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Click Step 1: Research the Steps to Create and Manage a Small Business to get started.
Competencies
Your work will be evaluated using the competencies listed below.
1.7: Create neat and professional looking documents appropriate for the project or presentation.
1.8: Create clear oral messages.
Step 3: Determine Your Organization’s Structure: Gather and Analyze Information
After selecting the most appropriate legal form of business, you’re messaged by one of your colleagues in the collaboration, Roza Worrell:
INBOX (1 NEW EMAIL)
From: Roza Worrell
To: You
I’m glad you finalized your decisions on the legal form for the new business. Now we need to decide on the
organization structure and design
that would work best for our goals. We need to determine what departments the organization will need, who will report to whom, how many levels we will have in our organization’s hierarchy, and how many individuals will report to each manager (span of control).
We really need a structure that will promote communication and coordination of efforts across the entire organization. We also need to consider whether or not we should be outsourcing the HR function.
After formulating your thoughts, you may also need to do some additional research on the web and in the library to enhance your knowledge for this presentation.Thanks for all you’re doing to make this business a reality. Good luck in your final prep for the presentation.Sincerely,Roza
Step 4: Prepare Your Presentation
Using the information you gathered from your reading and research, you now are ready to prepare a narrated PowerPoint. Because you want to record yourself and critique your own work, it should follow the form of
asynchronous presentations
. After doing some research, you find that the best presentations are organized by using the following guidelines:
Tailor your presentation to suit the audience.
Include a title slide, with your name on it, introducing the presentation.
Include only the major bullet points for each issue on the presentation slides.
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.
Include a clear summary of your major conclusions and any recommendations on the conclusion slide.
5/24/24, 8:37 AM
Conference Call for New Venture with Gary and
Roza
Course Resource
Conference Call for New Venture with Gary and
Roza
Four icons: gears, light bulb, smartphone, two people
You: Gary and Roza, it’s great to be working with you. I think we make a great team based
on our skill sets. Let me tell you more about the new product and how it will be
invaluable to the solar energy industry. It’s a solar energy–fueled charger that
charges a variety of products on the go, including cell phones and other electronic
devices. We need to come up with a name for it.
I showed you the prototype last month. It’s just about ready to roll, but now I just
need some time to work the kinks out. I project that it will take approximately two
years to develop this prototype for large-scale distribution, but once the product is
on the market, there is excellent growth potential. Think of how much money people
could save on electricity by using this product to recharge their cell phones and
other electronics.
However, you know that my skills are in engineering, and you probably know that
finance, marketing, and politics are not my strong suits. Also, I have to admit that I’m
not very interested in the day-to-day business operations of the company. I’d rather
spend most of my time inventing new products and would like to focus on research
and development.
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Conference Call for New Venture with Gary and Roza
Roza: I think this is a great product and loved seeing the prototype in action last month,
but we’re going to need additional investors and expertise to get this business off
the ground. 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.
We should work to address these from the start. My background in marketing could
help with this, and I also have some experience in new business formation. First, we
need to choose the right legal form of business. We also need to develop our
mission statement and structure our organization to serve that mission. What do you
think are the main priorities of our new enterprise?
You: Last time we discussed this we identified innovation, sustainability, and timely
customer service as our top priorities. I think these are spot on.
Gary: We need to think about how we will bring in the additional skills we need to be
successful. I have decades of experience managing sales in cutting-edge technology
companies. Roza has a background in marketing, and you are our research and
development idea person. We definitely will need someone with finance skills, and
we’ll need to hire staff to handle product development, production, finance,
accounting, marketing, sales, and human resources. We should organize our business
with this in mind. My colleague, Katie Bourne, has expressed interest in working
with us, but she would need an upper five-figure salary and benefits to entice her to
leave her current position. She does not want to be an owner given her desire for
work-life balance, but she would consider joining us as an employee.
We also need a visionary CEO. Ideally, a person with connections and experience in
the solar industry. Since our last conversation, I spoke to Elijah Hecal, a forwardthinking figure in the solar energy field, who is known for being a rainmaker. Hecal
has expressed some interest, but it will take significant incentives to get him on
board. He will want to see the potential to make a lot of money. I know some
companies use stock options to retain executives; perhaps we should look into that
possibility.
We also need to think about raising some start-up capital. I have about $100,000 I
can invest in this company. How about you guys?
Roza: Unfortunately, at this time, I don’t have much money to invest. But I do have some
connections with a wealthy potential investor, Carmen Palombo. I’ve already talked
with her, and she thinks our product has a lot of promise. Carmen would like to play
an active role in running the business and could invest approximately $500,000 up
front. However, she would want to join the three of us as founders of the company.
