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George and Nora started a gourmet food store together but were having communication issues that hindered their business. They disagreed about equity splits and responsibilities. George felt Nora's management led to financial problems, while Nora wanted more equity for her work. They also struggled with timely financial reporting and decision making. Both partners felt their friendship and working relationship had deteriorated. They decided to pursue mediation to resolve their issues and challenges with the partnership.

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Rey Visitacion Molina
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44 views3 pages

Group Act

George and Nora started a gourmet food store together but were having communication issues that hindered their business. They disagreed about equity splits and responsibilities. George felt Nora's management led to financial problems, while Nora wanted more equity for her work. They also struggled with timely financial reporting and decision making. Both partners felt their friendship and working relationship had deteriorated. They decided to pursue mediation to resolve their issues and challenges with the partnership.

Uploaded by

Rey Visitacion Molina
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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BM1803

TASK PERFORMANCE
Members: Date: Score:

Section:

New Venture Suffers from Unmet Partner Expectations: A Case Study


George and Nora are partners in a new gourmet food store in an upscale Washington D.C. neighborhood.
The store was starting to gain traction after a rocky first year but their inability to communicate was making
it hard to take timely action and they worried that they were missing out on critical opportunities. They
agreed that mediation was the best course to try to resolve their issues.
Partnership Background:
The partners met and became friends in business school almost 15 years ago and had remained friends
since then. They both had experience as management consultants, but neither had run a retail store. Nora
had been in a business partnership previously that had ended very dramatically, and expensively, and was
sensitive that this partnership did not end as that one had.
They had decided on a 50/50 equity split though George contributed over 70% of the start-up capital. He
planned to keep his job as a partner in a management consulting firm, and Nora would manage the daily
operations of the store and keep some of her own consulting clients on the side. He took on the role of
CFO and Nora was COO.
A year in, the store launch was over-budget, they were having issues with inventory management and
staffing, and both felt unable to communicate their concerns as attempts were often met with defensiveness
on both sides. One of the store staff was now running interference on their communication; something both
of them knew was a bad idea.
Some details:

• Nora felt that her work at the store had become all consuming, much more than expected, and
wanted additional equity to compensate for lack of salary. George agreed that Nora was much more
engaged in the store, but saw that as part of their deal and felt her management-by-crisis led to the
financial distress in the company.

• They were going to need another capital infusion to continue, and George was reluctant to do this
without resolving their work issues.

• George had always seen Nora as incredibly competent and was surprised by how much support
and input she needed in managing store operations. He had seen his role as contributing capital,
monitoring finances and thinking strategically, and given his demanding job that was all he felt able
to do.

• Nora valued George’s advice; it was the most valuable thing she thought he brought to the business.
His lack of responsiveness, sometimes not responding to her texts for days, left her without support
in dealing with day-to-day decisions, but then second-guessed when it came to the financial
implications.
• George was sometimes late with financial reporting which Nora felt made it hard for her to manage
inventory and plan appropriately, which affected sales and customer service.
• They both were concerned that they did not interact as friends at all anymore and the business had
taken over their entire relationship.

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BM1803

Questions (3 items x 10 points):

1. What are the main partnership issues in the case?

Answer:

2. Given the issues presented in this case, do you think the partnership is still a preferable form of
business ownership? Why or why not?
Answer:

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BM1803

3. If not a partnership, what form of business organization would you like to recommend to the two?
Defend your answer.
Answer:

Group Case Analysis Grading Rubric:

Categories Performance Criteria Total Points


The information is clear and based on the case study. 7
The thought development of the answers is clear,
Answers to Case Study 1
logical, and consistent.
Answers are well-elaborated based on the concepts and
2
theories discussed relative to the topic.
TOTAL 10

REFERENCE:
New venture suffers from unmet partner expectations (n.d.) Retrieved from The Partnership Resource:
http://www.thepartnershipresource.com/CaseStudies/Mediation.aspx

02 Task Performance 1 *Property of STI


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