Organizational life cycle

The organizational life cycle is the life cycle of an organization from its creation to its termination. It also refers to the expected sequence of advancements experienced by an organization, as opposed to a randomized occurrence of events. The relevance of a biological life cycle relating to the growth of an organization, was discovered by organizational researchers many years ago. This was apparent as organizations had a distinct conception, periods of expansion and eventually, termination.

Sometimes the term business life cycle is used interchangeably with the organizational life cycle, while the two are different. The organizational life cycle is a more inclusive term for all kinds of organizations which includes even government organizations, but the business life cycle refers more specifically only to for-profit companies. Other than this, within the scope of business, the organizational life cycle and business life cycle can be distinguished by their primary focus. The organizational life cycle is primarily concerned with the internal development and evolution of the organization itself, while the business life cycle is primarily concerned with the external development and evolution of the business within its market environment. In other words, the organizational life cycle is an inward-looking process, while the business life cycle is an outward-looking process.