Stages of growth models have been used widely in both organizational research and information technology management research. According to King and Teo (1997), these models 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, 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.
Stages of growth models are criticized for lack of empirical validity. Benbasat et al. (1984) found that most of the benchmark variables for stages used by Nolan (1979) were not confirmed in empirical studies. Based on empirical evidence, Benbasat et al. (1984) wrote the following critique of Nolan's stage hypothesis:
The stage hypothesis on the assimilation of computing technology
provides one of the most popular models for describing and managing
the growth of administrative information systems. Despite little
formal evidence of its reliability or robustness, it has achieved a
high level of acceptance among practitioners. We describe and
summarize the findings of seven empirical studies conducted during
the past six years that tested various hypotheses derived from this
model. The accumulation of evidence from these studies casts
considerable doubt on the validity of the stage hypothesis as an
explanatory structure for the growth of computing in organizations.
For example, Nolan (1979) proposed that steering committees should be constituted in later stages of maturity. However, an empirical study showed that of 114 firms, 64 of which had steering committees, the correlation between IT maturity and steering committees was not significant. Organizations in practice adopt steering committees throughout the development cycle rather than in the later stages.
Another example is charge-back methods. In a survey, approximately half of the firms used charge-back systems and the other half did not. In the Nolan (1979) structure, as firms mature through later stages, they should have adopted charge-back systems. Yet, in the empirical analysis, there were no significant correlations between maturity indicators and charge-back system usage, according to Benbasat et al. (1984). Benchmark variables such as steering committees and charge-back systems have to be carefully selected and tested before they are applied in survey research.
The concept of stages of growth has created a number of skeptics. Some argue that the concept of an organization progressing uni-directionally through a series of predictable stages is overly simplistic. For example, organizations may evolve through periods of convergence and divergence related more to shifts in information technology than to issues of growth for specific IT. According to Kazanjian and Drazin (1989), it can be argued that firms do not necessarily demonstrate any inexorable momentum to progress through a linear sequence of stages, but rather that observed configurations of problems, strategies, structures and processes will determine firm evolution.
Kazanjian and Drazin (1989) addressed the need for further data-based research to empirically examine whether organizations in a growth environment shift according to a hypothesized stage of growth model or follow a more random pattern of change that would be associated with shifts in configurations that did not follow such progression. Based on a sample of 71 firms they found support for the stage hypothesis.
To meet the criticism of lack of empirical validity, this research paper describes the careful development, selection and testing of a variety of instrument parts to empirically validate a knowledge management technology stage model. …