Diploma Thesis Nikolaos Chaliamantas

Masaryk University Faculty of Economics and
Administration
ORGANIZATIONAL STRUCTURE OF A
MULTINATIONAL COMPANY
Diploma Thesis
Advisor: Author:
Ing. Bc. Sylva Žáková Talpová Ph.D. Bc. Nikolaos Chaliamantas
Brno, 2016
MASARYK UNIVERSITY
Faculty of Economics and Administration
MASTER’S THESIS DESCRIPTION

Academic year: 2015/2016
Student: Bc. Nikolaos Chaliamantas
Field of Study: Business Management (Eng.)
Thesis topic: Organizational Structure of a Multinational Company
Thesis topic in English: Organizational Structure of a Multinational Company
Thesis objective, procedure and methods used: Aim of the thesis: The aim of the thesis is to analyse and critically
assess the organizational structure of a multinational company. Pro-
cedure and techniques used: The thesis will consist of two parts. Theo-
retical part will be devoted to introduction and discussion of methods
that will be used in the practical part in order to achieve the goal of
the thesis. In the practical part, these methods will be applied to a
real MNE. Speciﬁcally, it will analyse the organizational structure and
critically assess it, with respect to a stage of internationalization stage
of the company and its future development, including economic as-
sessment. Student is expected to deﬁne the problem and choose ap-
propriate methods to reach the goal of the thesis.
Extent of graphics-related work: According to thesis supervisor’s instructions
Extent of thesis without supplements: 60 – 80 pages
Literature: VERBEKE, Alain. International business strategy :rethinking the foun-

