Definition of Criteria for Company Life Cycle's Phase Assesment

Abstract

A company life cycle assessment and stage determination allow us to predict company’s future development and to prevent crisis situations or even its early dissolution. In theory, the number of life cycles stages usually varies from three to ten; nevertheless authors describe the life cycle development more or less alike. Generally, companies pass through birth (existence), growth, maturity, decline and revival stages. In order to determine the appropriate phase, quantitative measures such as a company size (presented as a number of employees) or a company age (the time of its existence) are usually applied. These criteria are not always sufficient; therefore they are also accompanied by qualitative aspects. These may be a company structure, management style, strategies etc. Unfortunately, the obstacles in analysis could arise since qualitative criteria could be influenced by subjective approach of the provider and evaluator, plus some may be considered confidential. Therefore, the aim of the paper is to define a set of criteria for accurate life cycle stage determination. These criteria will be quantitative, detectable and suitable for multi criteria evaluation. The proposed approach will be compared with findings from literature and evaluated in a case study.