ORGANIZATIONALPLANDISCUSSIONON

B a s e d o n t h e P e r s p e c t i v e o f P a k i s t a n

An Organizational Plan is basically a “to do” list for an organization.It lists out the plan of work, programs, and organizational growth over a period of time - six months, a year or five.The tasks involved, who is responsible for them, and when they’ll be done.

• Set priorities for work• Make sure tasks get done on time• Focus on one thing at a time• Share work among staff, board members & volunteers• Make goals clear to investors• Get a handle on big projects by breaking them down• See the big picture of what organization is doing

An Organizational Plan Helps To:

•Management’s ability and commitment to the new venture are significant to investors.

•Investors demand that the management team not operate the business as part time venture.

developing the manageme

nt team•management team to operate the business full time at a modest salary

•Drawing out large salaries for the management team is unacceptable to an Entrepreneur and considered to be a lack of psychological commitment to the business

basic legalforms

are

Proprietorship form of business with single owner; unlimited liability; control over all decisions; receives all profits

Legal forms of Business

Partnership form of business with 2 or more individual with unlimited liability, pooling resources to own a business.Corporation form of business with separate legal entity, run by stockholders having limited liability & regulated by statute

Factors Proprietorship Partnership Corporation

Ownership Individual

No Limitation on Number of partners

No Limitation on number of

stockholders

Liability of Owners

Individual Liable for business Liability

In general partnership,

individuals are liable for business

liabilities. In Limited

Partnership partners are

liable for capital contribution

Amount of capital

contribution is limit of

shareholder’s liability

Factors of the three forms of Business Formation

Factors Proprietorship Partnership Corporation

Costs of Starting Business

Only Filing Fees for

trade name

Partnership agreement,

legal cost, and minor filing fees for trade name.

Limited partnership

requires more comprehensive

agreement, hence higher

cost

Created only by statute, Articles

of incorporation,

filing fees, taxes, and fees

for states in which

corporation is registers to do

business

Factors Proprietorship Partnership Corporation

Continuity of

Business

Death dissolves the

business

Death or withdrawal of one partner terminates partnership

unless partnership agreement stipulates

otherwise. In limited

partnership death or

withdrawal of one partner has

no effect on continuity.

Limited partners can withdraw

capital six months after

notice is provided

Greatest form of continuity. Death or

withdrawal of owner(s) will

not affect legal existence of

business

Factors Proprietorship Partnership Corporation

Transfer-ability of interest

Complete freedom to

sell or transfer any

part of business

General Partner can transfer

his/her interest only with

consent of all other general

partners. Limited partner can sell interest without consent

of general partners.

Stockholders can sell or buy stock at will.

Stocks’ transfer may be

restricted by agreement. In S

corporation, stock may be

transferred only to an individual

Capital Requirem

ents

Capital raised only by loan or increased

contribution by

proprietor.

Loans or new contributions by partners require

a change in partnership agreement

New Capital raised by sale of stock or bonds or by borrowing in name of Corp. In S Corp. only

one class of stock & limited

to 75 shareholders

Factors Proprietorship Partnership Corporation

Management

Control

Proprietor makes all

decision and can act

immediately

All partners have equal control and

majority rules. In limited

partnership, only the general partners control

the business.

Majority stockholder(s)

have most control from legal point of view. Day-to-day control in

hands of management

who may not be major

stockholders.

Distribution of

profits and losses

Proprietor responsible and receives

all profits and losses

Depends on partnership

agreement and investment by

partners.

Shareholders can share in

profits by receipt of dividends

Attractive-ness for raising capital

Depends on capability of proprietor

and success of business

Depends on capability of partners and

success of business

With limited liability for

owners, more attractive as an

investment opportunity

The 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 manageme

nt team

Once legal form of organization is determined, the entrepreneur will need to prepare a job description and job analysis.

building a successful

organizational culture

The job analysis will be serving as a guide in determining hiring procedures, training, performance appraisal, compensation program, and job description and specification.

Job description Specify the details of the work that is to be performed and any special conditions or skill involved in performing the job. Job description should contain a job summary, skills or experience required, a summary of the responsibilities and duties the authority of the individual and standards of performance.

building a successful

organizational culture Job specification

outlines the skills and abilities needed to perform the job including prior experience. Outlining the job specification for a trained employee is easier than for the untrained people who will be trained on the job. So the entrepreneur should focus on specific qualities that will be required, such as personality, physical traits, interest, or sensory skill.

•Reviewing operating and capital budgets

•Developing long-term strategic plans for growth and expansion

role of the Board of Directors

•Supporting day to day activities

•Resolving conflicts among owners or shareholders

•Ensuring the proper use of assets or

•Developing a network of information sources for the entrepreneurs

The member of board members should be carefully selected considering the following criteria

selecting Board members

• Select individuals who can work with a diverse group and will commit to the venture mission

• Select candidates who understand the market environment or can contribute important skills to the new venture’s achievement of planning goals

• Select candidates who will show good judgment in business decision making

Board of Advisors• Loosely tied to the organizations

• Serve the venture in an advisory capacity

• Has no legal status

• Meet less frequently; depending on the important venture decision

• Useful in a family business

• Selection process similar to the BOD

• Compensated per meeting basis or with stock

• Provide reality check

Uses of Board of Advisors

• Formal part of a venture

• Outside advisors, such as lawyers, accountants, ad agencies, etc.

thank

you