Pedal to the Medals is an electric bicycle company recognized by the local community for promoting healthy and sustainable living. You have worked as an intern for Pedal to the Medals for the last five months as part of a field experience program coordinated by your business school. The founder of the company, Andrew Goldman, is a former champion cyclist and environmental activist who created his own line of custom electric bicycles designed for economical and emissions-free urban transportation. Along with his best friend Sam, Andrew has grown the business from just a small retail store and back storage room. Sam has invested 40% of the start-up costs and works full time for the company. Up to this point, both of them have shared roles and responsibilities in the company, with Andrew being the ultimate decision maker and de facto head of the business. However, Sam and Andrew split the profits evenly, after paying expenses.

Because Andrew and Sam started this organization out of love for cycling and passion for environmental sustainability, they have largely made up for their lack of formal business training through hard work and enthusiasm. For example, while Andrew certainly has an implicit mission and vision in mind for his business, he has never taken the time to formally articulate either. However, due to surging sales and growth, they have found the need to increase their time commitments and formalize their structure and roles.

Directions

Andrew has asked you to pull together information to support his efforts in transitioning his start-up into a formal business. He has asked you to draft an internal report that presents the different forms and structures that his business could take, as well as any other organizational suggestions you might have, to address the challenges described below:

• Currently, there is no system for hiring or training staff. The friends take turns running the shop but need to hire at least 10 staff members to handle inventory, sales, and security. This has Andrew worried that the values he and Sam both share might be diluted or changed with the influx of new personnel into the organization.
• Due to the newness of the technology, the laws and regulations are often confusing and contradictory. So far, Andrew has handled the research, including permitting and licensing issues. A dedicated person needs to monitor legal compliance and track industry trends and policies.
• The business needs to set up and oversee systems for interacting with vendors, purchasing and tracking inventory, and security at its store and warehouse. To that end, a new computer system and software program need to be implemented to manage sales, inventory, and data collection.
• The business needs to study and plan for future capital expenses. It also needs to manage the company’s sources and uses of cash to maximize the value of the company and protect against financial risk.
• The business needs to ensure that its products and services meet high quality standards, and that it is aligning product inventory to match consumer preferences.
• Andrew and Pedal to the Medals recently settled a lawsuit for injuries a rider sustained due to a problem with one of the bikes. Andrew wants assurance that he and any other key employees are protected from personal liability for any problems arising out of the business.

In your report, you need to include the following:

1. Explain some different legal forms (i.e., legal entities) that Pedal to the Medals could take. Be sure to include the following:
   • Define each form using appropriate terminology.
   • Describe how each type of legal entity could impact the owners/founders in terms of personal liability for lawsuits filed against the business.
2. Compare and contrast some organizational structures that the business could take. Be sure to do the following:
   • Define each structure using appropriate terminology.
   • Explain the advantages of each structure, considering the facts and needs of Pedal to the Medals listed in the scenario.
   • Identify possible risks related to each structure, and provide one or two suggestions of professional skills that could be incorporated into new-employee training to aid effective cross-functional collaboration.
3. Describe the various functional areas of a business and their purpose within an organization.
   • Identify functional areas that would be relevant for Andrew to consider as he formalizes his business structure, and explain the purpose of each.
   • Cite specific examples from the provided scenario that illustrate how creating the functional area could improve the business or address a current challenge.
4. Demonstrate the purpose and nature of mission and vision statements.
   • Discuss the relationship between mission and vision statements and the development of organizational culture and values.
   • Provide examples of mission statements from other companies to inform Andrew’s development of a mission statement for Pedal to the Medals. Be sure to evaluate the strengths and weaknesses of each.
   • Provide examples of vision statements from other companies to inform Andrew’s development of a vision statement for Pedal to the Medals. Be sure to evaluate the strengths and weaknesses of each.