dations of global corporate success. 1st ed. Cambridge: Cambridge
University Press, 2009. xxiii, 481. ISBN 978-0-521-86258-5.
GOODERHAM, Paul N. and Odd NORDHAUG. International ma-
nagement :cross-boundary challenges. 1st ed. Malden: Blackwell,
2003. xiii, 473. ISBN 0-631-23341-5.
DERESKY, Helen. International management :managing across bor-
ders and cultures : text and cases. 7th ed., International ed. Boston:
Pearson, 2011. 480 s. ISBN 9780132545556.
DAVID, F. R. Strategic management :concepts and case. 13th ed. Har-
low: Pearson, 2011. 306 s. ISBN 978-0-273-75599-9.
Thesis supervisor: Ing. Bc. Sylva Žáková Talpová, Ph.D.
Thesis supervisor’s department: Department of Corporate Economy
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Thesis assignment date: 2016/01/04
The deadline for the submission of Master’s thesis and uploading it into IS can be found in the academic year calendar.
.................................. ..................................
Head of department prof. Ing. Antonín Slaný, CSc. dean
In Brno, date: 2015/09/04
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Author’s name and surname: Bc. Nikolaos Chaliamantas
Diploma Thesis topic: Organizational Structure of a Multinational Company
Department: Business Management, Department of Corporate
Economy
Supervisor: Ing. Bc. Sylva Žáková Talpová, Ph.D.
Defense year: 2016
Abstract
The goal of the below diploma thesis is to analyze the organizational structure of T-Mobile Czech
Republic a.s. which is managed by Deutsche Telekom. The theoretical part includes information
about the characteristics of multinational companies, describes organizational structure aspects
and provides all the necessary information, which will be used and applied in the practical part.
The practical part is related with the firm itself. More particularly, the theoretical concepts are
applied on T-Mobile Czech Republic a.s. and the organizational structure of the given firm is
analyzed.
Keywords
Multinational Company, Organizational Structure, Acquisition
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Author’s Statement
I hereby declare that this thesis I submit for assessment is entirely my own work and has not
been taken from the work of others save to extent that such work has been cited and
acknowledged within the text of my work.
In Brno__________________
Nikolaos Chaliamantas
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Acknowledgments
In this point I would like to thank my advisor Ing. Bc. Sylva Žáková Talpová Ph.D., who gave
me valuable advises for the creation of this diploma thesis. Also I would like to thank all the people
from T-Mobile CZ, who contributed and gave me helpful information in order to complete the
below diploma thesis
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Table of Contents
INTRODUCTION ....................................................................................................................................... 9
THEORETICAL PART ............................................................................................................................. 12
1 MULTINATIONAL COMPANY....................................................................................................... 12
1.1 Definition and characteristics ...................................................................................................... 12
1.2 Types of Multinational Companies ............................................................................................. 13
1.3 Foreign Market Entry .................................................................................................................. 16
1.4 Level of Internationalization ....................................................................................................... 20
2 ORGANIZATIONAL STRUCTURE ................................................................................................ 21
2.1 Organizational Structure characteristics ...................................................................................... 21
2.2 Types of Organizational Structures ............................................................................................. 27
2.2.1 Basic Types .......................................................................................................................... 27
2.2.2 Multinational Company Organizational Structures ............................................................. 35
PRACTICAL PART ................................................................................................................................... 38
3 T-Mobile Czech Republic a.s. ............................................................................................................ 38
3.1 General Information .................................................................................................................... 38
3.2 Financial Results ......................................................................................................................... 41
3.3 Branches ...................................................................................................................................... 42
3.4 Deutsche Telekom ....................................................................................................................... 42
3.4.1 Type of MNC ....................................................................................................................... 42
3.4.2 Level of Internationalization ................................................................................................ 43
4 Brief Description of the problematic ................................................................................................. 46
4.1 Introduction to the problematic ................................................................................................... 46
4.2 Methodology ............................................................................................................................... 47
5 Analysis.............................................................................................................................................. 48
5.1 T-Mobile 2013 Organizational Structure .................................................................................... 48
5.1.1 Managing Director Department ........................................................................................... 49
5.1.2 Human Resources Department ............................................................................................ 50
5.1.3 Finance Department ............................................................................................................. 51
5.1.4 B2C Department .................................................................................................................. 52
5.1.5 B2B Department .................................................................................................................. 54
5.1.6 Technology Department ....................................................................................................... 55
5.2 T-Systems 2013 Organizational Structure ................................................................................... 56
5.2.1 Marketing, HR & PQIT ....................................................................................................... 57
5.2.2 Finance department .............................................................................................................. 58
5.2.3 Sales ..................................................................................................................................... 58
5.2.4 Delivery................................................................................................................................ 59
5.3 T-Mobile’s Organizational Structure evolution from 2013-2014 ................................................ 61
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5.3.1 Changes after acquisition in Manager Director’s Department ............................................ 61
5.3.2 Changes after acquisition in Human Resources Department .............................................. 63
5.3.3 Changes after acquisition in Finance Department ............................................................... 65
5.3.4 Changes after acquisition in B2C Department .................................................................... 68
5.3.5 Changes after acquisition in B2B Department .................................................................... 72
5.3.6 Changes after acquisition in Technology Department ......................................................... 78
5.4 Changes in the Division of Labor ............................................................................................... 82
5.5 Summary ..................................................................................................................................... 83
5.5.1 Analysis Summary............................................................................................................... 83
5.5.2 Answers to Research Questions .......................................................................................... 83
6 RECOMMENDATION PLAN .......................................................................................................... 84
CONCLUSION ......................................................................................................................................... 89
REFERENCES .......................................................................................................................................... 91
LIST OF PICTURES ................................................................................................................................. 92
LIST OF TABLES ..................................................................................................................................... 94
LIST OF ABBREVIATIONS .................................................................................................................... 94
ATTACHMENTS ...................................................................................................................................... 95
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INTRODUCTION
To begin with, multinational companies play very significant role nowadays. The fact that some
governments rely on the multinational companies that operate within their country shows us that
without them, some countries would have enormous problems with increasing their GDP. In any
case, multinational companies (MNCs) are a phenomenon of the modern society and since we live
in it, we can see ourselves how big influence they have.
In today’s situation, the key players of the global markets are mainly MNCs. For a long time the
theory was oriented towards organizational structures of companies, which were conducting
business within the borders of their home country. These firms of course did not have to deal with
issues such as cultural differences or different local market conditions. The contemporary theory
starts to be oriented over firms, which have expanded abroad and deal with the aforementioned
issues.
Furthermore, many employees consider the organizational structure as unimportant and as an

