Elise and Kim Are Trying to Decide How to Set

question 20

Essay

Elise and Kim are trying to decide how to set up the internal management structure of the corporation they have just incorporated to carry on their engineering consulting business.They each hold 35 percent of the shares, with the remaining 30 percent being held by five employees.Elise will run the business.She will be responsible for all aspects of the management of the office.Kim will be a passive investor, but is nevertheless interested in being kept informed regarding what is going on in the business.Kim and Elise decide that they will both be directors and then delegate all management powers to Elise, subject only to an obligation to report to the board every two months as to what is happening.Will this structure work? Support your answer.

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Definitions:

Motivated

Being driven or encouraged to act or engage in an activity due to internal or external factors.

Effort

The amount of physical or mental energy put into a task or activity.

Performance

The act of carrying out or completing tasks or functions; often measured in terms of efficiency, effectiveness, and productivity.

Rewards

Incentives or benefits given for achieving certain goals or performances, aimed at motivating individuals or teams.