Wrap up - Entrepreneurship/Organization

5 Pages
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Department
Global Management Studies
Course Code
GMS 200
Professor
Shavin Malhotra

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GMS200: Week 13 Wrap Up
April 12, 2011
Entrepreneurship cont.
Family owned business account for 35% of all Fortune 500 companies, they account
for 50% of U.S. gross domestic product
Family businesses…
Owned and financially controlled by family members
Largest percentage of businesses worldwide
Can provide an ideal business situation can set up new processes etc.
Problems unique to family businesses:
oFamily business feud
oSuccession problem
Forms of legal ownership
Sole proprietorship
Partnership
Corporation
Financing the new venture
Sources of outside financing
oDebt financing (loans from a bank, any financial institution. Whoever gives
you the loan doesnt have any ownership stake in your company, but you have
a liability to pay back the loan with interest)
oEquity financing (enroll yourself on the stock exchange. Diluting your
ownership, but you have no liability to pay back)
Equity financing alternatives
oVenture capitalists
oInitial public offerings
oAngel investors (individuals who have a lot of money, who like a certain idea
and want to invest in it)
Organizing
Organizing as a management function?
Organizing: the process of arranging people and other resources to work together to
accomplish a goal
Organization structure: the system of tasks, workflows, reporting relationships, and
communication channels that link together diverse individuals and groups
www.notesolution.com
Formal structures…
oThe structure of the organization in its official state
oAn organization chart is a diagram describing reporting relationships and
the formal arrangement of work position within an organization.
Different types of structures
Functional structures: categorized by departments, example: marketing, finance, HR
oAdvantages:
Allows for more specialization
Offers a clear career path
High-quality technical problem solving
In-depth training and skill development
oDisadvantages:
Lack of coordination between different functions
Delay in turnaround
Pass-off failures
Limits employees to their specific function
Divisional structures: by geography; example: Asian division, North American
division etc.
oCompany example: Deutsche Post World Net
Global logistics services provider
500,000 employees in over 220 countries
Structured into five divisions
Mail
Express-DHL
Logistics
Financial services
Services
oAdvantages:
More flexibility
Improved coordination
Expertise focused on specific customers, products, and regions
oDisadvantages:
Duplication of resources
Competition and poor coordination across division
Emphasis on divisional goals at expense of organizational goals
www.notesolution.com

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Description
GMS200: Week 13 Wrap Up April 12, 2011 Entrepreneurship cont. Family owned business account for 35% of all Fortune 500 companies, they account for 50% of U.S. gross domestic product Family businesses Owned and financially controlled by family members Largest percentage of businesses worldwide Can provide an ideal business situation can set up new processes etc. Problems unique to family businesses: o Family business feud o Succession problem Forms of legal ownership Sole proprietorship Partnership Corporation Financing the new venture Sources of outside financing o Debt financing (loans from a bank, any financial institution. Whoever gives you the loan doesnt have any ownership stake in your company, but you have a liability to pay back the loan with interest) o Equity financing (enroll yourself on the stock exchange. Diluting your ownership, but you have no liability to pay back) Equity financing alternatives o Venture capitalists o Initial public offerings o Angel investors (individuals who have a lot of money, who like a certain idea and want to invest in it) Organizing Organizing as a management function? Organizing: the process of arranging people and other resources to work together to accomplish a goal Organization structure: the system of tasks, workflows, reporting relationships, and communication channels that link together diverse individuals and groups www.notesolution.com
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