eBay Organization Structure Anlaysis

I will be discussing about eBay’s organizational structure.

eBay tends to be more of a formal organization. This is reasonable because eBay is a large and complex business; the organization has to become more structured in order for tasks and roles to be fulfilled in a manageable and coherent way.

eBay contains a short chain of command because the business has a flat hierarchical structure. For instance, Pierre Omidyar, the Founder and the chairman of the board is on the top of the organizational structure as he posses the most authority and responsibility of the business. Then, below him are the president and director, the next level are the managers, and the last level is supervisors and team leaders. The organizational chart of eBay illustrates that the chairman has the most command over the other positions. However, the director, who is positioned in the chain of command right below the chairman, does not have any command over management level and employees as he is isolated and does not connect to other parts in the organizational chart. This is important for the business to understand because it shows the director’s level of authority and responsibility.

There are only 4 levels of organizational structure. This indicates that eBay is considered as a flat organization as there are very few layers in the organizational hierarchy. Therefore, each manger will tend to have a wider span of control: ex. The president has direct accountability for over 7 different managers. There are several advantages that are associated with a wider span of control in eBay. First, Delegation becomes a relatively important part of managing the organization because there are opportunities for subordinates to take on extra responsibilities to develop their professional careers. However, even the mangers are passing on or empowering their staff of control and authority, the manger must be aware that he still holds responsibility and accountability for his staffs’ actions. Lastly, there will be a better communication in a wider span of control as there are fewer layers in the hierarchy.

eBay has a decentralized structure. Decentralized structure refers to that some decision–making authority and responsibility is passed onto others in the organization. For example, in eBay, the management levels like senior vice president of Human Resource, the senior vice president of France and chief financial officer and others can make some decisions on behalf of the business, rather than the chairman or President/CEO making “ALL” the decisions alone. However, the key decision-making power is still centralized or concentrated in the hands of the senior management team, in this case, the president/CEO or the chairman. There are several reasons why eBay would choose to have a decentralized structure. First, eBay can benefit from the development and exploitation of the skills of employees, especially their middle mangers. Second, planning and execution become faster and more efficient since there is delegation of authority and responsibility. Third, it will increase morality because the empowered staff will feel more valued. This creates initiative and a sense of ownership for these workers, which as a result, increases the workforce productivity.

Organizational structures are important to a business since they determine how decisions are made and how things are done in the workplace. eBay consists of a flexible organizational structure because they are able to adapt when there is a need to respond of rapid change. Also, since eBay is an internationally known business, they must make sure their mangers have effective control, effective communication methods and channels, and effective coordination for fast and precise decision-making. Therefore, because eBay is able to achieve these factors due to their organizational structure, their business is very successful.