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Individual Project: Project Proposal


Your task is to prepare a project proposal on how to set up the start-up company successfully, while ensuring
that the executive team and the supplier teams remain motivated. Your proposal must indicate all the tasks that you
will complete to ensure a successful start-up along with the schedule for completion of these tasks. Your proposal
should have a brief project introduction, a problem statement, the project objectives, and conclusion. All
references should be in the Harvard Referencing System.
One example of a project proposal can be found at the following Web site: Plutonic Power Corporation East
Toba River and Montrose Creek Hydroelectric Project proposed construction
schedule [Online]. (n.d.). Available from:
5cd42fc4020fb.pdf (Accessed: 15 September 2009).
The case study on which the project is based is as follows:
Project Background: Assume that you are a project manager who has delivered a number of projects
exceeding customer expectations within the schedule and budget in high-technology sectors including
aerospace and robotics. So far in your career, you have been managing projects under different
organisational forms including functional, projectized, and matrix structures. You have completed projects
to initiate new business units in existing organisations. However, you do not have experience in starting
an organisation, in particular an organisation where the time to allow the employees to work collectively
as a team is limited.
An entrepreneur, Dr. Ryan O'Neal, and an investor, Jeff Hoffman, approach you with a business idea and
a funding of $12 million. Ryan and Jeff would like you to develop an innovative system in warehouse
order fulfilment. The system will consist of a group of autonomous mobile vehicles which will move quickly
through the warehouse and load and move orders to the fulfilment platform. Dr. O'Neal is an expert in
mobile robotics while Jeff Hoffman is an investor with a strong background in warehouse management,
supply chain management, and fulfilment technologies. A critical project requirement is to implement the
business idea and launch the product within 10 months. Ryan and Jeff are both convinced that if the
product is launched in 10 months, there will be a set of committed customers in the U.S. to sustain future
venture funding. Ryan and Jeff estimated that about 100 professionals will be needed for eight months to
undertake the necessary technical and engineering work. This translates to 1,000 staff-months.
The brief project statement that you wrote together with Ryan and Jeff is:
To create the start-up company so that the product (as defined in a charter document) is available for
installing at customer sites in 10 months from the start date and a production operation is also in place by
that time to develop the vehicles at a rate of 50 units per week and control station at one per week.
The proposed name for the new organisation is Sturata Inc. and it will be setup in Vermont, USA. You will
be the interim COO (Chief Operating Officer) of the company until successful completion of the setup
phase. Jeff Hoffman will be the president and CEO (Chief Executive Officer) of the company at least
during the setup phase, while Dr. O'Neal will be vice president, engineering and the CTO (Chief Technical
Let us assume that after discussion with your family and friends you decide to become the key player of
the executive team together with Jeff Hoffman and Dr. O'Neal. Miss Yamaguchi, a young Japanese-
American with a degree from The RoboticsInstitute at Carnegie Mellon University and an MBA, was hired
as VP, Administration. Miss Yamaguchi has earlier experience of setting up two start-ups in cross-cultural
configurations. The position of a CFO (Chief Financial Officer) is still vacant, however.
There are a number of issues involved with this project, including the following:
The product needs to be extensively tested in a live warehouse environment before it can be
rolled out or even before performing test installations on potential customer sites.
Safety regulations must be met because the mobile vehicles will work in warehouses together
with human workers. These safety regulations are different for different states in the U.S.
The project team needs to be assembled. As the overall project is of significant size and
challenging in multiple dimensions, you need to employ staff quickly and the team members you
recruit need to start contributing as soon as they are hired. On the other hand, as the project is at
the "idea level" at this point in time, it will take some time before work can be assigned.
Therefore, employing staff should be done accordingly.
The project consists of two phases, work on which must continue on an ongoing basis: Phase A)
Research, Design and Development and Phase B) Production. Although production will lag the
first phase, the infrastructure needs to be ready before production begins and therefore
production planning should start very early during the first phase.
The management of and relationship with the suppliers of components and subsystems needed in
developing autonomous mobile vehicles (or robots) and other technical systems is an important
aspect of the project. The autonomous mobile vehicles and other technical systems will be
designed in-house, but an estimated 100 suppliers will supply necessary components even during
the first phase. Moreover, production needs to begin and the supply chain should be in place for
production needs by the end of Phase A.
The project also involves some challenging research work. Dr. O'Neal has background in
research and has contacts in some best schools around the world especially in the Republic of
Ireland, Italy, Germany, and California, and the UK. However, a liaison function needs to be
developed to interface with the academics involved in the project.
No company has been set up to undertake the project so far. Therefore, all legal and
administrative work to form a legal business is also included in the project.
Acquisition Proposal: Jeff Hoffman discovered a small company called Ryoichi in Tokyo, Japan, which
undertakes contract work. The company is comprised of 13 closely-knit engineers. Jeff reported that the
team at Ryoichi had the skills and expertise Sturata Inc. needs to design autonomous mobile vehicles.
Jeff knows a few people from within Ryoichi. In fact, one of them was his student at a course which he
taught at UC Berkeley. Dr. O'Neal was also impressed by the portfolio of contract work Ryoichi has
delivered. He agreed that their skills and expertise correspond to the needs of Sturata Inc. Jeff wants to
buy Ryoichi, using a mix of stock options and cash to finance the purchase. Ryan instead wants to use
Ryoichi as a contract company because he is concerned about difficulties in communications (only five
people from Ryoichi speak fluent English), the entrepreneurial spirit of that team, and the fact that the
team members are very tightly knit together.
Assume that after discussions and negotiations mediated by you, Sturata Inc. decided to acquire Ryoichi
and use it as a design and development centre. A formal offer is being prepared to acquire Ryoichi for
US$1.25 million 30/70 cash/options ratio (ratio of cash to the underwritten value of stock options that a
buying company offers to the shareholders of the company being purchased). As a start-up company,
Sturata can only offer stock options and not marketable securities with cash or other tangible assets. It
was also agreed that the team will look into the possibility of opening up a production centre in China.
This has further complicated the overall project.
Recent Developments: Each member of the executive team spent 60 hours during the first week just to
develop a hiring plan and to engage recruiters. During the second week of operations, a series of
unfortunate events occurred. Ryoichi requested a revision in the buyout offer to a 50/50 cash/options
ratio. Jeff Hoffman suffered a mild heart-attack and is currently hospitalised. Dr. O'Neal had to take a
leave of five days to travel to Ireland for the funeral of his grandmother. These events have almost
destroyed the original start-up project plan you had designed. Things were changing too fast and you
found yourself under immense pressure to keep the project on schedule. More than half of your project
contingency buffer has already been absorbed in a matter of just one week. There is no more room for
error, and obviously, you are under immense pressure.
In a conference call, the executive team emphasised that start-ups are high-stress and high-stake
undertakings and thought that there should be a way to control leadership stress.

