Cupcakes-Palooza (CP) is bakery in Janesville, WI, that specializes in gourmet cupcakes. CP is a
privately held corporation that was founded by partners Pat and Chris Anderson. Pat and Chris are the majority shareholders, and all of the current employees report directly to Pat and Chris. The current employees include nine bakers, an accountant, an office manager, and one salesperson. Pat and Chris manage the production themselves at the current location. CP currently owns a building that serves as their bakery. They sell their cupcakes at select area grocery stores. They do not currently sell directly to consumers; they only sell to grocery stores that sell to consumers. They sell an average of 1,000 cupcakes a day (5 days a week, year-round) at their current location, and see demand staying strong despite the economy. Pat and Chris would like to expand their business. After conducting some brainstorming sessions, they decided to build two new bakeries - one in Monroe and one in Madison - and sell to grocery stores in those cities. They expect the new bakeries to be about the same size as their current bakery. Pat and Chris are nervous about opening these new locations, since they've never had more than their existing location. They have asked you, a local management consultant, to make a document to help them with the management of the expanded business. Specifically, your report to them should include information on: • How should the company be organized? What would the structure of the expanded company look like? • What would the vertical and horizontal structure of the organization look like? • What type of span of control would you recommend for the expanded business? • Will Pat and Chris need to delegate authority in the expanded business? If so, how would you recommend they delegate effectively? • What types of control systems should Pat and Chris put in place in the expanded business? • What control mechanisms would you recommend for the expanded business? What should Pat and Chris do to ensure their business goals are met?