Preface of Textbook
About the Textbook
About the Authors
Book Website at McGraw-Hill
DVD Contents
Stanford 1e Book Website
McGraw-Hill 1e Book Website
Book Contents
Table of Contents
Venture Opportunity, Concept and Strategy
Venture Formation and Planning
Functional Planning of the Venture
Financing and Building the Venture
  Business Plans (App. A)
  Case Studies (App. B)
Online Sources (App. C)
Sample Syllabus
Course Overview
Calendar of Sessions
Entrepreneurial Perspective
Idea or Opportunity
Gathering Resources
Managing Ventures
Entrepreneurship and You
Additional Resources
Schools Using This Textbook
Authors Blog


This case is centered around the 'growing pains' that a rapidly growing company faces. RADCO Electronics grew out of the successful commercialization of a simple method for probing agricultural fields with inexpensive chemical sensors. Expanding to different industries, the rapidly expanding company is challenged with organizational, political and strategical issues. The company is outgrowing its centralized management and organizational hierarchy and is considering the restructuring of its upper management and budgeting procedures. Questions arise in how customers are billed and which departments are actually bringing in revenue.

When should this case be discussed?

RADCO Electronics is a good case study to jumpstart discussion on organizational dynamics as well as strategy challenges that a startup faces as it grows up. This case will enrich concepts learned in Sections II and III of the text.

Relevant chapters and questions

Ch 3: Building a Competitive Advantage
Ch 12: The New Enterprise Organization
Ch 20: Leading a New Technology Venture to Success

1. What are the intellectual property issues that RADCO Electronics faces? What are the advantages and disadvantages of keeping their software algorithms a trade secret rather than patenting the idea? Given that they do not have the patent to the sensors, how can they better approach the sensors issues?

2. What are the major flaws in the current organizational design and what are the effects on RADCO? What can be done to improve the organizational and management structure? What should be done about Poulos and Sells, if anything?

3. Given that Moore's 'Crossing the Chasm' model suggests that a company should 'put all its eggs in one basket' and secure a vertical before branching out to other industries, can you gage how well RADCO is doing? " Analyze Exhibit 3. Do you agree with ExCom's centralized budget or Braun's decentralized budget? What are the advantages and disadvantages of each? Consider the effects beyond the financial context.

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