Organisations exhibit a similar, though not identical, life-cycle pattern of changes to living organisms. They grow, mature, decline, and eventually pass away. However, there are some differences that require attention. Firstly, the duration of each stage is less precise than that of typical organisms. In human beings, physiological growth reaches its climax at about the age of 25 whereas the growth phase of an organisation can vary to a great extent. Secondly, the mechanics upon which changes are based are different. Living organisms are typical biological machines with their own physics and chemistry, while organisations are not. According to Boulding (1956), organisations are at a higher level of complexity than living organisms.

Genetic factors and available resources both influence growth in organisms. Organisms develop from fertilisation to maturity through a programmed or predetermined genetic code, a process termed ‘ontogenic development’ (Ayres, 1994). Apart from this, it is also necessary that the organism acquire sufficient necessary resources from the environment to sustain its life and remain viable. Although the concept of ontogenic development may not be directly applicable to the growth of real organisations due to the difference in basic constituents and mechanisms (i.e. biological vs. socio-technical), there is a similar idea upon which the description of growth in organisations can be based. Greiner (1972) proposed a growth model that explained the growth in business organisations as a predetermined series of evolution and revolution (Figure 11.2, “The five phases of organisational growth (adapted from Greiner, 1972).”). In order to grow, the organisation is supposed to pass through a series of identifiable phases or stages of development and crisis, which is similar, to some degree, to the concept of ontogenic development. Thus, it is interesting to see that systems at different levels of complexity (Boulding, 1956) can exhibit a similar pattern of change. This is also consistent with General System Theory, which attempts to unify the bodies of knowledge in various disciplines (Bertalanffy, 1973).

Greiner’s model suggests how organisations grow, but the basic reasons behind the growth process and its mechanics remain unclear. As mentioned previously, growth in a living organism is a result of the interplay between the ontogenic factor and the environment. Here, positive feedback plays a vital role in explaining changes in a living system. Although both positive and negative feedback work in concert in any living system, in order to grow (or to effect other changes in a system), the net type of feedback must be positive (Skyttner, 2001). In organisms, starting at birth, the importation of materials and energy from the environment not only sustains life but also contributes to growth. As they keep growing, so does their ability to acquire resources. This means that the more they grow, the more capacity in resources acquisition they have and the more resources they can access. This growth and the increase in resource acquisition capabilities provides a positive feedback loop, which continues until the organism matures. The positive feedback loop will be active again when the organism starts to decline, which will be mentioned later.

An analogy can be made between the process of growth in a business organisation and that in an organism (provided that the business organisation pursues a growth strategy). If the resources in a niche or a domain are abundant, a business organisation in that niche is likely to run at a profit (provided that the relevant costs are under control). An increase in profit results in an improvement in return on investment (ROI), which tends to attract more funds from the investors. The firm can use these funds to reinvest for expansion, to gain more market control, and make even more profit. This positive feedback will continue until limiting factors (e.g. an increase in competition or the depletion of resources within a particular niche) take effect.

A living system cannot perpetually maintain growth, nor can it ensure its survival and viability forever. After its growth, the system matures, declines, and eventually ends. This can be explained by using the concept of ‘homeokinesis’ (Cardon, et al., 1972; Van Gigch, 1978, 1991; Skyttner, 2001). It has already been argued that one of the most important characteristics of any living system is that it has to be in a homeostatic, or dynamic, equilibrium condition to remain viable. Nonetheless, the fact that a living system deteriorates over time and eventually expires indicates that there is a limit to this. Rather than maintaining its dynamic equilibrium, it is argued that a living system is really in a state of disequilibrium, a state of evolution termed ‘homeokinesis’. Rather than being a living system’s normal state, homeostasis is the ideal or climax state that the system is trying to achieve, but that is never actually achievable. Homeostasis can be described in homeokinetic terms as a ‘homeokinetic plateau’ (Figure 11.3, “Control requires that the system be maintained within the bounds of the homokinetic plateau. Adapted from Van Gigch (1991).”) – the region within which negative feedback dominates in the living system. In human physiology, after age 25 (the physiological climax state), the body starts to deteriorate but can still function. After achieving maturity, it seems that a living system has more factors and contingencies to deal with, and that require more energy and effort to keep under control. Beyond the ‘upper threshold’ (see Figure 11.3, “Control requires that the system be maintained within the bounds of the homokinetic plateau. Adapted from Van Gigch (1991).”), it is apparent that the system is again operating in a positive feedback region, and is deteriorating. Even though the living system is trying its best to maintain its viability, this effort, nonetheless, cannot counterbalance or defeat the entropically increasing trend. The system gradually and continuously loses its integration and proper functioning, which eventually results in the system’s expiry.

Although we argue that the concept of homeokinesis and net positive feedback can also be applied to the explanation of deterioration and demise in organisations, as noted earlier it is very difficult to make a direct homology between changes in organisms and changes in organisations. Rather than being biological machines, which can be described and explained, to a large extent if not (arguably) completely, in terms of physics and chemistry, organisations are much more complex socio-technical systems comprising ensembles of people, artefacts, and technology working together in an organised manner.

As mentioned earlier, after its maturity, the organism gradually and continuously loses its ability to keep its integration and organisation under control (to counterbalance the entropically increasing trend) and this finally leads to its demise. While this phenomenon is normal in biological systems, even though organisations in general may experience decline and death (as many empires and civilisations did in history), it appears that the entropic process in organisations is less definite and more complicated than that in organisms. Kiel (1991) suggests that this dissimilarity can be explained in terms of systems’ differences in their abilities to extract and utilise energy, and the capacity to reorganise as a result of unexpected and chaotic contextual factors. This suggests that biological systems are less resilient and capable than social systems with respect to natural decline. This may be reflected in the difference in timing and duration of each of their developmental phases. For example, while the duration of each phase in the life cycle, and the life expectancy, are relatively definite for a particular type of organism, such duration is very difficult, if not impossible, to specify for organisations. A small business may, on average, last from several months to a number of years whereas, in contrast, the Roman Catholic Church has lasted for centuries (Scott, 1998). It may be that the size and form of the organisation are influential factors in this respect, a proposition that still requires further empirical investigation.

To be in the region of the homeokinetic plateau, the proper amount of control for a well-functioning and sustainable living systems must be present, and similarly for organisations. Too little control will lead to poor integration and a chaotic situation whereas too much control results in poor adaptation and inflexibility.