A Clustering Approach to Identify the Organizational Life Cycle

Round 1

Reviewer 1 Report

Dear Authors,

The article presents an interesting study using a cluster approach to identify the life cycle of an organization. The abstract is very concise and captures the essence of the article. The title of the article is very interesting for the professional community. However, we would recommend a few modifications before presenting the article:

1.       The introduction is shorter in length. It would be useful to expand it. At the same time, we would recommend moving the table in the introduction to the materials and methods section.

2.       The background and related study is quite good. We would recommend moving the formula that is presented in this section (1) to the materials and methods section. If this is not possible, we would recommend that this formula be modified so that it is easy to read and in the correct format.

3.       For the materials and data chapter, we recommend:

a.       insert at least one or two sentences between the Materials and Data heading and the first subsection. There should be no headings and no subheadings immediately.

b.       For Table 2. the source is missing.

c.       For formulas, numbering is missing.

d.       Expand the chapter more. 

4.       For the results chapter, insert at least one or two sentences between the materials and data heading and the first subsection. There should be no headings and no subheadings immediately.

a.       Tables 3-7 are missing sources. Recommend embellishments.

b.       For figures, same formatting.

c.       We recommend expanding the chapter more.

5.       Chapter discussion is very good and concise.

6.       We recommend that the chapter conclusion be expanded

The article is factual. After resolving and editing the article, we recommend the article for publication. 

Author Response

Dear Reviewer,

We thank you for your most valuable comments and appreciate having had this wonderful opportunity to learn from you. We hope that our responses have effectively addressed your comments.

Question 1: The introduction is shorter in length. It would be useful to expand it. At the same time, we would recommend moving the table in the introduction to the materials and methods section.

Response 1: Thank you for your comment. We expanded the introduction section (page 2). We should mention that Table 1 is extracted from literature and is about the essential characteristics, solutions, and applications of organizational life cycle theory. It is not relevant to our used method. We have edited the title to address it.

We have copied here:

Page 2: Although the OLC stages are presented as a series of phases, these stages should not be considered sequential levels over time, because the organizations may have several revival phases throughout their lifecycle [8]. However,  the hierarchical progression of OLC stages is not easily possible and requires many company activities and Organizing [9]. Overall, thinking about the firms and their development is moved away from the linear growth trajectory to a multidimensional firm situation, where the crises can appear at different points of organizational development. Growth and survival in a competitive environment bring crises proportional to the firm's size and complexity, which the managers should be able to face [10]. Regardless of how the various stages of the organization's life cycle progress, using the firm life cycle theory can predict what solutions and management practices are the best for the corporation to cure itself and improve company performance [9].

Question 2: The background and related study is quite good. We would recommend moving the formula that is presented in this section (1) to the materials and methods section. If this is not possible, we would recommend that this formula be modified so that it is easy to read and in the correct format.

Response 2: Thank you for the carefully review and for noticing this. We transferred equation (1) to the materials and methods section. Also, we numbered all the formulas.

Question 3: For the materials and data chapter, we recommend:

1. insert at least one or two sentences between the Materials and Data heading and the first subsection. There should be no headings and no subheadings immediately.
2. For Table 2. the source is missing.
3. For formulas, numbering is missing.
4. Expand the chapter more.

Response 3: Thank you for noticing this, we have edited the entire method section to address these comments, we have copied the modification here:

Page 4: After data-gathering between 2001-2018, we performed a multi-step analysis to identify the firms' situation from the organizational life cycle perspective. Following we reported the study method in detail.

Page 5: In the maturity stage, the firms experience stable sales, and the dividend payout ratio usually is more than the growth phase. And finally, in the decline stage, sales growth drops, and the firms increase DPR to signal to the market that the profitability has improved [1],[33]

Page 6: In other words, this analysis allows the variables to be transformed into lower numbers of factors in which the counterpart ones are combined and build pithy indexes. This leads to a more accessible and accurate analysis for clustering the firms.

Page 6: After PCA analysis, the developed variables were analyzed by the auto cluster option proposed by IBM SPSS modeler 18.0, and the best method for clustering was chosen for the classification of the pharmaceutical firms based on the fitness indexes. In this stage, considering the indexes' similarity of the firm-years, we classified them into the best accurate and conforming groups.

Question 4: For the results chapter, insert at least one or two sentences between the materials and data heading and the first subsection. There should be no headings and no subheadings immediately.

1. Tables 3-7 are missing sources.

Thank you, we added data source to tables.

1. For figures, same formatting.

Thank you, we added data source to figures.

1. We recommend expanding the chapter more.

Thank you for noticing this, we expanded this section, we have copied them here:

Page 6: We calculated each variable for each firm based on the mentioned formula in the above section and normalized them by the SPSS modeler 18.0 software. The descriptive statistics and normalized forms of each variable are presented in Table 3. The normal form of variables is the most matched formation with the Gaussian distribution. Based on Table 3, for the sales growth and Qtubin variables, log10 of the variables was the closest form to the normal distribution, and other variables had proper normal distribution on their own.

