ABSTRACT
The corporate strategy that a firm may choose to implement, to a large extent, is determined by the life cycle of the firm. It appears that organizations resemble organic systems in more than one way. The open systems model of organizations, previously discussed, survived by taking inputs from the external environment, processing those and returning the processed inputs to the external environment to gain more resources for continuation of the process. The second and equally relevant resemblance is that a product (the output of an open system), the firm (the open system itself), and the industry in which the firm operates all seem to have a life cycle that resembles that of an organic life cycle. An organic system begins with birth, progresses through a growth stage before reaching maturity, which is followed by decline in vitality, and then finally succumbs to death. The primary difference among the product, firm, and industry life cycles is simply the unit of analysis. Otherwise, they share many similarities.
