international business relationships

Project Description:

case study i:

business associations –

case i:

javier bieber-timberlake, currently 22 years old, was born and grew up in the small town of kanorado, kansas (on the border of colorado and kansas). javier, who graduated from high school at 17 years old, previously served four years of active duty military service in the united states army. he was honorably discharged at the end of his four year enlistment and has no criminal record. while serving in the us army (mostly in europe and afghanistan), javier completed his bachelor of science degree in business administration from the university of maryland, university college (umuc). he recently met the love of his life while on vacation in mumbai, india. she is adele latoya jolie-pitt and is 42 years old. she holds a phd in management from mit sloan school of management but is currently unemployed. together they moved to the town of sedgwick, colorado where javier recently was hired as a master grower at sedgwick alternative relief medical marijuana center (http://www.sedgwickalternativerelief.com).

javier is really enjoying his new job as a master grower. according to the state of colorado, a master grower, “determines what or how much of a particular strain to produce or an individual whose decisions have an significant impact on the business and its operations, but does not have an ownership interest in the business.” (occupational license information, 2014) a strain is the type of plant product that is cultivated and marketed as a differentiated product line (different varieties of the plant are marketed with different trade names). he feels that it is an exciting time to be at the start of a new industry as colorado is the “world’s first” jurisdiction to provide “legal recreational marijuana sales.” (ingold, 2014)

javier is approached by one of his co-workers (a bud tender), tyrone “t-dawg” arnold, age 30, about starting up a new marijuana retail business together. a bud tender is, “a medical cannabis dispensary worker that sells and is knowledgeable of various marijuana products.” (dictionaryfocus.com, 2014)tyrone has come up with the business name, “the pot spot!” and has created an original logo and some original artwork for the store signs.

javier misses his hometown of kanorado. while speaking with tyrone he realizes that having the first retail marijuana store near kanorado (which is in kansas one mile from the colorado border) would allow him to live his dream life (being at home with a great business and adele). the economic performance of the new marijuana retail stores in colorado has been impressive. from march 2014, “colorado made roughly $2 million in marijuana taxes in january, state revenue officials reported monday in the world's first accounting of the recreational pot business. […] by comparison, colorado made about $2.7 million in liquor excise taxes in january of last year.” (wyatt, 2014)

javier, tyrone and adele agree to start a new store together. they know they must obtain a vendor license from the state of colorado. please see the attached “colorado medical marijuana vendor

registration application” (form dr 8533) from the state of colorado department of revenue, medical marijuana enforcement division. (appendix a) it requires that javier, tyrone and adele determine what type of business they will start.

on page three (of eight) it states, “type of business structure
sole proprietorship c corporation partnership
s corporation limited partnership
publicly traded corporation limited liability company trust
other ”



javier, adele and tyrone agree to go to a lawyer next week to have a meeting and determine what needs to be done to start the new retail business.

tyrone is your cousin. he calls you and says his business law knowledge is a little rusty. he asks for your help (he says he is scared to go to the lawyer meeting because he does not want to “look stupid”). so, you locate the custom text from dmba 610 and tell him that the two of you should go through the comparison chart on pp. 766 and come up with your “best” and “second best” forms from a business perspective (before the meeting with the lawyer).

note the following issues as you evaluate the comparison chart in your custom text:

1. tyrone, an experienced bud tender and talented artist, has $10,000 he could invest; he also wants to protect his full ownership interest in the original business name and artwork that he has already created, beyond that he does not wish to place his personal assets at risk in this venture – down the line he wants to pursue venture capital investors for the business;

2. javier, an experienced master grower with exceptional leadership skills, will be creating intellectual property (strain of product) that he intends to transfer to the company as an asset (the valuation of this is to be determined, as well as any cash contribution); he also wants to shield his personal assets from liability;

3. adele will invest only $10 at this time and demands limited liability. javier has stated that “her beauty is priceless.”

