It has always been your dream to have your own business. You
and your childhood friend Ravi have developed a product called Sunburst that
could be used by the growing solar energy industry Tanya, a friend you met
through an alumni group, has experience in marketing. The three of you agreed
to form the startup team for Sunburst and you gather together one weekday
morning to discuss the legal form and organizational structure your business
should take.
We’re going to need additional investors and expertise to
get this business off the ground, Ravi says. We should develop a business plan
that will be attractive to potential investors and partners. They’re going to
have concerns about joining a new startup, Tanya says. We should work to
address these from the start.
Ravi looks to you. Can you prepare a PowerPoint presentation
for potential investors? Let them know what legal form the business is going to
take and explain why it works for our company. You should include your analysis
on personal liability, taxes, interests of contributing parties, and management
of the business. We want them to know we’ve done our homework.
Tanya interrupts, the other thing is we have to decide what
organization structure would best serve our goals. That’s right, Ravi says.
We’ve already identified innovation and timely customer service as our top
priorities for Sunburst. We know we need staff to handle product development,
production, finance and accounting, and marketing and sales.
We’re definitely going to need human resources functions,
Tanya says. Outsourcing is one option we should look into. We need to do some
research before we make a decision. Ravi looks to you again. I think we need to
develop a clear mission statement and an organization chart and explain the
rationale for our decisions in a short paper. You’re the most detail-oriented.
You think you can handle it?
In this project, you are determining the best legal form and
organizational structure for your new business. The nature of the
organization’s business and the environment the business operates in are
factors you must consider. Initially, Sunburst will operate locally, but within
five years operations will go national (or international). Read about how you
might plan these stages in Creating and Managing a New Business. (Ref 1)
In the first part of this project, you will create a
narrated PowerPoint presentation for potential investors and partners in your
new company. In this presentation, you will analyze the pros and cons of
various forms of business and recommend the best legal form of business to
achieve your organization’s goals.
In the second part of this project you will design an
effective organizational structure for the business at its inception and in its
next phase of growth. To achieve this, you’ll need to create one short paper
with three sections: (1) a brief mission statement reflecting the primary goals
of the business, (2) a detailed organization chart, and (3) a rationale statement
that explains and supports, thoroughly but succinctly, the mission statement
and structural decisions reflected in the organization chart.
Step 1: Determine the Legal Structure of Your Business:
Gather and Analyze Information
You go to your office to begin the task at hand—the
preparation of a narrated PowerPoint presentation to potential investors that
will address all of the issues involved in making this decision. For critical
background information, see Creating Sunburst: Legal and Organizational Considerations.
(Ref 2) You will need this information to make the best legal and
organizational decisions for your business.
Since one of the investors will not be able to attend a
presentation in person, you need to prepare and record a narrated PowerPoint,
so she can listen at her convenience. In order to complete this task, you
realize that you must do some research to address the legal and strategic
implications if your business is to get off the ground.
What types of business organizations are available to
entrepreneurs?
What are the advantages and disadvantages of each
alternative?
What are the two best choices and why?
How would you explain your choices to your investors?
Be sure to discuss the following information in your plan
(refer to Legal Forms of Business (Ref 3) before you begin writing):
What are the different legal forms of business that you
might consider? You remember that there are at least six factors that will
influence your choice:
creation and maintenance
continuity
ownership and control
personal liability
compensation and division of profits
taxation
What is your proposed choice for the legal form of business?
Include your reasoning based on the preceding six factors and any other
relevant factors.
When your research is complete, continue to the next step,
in which you will create the Powerpoint presentation for your investors.
Step 2: Prepare Your Presentation
Using the information you gathered in the previous step,
prepare a PowerPoint with a transcript. Because you will not deliver this
presentation in person, it should follow the form of asynchronous
presentations. (Ref 4) Be sure to meet the following requirements:
Include a title slide, with your name on it, introducing the
presentation.
On the presentation slides, include only the major bullet
points for each issue.
Include no more than 15 slides (not counting title page or
references list).
Cover all the elements of your plan as outlined in Step 1.
Use your narration to provide the supporting rationale for
each major bullet point.
Include a script of your narration in the notes section of
PowerPoint.
The final slide must present a clear summary of your major
conclusions and any recommendations.
Include a reference page in APA format citing any sources you
used to develop your presentation.
When your presentation is complete, continue to the next
step, in which you will gather information about the potential organization structure for your
business.
Step 3: Determine Your Organization’s Structure: Gather and
Analyze Information
Now that you have decided on a legal organization form for
your business, which currently has a single location, you need to decide on an
organization structure. Organization structure determines such things as what
departments the organization will need, who will report to whom, how many
levels you will have in your organization’s hierarchy, and how many individuals
will report to each manager (span of control). An effective structure should
promote communication and coordination of efforts across the entire
organization. See: Organization Structure and Design. (Ref 5)
You begin your research by formulating a number of
questions, the answers to which will be reflected in a short paper that
includes your mission statement, organization chart, and your rationale for
these recommendations.
1. Sunburst’s primary goals are innovation and customer
responsiveness. How should your mission statement (ref 6) articulate these
goals? How can this statement be drafted so that it is clear, concise, and
meaningful to organization stakeholders?
2. What key tasks must be accomplished in order to meet the
organization’s goals? What individuals or groups will have responsibility for
delivering these processes or items?
3. Will individuals have titles and, if so, which
individuals? What will those titles be?
4. To whom will individuals report? Why?
5. What are the possible impacts of outsourcing the HR
function (Ref 7)? What are the pros and cons of doing so? Make a recommendation
in your paper. If you decide to keep HR in house, make sure its place in your
business structure is reflected in your organization chart.
6. Consider all other relevant factors (for example, will
your business structure be functional, centralized, or decentralized, etc.).
When you have formulated your preliminary thoughts and questions,
begin your research. The resources below are a good start, but you should also
conduct your own research to enhance your knowledge and the final product.
When your research is complete, continue to the next step,
in which you will write your short paper, which will include a mission
statement, organization chart, and summary of the rationale behind your
decisions.
Step 4: Integrate Your Thoughts and Material
You’ve formulated your key questions; you’ve done your
research; you’ve analyzed and refined your information and thoughts. Now it’s
time to put it all together and start drafting your deliverable.
Assemble a short paper that contains the following:
your mission statement of no more than one paragraph
your organization chart
your rationale, no more than five pages (12 point type,
double-spaced), for your chosen mission statement and organization structure as
displayed in your chart
Be sure to attribute any sources you use in the creation of
any of the documents you submit.
Include a reference page in APA format citing any sources
you used in your short paper.
When your mission statement, organization chart, and
rationale statement are complete, continue to the next step, and submit your
work.
Step 5: Materials
narrated PowerPoint with recommended legal form of business
short paper including mission statement, organization chart,
and rationale
