauer (1995) also Kemmetmüller and Schmidt (1995) actively contributed in this field. Common tasks of St. Gallen- Blakher (2004) management complete model, Pumpin and Prange (1991) Fueglistaller and Halter (2005) have played a very important role in organizational life cycle development. Dickinson (2006) has introduced a five-stage life cycle in the following order: The introduction at which innovation is created is the first stage. At this stage companies are trying to create awareness, provide information and increase share of the market. The first entries will enjoy the market temporary ownership (Dickinson, 2006,128). Jovanovic (1982) on the subject says: to enter into the market and begins operations companies pay an unrecyclable cost. They receive vocal information on the actual costs and performance levels. Dividend ratio of these companies is usually zero or at most ten percent. Sometimes, the return on investment or adjusted investment is negligible compared to the financing weighted rate (Adizes., 1989,361). Growth stage is the second stage at which the firm's size is greater than firms at intuition stage and sales and earnings growth is higher than the emerging stage. Companies have optimistic expectations about their abilities (such as cost structure and competitive advantage) and at this point make lots investment which are not evident in financial assets and include the organizational capital (such as investment in distributed systems and production infrastructure) as well as technological capabilities (Dickinson, 2006,128). In this range of motions, the dividend ratio usually fluctuates between 10 and 50 percent (Adizes, 1989). Maturity is the third stage at which companies experience a stable and balanced sale and their primary assets are amortized. It should be cited that the speed of equipment disability depends on technological and industrial changes. In these circumstances, the company's inability to cope with the changing competitive environment affects the life cycle progression (Dickinson, 2006, 128). Moreover, the size of the company's assets is greater than growing companies and the dividend ratio usually fluctuates between 50 to 100 percent (Adizes, 1989). Stagnation is the fourth stage at which competitive advantage analysis determines that the maturity stage leads to an inevitable stagnation; to the extent that companies can resume their operations through restructuring (such as acquisition, merger and integration or join to other markets). Corporates try to cash their unproductive assets; in other words to change these resources to new projects that create positive returns (Dickinson, 2006). At this stage, the cost of financing from external sources is high in such a way that in most cases the investment return or the return on the adjusted investment is less than the rate of financing (Adizes, 1989). Bankruptcy is the last stage. Any company can enter into to the degeneration (bankruptcy) stage from any of the previous steps. For example, Jovanovic (1982), via an analytic model showed that due to the long period of the necessary training for stabilizing the competence of the company, the degree of endangerment (probability of bankruptcy) is high in early stages of their http://www.ijhcs.com/index.php/ijhcs/index Page 561 Special Issue INTERNATIONAL JOURNAL OF HUMANITIES AND March 2016 CULTURAL STUDIES ISSN 2356-5926 lifecycle. In addition, if at the previous stages the company's competitive adoption or innovation efforts fail it will enter into bankruptcy or degeneration (Dickinson, 2006). According to Gordon and Walter (2003), based on the life cycle companies are divided into three categories of growing, mature and declining. By accumulating the profit,
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