Gene One – the Transition from Private to Public

Introduction
Making the decision to transition from a private to public company, Gene One faces many obstacles that must be overcome in order to be established as strong competitor on Wall Street. The goal of Gene One is to go IPO within 3 years and increase annual growth targets by 40 percent without sacrificing the culture of the organization. Having received resignations from top executives based on the company’s decision to go public, Gene One has the challenge of forming a senior leadership team that is capable of making the transition. The team needs to ensure requirements of the SEC are met to avoid future consequences. By benchmarking other companies, Gene One will be able to learn from the best practices as well as the mistakes that have been made when going IPO. Taking advantage of this information will lead to a successful transition and allow Gene One to accomplish the goals executives have set forth.

Course Concepts
Formalization and Span of Control are two course concepts that are reflective in Entergy Corporation and Pfizer Pharmaceuticals. “Formalization is the degree to which organizations standardize behavior through rules, procedures, formal training, and related mechanisms”. In other words, formalization represents the establishment of standardization as a coordinating mechanism (McShane and Glinow, 2005).

J. Wayne Leonard, CEO since 1999 has been responsible for leading the organization and setting philosophies and long-term strategies that are consistently applied and implemented. “CEOs and other employees with strong security needs and a low tolerance for ambiguity like working in highly formalized organizations, others become alienated and feel powerless in formalized areas” (McShane and Glinow, 2005). Employees at Pfizer and Entergy Corporation share the need for strong security and low ambiguity.

The Span of Control describes the number of employees reporting to the subsequent in the organizational pecking order. Entergy Corporation and Pfizer Pharmaceuticals are both large organizations and it would be very difficult for one supervisor to supervise 75 or more people. The span of control consists of a relatively narrow margin of control limiting 20 or less employees per supervisor.

Span of control and centralization are two course concepts that were discovered in both Radio One and 1st Pacific Bancorp. McShane and Glinow (2005) defines span of control as the number of people directly reporting to the next in the organizational hierarchy. Catherine Hughes and her son Alfred Liggins are joined in the top ranking by three other top executives. They oversee the work of 14 senior managers and a board that consists of 7 members. This differs from 1st Pacific Bancorp. The company has seven members on its board of directors that works with an advisory board consisting of 29 members and four senior managers.

Centralization means that formal decision-making authority is held by a small group of people, typically those at the top of the organizational hierarchy (McShane and Glinow 2005). Both companies have centralized structures. The founder and other top executives serve in their position as well as on the board of directors. Therefore, they are involved in different aspects of the business and can make decisions using different viewpoints.

Starbucks Coffee Corporation and Krispy Kreme Doughnuts share the element of centralization. This means that formal decision authority is held by a small group of people, typically senior management. Unlike Starbucks Coffee and Krispy Kreme “many organizations decentralize as they become larger and more complex because senior executives lack the necessary time and expertise to process all decisions” (McShane and Glinow, 2005).

In 1982, Schultz became director of retail operation (Wilson, 2008). When Shultz took over a new era begin for the business. Schultz spent all his time at the stores trying to make everything perfect in every way. Krispy Kreme struggled for a few years, but in 1989 the company had become debt-free and slowly begun to expand. The practices of Starbucks Coffee Corporation and Krispy Kreme Doughnuts are indicative of their commitment to remain manageable and centralized.

Google and Clearwire Corporation both share the fundamentals of a formalized organization. They operate under standardized behavior through rules, procedures, formal training, and related mechanisms that have contributed to the organizations successful performance. As a private company Google was hugely successful and because of this they were not expected to go public especially as soon as they did. Since 1999 the company had raised $40 million and had enough cash flow to continue business as is.

Formalization plays a major role in the rapid growth rates that are believed to be a result of Clearwire’s innovative services which lead customers to choose broadband over cable modem and DSL internet services. The company has advantages over existing wireless networks when it comes to speed, portability, and reliability (NASDAQ, 2008).

Compare and Contrast
In comparison to Gene One, Entergy’s continuing proposal is to maintain equilibrium and industry comprehension to position Entergy as a leading incorporated wholesale energy company. At Gene One distinct planned initiatives helped to inflate the organization to a successful high. Entergy Corporation’s clear planned initiatives in nuclear generation collection, develop power projects in preferred expansion markets, fabricate product advertising and trading capabilities, and reinforce core utility authorization have taken them to equal heights.

