The Five Stages of Team Development

Every team goes through the five stages of team development. First, some background on team development. The first four stages of team growth were first developed by Bruce Wayne Tuckman and published in 1965. His theory, called "Tuckman's Stages" was based on research he conducted on team dynamics. He believed (as is a common belief today) that these stages are inevitable in order for a team to grow to the point where they are functioning effectively together and delivering high quality results. In 1977, Tuckman, jointly with Mary Ann Jensen, added a fifth stage to the 4 stages: "Adjourning." The adjourning stage is when the team is completing the current project. They will be joining other teams and moving on to other work in the near future. The five stages of team development are as follows:

Stage 1: Forming Stage 2: Storming Stage 3: Norming Stage 4: Performing Stage 5: Adjourning

Stage 1: Forming
The "forming" stage takes place when the team first meets each other. In this first meeting, team members are introduced to each. They share information about their backgrounds, interests and experience and form first impressions of each other. They learn about the project they will be working on, discuss the project's objectives/goals and start to think about what role they will play on the project team. They are not yet working on the project. They are, effectively, "feeling each other out" and finding their way around how they might work together. During this initial stage of team growth, it is important for the team leader to be very clear about team goals and provide clear direction regarding the project. The team leader should ensure that all of the members are involved in determining team roles and responsibilities and should work with the team to help them establish how they will work together ("team norms".) The team is dependent on the team leader to guide them.

Stage 2: Storming
As the team begins to work together, they move into the "storming" stage. This stage is not avoidable; every team - most especially a new team who has never worked together before - goes through this part of developing as a team. In this stage, the team members compete with each other for status and for acceptance of their ideas. They have different opinions on what should be done and how it should be done - which causes conflict within the team. As they go progress through this stage, with the guidance of the team leader, they learn how to solve problems together, function both independently and together as a team, and settle into roles and responsibilities on the team. For team members who do not like conflict, this is a difficult stage to go through.

The team leader needs to be adept at facilitating the team through this stage - ensuring the team members learn to listen to each other and respect their differences and ideas. This includes not allowing any one team member to control all conversations and to facilitate contributions from all members of the team. The team leader will need to coach some team members to be more assertive and other team members on how to be more effective listeners.

Stage 3: Norming
When the team moves into the "norming" stage, they are beginning to work more effectively as a team. They are no longer focused on their individual goals, but rather are focused on developing a way of working together (processes and procedures). They respect each other's opinions and value their differences. They begin to see the value in those differences on the team. Working together as a team seems more natural. In this stage, the team has agreed on their team rules for working together, how they will share information and resolve team conflict, and what tools and processes they will use to get the job done. The team members begin to trust each other and actively seek each other out for assistance and input. Rather than compete against each other, they are now helping each other to work toward a common goal. The team members also start to make significant progress on the project as they begin working together more effectively. The team has greater self-direction and is able to resolve issues and conflict as a group. The team leader should always ensure that the team members are working collaboratively and may begin to function as a coach to the members of the team.

Stage 4: Performing
In the "performing" stage, teams are functioning at a very high level. The focus is on reaching the goal as a group. The team members have got to know each other, trust each other and rely on each other. The team is highly motivated to get the job done. They can make decisions and problem solve quickly and effectively. When they disagree, the team members can work through it and come to consensus without interrupting the project's progress. If there needs to be a change in team processes - the team will come to agreement on changing processes on their own without reliance on the team leader. The team leader will continue to monitor the progress of the team and celebrate milestone achievements with the team to continue to build team camaraderie. The team leader will also serve as the gateway when decisions need to be reached at a higher level within the organization.

Stage 5: Adjourning
In the "adjourning" stage the project is coming to an end and the team members are moving off into different directions. This stage looks at the team from the perspective of the well-being of the team rather than from the perspective of managing a team through the original four stages of team growth. The team leader should ensure that there is time for the team to celebrate the success of the project and capture best practices for future use. (Or, if it was not a successful project - to evaluate what happened and capture lessons learned for future projects.) This also provides the team the opportunity to say good-bye to each other and wish each other luck as they pursue their next endeavour. It is likely that any group that reached

Sole Proprietorship
A sole proprietorship is the oldest and the most common form of business. It is a one-man organization where a single individual owns, manages and controls the business. Its main features are :

Ease of formation is its most important feature because it is not required to go through elaborate legal formalities. No agreement is to be made and registration of the firm is also not essential. However, the owner may be required to obtain a license specific to the line of business from the local administration. The capital required by the organization is supplied wholly by the owner himself and he depends largely on his own savings and profits of his business. Owner has a complete control over all the aspects of his business and it is he who takes all the decisions though he may engage the services of a few others to carry out the dayto-day activities. Owner alone enjoys the benefits or profits of the business and he alone bears the losses. The firm has no legal existence separate from its owner. The liability of the proprietor is unlimited i.e. it extends beyond the capital invested in the firm. Lack of continuity i.e. the existence of a sole proprietorship business is dependent on the life of the proprietor and illness; death etc. of the owner brings an end to the business. The continuity of business operation is therefore uncertain.

