Entrepreneurship
Videos/Reading materials:
1. How to build a winning team-5 best building practices by Robin Sharma
2. Building an entrepreneurial team by Collin Graham.
3. Building the Next Tem – Steve Jobs building Next.
Question 1
We know that organizations need to be more entrepreneurial if they are to succeed. After viewing all the reading material and the videos, what component or technique in team building do you believe is most important to assure success and growth of a new enterprise?
150 words
Question 2
Analyze the case as discussed in the Case Methodology reading attached below. Case Frank”s Machine shop. 150 words.
Case Frank’s Machine Shop
Frank was not happy with his meeting with Jim Rudnik. Jim had worked in Frank’s Machine Shop for over four years. During all that time Frank had counselled and trained the younger Rudnik leading up to the day, four months earlier, when Frank appointed Rudnik as his shop manager. There was a very important reason for this move. Not only was Frank convinced that he needed a good management team to help him build his company, but he was also convinced that the process of (a) calling on customers, (b) getting a backlog of orders, followed by (c) weeks in the shop getting the orders produced, then going out to call on customers again was counterproductive. One day, Frank believed, his company would be the biggest and best in the city.
But now, just when his plans were starting to coalesce, Rudnik asked Frank to let him re-sign in two months so that he could start his own machine shop. Frank admired Jim for his candour and determination. But he couldn’t hide his disappointment and anger. It was only three years ago that his plans had been set back for the first time by losing another good employee. Now it seemed he had to start again.
History
During the cold war of the 1950s and into the 1970s many young people escaped from Soviet-dominated, East European countries and made their way into the West. In Frank’s case he had applied to the U.S., Australian and Canadian embassies for new immigrant status and was rewarded with a Canadian entry visa. For a number of years he worked as a lathe and machine tool operator until starting his own small business in Toronto, Ontario.
The machine shop was old and most of the equipment was old or run down. However, using his training and innovativeness, Frank soon had the operation running on a first-rate basis. One of his first contracts from General Motors was a job that turned into an ongoing, long-term contract for spacer rods in trailer assemblies. While it would be the case that in the future Frank’s company would derive most of its business from many such contracts, his pre-sent operation needed consistent, hard-driving sales activity to keep the shop busy and to grow.
Company Operations
The machine shop was organized into four operations:
Drill press, punch press—one operator
Bending and welding—one operator’
Lathes and N.C.—two operators
Tool making grinders and mill—one operator’
In addition to four skilled operators there were three apprentice helpers and a shop janitor. Frank’s wife ran the office, handled the accounting function and answered the phone.
The shop foreman was responsible for production control, scheduling the work through each operation, purchasing the materials for each job, training programs and shop morale.
It was now a year after Rudnik’s departure. Frank knew that he could increase the company’s sales level over the million dollar level if he could spend more of his time in the field dealing with customers. His problem was trying to keep a shop foreman in place for the long term while he went after sales and began to execute his master plan for growth. Recently he had read in the Wall Street Journal about a technique referred to as the “golden handcuffs” technique.
A number of versions of the “golden handcuffs” theory were discussed in the article. The simplest method was to promise equity to an employee after they had performed for some period of time, usually one to three years. In larger corporations the equity took the form of share purchase options or warrants, which could be exercised following board approval. In smaller companies it was the promise of a partnership of varying degrees after some period of time. There was no particular formula for the arrangement. It was always, however, the owner or management’s position to maximize performance requirements and minimize the payout of equity participation.
The following information is representative of a provincial program to encourage employee participation in the workplace. It outlines one form of providing the opportunity to become shareholders in an existing venture.
Questions
1. Frank was very happy with his new foreman. But he still was not sure that if he could persuade him to stay that he would remain with the company any more than two to three years. How could he make him a part of the long-term plan, which was to create and operate a multi-million-dollar corporation?
Frank’s Machine Shop Ltd.
Income Statements, Year End 19xx
Sales 686 145
Less discounts, warranty 14 951
Revenue 671 194
Cost of Goods SoldMaterial 103 210
Labour, wages 197 678
Supplies 19 788
320 676
Net Income 350 518
Administration expense 26 600
Rent (plant and office) 24 000
Power and fuel 13 700
Auto expense 9 645
Phone and supplies 6 641
Marketing 5 000
Travel 7 405
Equipment depreciation 12 100
Loans and bank 17 499
Accounting and legal 7 811
Miscellaneous 4 466
204 867
Net Profit after Tax 111 614
Dividends 75 000
Retained earnings 36 614
Frank’s Machine Shop Ltd.
Balance Sheet, Year End 19xx
ASSETSCurrent Assets
CashAccounts receivableMaterial inventoryTotal Current AssetsFixed AssetsEquipmentTruckLess accum. depreciationTotal Fixed AssetsTOTAL ASSETSLIABILITIES 7 448127 65933 650 168 757123 744
171 5105 11152 877
292 501
Current LiabilitiesAccounts payable 5 714
Wages, holidays 20 406
Taxes owing 6 111
Total Current Liabilities 41 231
Long-Term LiabilitiesFBDB loan 79 144
Shareholders’ advances 91 940
Total Long Term Liabilities 171 084
Owner’s EquityAuthorized 10 000 NPV 1
Common shares, 100 issued 80 145
Retained earnings 80 146
TOTAL LIABILITIES 292 501
Question 3
What was the most impressive concept or presentation for you this week based on questions 1 and 2. Discuss in a bit of detail…refer to sources and references.
150 words
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