Part-II- Individual project (To be answered separately)

Final Project Requirements
Your project deliverables will include:
1. An organisational design plan for the start-up showing its evolution over 10 months. Include the following
in this plan:

1. Your decision for the initial organisational form. What should the organisational form look like as the
project progresses towards completion? Provide explanations to support your answer.

2. An interface diagram to show interfaces between various teams and units within the organisation and
their interfaces with external organisations and regulatory bodies. For each internal and external
interface, identify stakeholders. Describe what form of leadership skills will be needed for interaction at
these interfaces.

3. Concrete activities and a plan to resolve the potential conflict between Jeff Hoffman and Dr. O'Neal about

4. Assessment of any behavioural issues with regard to Sturata Inc. buying Ryoichi and whether you should
put a structure in place so that Ryoichi employees are assimilated cohesively within the new organisation.
Explain your answer.

5. A plan to manage leadership and team member stress individually and collectively. You need to research
to find and the best ways to control leadership stress. Your description for these should not exceed two
paragraphs. Your research should not be limited to the recommended text. Explain how leaders can
reduce stress for team members.

6. A Code of Ethics for Sturata Inc. highlighting the value system the organisation should embrace keeping
in view its multi-cultural and cross-functional nature. The code should include one short paragraph to
explain each of the following:

General employee conduct in a multicultural environment
Conflict of interest and post-work activities
Recording organizational communications
Relationship with suppliers
Relationship with customers and partners
Gifts, favours, and commissions
Responsibility to society and environment
Glindinning. M. (2009) 'Kiva robots save Zappos shoe leather', Material Handling Wholesaler [Online].
Available from:http://www.mhwmag.com/article.cfm?id=27246&PageNum=1 (Accessed: 22 February 2009).