Scribd
Upload
25 views

The Organizational Plan

The document discusses developing an effective management team and organizational structure for a new business venture. It outlines three key functions a management team must accomplish: execute the business plan, identify changes, and adjust the plan based on market conditions. Additionally, it discusses important factors like matching culture to strategy, motivating employees, and spending time on hiring. The document also covers the roles and selection criteria of boards of directors and advisory boards in advising and governing the organization.

Uploaded by

S H A S H I
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
25 views

The Organizational Plan

The document discusses developing an effective management team and organizational structure for a new business venture. It outlines three key functions a management team must accomplish: execute the business plan, identify changes, and adjust the plan based on market conditions. Additionally, it discusses important factors like matching culture to strategy, motivating employees, and spending time on hiring. The document also covers the roles and selection criteria of boards of directors and advisory boards in advising and governing the organization.

Uploaded by

S H A S H I
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 10

The organizational plan

Developing the
Management Team
Investors demand that the management
team not operate the business as a part-
time venture.

It is assumed that the management team


is prepared to operate the business full
time and at a modest salary.

An attempt to draw a large salary out of


the new venture may be perceived as a
lack of commitment to the business.
Legal Forms of Business
Three basic legal forms of business:
Proprietorship - Single owner, unlimited
liability, controls all decisions, and receives
all profits.
Partnership - Two or more individuals
having unlimited liability who have pooled
resources to own a business.
Corporation (C corporation) - Most common
form of corporation; regulated by statute;
treated as a separate legal entity for
liability and tax purposes
Stages in
Organizational Design
Building the Management Team and a
Successful Organization Culture

A management team must be able to


accomplish three functions:
Execute the business plan.
Identify fundamental changes in the
business as they occur.
Make adjustments to the plan based on
changes in the environment and market
that will maintain profitability.
Building the Management Team and a
Successful Organization Culture

Important factors in establishing an effective


team:
Desired culture must match business strategy
outlined in the business plan.
Employees must be motivated and rewarded for
good work.
Entrepreneur should be flexible to try different
things.
Spend extra time in the hiring process.
Core values and appropriate tools must be
provided for employees to effectively complete
their jobs.
The Role of a Board of
Directors
Functions of the board of directors:
Reviewing operating and capital budgets.
Developing longer-term strategic plans for
growth and expansion.
Supporting day-to-day activities.
Resolving conflicts among owners or
shareholders.
Ensuring the proper use of assets.
Developing a network of information
sources for the entrepreneurs.
The Role of a Board of
Directors
They meet the requirements of the Sarbanes-
Oxley Act and the following criteria:
Ability to work with a diverse group and
commit to the ventures mission.
Ability to understand the market environment.
Ability to contribute important skills to the new
venture’s achievement of planning goals.
Ability to show good judgment in business
decision making.
The Board of Advisors
They serve only in an advisory capacity.

No legal status; not subject to regulations


stipulated in the Sarbanes-Oxley Act.

Likely to meet less frequently.

Useful in a family business.

Selection process is similar to the process for


selecting a board of directors.

Advisors may be compensated on a per-meeting


basis or with stock or stock options.
The Organization and
Use of Advisors
Outside advisors are usually used on an as-
needed basis.

They can become a part of the organization and


need to be managed.

The relationship between the entrepreneur and


outside advisors can be enhanced by involving
them thoroughly and at an early stage.

Even after hiring advisors, the entrepreneur


should question their advice.

You might also like