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Signs your company is going down the tubes

Organisations have lifecycles just like organisms. Hundreds on new companies are born every week, and unfortunately hundreds others close their doors. I came across a good list in my Organisation Behaviour text that outlines 14 factors that you should watch out for if you’re looking out for your organisation’s decline. Here they are:

  1. Excess personnel (and excessive job classifications).
  2. Tolerance of incompetence (failure to dismiss poorly performing employees).
  3. Cumbersome administrative procedures (excessive red tape and regulations).
  4. Unusually powerful staff who overwhelm line decisionmakers and deride them as conventional and unsophisticated.
  5. Form over substance, e.g., the planning system and its rules become more important than the results of planning.
  6. Few clear goals and criteria for measuring organisational success.
  7. Reluctance to tolerate conflict or preferring harmony over disagreement in spite of its potential damage to decisionmaking.
  8. Loss of effective communication and excessive centralisation of decisionmaking.
  9. Outdated organisational structure.
  10. Increased scapegoating by leaders (a rise in political behaviour at the top of the management hierarchy).
  11. Resistance to change.
  12. Low morale.
  13. Special interest groups become more vocal (resist changes in technology and methods).
  14. Decreased innovation (fewer new products are developed and introduced in the market).

If you see too many of these, you know action needs to be taken.

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