Advantages

Ease of formation Maximum incentive for work Secrecy of business Quick decisions and flexibility of operations

Disadvantages

Limited capital Limited managerial ability Limited life Unlimited liability

Hence, this form of organization is suitable for the businesses which involve moderate risk, small financial resources, capital requirement is small and risk involvement is not heavy like automobile repair shops, small bakery shops, tailoring, etc. It accounts for the largest number of business concerns in India.

EXAMPLES

By Default
If you provide goods and services for consumers or businesses but do not form a partnership, limited liability company or corporation, you are automatically considered a sole proprietorship. As a sole proprietor, you are required to declare all your income and pay self-employment taxes, either quarterly or on an annual basis, when you file your personal return.

Small Shops and Boutiques

When you enter a neighborhood store such as the local flower shop, pizza and sub shop or hardware store, you are generally greeted by the same one or two people. Most likely, the person who greets you is the owner or the owner& spouse. These small businesses are most likely sole proprietorships if the owner did not declare another business structure, such as a limited liability company.

Artisans and Musicians

If your artwork or jewelry is sold in galleries and boutiques, either with a straight payment or on a consignment basis, your business is considered a sole proprietorship. Also, if you are a band member who gets paid for gigs, the proceeds from the gigs are considered income and make you a sole proprietor.

Independent Contractors
If you complete work for businesses but are not an actual employee of these companies, you are considered self-employed and therefore a sole proprietor. For example, if an IT professional with a full-time job also does home-networking setup and installation after work or on the weekends and is not representing the company for which he works, the home networking is considered moonlighting. Many hobbyists can also become sole proprietors if their hobby becomes popular and they find themselves filling orders.

Commission-Only Sales
If you work in sales but receive income only from the products you sell and you have not designated another business structure, you are a sole proprietor. Even if you have a contract with a company that states how much you will be paid per product, this does not make you an employee. You are still responsible for paying taxes on the profits from selling the company products.

Partnership Firm
Partnership is defined as a relation between two or more persons who have agreed to share the profits of a business carried on by all of them or any of them acting for all. The owners of a partnership business are individually known as the "partners" and collectively as a "firm". Its main features are :

A partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms. The minimum number of partners must be two, while the maximum number can be 10 in case of banking business and 20 in all other types of business. The firm has no separate legal existence of its own i.e., the firm and the partners are one and the same in the eyes of law. In the absence of any agreement to the contrary, all partners have a right to participate in the activities of the business. Ownership of property usually carries with it the right of management. Every partner, therefore, has a right to share in the management of the business firm. Liability of the partners is unlimited. Legally, the partners are said to be jointly and severally liable for the liabilities of the firm. This means that if the assets and property of the firm is insufficient to meet the debts of the firm, the creditors can recover their loans from the personal property of the individual partners. Restrictions are there on the transfer of interest i.e. none of the partners can transfer his interest in the firm to any person(except to the existing partners) without the unanimous consent of all other partners. The firm has a limited span of life i.e. legally, the firm must be dissolved on the retirement, lunacy, bankruptcy, or death of any partner.

A partnership is formed by an agreement, which may be either written or oral. When the written agreement is duly stamped and registered, it is known as "Partnership Deed". Ordinarily, the rights, duties and liabilities of partners are laid down in the deed. But in the case where the deed does not specify the rights and obligations, the provisions of the THE INDIAN PARTNERSHIP ACT, 1932 will apply. The deed, generally contains the following particulars:

Name of the firm. Nature of the business to be carried out.

Names of the partners. The town and the place where business will be carried on. The amount of capital to be contributed by each partner. Loans and advances by partners and the interest payable on them. The amount of drawings by each partner and the rate of interest allowed thereon. Duties and powers of each partner. Any other terms and conditions to run the business.

Advantages

Ease of formation Greater capital and credit resources Better judgment and more managerial abilities

Disadvantages

Absence of ultimate authority Liability for the actions of other partners Limited life Unlimited liability

Partnership is an appropriate form of ownership for medium sized business involving limited capital. This may include small scale industries, wholesale and retail trade; small service concerns like transport agencies, real estate brokers; professional firms like charted accountants, doctors' clinic, attorney or law firms etc.

