(Exhibit 2)

Stages of Organizational Growth

Crisis of
Leadership

Crisis of
Autonomy

Crisis of
Control

Crisis
Bureaucracy

Stage 1
Creativity

Stage 2
Direction

Stage 3
Delegation

Stage 4
Coordination

Stage 5
Collaboration

Management
Focus

Produce and
Sell

Operational
Efficiency

Market
Expansion

Organizational
Consolidation

Problem Solving
and Innovation

Top
Management
Style

Individualistic and
Entrepreneurial

Directive Delegative Monitoring Participative

Organizational
Structure

Informal

Centralizated and
Functional

Decentralizated and
Geographical

Line-Staff and
Product Groups

Matrix of
Teams

Control
System

Market
Results

Standards and
Cost Centers

Reports and
Profits Centers

Plans and
Investment Centers

Mutual Goal
Setting

Management
Reward
Emphasis

Ownership

Salary and Merit
Increases

Individual
Bonus

Profit Sharing and
Stock Options

Team Bonus



BYRON LEONARD INTERNATIONAL, INC.
Telephone: (805)373-7500 or Fax: (805)373-5531
99 Long Court Suite 201 - Thousand Oaks, CA 91360