Journal of Pharmacoeconomics and Pharmaceutical Management (Jan 2023)
Analysis of DarouPakhsh MFG Co. from the organizational life cycle perspective during 2009-2016
Abstract
Background: Organizational life cycle (OLC) model is an approach for analyzing the economic features of organizations. Determining a company OLC is the first step in identifying its weaknesses and can offer the right solutions to address them. In this study, the OLC stage of DarouPakhsh MFG Co. (DPMC) was investigated. The results of this study help the company develop more appropriate programs to achieve organizational goal. Methods: The present study is a descriptive-analytical study from 2009 to 2016, during which the OLC of DarouPakhsh MFG Co was studied. The four variables, age, annual sales growth, capital expenditures, and dividend payout ratio, were calculated, and the OLC score - which shows the OLC stage - was constructed using the Anthony-Ramesh method. Results: According to the results, DPMC was in the maturity phase between 2009 to 2016, except for 2014, which was in the decline stage. The reason for the reduced OLC index was mainly lowering sales growth and fixed assets. Conclusion: DPMC can set appropriate implementations, such as lowering the DPR and current cost or increasing fixed assets to improve its financial performance. Growing fixed assets lead to new technology and product that will enhance firms’ production capacity and profitability. Also, more marketing efforts can increase its sales growth and, subsequently, the OLC index.