Entergy’s revenue was more than $11 billion in 2007 and it employs approximately 14,000 people according to the 2007 Annual Report” (Entergy, 2008). The organizational culture at Entergy Corporation demands the highest ethical standards. The reliable ethical ideology at Gene One, along with their ground-breaking initiatives in the biotechnology arena have propelled Gene One to the forefront of that industry as Entergy Corporation has propelled in the nuclear energy industry.

Like Gene One is in the biotechnology industry, Pfizer is devoted to being a global controller in healthcare and to assisting with changing millions of lives for the better through providing admission to secure, efficient, and reasonably priced medicines and link healthcare services to the people who need them.

Radio One emerged in a short time as a leader in it field as well as Gene One. The focal point of their training is in urban markets. Without much opposition they have been able to expand top skills in programming promotion and turnaround know-how. Gene One has immense potential to use the public’s interest in biotechnology to expand the company. Radio One was able to gain a periphery in the entertainment business by expanding from radio into magazines and the World Wide Web. Several ways to keep growing include acquiring other businesses, contributing new products, services, and technologies, and selling shares of the company in the public market. The Initial Public Offering of common Stock for Radio One was filed in 1999. Forward-looking statements for the company were filed with the Securities and Exchange Commission (SEC).

The initial IPO for 1st Pacific Bancorp was filed and completed in 2000 (NASDAQ, 1976). In 2007 the company underwent reorganization. This allowed a holding company to be formed. This holding company is known as 1st Pacific Bank. The banks outstanding stock was converted into an equal number of public company shares.

Domestic growth of Starbucks Coffee Corporation has slowed down, although the company continues to expand in foreign markets. The first location outside of the United States and Canada was established in 1996 (Wilson, 2008). In 1991, Starbucks had 165 stores operating. Starbucks has become nationally known. This company currently has expanded to 7,225 stores including overseas operations (Wilson, 2008).

Krispy Kreme continues to grow and thrive through the production of over 20 varieties of doughnuts, a variety of coffees, and other beverages and the opening of new stores. Today the company continues to expand the international operations.

On April 29, 2004 Google announced that they would go IPO and registered with the Securities and Exchange Commission. Like Gene One, Google was able to pull off its initial public offering the company faced many obstacles along the way. The number of shares dropped and the organization was faced with the decision not to seek assistance from skeptical investors.

Clearwire entered the public market with considerable losses and huge debt. The company merely needed IPO capital in order to endure. Losses are predicted to amplify in the years to come however; the certainty is that by 2011 Clearwire will become lucrative (Cook, 2007). Having a founder who has had much success in the industry and receiving backing by big-name investor’s success is definitely possible for Clearwire.

Conclusion
Gene One can learn from each organizations mishap of innovative ideas as presented in each synopsis. The responsibility of leadership within each organization presented and Gene One is to keep employees informed as the organizations move forward with the IPO process. Gene One and the other organizations will use whatever resources are available to prior to determining if outsourcing prior to the IPO offering is necessary.

References
Cintron, Ivan. (2008). High Beam Research. Black Enterprise. Retrieved December 18,
2008 from www.highbeam.com
Cook, J. (2007, March 8). Clearwire IPO nets $600 million. Seattle Post-Intelligencer. Retrieved December 20, 2008, from http://seattlepi.nwsource.com/business/306553_clearwire08.html.
Entergy Corporation, (2008). Retrieved on December 19, 2008 from
https://www.entergy.com.
Garza, George. (2007). The History of Starbucks. Retrieved December 19, 2008 from
https://www.catalogs.com.
Krispy Kreme. (2008). Krispy Kreme Doughnuts & Coffee Since 1937. Retrieved
December 19, 2008 from http://www.krispykreme.com.
McShane, S.L. & Glinow, M.V. (2005). Organizational Behavior: Emerging Realities for
the Workplace Revolution. New York: The McGraw Hill Companies.
NASDAQ (1976). 1st Pacific Bancorp. Retrieved December 12, 2008, from
http://secfilings.nasdaq.com/edgar_conv_html%2f2008%2f03%2f31%2f0001047469-08-003795.html#FIS_BUSINESS
NASDAQ (2008). SEC Filings: Clearwire Corporation. Retrieved December 18, 2008
from http://secfilings.nasdaq.com/edgar_conv_html%2f2008%2f03%2f13%2f0000891020-08-000056.html#FIS_BUSINESS
Pfizer Pharmaceuticals (2008). Retrieved on December 19, 2008 from
https:www.pfizer.com.
Radio One (2008). Radio One The Urban Media Specialist. Retrieved December 18,
2008, from www.radio-one.com/about.
Tunick, B. E. (2005, January 17). Google goes its own way. Investment Dealers’ Digest,
71(2), 56-57. Retrieved December 20, 2008, from Business source complete
database.
Wilson, Randy 2008 The Coffee Site: Starbucks Coffee History Retrieved December 19,
2008 from htts://www.twilightroastery.com

