Kendra L. Brown
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 …show more content…
The Marketplace unit can co-operate with the PayPal units to use their Internet payment and communication services. However, this is also likely to cause problems in the control of resources and incomes obtained in each unit.
Since 2008, eBay has encountered various changes in the external environment that have led to a decline in its financial performance and lower growth in its projected incomes from Marketplace activities. These changes include the great recession that influenced the ability to buy items on the auction market, lack of popularity in the online auction business strategy, increased competition from other companies like Amazon and Google and pressure from investors to maintain profit levels.
Therefore, eBay made rapid changes in the company in form of rules and regulations to take care of the changing environment and the growing number of buyers and sellers. The rules and regulations were incorporated in a new strategy that would allow eBay to utilize the synergies of Marketplace and PayPal operations. However, this new strategy received a lot of criticism from buyers and sellers in both the domestic and international markets. They were against the introduced policies that would result in increased fees, commissions, and adoption of PayPal as the only payment option, which was criticized for being anticompetitive in online commerce. Therefore, the new plans only resulted in leaving buyers