She was very firm about requiring an ownership stake as well as some protection for
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Conference Call for New Venture with Gary and Roza
her own very considerable personal assets. I’ve told Carmen about our plan to start
locally, go national within a few years, and then international. She seems very
interested. I suggest we plan a dinner with the four of us in the near future. I’ll check
for available dates with Carmen and circle back to you.
Gary: Great idea, Roza. Let’s definitely plan that dinner. We’ve talked about this before,
and none of us mind sharing ownership if Carmen is willing to put that kind of
money into this business. Even if Carmen does join us, I’m still concerned that we
may not have the right level of capital and expertise to ensure our success, especially
with the growth we anticipate. We should look into getting some additional advisors
or put together a group of people to help us with large-scale management. We
should find a way of getting some advisors regularly involved in the company.
You: This is great! I’m really excited to be working with you both and I’m looking forward
to meeting Carmen. I agree with everything that’s been said today and will take a
stab at developing a presentation for Carmen and other investors. Let’s talk again
soon.
Gary: Bye.
Rosa: Have a great one!
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Creating and Managing a New Business
Learning Topic
Creating and Managing a New Business
There are many things to consider when creating and managing a new business. Planning
a business involves many considerations, including:
choosing a business entity type
registering with required government agencies
acquiring licenses and permits
opening bank and credit accounts
adopting management agreements
adopting a business plan and organizational structure
adopting a marketing plan
developing a mission statement
developing a code of conduct or ethics code
joining relevant professional organizations
choosing a stakeholder set of employees, customers, suppliers, advisors, and
investors
All of these actions should be researched and achieved in the 12 months or so before
starting a new business.
One common reason small businesses fail is because of inadequate preparation and
planning before beginning a new business. The reality of business practice is that no one
can predict every potential issue or dilemma. Nevertheless, the resolution of unknown
issues will be expedited and a process will be in place to address them through
instruments such as management agreements, mission statements, business plans, and
codes of conduct.
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5/24/24, 8:37 AM
Creating and Managing a New Business
Moving a business from local to national or even international involves many additional
considerations of management, structure, tax, law, culture, and strategy. Preparing in
advance for such an expansion is a key element of successfully expanding to other
markets. Those who treat international expansion as an afterthought frequently face a
more difficult time when trying to transition to other markets. Moreover, many companies
have blundered by not considering the cultural norms of targeted markets when
attempting to expand beyond local distribution.
© 2024 University of Maryland Global Campus
All links to external sites were verified at the time of publication. UMGC is not responsible for the validity or integrity
of information located at external sites.
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5/24/24, 8:36 AM
Legal Forms of Business
Learning Topic
Legal Forms of Business
Business entities are an integral part of business practice and economic productivity. An
effective business practitioner must understand the characteristics of the major types of
business entities, as these attributes can dramatically affect the nature of the business’s
relationships. Before beginning to conduct business, one should always weigh the benefits
and burdens of the different types of business entities and make a conscious decision
about which type of entity to form to conduct one’s business.
Depending on the type of business, the people involved, and the goals of the business,
some entities may be more appropriate than others for a particular business. To make the
decision about the appropriate type of entity to form, one should consider factors
including the following:
creation and maintenance—the effort associated with forming and maintaining the
entity
continuity—the continuity or stability of the organization upon given occurrences
ownership and control—the ownership rights and control of those involved with the
business
personal liability—the potential for personal liability of those involved with the
business
compensation—the compensation and division of profits among business owners
taxation—the taxation of the organization’s earnings and its distributions of profits
to the owners
Weighing these and related factors, which vary in consequence depending on the entity,
informs the choice of the type of business entity best suited to one’s business.
Examination of these characteristics will make obvious the effect of these attributes on
stakeholders of the business entity. The decision of which entity is right for a particular
business impacts many facets of a business’s operation, including accounting,
management, and finance.
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Legal Forms of Business
Check Your Knowledge
Choose the best answer to each question:
Question 1
Which of the following business entities imposes unlimited liability on all
of the owners?
limited partnership
general partnership
limited liability partnership
S corporation
Question 2
Which of the following is a characteristic of a sole proprietorship?
A sole proprietorship is subject to double taxation.
A sole proprietorship has perpetual life, beyond that of the owner.
A sole proprietorship is formed simply by someone carrying on an
activity seeking a profit.
A sole proprietorship provides limited liability to its owner.
Question 3
What are the owners of a limited liability company (LLC) called?
stakeholders
partners
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Legal Forms of Business
shareholders
members
Question 4
Which of the following is the greatest disadvantage of a C corporation?
The C corporation is subject to double taxation.
The C corporation allows for limited liability.
The C corporation requires a board of directors.
The C corporation provides a means of seeking investment through
issuing equity and debt securities.