Entergy Corporation (Anita Clark)
The Entergy Corporation began with a mound of sawdust and a handshake. The sawdust belonged to H. H. Foster, president of the Arkansas Land and Lumber Company. The handshake was between Foster and Harvey Couch, president of Arkansas Power Company. Entergy New Orleans, a company of Entergy Corporation, is an electric and gas utility serving Orleans Parish. Entergy New Orleans plays a fundamental role in economic development through its operations in New Orleans. Like Gene One, Entergy’s long-term plan is to influence balance and industry knowledge to set up Entergy as a leading incorporated wholesale energy company. At Gene One defined planned initiatives helped to expand the organization to a successful high. Entergy Corporation’s defined planned initiatives in nuclear generation collection, develop power projects in chosen expansion markets, build product advertising and trading capabilities, and reinforce core utility authorization have taken them to equal heights.

A member of the Fortune 500, Entergy, owns and operates power plants with roughly 30,000 megawatts of electric generating capability, and it is the second-largest nuclear generator in the United States. “Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Energy’s revenue was more than $11 billion in 2007 and it employs approximately 14,000 people according to the 2007 Annual Report” (Entergy, 2008). The culture at Entergy Corporation demands the highest ethical standards. The sound ethical principles at Gene One, along with their innovative initiatives in the biotechnology have propelled the organization to the forefront of that industry as Entergy Corporation has propelled in the nuclear energy industry.

J. Wayne Leonard, CEO since 1999 has been responsible for leading the organization and setting philosophies and long-term strategies that are consistently applied and implemented. “CEOs and other employees with strong security needs and a low tolerance for ambiguity like working in highly formalized organizations, other become alienated and feels powerless in formalized areas” (McShane and Glinow (2005).
Organizing objectives and plans that meet the needs of shareholders, stakeholders and employees is essential. J. Wayne Leonard effectively led the Entergy Corporation organization through the restoration of power in Louisiana, Mississippi and Texas after Hurricane’s Katrina and Rita. This tremendous effort is indicative to the values and ethics that Entergy Corporation abides by on a daily basis. These qualities are not unique to Gene One as they make the quest for public trading.

Pfizer Pharmaceuticals (Anita Clark)
Pfizer was founded by cousins, Charles Pfizer and Charles Erhart in 1849, the pharmaceutical organization has remained committed to discovering and developing innovative, and enhanced, ways to treat and prevent disease and advance the health and value of life for people around the world. From the phenomenon of penicillin to the patient support program Pfizer has developed the organization strives to grow bigger and stronger every day. The organization sets strides to continue to explore the rich history and see how organizational planning continually evolved the organization to keep pace with the needs and expectations of the stakeholders and society as a whole.

Like Gene One is in the biotechnology industry, Pfizer is dedicated to being a global organizer in health care and to assisting with changing millions of lives for the better through providing admission to secure, efficient and reasonably priced medicines and linked health care services to the people who need them. “Pfizer has a primary collection of medicines that avert, treat and cure diseases across a wide variety of therapeutic areas, and an industry-leading channel of capable new products in areas such as oncology, cardiovascular disease and diabetes” (Pfizer, 2008). Gene One has a collection of research efforts that provided the elements required for the organization to reach the level of public trading.

