Verizon Communications, Inc. has an organizational structure that facilitates and accounts for business growth and expansion. This corporate structure is a result of adjustments or reforms to address changing demand and technologies in the telecommunications market and the information and communications technology industry. A firm’s organizational structure or corporate structure determines the interactions among employees and workgroups, based on the design, system and composition of the organization. Verizon’s corporate structure is based on the nature of the business. For example, the operations of Verizon Wireless and Oath are parts of different divisions that characterize the structural system of the business. The current structural features of the business reflect expansion efforts, including the acquisition of firms. The current organizational structure of the company indicates shifts in the significance, revenue contributions, and profit contributions of various operations, including those of subsidiaries, such as the operations of Verizon Wireless in the wireless telecommunications services market.
Business managers develop the corporate structure of Verizon Communications, Inc. to address the rapid changes in the telecommunications market and mass media market, as well as the advancement of technologies in the information and communications technology industry. For example, the structural characteristic of operations-based divisions are established and emphasized to consider the current and future expansion of the business. While established and stable business operations like those of Verizon Wireless remain significant, changes are implemented in the organizational structure to ensure the relevance of the company’s operations to market demand and related opportunities. Verizon’s corporate structure continues to evolve as the industry and market change over time.
Verizon’s Organizational Structure Type and Characteristics
Verizon Communications, Inc. has an operations-based divisional organizational structure. This structure is a result of the company’s restructuring for business expansion. The new corporate structure is designed to enable the business to easily implement new operations resulting from new opportunities in the information and communications technology and services industry, especially in the United States. For example, the same structural division can support the managerial needs of Verizon Wireless and related operations in the telecommunications market, including new ones. In this regard, the following characteristics define Verizon’s organizational structure:
- Operations-based divisions (most significant)
- Corporate hierarchy
- Geographical segments
1. Operations-Based Divisions. These divisions are the main feature of Verizon’s corporate structure. The company continues to expand its operations, leading to the creation of new divisions as a structural characteristic based on type of operations. Prior to the restructuring, there were only two divisions: Wireless and Wireline. The Wireless division included the operations of Verizon Wireless and related wireless technology services of the telecommunications business. The Wireline division included the remainder of the company’s operations. After the restructuring, the new operations-based divisions more accurately represent operational expansion. The Media and Telematics division involves business operations in digital media and telematics. For example, the acquired AOL and Yahoo assets are under this division. On the other hand, the Network and Technology division focuses on developing the company’s networks and related technologies, with emphasis on fiber optics. The Customer and Product Operations division include established businesses, such as Verizon Wireless and Verizon Partner Solutions. In summary, the operations-based divisions in the organizational structure of Verizon Communications, Inc. are as follows:
- Media and Telematics
- Network and Technology
- Customer and Product Operations
2. Corporate Hierarchy. This structural characteristic has a supporting role in influencing the interactions among Verizon’s employees and work units. This hierarchy enables the business to manage its operations as an integrated whole through the organizational structure. For example, an executive is responsible for the company’s information and technology architecture. Another executive is responsible for marketing. Each of the other main functional areas of the business is under a senior manager or executive. Also, this feature of the organizational structure is developed around the main operations-based divisions. For instance, the hierarchy allows corporate managers to address the strategic concerns of Verizon Wireless. Thus, the corporate structure supports the need to seamlessly manage, grow and expand the operations of Verizon Communications, Inc., especially in its current main market in the United States.
3. Geographical Segments. Geographical segments are a minor structural characteristic that influences decision-making processes among Verizon Communications, Inc.’s management teams. Considering that the emphasis of the organizational structure is on the divisions based on type of operations, geographical segments are not readily used as basis for strategy formulation. For example, most of the corporate strategies of the company consider all operations per operations-based division. Also, because of the operational focus of subsidiaries like Verizon Wireless within the U.S. telecommunications market, the corporate structure does not necessarily require managers to separately consider different geographical segments. Nonetheless, the following geographical segments in the corporate structure are notable because of the company’s increasing potential for global expansion:
- United States
Verizon’s Corporate Structure: Advantages & Disadvantages, Recommendations
The organizational structure of Verizon Communications, Inc. evolves to address changing market and industry conditions. For example, the company used to focus its structure on the significance of Verizon Wireless, and the corresponding significance of wireline operations. In contrast, the current structural characteristics account for new business activities and opportunities in the information and communications technology and services industry, particularly in the United States. Thus, an advantage of Verizon’s corporate structure is that it supports current business growth and facilitates further growth and expansion in the U.S. market. Another advantage of the organizational structure is its support for integrating the company through corporate functions, as reflected in the corporate hierarchy that runs throughout the organization.
In spite of the benefits of its corporate structure, Verizon Communications, Inc. experiences the disadvantage of limited structural support for international expansion. This condition is understandable, especially because the company focuses most of its operations in the United States. However, there is considerable opportunity to globally grow and expand based on the global development of information and communications networks, which is a significant technological trend identified in the PESTEL/PESTLE analysis of Verizon Communications, Inc. For example, there is opportunity to expand the wireless telecommunications service operations of Verizon Wireless in Canada and Mexico, among other areas. Thus, a recommendation to improve the company’s organizational structure is to increase the emphasis on geographical segments in strategic decisions. This recommendation aims to enhance the corporate structure’s support for the company’s international expansion. Such expansion should align with differentiation, diversification, and market development in Verizon’s generic strategy and intensive growth strategies.
- Ashkenas, R., Ulrich, D., Jick, T., & Kerr, S. (2015). The boundaryless organization: Breaking the chains of organizational structure. John Wiley & Sons.
- Dischner, S. (2015). Organizational structure, organizational form, and counterproductive work behavior: A competitive test of the bureaucratic and post-bureaucratic views. Scandinavian Journal of Management, 31(4), 501-514.
- Gaba, V., & Joseph, J. (2013). Corporate structure and performance feedback: Aspirations and adaptation in M-form firms. Organization Science, 24(4), 1102-1119.
- Menguc, B., & Auh, S. (2010). Development and return on execution of product innovation capabilities: The role of organizational structure. Industrial marketing management, 39(5), 820-831.
- Polat, R., & Nisar, T. M. (2013). Financial crisis and changes in firm governance, corporate structure, and boundaries. Managerial and Decision Economics, 34(6), 363-378.
- Sakhartov, A. V. (2016, January). Selecting Corporate Structure for Diversified Firms. In Academy of Management Proceedings (Vol. 2016, No. 1, p. 11521). Academy of Management.
- Verizon Communications, Inc. – About Verizon – Leadership.
- Verizon Communications, Inc. – Annual Report.
- Verizon Communications, Inc. – Form 10-K.
- Verizon Wireless – Official Website.