Question 5
Which entity allows for the owners to elect whether they manage the
business or they appoint managers?
limited partnership
limited liability company
general partnership
C corporation
Resources
Business Entities
(https://leocontent.umgc.edu/content/scor/uncurated/mba/2218mba630/learning-resourcelist1/business-entities.html?ou=927731)
© 2024 University of Maryland Global Campus
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5/24/24, 8:36 AM
Legal Forms of Business
All links to external sites were verified at the time of publication. UMGC is not responsible for the validity or integrity
of information located at external sites.
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5/9/24, 2:00 PM
Employment at Will
Learning Topic
Employment at Will
0:00 / 6:34
Transcript
Employment at will is a doctrine of common law that allows either the employee or the
employer to terminate an employment relationship at any time, for any reason, with or
without notice, and even for a morally reprehensible reason, so long as the ending of the
relationship does not fall into an exception to the employment-at-will doctrine.
Employment at will is the prevailing legal doctrine concerning employment relationship
termination in 49 US states (not Montana). In the overwhelming majority of the United
States, employment at will and its exceptions govern the rules by which one may legally
terminate an employee.
The generally accepted exceptions to employment at will include
express contract,
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Employment at Will
implied contract,
promissory estoppel,
public policy violations, and
good faith and fair dealing.
We discuss these five exceptions below.
Express Contract Exception
If an employer terminates an employee in violation of the terms of an express contract
between the employer and employee, then the employee can sue the employer for breach
of contract (and, in some states, wrongful termination).
For example, an employment contract guarantees that the employee will be employed by
the employer for a definite duration of time, with cognizable boundaries, such as a “oneyear period” or “for six months.” The employer terminates the employee before the stated
period has expired, and that termination is not otherwise permitted by the contract.
Likewise, consider a case where an employment contract states that an employee can be
terminated only “for cause” or “for just cause,” and the employee is terminated without
cause.
Implied Contract Exception
Implied contracts are contracts created by the conduct of the parties, which include any
representations or assurances made by the employer prior to or during the term of
employment. In some states, an implied contract is an exception to the employment-atwill doctrine.
For example, if an employer provides an employee handbook to a new employee, the
provisions in the handbook may be considered part of the contractual relationship. Often,
such handbooks outline a procedure for performance review, discipline, and discharge of
the employee. An employer who fails to live up to procedural obligations prior to
discharging an employee could be liable.
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Employment at Will
Promissory Estoppel Exception
In many states, promissory estoppel acts as an exception to the employment-at-will
doctrine. That is, when an employer makes a promise to an employee of employment or a
period of employment, and the employee relies on that promise to his detriment, and it
leads to injustice, then an employee may be able to have that promise enforced regardless
of employment at will.
For example, John is offered a job with Widget Co. He discusses with Widget’s manager
that, to take the job, he needs to move from California to New Jersey and give up an
already lucrative position with benefits. The manager assures John that he will have
gainful employment and a substantially larger income with Widget Co. for at least a year if
he makes the move. In reliance on this promise, John quits his job and moves to New
Jersey to begin work at Widget Co. After one week, John is laid off. Despite being an
employee at will, John may be able to recover under the theory of promissory estoppel.
Public Policy Violations Exception
Most states in the United States prohibit an employer from firing an employee if the
reason for the action violates some readily accepted public policy. This prohibition
prevents an employer from terminating an employee for exercising a legal right, including
a right contained in state and federal laws; or for failing to perform an illegal act for the
employer.
Firing an employee for performing some public duty (showing up to jury duty), for
exposing illegal conduct (such as reporting violation of some law to the employer or a
government agency), or for exercising her rights as a US or state citizen (such as voting)
are all against public policy.
This exception to employment at will encompasses the inability to terminate an employee
if doing so would violate her state or federal statutory rights. If an employee is terminated
because of her race, this may be a violation of Title VII of the Civil Rights Act of 1964, and
so an otherwise at-will employee would have a claim against the employer for violating a
federal statute.
Moreover, it is against public policy to terminate an employee for refusing to commit an
illegal act, such as a crime.
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Employment at Will
Good Faith and Fair Dealing Exception
A minority of states impose upon the employer a duty to exercise good faith and fair
dealing in regard to all employees. This doctrine, to varying degrees, means that an
employer must treat an employee fairly in the decision to fire her. This generally means
that an employer would violate these duties in firing an employee without due cause or
justification.
The preceding five generally accepted exceptions to employment at will allow injured
parties to seek recovery even in the face of the employment-at-will doctrine. As such,
they limit the circumstances by which an employer can terminate an employee.
Licenses and Attributions
Business Law: An Introduction (https://thebusinessprofessor.com/business-law-anintroduction/)
, by TheBusinessProfessor.com, Jason M. Gordon & Colleagues has been
adapted with permission from Jason M. Gordon. © Business Professor, LLC.
© 2024 University of Maryland Global Campus
All links to external sites were verified at the time of publication. UMGC is not responsible for the validity or integrity
of information located at external sites.
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