Pfizer is a member of today’s fast evolving global society, everyone is determined to adjust to the developing requirements of society and be a factor to the overall health and wellness of our world. The organization is continually reviewing and improving efforts to reduce the impact on the environment, cultivate a workplace of multiplicity and addition, conduct reliable business practices, and support the uppermost ethical standards in everything from research and development to sales and marketing. In comparison to Gene One, both organizations have high ethical standards when it comes to employee responsibility for organizational growth, research and marketing the products. Pfizer continues to build partnerships in communities all over the world to reinforce health systems, increase admission to medicines and find sustainable solutions to the health challenges of today, and tomorrow.

Course Concepts
Formalization and Span of Control are two course concepts that are reflective in Entergy Corporation and Pfizer Pharmaceuticals. “Formalization is the degree to which organizations standardize behavior through rules, procedures, formal training, and related mechanisms. In other words, formalization represents the establishment of standardization as a coordinating mechanism (McShane and Glinow, 2005).
The Span of Control describes the number of employees reporting to the subsequent in the organizational pecking order. Entergy Corporation and Pfizer Pharmaceuticals are both large organizations and it would be very difficult for one supervisor to supervise 75 or more people. The span of control consists of a relatively narrow margin of control limiting 20 or less employees per supervisor. Gene One fits the span of control pecking order. There are different groups or departments with a corresponding supervisor depending of the area.

Starbucks Coffee Corporation (Sharmeka Clark)
Starbucks Coffee Corporation is a national coffeehouse chain based in the United States. The company was founded in 1971 in Seattle, Washington, as a local coffee bean roaster and retailer. Starbuck original founders were three friends Jerry Baldwin, Gordon Bowker, and Zev Siegl who shared a passion for fresh coffee (Garza, 2007). The men named the company after the first mate in the novel Moby-Dick. Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, snacks and items such as mugs and coffee beans. Domestic growth of the company has slowed down, although the company continues to expand in foreign markets. The first location outside of the United States and Canada was established in 1996 (Wilson, 2008).

The founders designed their own well known logo for Starbucks. Baldwin, Bowker, and Siegl never thought this small company would become a large company. As time progressed the founders began to have other interests and were involved in other careers. A man by the name of Howard Schultz started to show an interest in the company. In 1982, Schultz became director of retail operation (Wilson, 2008). When Shultz took over a new era begin for the business. Schultz spent all his time at the stores trying to make everything perfect in every way. One of Schultz biggest ideas came from a visit to Italy. During this trip Schultz experienced going to a coffee shop and seeing the idea of an espresso bar. This was not going to be an easy task but finally in 1984 Starbucks opened the espresso bar within the Starbucks franchise (Garza, 2007). Today, Starbucks is known as an Espresso bar, few people order regular coffee.

In 1985, Schultz decided to go on to a new adventure. He left Starbucks. The company has still continued expansions. In 1987, a store in Chicago was opened this would quickly expand to Portland, Oregon and Los Angeles. In 1991, Starbucks had 165 stores operating. Starbucks has become nationally known. This company currently has expanded to 7,225 stores including overseas operations (Wilson, 2008).

Krispy Kreme Doughnuts (Sharmeka Clark)
Krispy Kreme Doughnuts began operating in the mid-1930s when a doughnut maker named Vernon Rudolph bought a secret recipe for yeast-raised doughnuts from a French pastry chef out of New Orleans, Louisiana. Mr. Rudolph moved to Winston-Salem, North Carolina and, on July 13, 1937, opened up a wholesale business selling Krispy Kreme doughnuts to local grocery stores (Krispy Keme, 2008). People began requesting the purchase of hot doughnuts, so Rudolph cut a hole in the factory wall and sold hot original glazed doughnuts directly to customers. By the 1940s and 1950s there were a small chain of Krispy Kreme stores that were mostly family-owned. During the 1960s Krispy Kreme had a steady growth throughout the Southeast and began expanding.

