Confusion and Institutionalization Levels

Institutionalization model is placed on a biaxial graphic as seen in Figure

Vertical axis refers “Level of Confusion”, while horizontal axis referring “Level of Institutionalization.” Going through the eight institutionalization stages, mess and

correspondingly level of confusion is low at the beginning, while it reaches the highest point during confused company status in fourth stage. After deciding and starting the institutionalization, level of confusion keeps at higher levels, but with passing the stages and lessening of confusion it becomes normal. Business and executive management is controlled by founder since the foundation, then devolved on second or third generation stakeholders. In confused company stage, the professional “Institutionalization and Change Leader” assigned via the decision of institutionalization takes over the executive management of business. After assignment of institutionalization and change leader, the business is managed in coordination by two parties for a while during transition and delegation. This period should not be too long

and responsibility and authorization of executive management of business should be devolved on professional leader by establishing an environment of mutual trust. Thereafter, stakeholders should take roles such as board chairman or board of management membership and should not intervene the executive management.