Organizational Change: Technology, State, Government

Organizational Change
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Description of the organization
EBay is an international corporation that offers a platform for the sale of goods and services by individuals and businesses. It is a multibillion business with a global customer base of 233 million and operates in 37 countries. There are several items listed on EBay like electronics, books, computers, and antiques. EBay acquired PayPal in 2002; a move that increased the number of electronic payments made through EBay and eliminated transactions conducted via money order or check. Various factors prompted EBay and PayPal to split into separate companies in 2015. The CEO of EBay stated that the changing economic environment made it not feasible for the two companies to be tied together. Therefore, as independent companies, EBay and PayPal would have greater focus and better flexibility to pursue potential accomplishments in their relevant global business and payments markets. Investor Carl Icahn, who controls the highest stake in the company also pushed for the split, arguing that the companies would perform better when they are independent. Furthermore, they were different businesses, operating in diverse markets, and having dissimilar strategic priorities. Hence, the split allowed each business to center on what is paramount to them, rather than what is best for the whole group (Bensinger, 2015).
Impacts of the change
The separation had various impacts on the EBay business. PayPal commenced to trade independently on the stock market that resulted to drop of EBay’s market value. The EBay market value dropped from $75 billion to around $30 billion. While, PayPal worth was more than that of EBay with a market capitalization of $50 billion. Furthermore, PayPal revenue grew by double-digit after the companies’ separation, but EBay reported dwindling sales (Bensinger, 2015).
EBay responded to the change by cutting 2400 jobs that represented 7 percent of its global workforce. The restructuring helped the company to manage its online shopping operations and address the reduction in growth of its auction business. In addition, EBay sold its EBay enterprise unit for $925 million in order to streamline its core marketplace business (Huddleston, 2015).
Strategies
EBay adopted various restructuring strategies in its change plan. The company reduced its global workforce by 7 percent. The strategy of restructuring its workforce helped to address the dwindling sales of its auction business. EBay sold its stake in Craigslist back to the online-classified advertising site. The strategy helped the company to end legal wrangling between EBay and Craigslist. Craigslist accused EBay of utilizing private information to set up its own classified site. The divesture strategy dismissed all lawsuits between EBay and Craigslist and allowed EBay to concentrate on its core business (Huddleston, 2015).
Impacts on stakeholders
After EBay and PayPal separation, shareholders obtained one PayPal share for each EBay share, they owned. The rapid growth of Pay Pal enabled the company to command a higher valuation as a separate entity. PayPal revenue growth had a significant effect on the company sto...