Joint Stock Company

Before going for starting a business in company form of business, the entrepreneur must passes detail knowledge about the company. A good number of authors have defined .he company in their own ways and languages. Few important among them are presented below : According to Prof. L. H. Haney - "A Joint Stock Company is a voluntary association of individuals for profit, having a capital divided into transferable shares, the ownership of which is the condition of membership." According to James Stephens - "A company is an association of many persons who contribute money or money's worth to a common stock and employ it in some trade or business, and who share the profit and loss arising therefrom." Indian Companies Act, 1956 - According to Section 3 of Indian Companies Act, 1956, "A company means a company formed and registered under this Act or an existing company." According to Clause (ii) of Section 3, "Existing Company means a company formed and registered under any of the previously formed Companies Act." A joint-stock company is a business entity which is owned by shareholders. Each shareholder owns the portion of the company in proportion to his or her ownership of the company's shares (certificates of ownership). This allows for the unequal ownership of a business with some shareholders owning a larger proportion of a company than others. Shareholders are able to transfer their shares to others without any effects to the continued existence of the company. In modern corporate law, the existence of a joint-stock company is often synonymous with incorporation (i.e. possession of legal personality separate from shareholders) and limited liability (meaning that the shareholders are only liable for the company's debts to the value of the money they invested in the company). And as a consequence joint-stock companies are commonly known as corporations or limited companies. Thus, a company may be defined as a legal and invisible artificial person, incorporated under an association of persons having an independent, separate legal entity along with perpetual succession and common seal, whose liability is ordinarily limited, the capital is divided into transferable shares, held by shareholders in order to earn profit.
Characteristics of Joint Stock Company:

The analysis of above definitions reveals the following characteristics of a company:

1. Association of persons:

A company is a voluntary association of persons established for profit motive. A private company must have at least two persons and the public limited company must have at least seven

persons to get it registered. The maximum number of persons required for the registration in case of private company is fifty and in case of public company there is no maximum limit.
2. Artificial person:

A company is an artificial person. It is created by law. Like that of the natural person, it can own property, incur debts, file suits, enter into contracts with others under its own name. It can be sued and fined but cannot be imprisoned.
3. Separate legal entity:

A company being created under law has a separate entity from its members. Any of its members can enter into contracts with others. A member cannot bind a company by his acts or dealings with the third parties. The company can file a suit against its members and its shareholders can also sue the company. Further, a shareholder is not liable for the acts of the company even though he may be holding all the shares of that company.
4. Limited liability:

The liability of the members or shareholders is limited to the extent of the value of shares held or the amount guaranteed by them. The shareholders are not personally liable for the debts of a company beyond that limit.
5. Transferability of shares:

The shares of a public limited company are freely transferable and can be purchased and sold through the stock exchanges. A shareholder of a public limited company can transfer his shares without the consent of other shareholders. But there are certain restrictions on transferability of shares in case of private limited company.
6. Common seal:

Since a company is an artificial person, it cannot put its signature on any document. Therefore, it is statutory for every company to have a seal on which the name of the company is engraved. Affixing of seal on any document signifies the signature of the company. Of course two directors have to sign as witnesses in such .cases.
7. Separation of ownership from management:

The shareholders are the owners of the company. They are heterogeneous group of people who are widely scattered throughout the country and abroad. The shareholders elect their representatives called directors to manage the company. Thus, the company is managed by directors rather than the shareholders. This results in separation of ownership from management.

8. Perpetual succession:

The company enjoys a continuous existence. Its existence is not affected by death, lunacy or insolvency of its shareholders or directors as the case in partnership or sole proprietorship. The company can only be dissolved by the operation of law.
9. Investment facilities:

A joint stock company raises its funds through issue of shares to general public. Due to the small denomination of the shares, the company provides investment opportunities to all sections of people who want to put their surplus money in the company's share.
10. Accountability:

A joint stock company has to function as per the provisions of the Companies Act. The accounts are to be audited by qualified auditors. Such accounts and exports are published for the information of all stakeholders. Regular and timely reports are to be submitted to the Government.
11. Restricted action:

A company cannot go beyond the powers mentioned in the abject clause of the Memorandum of Association. Therefore, its action is limited.

TYPES OF JOINT STOCK COMPANIES

Chartered Companies These are types of companies that come into existence when a special Charter or Royal Charter is granted by a King or a Queen or the Head of a country. Eg. East India Company, Chartered Bank of Australia, China etc. Such companies rarely exist in our country today. Such a Royal Charter empowers the company to an unrestricted corporate capacity within the jurisdiction of the state. Statutory Companies These are companies that are established by passing special and specific Acts at the Parliament. This is done mainly to regulate the working of certain companies in the national interest. Reserve Bank of India, Bank of India, and State Bank of India, Life Insurance Corporation is examples of Statutory Companies.

