Stage of Growth Theory

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Stages of Growth Theory
by Dr. Richard L. Nolan

In the 1970s Richard L. Nolan developed the Stages of growth model which describes the evolution of information technology in organizations. It identifies six stages that an organization could pass through. His models have been used widely in both organizational research (Greiner, 1972) and Information Systems (IS) research (Burn, 1994). These models have been used to describe a wide variety of phenomena-the organizational life cycle, product life cycle, biological growth, etc. These models assume that predictable patterns (conceptualized in terms of stages) exist in the growth of organizations (Smith, Mitchell, & Summer, 1985), the sales levels of products, and the growth of living organisms. These stages are (1) sequential in nature, (2) occur as a hierarchical progression that is not easily reversed, and (3) involve a broad range of organizational activities and structures (Lavoie & Culbert, 1978). Stage 1 – Initiation

The first cautious use of a new technology.
low expenditures for data processing.
small user involvement.
lax management control.
emphasis on functional applications to reduce costs.
Stage 2 – Contagion
The enthusiastic adoption of computers in a range of areas.
proliferation of applications.
users superficially enthusiastic about using data processing. •management control even more lax.
rapid growth of budgets.
treatment of the computer by management as just a machine. •rapid growth of computer use throughout the organization's functional areas. •computer use is plagued by crisis after crisis.
Stage 3 – Control
A reaction against excessive and uncontrolled expenditures of time and money on computer systems. •but no going back on computer use.
Data processing department is raised higher in the organization. •centralized controls placed on the systems.
applications often incompatible or inadequate.
use of database and communications, often with negative...
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