Vernon Rudolph died in 1973. Beatrice Foods bought the company and quickly expanded it to more than 100 locations. Beatrice Foods introduced other products in addition to the doughnuts, such as soups and sandwiches (Krispy Keme, 2008) the new owners also cut costs by changing the appearance of the stores and substituting cheaper ingredients in the doughnut mixture. In 1980 the company was starting to fail in production and finance, so Beatrice Foods put it up for sale. A group of franchisees, who were in the original Krispy Kreme franchisees, completed the buyout of the company in 1982. They also bought back the original doughnut recipe and the company’s traditional logo (Krispy Kreme, 2008). Krispy Kreme struggled for a few years, but in 1989 the company had become debt-free and slowly begun to expand. A store was opened in New York in 1986, and in 1999 Krispy Kreme opened in California. In December 2001 the franchise opened the first international store in Canada. Today the company continues to expand the international operations.

Krispy Kreme Doughnuts celebrated 60-years of being in business in 1997. The company has been recognized by the Smithsonian National Museum of American History (Krispy Keme, 2008). The company continues to grow and thrive through the production of over 20 varieties of doughnuts, a variety of coffees, and other beverages and the opening of new stores.

Radio One (Sheena Johnson)
Radio One Inc. is one of the largest radio broadcast companies (Radio One, 2008). The company was founded over 25 years ago its media targets primarily African-American markets. Chairperson and Founder, Catherine Hughes partnered with her son Alfred Liggins to run the company. Her son acts as CEO and President Radio One Inc. owns and or operates over 50 radios stations in 16 different markets, Giant Magazine, cable network TV One LLC, and Reach Media Inc. also known as www.blackamericaweb.com (Radio One, 2008).

Like Gene One, Radio One emerged in a short time as a leader in it field. The focus of their programming is in urban markets. Without much competition they have been able to develop top skills in programming marketing and turnaround expertise. Gene One has great potential to use the public’s interest in biotechnology to expand the company. Radio One was able to gain an edge in the entertainment business buy expanding from radio into magazines and the World Wide Web. Ways to keep expanding include acquiring other business, offering new products, services and technologies, and selling shares of the company in the public market.

Prior to 1999 Radio One was a privately owned company. Its market base began on the east coast out of Lanham, Maryland. The operations were growing but still limited to the Philadelphia, Baltimore and Washington DC markets. The trendsetting urban media was not unlike the new gene technology of Gene One. There was obvious growth potential with both companies meaning that going public would boost sales and investments. The Initial Public Offering of common Stock for Radio One was filed in 1999. Forward-looking statements for the company were filed with the SEC, Securities Exchange. The statements included information about management’s expectations, risks, uncertainties and other factors that could possibly affect the future performance and achievements of the company. Radio One filed to sell 5 million shares of Class A stock (Cintron, 2008). Hughes and Liggens wanted to use the proceeds of the stock to acquire new business, to develop new activities and services, and also for other corporate purposes. After the first year as a public company it gross earnings increased from $28.2 million to $93.2 million in a year.

1st Pacific Bancorp (Sheena Johnson)
1st Pacific Bancorp was incorporated on August 4, 2006. The corporation serves as an umbrella for several local banking institutions in the San Diego, California area. 1st Pacific Bancorp has grown with the city. San Diego started from a small military into one of the nation’s most recognized cities. The company was able to capitalize on the city’s growth. New branches were opened and other privately own banks were acquired.
The target customers live and work within the city limits. Banking services include consumer loans, deposits products and services, back deposits, cash management services and internet banking (NASDAQ, 1976). The company introduced a new service in 2006. This new technology goes by the name of Remote Deposit Capture. This service allows clients to make deposits into their business accounts from their place of business. 1st Pacific Bancorp can be an example for Gene One. Gene One is looking to develop new technologies prior to becoming a publicly traded company but they need investors to accomplish this goal. 1st Pacific became public and than developed new services and they have been proven successful in their market. Gene One has become more successful thanks to their gene technology that eradicated disease in tomatoes potatoes. They could improve upon this technology to get more investors instead of attempting to raise money for new costly technologies.

The initial IPO for 1st Pacific Bancorp was filed and completed in 2000 (NASDAQ, 1976). In 2007 the company underwent reorganization. This allowed a holding company to be formed. This holding company is known as 1st Pacific Bank. The banks outstanding stock was converted into an equal number of public company shares.