Registered Companies: These are companies that are incorporated in India under the Companies Act, 1956. These are formed and registered with the Registrar of Companies under the provisions of the Companies Act. On the basis of limit to liability, these companies may be classified into the following three categories. a. Companies that are limited by shares. b. Companies that are limited by guarantee. c. Unlimited Companies a. Companies limited by shares The share holders of such companies enjoy limit to the liability of the company in the event of its winding up, to the extent of the unpaid value of the shares only, if any. They will not be asked to pay anything more than the fully paid up value of the share. b. Companies limited by guarantee The company may be registered in one of the two forms; i) Companies limited by guarantee having no share capital. ii) Companies limited by guarantee having share capital. The members in case of the former type agree to pay at the time of winding up agreed sums as stipulated in the Memorandum of Association. The members in case of the latter type are liable to pay the unpaid value of share capital and in addition the amount of guarantee that they had agreed to pay while becoming shareholders in the event of winding up of the company. These companies are also known as guarantee companies and are usually formed to promote art, sports, education, charity etc. c. Unlimited Companies These are companies, the members of which have no limit on the liability in the event of winding up. In case the assets of the company are insufficient to raise funds to clear the external liabilities of the company, the shareholders may be asked to pay from their personal properties in order to set off the company's liabilities.

The companies limited by shares and guarantees may be classified into two categories. (i) Private Companies (ii) Public Companies (i) Private Companies :- According to the Companies Act, a Private Company is one which is formed by at least 2 persons, and which: a. restricts the number of members to 50 b. restricts invitation to public for subscriptions towards shares or debentures. c. restricts transfer of shares. (ii) Public Companies: The Companies Act does not give a direct or clear definition of a Public Company. It states that all the Companies that do not follow the three restrictions to be followed by a Private Company are Public Companies. Also, there must be a minimum of seven members to start a Public Company. In addition to the above mentioned types of companies there are the following types of companies. Government Companies Foreign Companies Holding Companies Subsidiary Companies a. Government Companies: Sec. 617 of the Companies Act defines a Government Company as one in which not less than 51% of the paid-up share capital is held by the Central or State Government or partly by both central and state Governments. b. Foreign Companies: Foreign Companies are companies incorporated outside the country but have transactions in places within India. These companies transact business in India in accordance with the regulations laid down by the Indian Companies Act as far as their operations within India are concerned.

c. Holding Companies: A Holding Company is a company that holds more than 51% of the Registered Capital of another company. Since they are the major shareholders, they have the right of appointing or removing directors of the company whose shares are held by the Holding Company. d. Subsidiary Companies: Subsidiary Companies are companies whose shares are held by another company to the extent of 50% or above its nominal value of share capital. Difference between Private Company and Public Company The Private Companies differ from the Public Companies in various aspects of their incorporation, working and operations. The Private Companies enjoy more benefits when compared to Public Companies. The following are some of the differences: Steps in Promotion: Promotion is a process which involves execution of work in, several phases namely. a.Discovery of a business opportunity. b.Conduct of preliminary investigation c. Assembling d. Financing a. Discovery of business opportunity: The incorporation of a company starts when a few business opportunities are discovered. The promoters have to choose the appropriate idea by making rough estimate of the proposition. b. Conduct of preliminary investigation: The promoters then conduct a study on the feasibility of the project, an estimated output, likely turnover, working capital requirement, investment requirements etc. The promoters may take the assistance of professional experts in the conduct of preliminary investigation to ensure minimum errors. c. Assembling: The next stage is to collect the necessary equipments, land, men, material, money and managerial ability. This stage also includes the initial spade work made by the promoters in the form of

entering into contractual agreements whenever necessary, to make the project a viable proposition and to make an early beginning of the activity of a Company. d. Financing: After deciding the business proposition, conducting preliminary investigations, assembling resources, the promoters have to prepare the financial estimates and ways and means of raising the same. Usually the promoter directs his efforts by issue of prospectus inviting public to subscribe for the shares of the company, by arranging the underwriters and to raise initial funds from all the promoters. Selection of Name To enable the company to enter into preliminary contracts, it is necessary for the promoters to select a name for the company. There is no restriction on choosing of a name except that it should not resemble the name of an existing company, should not carry the Government name or emblem (Unless a Government Company) and should not be objected by anyone with respect to its proposed name. To ensure the same, an application is to be submitted to the Department of Company Law Administration, Government of India through the Registrar of Companies in the concerned state where the registered office is to be situated.