Implementing_Leadership_Change

Implementing Leadership Change Gene One is a privately owned biotechnology company seeking an initial public offering (IPO). Before transitioning into an IPO company, the Chief Executive Officer, Don Ruiz should consider various options in deciding Gene One’s future. Team A has provided two strategies to help Ruiz in making the correct decision for his company. Strategy one suggests Gene One to continue to work as it is currently, research, and develops more products that Gene One would benefit from in the future. The second strategy focuses on the transition of Gene One becoming an IPO company. Implementation of Remaining with the Current Strategy Gene One has grown tremendously with a groundbreaking gene technology in the last eight years. The key players in Gene One need to influence the organization to remain on their successful growth by keeping the business the way it is. Greg Thoman, Chief Human Resources Officer, has “staffed Gene One with talented researchers and innovative product developers” (University of Phoenix, n.d.). Teri Robertson, Chief Technology Officer, has a world-renowned reputation and the led the genetic breakthrough discovery that made Gene One successful (University of Phoenix, n.d.). Teri Robertson can help lead the current researchers and developers continue on their successful developments. The Gene One leaders need to “communicate their values when they articulate a vision for the organization, make statements about the values and ideals that are important, and formulate long-term objectives and strategies for attaining them” (Yukl, 2010, p. 307). Also, Gene One leaders can present “formal budgets, planning sessions, reports, performance review procedures and management development programs can be used to emphasize some values and beliefs about proper behavior” (Yukl, 2010, p. 307). By using the various presentations, this will help leadership emphasize their goals to keep the current vision of the organization. Gene One can use performance objectives “to guide planning and facilitate evaluation progress, but the focus of a vision should be on values and ideological themes, not on improvement of economic outcomes or outperforming rivals” (Yukl, 2010, p. 311). Performance objectives can set goals to achieve the organization’s objectives when it is included in their vision (Yukl, 2010). Innovative Strategy Gene One has and will continue to be an innovative leader in the biotech world creating plants that grow two times more rapidly with a reduced amount of pesticides and that taste better. Teri Robertson, the Chief Technology Officer, won the CTO of the year. This distinguished award reflects the direction and motivation of Gene One and its employees. The location of Gene One allows testing in every type of climate by the same testers. This will permit a consolidated consensus by the researchers when analyzing test results, growth patterns and changes. By continuing under the same strategy and leadership that has made Gene One a world leader in biotechnology the organization will be able to continue operations without major changes to structure and leadership. This strategy has grown a two million dollar business to a 400 million dollar business in a short eight years. The current operation and leadership program is proven to be successful and should remain in effect. Implementation of Going Public Current Strategy The going public process of an organization is very time consuming and expensive. However, if the company is successful, the company will tremendously benefit from the revenue and growth of the company generated from the IPO. Although growth is beneficial to the Gene One, there are advantages and disadvantages that occur by the process of Gene One transitioning from a private to public company. There are numerous advantages for Gene One going public. The first is the financial benefit earned from the increase capital. Capital can be used to fund research and development, fund capital expenditure or even used to pay off existing debt (Taubman, n.d.). In addition to an increase in capital and once the shares of Gene One are traded publically, the shares are now considered to have a market value can be resold. In addition, public companies are more known to the public and this enables Gene One to obtain a larger market and produce more investors. There are numerous disadvantages for Gene One to go public. First, conducting an IPO is time consuming and expensive. A successful IPO can take up to a year or more to complete (Taubman, n.d.). In addition, Gene One can expect to spend an excess of sums on attorneys, accountants, and underwriter’s fees. Once Gene One becomes a publically traded company, it will register with the Securities Exchange Act of 1934 (SEC) and regulated by the SEC. Therefore, Gene One must meet the rules and regulations monitored by the SEC. The SEC requires public companies to make financial disclosures, file quarterly statements, and provide information regarding the company regarding compensation of senior management, transactions with parties related to the company, conflicts of interests, and how the company intends to develop future products (Taubman, n.d.). In addition, Gene One could suffer economically because of the fall of stock price. Should shares of the company fall, Gene One may lose market confidence, decreased valuation, causing changed to Gene One’s line of credit, and the decrease of capital could lead to layoffs within the organization (Taubman, n.d). Innovative Strategy The strategy to go public supports the Gene One’s desire to be innovative because it would provide the organization with the needed IPO “capital for new development, advertisement, and marketing if it is going to remain successful” (Gene One, 2011). Gene One is a successful, progressive biotech company who is attempting to capitalize on the combination of good reputable products and the high popularity of biotechnological stocks on Wall Street. In an effort to stay in business, gain interest from potential investors and to sustain a projected growth of 40 percent, Gene One has decided to consider going public within the next three years (Gene One, 2011). This is a major decision, and one that many other companies have ventured in and triumphed with. Other companies have had to venture into the stock market for similar reasons that Gene One would. “Going public” is one of the most important events in the life of a firm. Since an initial public offering (IPO) of equity is the first public offering of equity (and typically the first public offering of any security) undertaken by the firm, it not only satisfies the immediate capital requirements of the firm, but also paves the way for the firm to make subsequent public offerings of equity and other corporate securities (Chemmanur, 2010). Going public would give Gene One the edge needed to establish the organization as strong competitive force. A strong initial public offering would also show Wall Street that Gene One is capable of succeeding as a public entity. Three years may sound like a long time, but it will be the time needed for all the key players to come together as a cohesive force. “While going public can provide greater access to sources of capital, it also comes with significant responsibilities, including sharing corporate control with shareholders, increased corporate governance, and Sarbanes-Oxley (SOX) requirements” (McMullen et. al, 2011, p. 11). Letting go of the power and having to share it with the shareholders will be the biggest challenge for the current management figures of Gene One. Conclusion Gene One is a successful biotechnology company that is privately owned and had grown terrifically the development of gene technology. The decision to go public is necessary for Gene One is one that can generate funds for further product development, research, gain attention from other investors. Team A described two strategies for Gene One. The first was for the company to continue expanding their research and develop another product before going public. The second strategy described the advantages and disadvantages of the company to go public. Reference Chemmanur, T. J., He, S., & Nandy, D. K. (2010). The Going-Public Decision and the Product Market. Review Of Financial Studies, 23(5), 1855-1908. McMullen, D. A., Sanchez, M. H., & Stout, D. E. (2011). Initial Public Offerings and the Role of the Management Accountant. Management Accounting Quarterly, 12(2), 11-23. Taubman, Louis E. (n.d.). Considerations of an IPO. Retrieved April 22, 2012, from http://library.findlaw.com/2001/Jan/1/127967.html. University of Phoenix. (n.d.). Gene One Scenario [Multimedia]. Retrieved from University of Phoenix, LDR531-Organizational Leadership website. Yukl, G. A. (2010). Leadership in organizations (7th ed.) Upper Saddle River, NJ: Pearson/Prentice Hall. Retrieved from the University of Phoenix ebook Collection database.