Ebay Structures Its Bid for Change

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eBay Structures Its Bid For Change

Kendra L. Brown
Webster University

eBay Structures Its Bid For Change
Problem Statement Adoption of an improper organizational structure design that is not flexible enough to the unstable and the rapidly changing external environment in eBay’s domestic and international markets.
Analysis and Evaluation
A functional organizational structure with various operational areas, such as finance, operations, human resources, and legal units was adopted for the eBay during its establishment. In a functional structure, workers and activities are organized into areas of their expertise or units given specific functions. Therefore, the structure promotes efficiency and
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With the exception of PayPal and Skype, the other companies joined the Marketplace category that offers eBay main Marketplace activities. The Marketplace operation contributes the largest share of the revenues for eBay, followed by PayPal and Skype with the lowest revenues.
In such a multidivisional structure, there are separate and smaller divisions that perform varying functions. Every unit of the divisions is more focused in a given area, which makes the structure have more ability to adapt to market changes than the functional structure. Nevertheless, this kind of structure leads to duplication of management, administration, and staff activities, thus, there is inefficiency in the use of functional resources, higher costs, and loss of economies of scale. The multidivisional structure that was introduced in eBay was services-centric because it was focused on the kind of services provided in each division (Lee et al., 2015).
The changes that have occurred in eBay's organizational structure resulted in the current matrix structure. This is because the activities of the Company are aligned along more than one line of authority that is also applying the divisional and functional chains of command. As it is explained in the case study, each of the three divisional units has a president and its functional areas. This kind of structure

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