Verizon Communication Global Expansion Plan
The Most Important Factors to Consider When Establishing an International Organizational Structure
According to Kortmann (2012), an organizational structure is a system outlining how activities are directed toward meeting an organization’s goals. It is often dictated by the environment, strategy, goals, organization size, and technology. International organizational structures define the success of an organization in a foreign country and limit the organization’s operations to effectively manage operations in the organization and align the organization’s operations with the culture of the foreign market. In most instances, organizations expanding to foreign markets are reluctant to select an organizational structure due to uncertainty on whether it will be effective since they may not understand all aspects of the business environment in the foreign country. According to Kortmann (2012), organizations are also required to align their strategy with long-term and short-term organizational goals; thus, they need to be cautious to ensure that the best strategy is selected. Therefore, selecting the best international organizational structure requires considering all the factors that could affect strategy implementation and the effectiveness of the selected structure in addressing the organization’s needs in the international business environment.
One of the most important factors to consider when establishing an international organization structure is strategy. Ross (2021) argues that strategy includes how an organization intends to position itself in the market based on the products and services that it will be offering. When expanding to international markets, a company may decide to create a competitive advantage by always being the first to introduce new products in its business segment. For instance, Verizon Communications may decide to be the first to introduce a 5G network in foreign markets to create a competitive advantage by enhancing awareness among customers. A company may also decide to focus on producing what is already in the market by improving quality or reducing prices to attract more customers. Organizations intending to be the first to introduce a product or service in the market may opt for organic structures that allow organizations to respond to changes within the shortest time possible, thus maintaining business operations.
The second most important factor is the environment. According to Zadeh & Ghahremani (2019), a business environment includes the setting in which organizations run their operations and the conditions influencing the organization, such as social-cultural, economic, technological, legal-political, and natural environment conditions. A business environment can either be dynamic or stable. In a dynamic environment, customers’ desires are constantly changing. For instance, customers may develop a preference for a certain quality of products or opt for cheaper products, thus prompting an organization to adjust to meet the new needs. In a stable environment, customers’ needs and preferences are well understood and are anticipated to remain the same. For instance, in the technology industry, the most prevalent customers’ needs and preferences are high-quality internet connection at an affordable price. Therefore, companies need to first analyze the nature of the business environment before selecting an organizational structure to effectively align its activities with the characteristics of the business environment.
Strategy for the Organization and a Foreign Market Entry Strategy
Ross (2021) defines organizational strategy as the medium and long-term general objective and purpose of an organization and the activities that include the allocation of resources set aside to achieve the objectives. Strategy offers a structure for an organization to control and bring together its activities and increase communication among employees and management. The most appropriate strategy for Verizon Communications is differentiation. This strategy includes competing based on special features of a product or service. For instance, Verizon Communications may focus on the 5G network as the special feature of its internet services to attract customers and maintain customer loyalty. The strategy will also help the organization attract other well-recognized companies in the foreign market to form joint ventures. According to Surdu (2020), joint ventures are a common foreign market entry strategy that includes forming a partnership between a foreign and domestic company. The two companies invest an agreed amount of money and share control and ownership of the business. Verizon Communications can form a joint venture with a company that has been operating in Germany’s technology sector for a long time to benefit from its already established customer base for profit maximization. Forming a joint venture will also help Verizon Communication understand the rules and regulations of doing business in Germany’s technology sector to avoid legal issues that could jeopardize its growth in the foreign market. A joint venture is also ideal for Verizon Communications because it will enable the company to understand the telecommunication market in Germany before operating on a large scale, thus avoiding losses.
Proposed Organizational Structure
The centralized organizational structure would be best for Verizon Communications in Germany. According to Kortmann (2012), the structure includes making business decisions at the top and communicating them to people at the lower parts of a hierarchy, hence creating a strict chain of command. The centralized organizational structure is the best fit for Verizon Communication because it will allow the organization to align employee activities with the organization’s goals, hence increasing the chances of organizational success in the foreign market. Top management will also be able to coordinate with stakeholders in the market to determine their needs and meet them, thus gaining support from them, which translates to success in the market. The structure is also ideal because it will enable the organization to respond quickly to changes in the market because the decision-making process is fast, given the fact that the decision-making function is only handled by top management, and employees are not allowed to object to top management’s decisions. The organization can also use the centralized organizational structure to reduce resistance to change, especially for employees who may be transferred from other countries to Germany, to maintain a uniform completion of tasks in the company’s branches in the host market and those in its country of origin.
Proposed Hierarchy
The hierarchy will include a board of directors at the top. The board will be in charge of making decisions and communicating them to employees. Below the board of directors will be the manager who will be in charge of passing information from top management to other levels in the hierarchy. The next level will be department supervisors, who will be in charge of monitoring the activities in a department and reporting to the manager so that he or she can inform the board of directors about the progress in completing organizational goals. Employees in every department will directly report to their supervisor to ensure that the board of directors understands the specific needs of staff in every department. An overview of the proposed hierarchy is provided below. The board of directors may also communicate with department supervisors directly in case the manager is absent or does not convey the intended message as needed.
Organizational Chart
References
Kortmann, S. (2012). Organizational structure. The Relationship between Organizational Structure and Organizational Ambidexterity, 12-17. https://doi.org/10.1007/978-3-8349-3630-1_2
Ross, S. C. (2021). Organizational strategy and organizational behavior. Organizational Behavior Today, 3-21. https://doi.org/10.4324/9781003142119-3
Surdu, I. (2020). Foreign market re-entry strategies. The Oxford Handbook of International Business Strategy, 355-372. https://doi.org/10.1093/oxfordhb/9780198868378.013.18
Zadeh, L. K., & Ghahremani, M. (2019). Factors affecting organizational development (Case study: Welfare office of east Azerbaijan province). International Academic Journal of Organizational Behavior and Human Resource Management, 06(01), 46-51. https://doi.org/10.9756/iajobhrm/v6i1/1910005
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Question 
Verizon Communication Global Expansion Plan
Every organization needs a strategy to assist with making the best use of resources and core competencies in order to gain a competitive advantage. Globally competitive organizations seek efficiency, flexibility, and continuous learning as key strategic objectives. There must also be a way to determine hierarchy within an organization in order to ensure efficient management of job functions, smooth flow of information, and effective coordination of work at both individual and team levels. The hierarchy represents the organization’s structure, showing the links between people, functions, and processes. The organization’s strategy will often determine its organizational structure, especially as it relates to the manner in which responsibility is shared, which happens to be a fundamental issue with organizational structures in international business. The main issue is how to share decision-making responsibility between the organization’s headquarters and its foreign subsidiaries and affiliates, which will help to determine if the organizational structure should be centralized or decentralized. When planning a global expansion, it is very important to consider factors associated with the organizational structure that could potentially complicate workplace issues such as teamwork, employment, compensation, and union-management relationships (Cavusgil, Knight, & Riesenberger, 2020).
For this assignment, you will be required to propose the type of organizational strategy and structure that will best align with the business goals of your selected company and geographic location. Address the following for this assignment:
1. Describe some of the most important factors to consider when establishing an international organizational structure.
2. Briefly propose a strategy for the organization, including a foreign market entry strategy.
3. Based on your proposed organizational strategy as well as the country selection for your Global Expansion Plan, describe the type of organizational structure (centralized or decentralized) that would be the best fit and provide a rationale for your choice.
4. Briefly describe what the hierarchy will look like in the organization and include an organizational chart that is reflective of the same.