Page 7: Variable 1 was considered to analyze the firms’ performance which runs up to maximum in the maturity stages and drops in the decline stage. Higher amounts show earlier phases of the organizational life cycle for variable 2, which is the subtraction of dividend per ratio from the sales growth. As the firms move towards the decline stage, this index would decrease (section 3.1).

Page 9: According to the compared means approach, there is no significant difference between the average age in the three developed clusters (Figure 2). As presented in Figure 2, although the mean age for the firm-years in the decline stage (cluster 1) was 45.8 years old, and for the ones in maturity and growth stages (clusters 2 and 3) was 42.93 years old, this is not an essential statistical difference. Also, the mean age of the growing and mature firms is the same, which shows that the older companies are not necessarily in the decline stage or vice versa. In other words, age cannot be considered an influential variable for moving toward the decline stage.

Question 5: Chapter discussion is very good and concise.

Response 5: Thank you for your nice words.

Question 6: We recommend that the chapter conclusion be expanded.

Response 6: Thank you for mentioning this. We added a few more sentences to address the reviewer comment, we have copied here:

Page 13: It seems that the age of the firms (which they have shifted from maturity or decline stages into earlier phases of OLC, i.e., growth and maturity, respectively, over 18 years) positively impacts enhancing their experience to recover themselves through building external relationships, improving product development, and accumulating resources. In many cases, the OLC should not be considered as sequential phases during the time.

Reviewer 2 Report

The authors present a very interesting and pertinent paper. It is well organized and very well technically detailed. Some points that could improve the presented work:

1-     Once the paper is quite technical and not to large (~13 pages), I would suggest the authors to introduce a new chapter or subchapter to describe the major parts of the paper (how the paper is organized across the different chapters and subchapters).

2-     Please check also some minor writing typos (in the introduction: “… There are verities of approaches on analyzing life cycle stages ..”) I believe that the authors mean various instead of verities (?). It should be also instead: there are several …

1-     Please recheck the style across the whole document, there are different formatting styles. For example, chapter 1 is different from chapter 2 regarding the formatting style. Please correct this issue.

2-     The formulas across the document must be correctly enunciated. For example, in 3.2 the formulas to calculate the SG an DPR must be numbered or named as (1, 2, 3,.), or (a, b, c, …) etc. Also here, please pay attention to the formatting.

3-     The headers in Table 6 are not properly formatted. Please correct.

Good Job and good luck!

Author Response

Dear Reviewer,

We thank you for your most valuable comments and appreciate having had this wonderful opportunity to learn from you. We hope that our responses have effectively addressed your comments.

Reviewer 2

Question 1: Once the paper is quite technical and not to large (~13 pages), I would suggest the authors to introduce a new chapter or subchapter to describe the major parts of the paper (how the paper is organized across the different chapters and subchapters).

Response 1: Thank you for your comment, we addeed a paragraph to address the reviewer’s commnet

We have copied it here:

Page 2-3: In the following section, section 2 discusses the literature on the organizational life cycle theory and models and then provides a background about the method we used in the study. Section 3 details our data and the analysis method. In section 4, we have presented the study results. We discussed the findings in section 5. Finally, the conclusion and study limitations are reported in sections 6 and 7, respectively.

Also, considering the first reviewer comment we added a paragraph to the introduction, we have copied it here:

Page 2: Although the OLC stages are presented as a series of phases, these stages should not be considered sequential levels over time, because the organizations may have several revival phases throughout their lifecycle [8]. However,  the hierarchical progression of OLC stages is not easily possible and requires many company activities and Organizing [9]. Overall, thinking about the firms and their development is moved away from the linear growth trajectory to a multidimensional firm situation, where the crises can appear at different points of organizational development. Growth and survival in a competitive environment bring crises proportional to the firm's size and complexity, which the managers should be able to face [10]. Regardless of how the various stages of the organization's life cycle progress, using the firm life cycle theory can predict what solutions and management practices are the best for the corporation to cure itself and improve company performance [9].

Question 2: Please check also some minor writing typos (in the introduction: “… There are verities of approaches on analyzing life cycle stages ..”) I believe that the authors mean various instead of verities (?). It should be also instead: there are several …

Response 2: Thank you for your careful review. We edited the etxt to address this comment.

Question 3: Please recheck the style across the whole document, there are different formatting styles. For example, chapter 1 is different from chapter 2 regarding the formatting style. Please correct this issue.

Response 3: Thank you for noticing this. We reviewed the whole document to address the possible styling problems.

Question 4: The formulas across the document must be correctly enunciated. For example, in 3.2 the formulas to calculate the SG an DPR must be numbered or named as (1, 2, 3,.), or (a, b, c, …) etc. Also here, please pay attention to the formatting.

Response 4: Thank you for your comment; we numbered all the formulas. Also, the formulas are made by the MathType software, which is recommended as a tool for inserting equations by JOItmC.

Question 5: The headers in Table 6 are not properly formatted. Please correct.

Response 5: Thank you for your careful review. We have modified Table 6 to address these comments.

Round 2

Reviewer 2 Report

I am satisfied with the review done by the authors

good job!