What the research says about growth outrunning coordination
Larry Greiner’s model of organisational growth remains the standard account of why fast growth produces predictable crises rather than a smooth curve. Greiner’s argument is that each growth phase’s practices — informal coordination, direct supervision, delegated autonomy — resolve that phase’s problem and then become the source of the next phase’s crisis. The phases arrive faster the faster an organisation grows; a business expanding quickly can pass through several of Greiner’s crisis points in a period other organisations would take years to cover.
Jay Galbraith’s information-processing view of organisation design explains the mechanism underneath that pattern. Task uncertainty — which rises with headcount, function count and market reach — determines how much information-processing capacity an organisation needs. Fast growth is, in Galbraith’s terms, a rapid increase in task uncertainty, and organisations that do not correspondingly invest in coordination capacity experience a widening gap between what needs to be coordinated and what the existing systems can actually process.
Nelson Repenning and John Sterman’s research on the “capability trap” describes what tends to happen inside that gap. Using system dynamics modelling and case evidence, they found that under sustained pressure, managers default to working harder rather than working smarter — and that the people who prevent problems from occurring receive no visible credit for doing so, which systematically biases fast-growing organisations toward firefighting over prevention. Donald Sull and Rebecca Homkes’s research adds a further layer: in their study of more than 250 companies, the execution problem that actually bites is usually cross-unit coordination, not vertical alignment — and coordination gaps of exactly this kind tend to remain invisible to senior leadership for some time before they surface as a visible crisis.
Ronald Coase’s foundational argument connects these findings back to a single underlying cause. Coase held that internal coordination — choosing to resolve something through organisational hierarchy rather than repeated market transaction — carries a cost that rises with complexity and dispersion. A fast-growing organisation is, definitionally, increasing its internal complexity and often its dispersion (new functions, new locations, new reporting relationships) faster than most organisations do. What Greiner describes as predictable crisis points, what Galbraith describes as rising information-processing demand, and what Repenning and Sterman describe as the capability trap are three different views of the same underlying dynamic: coordination cost rising faster than the systems built to absorb it.
Why Dubai’s specific growth conditions intensify the pattern
Dubai’s growth conditions make this general pattern more acute in several specific ways. The emirate’s economy has been built deliberately around rapid diversification — logistics, trade, finance, tourism, real estate and, increasingly, technology — which means many organisations operating here are themselves scaling inside a market that is also structurally changing, compounding Galbraith’s task-uncertainty effect: the organisation and its environment are both adding complexity at the same time.
The regulatory structure adds a further, Dubai-specific dimension. Businesses here frequently operate across mainland UAE regulation and one or more of the emirate’s free zones — each with its own registration, licensing and, in some cases, distinct commercial and dispute-resolution regimes, most notably the common-law framework of the Dubai International Financial Centre (DIFC) operating alongside the UAE’s civil-law mainland system. An organisation growing across this structure is not simply scaling headcount; it is coordinating across genuinely different regulatory architectures, which raises the information-processing load in exactly the way Galbraith’s model predicts, independent of how fast the organisation itself is growing.
This particular source of complexity is easy to underweight precisely because it does not show up in headcount, revenue, or most of the growth metrics an organisation is already tracking. Two organisations of identical size, growing at an identical rate, can be carrying very different coordination loads depending on how many distinct regulatory environments — mainland, one or more free zones, the DIFC — their operations actually touch. Sull and Homkes’s finding that the execution problem which actually bites is cross-unit coordination rather than vertical alignment is especially relevant here: an organisation with a sound strategy and clear top-down direction can still struggle badly if the functions operating under different regulatory regimes are not coordinating with each other in practice.
Workforce composition compounds this further. Dubai’s private-sector workforce is overwhelmingly expatriate, with relatively high mobility between employers and markets compared to more workforce-stable economies. High workforce turnover interacts directly with Repenning and Sterman’s capability-trap finding: an organisation firefighting under growth pressure, with a workforce that turns over faster than institutional knowledge can be formally captured, loses exactly the informal coordination capacity that might otherwise have absorbed some of the strain.
Dubai’s position as a logistics and trade hub between Europe, Asia and Africa adds a further consequence worth naming directly: growth here is often not purely organic. It frequently arrives as a step change — a new trade route becoming commercially significant, a shift in regional supply chains, a new free-zone incentive attracting a wave of new entrants to a sector at once — rather than the smoother, more predictable growth curve Greiner’s original model was built to describe. Organisations navigating this kind of step-change growth have less time to build the coordination capacity Galbraith’s model says they need before the next uncertainty spike arrives, which is one reason the capability trap Repenning and Sterman describe can take hold especially quickly in this market.
Where it varies, and what it doesn’t explain
The pattern is strongest in organisations that are simultaneously scaling headcount, expanding across free-zone and mainland structures, and operating in a sector experiencing sector-wide growth (logistics and trade have historically shown this most clearly). It is comparatively weaker in organisations that are growing revenue without growing structural complexity in step — for example, a stable-headcount business benefiting from market-wide demand growth without itself expanding functions or locations.
What the research does not establish is that fast growth is itself the problem, or that slower growth would avoid these dynamics. Greiner’s own framing treats crises as a normal and largely unavoidable feature of growth at any pace; what varies is how much warning an organisation has before a given crisis arrives, and fast growth simply compresses that warning period. The evidence explains why complexity in a fast-growth market like Dubai tends to arrive as a series of step changes rather than a gradual climb — not that fast growth is avoidable or should be slowed as a solution in itself.
There is a consequence worth naming specifically for organisations that misread the pattern as a discipline problem rather than a structural one. An organisation that responds to visible coordination strain by asking teams to “communicate better” or “be more careful,” without addressing the underlying information-processing gap Galbraith’s research identifies, tends to see a temporary improvement followed by a return to the same strain at the next growth step — because the intervention addressed the symptom rather than the capacity mismatch producing it. This is a specific version of the capability trap Repenning and Sterman describe: effort goes into the visible, immediate fix, while the structural investment that would actually close the gap — in coordination systems, in information flow, in decision-rights clarity — remains under-resourced because its benefit is not directly visible in the way a resolved crisis is.
A further misconception worth separating out is the assumption that complexity here is primarily a function of headcount growth. For many Dubai-based organisations, particularly those operating across free zones and mainland structures or serving a genuinely regional client base, complexity is driven at least as much by regulatory and jurisdictional reach as by staff numbers — a distinction explored further elsewhere in this series in relation to regional scaling specifically.
Where this shows up
The questions here are set in Dubai. More Perspectives for this market are on the Dubai page, and the Markets index shows the other business hubs.
Questions worth considering
- Is the organisation coordinating across free-zone and mainland regulatory structures as a deliberate, resourced function, or as an accumulation of ad hoc arrangements?
- Where is workforce turnover quietly eroding the informal coordination capacity the organisation is currently relying on?
- Is current activity biased toward firefighting visible problems, in a way that leaves the people preventing the next set of problems under-recognised?
- Is the organisation reading its own complexity primarily against headcount, when regulatory and jurisdictional reach may be the larger driver?
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