The Organisational Life Cycle Scale: An Empirical Validation

Abstract

Organizational life cycle scales are widely relied upon by scholar and practitioners alike as a strategic tool to identify firms’ life cycle stages. However, little attention has been paid to verifying and validating the OLC measures despite the considerable amount of OLC literature. The purpose of this study is to critically examine the psychometric properties of the OLC scale proposed by Lester, Parnell and Carraher. Data were obtained from a sample of 174 Australian Chief Information Officers from different sized firms and different industries and analysed by the use of component-based structural equation modelling. Results showed that the five-stage OLC scale exhibits acceptable validity and reliability indices despite some minor weaknesses. Results also confirmed the validity and the generalisability of this scale to measure and identify OLC stages in different types of industries. Based on these results and the literature review, alternate items were developed as substitutes for the weak items and an agenda for future research on OLC measurement is provided.