4. tyrone and javier will be working for the business, but this is a “side business” for which they will not be leaving their full-time jobs at this time; adele currently does not work and will not be

working for the new business (she says that her job “is being fabulous”); and

5. javier is a u.s. citizen (4th generation from kanorado, kansas usa and basque heritage) and tyrone (black canadian of west indian heritage) is a permanent resident (green card holder), but you do not yet know the citizenship status of adele (tyrone thinks she said she is of irish-nigerian heritage).





questions to answer (label each answer 1a, 1b, 1c, 1d)

prepare your response to tyrone. support each item with principles and theories from the readings:

a) what are the primary considerations for the entrepreneur in choice of a legal form? (100 word limit)

b) what are the advantages and disadvantages of each form in terms of the specific constraints and objectives?

c) which one form would you choose and why? which form would be your “second- best” recommendation and why?

d) why is it valuable to have a legally astute management team making the decision about the choice of business entity, rather than leaving these decisions to the lawyers?



end of case study 1




















case study ii:


case ii:

while you are still working on the business formation issues above in cae study i, your cousin tyrone calls you back. he says that his mother (your aunt) has been in a car accident. he says that earlier today, your aunt was driving on the freeway and her 2007 chevrolet cobalt “just turned off” while she was driving at a speed of approximately 60 miles per hour. she was hit from behind by another vehicle (but her airbags did not deploy) and she is in stable condition at a local hospital.

tyrone asks you if you can pull out your business books (from dmba 610) and help out your family again. he says that he has read about companies having to recall automobiles like the 2001 ford explorer due to rollovers (in conjunction with firestone tires), 1978 ford pinto due to fuel tank fires, 1987 audi 5000 due to runaway acceleration, and the 2014 gm ignition defect recall of 1.6 million cars, etc. he shouts at you, “do these greedy business executives have no heart? for example, how can a gm executive know about a defect that has killed over 300 people (as per data from the national highway traffic safety administration) for more than ten years (from at least 2001) and keep quiet about it instead of alerting the public and saving lives?”

questions to answer (label each answer 2a, 2b) tyrone wants to know:

a) as you will be a future corporate officer (with your umuc mba degree), when would you issue a recall of a product that you had conclusive evidence had injured or killed people? support your response with an explanation of the decision making process that you would personally apply.

b) what are the duties and obligations of a corporate officer? (100 word limit)

after your response, tyrone tells you that your aunt says she is in immense pain from the car accident. she is asking the hospital nurse for a new painkiller pill that she heard about on the news that is five times stronger than other pain pills (such as vicodin, lortab, etc.). she doesn’t remember the name of it (and neither does tyrone) but he remembers hearing that it was debated in the us congress for approval. he heard that on one hand it is the strongest single-ingredient opiate (drugs that mimic the effect of opium poppy such as morphine, oxycodone and heroin) on the market in the us. on the other hand, there are safety risks from the multiple-ingredient opiates (usually in combination with non- addictive pain relievers, such as acetaminophen, which has its own safety risks and can result in deadly liver damage when taken at high levels).

thus, the new single-ingredient opiate actually is safer in that it does not have liver toxicity risk. it is also simultaneously more dangerous in that it is more potent, and is not tamper resistant (which means it can be chewed, crushed or dissolved to produce a quick, massive, heroin-like does of the drug which can be fatal). tyrone told his mother not to take it. he angrily says to you, “how can you support these selfish business people as an mba student? all they care about is money. they don’t care about human lives at all! do they care more about their company than they do the entire community of people at risk of addiction, overdose or death by abusing the new pill?”

questions to answer (label each answer 2c, 2d, 2e, 2f) he asks you:



c) for the director of the company that is selling the new single-ingredient opiate, what are their obligations? who are they loyal to? are they an agent of any entity?

d) you are listening to the passion in tyrone’s voice and you start to wonder, is this single- ingredient opiate example a “right v. ri
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