Question

Ruby, a recent fashion design school graduate, has received praise for her clothing designs from her peers and friends on social networking sites; this has inspired her to set up a store where she can design and sell apparel. After experiencing some success with sales, she recruits two employees to handle customers at the store. However, she handles other day-to-day affairs herself, while continuing to design clothes.
Which of the following is likely to be a pitfall of this organizational structure established by Ruby?

A. Once the firm starts growing and attracting more customers she is likely to feel overloaded.
B. Hiring more employees will result in loss of intellectual property.
C. People are highly unlikely to buy clothes from a store run by a fashion design student.
D. The online admiration of her designs will not translate into sales.

Answer 1

Answer:

A. Once the firm starts growing and attracting more customers she is likely to feel overloaded.

Explanation:

Ruby, from the case, is a talented designer. Startups often face financial challenges at commencement, hence the business founder is tempted to take up more roles than she is suited for. This could have an impact on her areas of competence. Hence, as the firm grows, she is likely to feel that she is doing so much work which may not be in line with her core skills.