Course Concepts:
Span of control and centralization are two course concepts that were discovered in both Radio One and 1st Pacific Bancorp. McShane and Glinow (2005) defines span of control as the number of people directly reporting to the next in the organizational hierarchy. Catherine Hughes and her son Alfred Liggins are joined in the top ranking by three other top executives. They oversee the work of 14 senior managers and a board that consists of 7 members. This differs from 1st Pacific Bancorp. The company has seven members on its board of directors that works with an advisory board consisting of 29 members and four senior managers.

Centralization means that formal decision-making authority is held by a small group of people, typically those at the top of the organizational hierarchy (McShane and Glinow 2005). Both companies have centralized structures. The founder and other top executives serve in their position as well as on the board of director. Therefore they are involved in different aspects of the business and can make decisions using different viewpoints.
Google (Eve Young)

Meeting at Stanford University, Sergey Brin and Larry Page founded Google in 1998 with a focus of improving the way people connect with information. As a private company Google was hugely successful and because of this they were not expected to go public especially as soon as they did. Since 1999 the company had raised $40 million and had enough cash flow to continue business as is. However, on April 29, 2004 Google announced that they would go IPO and registered with the Securities and Exchange Commission. Using the non-traditional Dutch auctioning system the company was able to keep control over choosing the investment bankers while opening the deal to any firm that was willing to bid. In the end, Credit Suisse First Boston and Morgan Stanley were chosen to complete the underwriting process (Tunick, 2005).

While Google was able to pull off its initial public offering the company faced many obstacles along the way. Finding themselves setting price for shares during a time that was slow for new issuance forced Google to cut the price to $85 per share from the $108 to $135 price per share that the company had hoped. The number of shares offered also dropped from 25.7 million to 19.6 million. Google also faced scrutiny for their decision not to divulge financial guidance to skeptical investors and withholding any details regarding the deal by swearing involved bankers to secrecy. Google’s founders also interviewed with Playboy magazine which was a violation of the SEC’s required quiet-period. It was thought that this violation would lead to pulling the deal (Tunick, 2005).
Google’s stock was successful despite all the obstacles and criticism. The offering price closed at $100.34 per share which was an 18 percent increase from the initial offering. Increasing 127% over the offering, at the end of 2004 shares closed at $192.79 (Tunick, 2005). Google remains the most popular web search web site today due to the company’s continued development of innovative products and services for users.

Clearwire Corporation (Eve Young)
Founded in October 2003 by telecommunications pioneer, Craig McCaw, Clearwire Corporation offers wireless broadband services to homes and businesses via WiMax technology. Having had lost $459 million in December 2006, the company looked to going IPO as an opportunity to expand its high-speed wireless networks. Clearwire went public in March of the following year using Merrill Lynch, Morgan Stanley and JP Morgan to underwrite the deal (Cook, 2007).

The business quickly grew after its initial price offering. By December 31, 2007 the company offered services to more than 16.3 million people and 46 markets in the United States. The rapid growth rates are believed to be a result of Clearwire’s innovative services which lead customers to choose broadband over cable modem and DSL internet services. The company has advantages over existing wireless networks when it comes to speed, portability, and reliability (NASDAQ, 2008). In just a year’s time Clearwire was able to increase its number of subscribers from 206,000 to 394,000 (Cook, 2007).

With a mission of continued growth of the business, Clearwire has plans to invest in building the network and acquiring necessary assets in order to expand. While revenues have increased expenses have as well therefore, making it impossible for the company to turn a profit (NASDAQ, 2008). As the demand for residential broadband grows the anticipation is that the need for anywhere internet access via WiMax will also increase substantially. However, with more companies offering high-speed wireless networks the expectation is that faster speeds will soon be offered at lower prices. Competition will no longer be based on operation but on price and in order for Clearwire to benefit from this they will need to have networks already in place. Remaining competitive in the industry will prove to be difficult for the early stage company (Cook, 2007).

Clearwire entered the public market with significant losses and huge debt. The company simply needed IPO capital in order to survive. Losses are expected to increase in the years to come however; the belief is that by 2011 Clearwire will become profitable (Cook, 2007). Having a founder who has had much success in the industry and receiving backing by big-name investors, success is definitely possible for Clearwire.

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