Structuring a Business Background

[MUSIC PLAYING]
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. (I have completed this already, proposed an LLC or

Corporation)
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?< Need

help on this section
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.
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 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? 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.

Blue highlights from above:
Organization Structure and Design
The structure of an organization plays a pivotal role in how everyday tasks are handled, in how resources are allocated, in employee

supervision and reporting, and in coordination amongst employees. It impacts employee behavior, demeanor, and psyche in ways that are

still being studied by theorists today. Organizational structure may play a role in employee motivation and even productivity.
A primary factor in creating and managing a new business involves choosing the best organizational structure for it. Some types of

business are better suited for a clear hierarchical structure, while others are more apt to work within a flatter organizational

structure, with fewer or even no levels of authority. From time to time, a business may reorganize, as online shoe retailer Zappos did

when moving from a hierarchy to a flatter “holacracy.” There were reportedly mixed results spurring from this major shift in business

structure.
As the Zappos case and others reveal, business structure plays an integral role in organizational success. Thus, one should clearly define

the initial organizational structure at the outset of starting a new business and monitor it through the business life cycle, tweaking it

and shifting it as necessary.
Reference to use: ”
Organizational Structure.” Encyclopedia of Management, 6th ed., Gale, 2009, pp. 665-672. Gale Virtual Reference Library,

http://link.galegroup.com.ezproxy.umuc.edu/apps/doc/CX3273100220/GVRL?u=umd_umuc&sid=GVRL&xid=fd86408c. Accessed 26 Feb. 2018.

Tyulkova, N. (2014). A Flexible Organizational Structure as a way of Knowledge Management in SMEs. Proceedings Of The International

Conference On Intellectual Capital, Knowledge Management & Organizational Learning, 549-557.
Mission Statement
In the contemporary economic environment, businesses must often take on roles beyond those of mere profit centers. A well-crafted mission

statement assists in defining the role of a company by succinctly outlining its core purpose and values. All other organizational

documents, such as codes of conduct, should be created to support the mission statement of the organization. Once crafted, a mission

statement should play a role in employee training, advertising, and management. It is the core principle that states who (as a business)

we are, and what (as a business) we do.
Reference: http://sk.sagepub.com.ezproxy.umuc.edu/reference/healthcaremanagement/n837.xml

Outsourcing the HR Function
Outsourcing is a technique used by some companies in which they transfer or contract out certain work to external companies, typically in

an effort to save costs. Outsourcing the human resources (“HR”) function involves the transfer of the tasks usually performed internally

by human resources employees to external companies. Depending on the structure of the organization, the human resources office often

handles such matters as managing employee compensation and benefits, recruiting new employees, ensuring compliance with employee rights

and safety laws, overseeing employee relations, and often the provision of certain employee training.
There are advantages and disadvantages associated with outsourcing the HR function. In addition to the potential cost savings, outsourcing

the HR function provides companies with a means of garnering expertise in the growingly complex areas of employee rights and employment

compliance without hiring additional staff. Outsourcing the HR function may also give companies, whether large or small, a layer of

protection from some lawsuits. By outsourcing, a company can more readily focus on its primary purpose and avoid potential distractions.
Outsourcing the HR function, like any outsourcing, creates distance between the employees of a company and the outside contractors. This

distance may lead to a culture mismatch between the company and its contractor, delays in processing, and reliance on another company to

manage a critical function (i.e., loss of control). The best HR managers align their actions with the organization’s strategic goals. HR

managers typically have organizational and financial knowledge that comes from being a part of the company. Can the outside contractor

provide the necessary alignment with the company’s strategic interests? This outside contractor may or may not be as dedicated to making

process improvements as your own company is, and so, particularly when in a long-term contract, may not expend resources to improve the

quality of service.
For multinational organizations, there are special challenges. Best HR practices may not transfer effectively between countries due to

cultural and institutional differences. Can the outside contractor adapt to local practices and customs while standardizing the best HR

practices across country borders?
These, and other, advantages and disadvantages of outsourcing the HR function should be weighed carefully and discussed prior to action.

Final paper should:
• Assemble a short paper that contains the following:
o your mission statement of no more than one paragraph
o your organization chart
o 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.

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