The case study involved the dilemma regarding the form of ownership for a health care service company called New Health Claim Processing. The co-founders, Peter and Jennifer, decided to start a business model to process claims at a very low cost while providing a high degree of customer service. They invited Andy and Grace to draft a business plan and eventually appointed Michael as a CEO. During the presentation, Michael handled the ownership questions poorly because nobody has settled the ownership of the company. He then seek help from Cathy, an expert in local law firm, to explain the problem and was asked to gather all the members for questioning. Cathy has uncovered two following issues regarding the situation which were related to Peter and Jennifer’s previous jobs. This paper will identify and address the following problems: (1) legal structure and issue in starting a company; (2) the issues raised by conduct of the start-up team; (3) three ethical businesses presented in the case, and (4) individual suggestions based on whether or not to continue proceeding the new business.
1. Identify the legal structure and issues involved in starting the business.
Though the company had a different CEO, the legal form of ownership still legally remained as a …show more content…
The problem that the team was formed based on informal agreements (assuming there were no writings involved) because they were all classmates. Eventually, they appointed a close friend of them, Michael, as a CEO and promised the presentation would make him “worthwhile” if he was a leader. As a result, Michael handled the questions poorly when being asked about what type of ownership the company