object, which limits their authority. The truth however is that the organizational structure is the
element, which contributes the most to the firm in terms of success and profitability.
Although, when it comes to multinational companies (MNCs) then the problems that arise are not
that simple, not only because of the wide variety of products or the big number of employees, but
also because of the cultural differences of the individual markets, in which the MNC tries to enter
or makes already business. The correct “set up” of the organizational structure can bring to the
company the competitive advantage over its rivals.
This diploma thesis is about the analysis of the organizational structure of a MNC. I selected this
topic (Organizational Structure of a Multinational Company) for my thesis because I consider it as
actual and really interesting. The world was never as connected as it is nowadays. On the other
hand, humans did not have the need to deal with so many cultural differences, high competition
and similar problems as they face in today’s situation.
In this diploma thesis I am going to analyze the organizational structure of T-Mobile CZ (TMCZ).
As of today, T-Mobile CZ belongs among the biggest players in the telecommunications market in
the Czech Republic. What is also important is that T-Mobile CZ is part of the Deutsche Telekom
9
Group, which influences the policy and hence the organizational structure of the given firm.
In 2013 T-Mobile CZ wanted to emphasize on B2B market and this resulted in acquiring T-Systems
CZ. It is remarkable to mention that T-Systems CZ was also part of Deutsche Telekom but in
practice T-Mobile and T-Systems were competing in the Czech market even though they were
united in foreign markets. Nevertheless, T-Mobile CZ acquired T-Systems and the whole process
was completed successfully in 2014. From 2014 until today therefore, T-Systems and T-Mobile
conduct business as one.
In 2014, Deutsche Telekom acquired GTS in 4 countries (Slovakia, Romania, Poland and Czech
Republic) as a response to emphasize even more the B2B market since the B2C market became
saturated and flat. All of the acquired firms in turn, such as T-Mobile CZ, T-Mobile SK etc. had
the opportunity to acquire the GTS in their respective countries from Deutsche Telekom. Apart
from T-Mobile SK the rest 3 National Companies1 (or NatCos) acquired GTS, which once again
brought about many changes, especially in the organizational structure.
All in all, the past decade was quite turbulent for T-Mobile CZ and the changes influenced its
profitability and its ability to gain customers.
The official goal is to “analyze and critically assess the organizational structure of a multinational
company” and I concretized it by setting the following goal: „analyze the changes, which were
caused by the acquisition of T-Systems”.
In order to analyze the changes, I will use one research question and three sub questions:
What changes occurred in the organizational structure caused by the acquisition of T-

Systems?
i) What changes occurred in the structure of the departments themselves?
ii) What changes occurred in the competencies?
iii) What changes occurred in the division of labor?
On the basis of the analysis, I will formulate recommendations, which will be reflected in
1
Subsidiary within the Deutsche Telekom Group
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chapter 6.
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THEORETICAL PART
To begin with, I will mention the individual attributes of MNCs and apply them in the practical
part afterwards. More particularly, I will define what MNC is, what types of MNC exist and what
internationalization is. The aforementioned will be reflected in chapter 3, where I begin to give
detailed information about the parent company (or Group). Later in the theoretical part, I will write
about organizational structures, what types of organizational structures exist and which aspects
characterize them. This information will be reflected in chapter 5, where the analysis of the
targeted firm will be carried out.
1 MULTINATIONAL COMPANY
1.1 Definition and characteristics
There are plenty of definitions, which we can find while reading the literature. Among them, we
can find definitions which vary from Barlett, Ghoshal and Dunning to Alan Shapiro. According to
Barlett and Ghoshal “Multinational Company, is the entity created from direct foreign investment,
which is effectively controlled“.2 In addition, John Dunning and Seriana Lundan believe that “A
multinational or transnational enterprise is an enterprise that engages in foreign direct investment
and owns, or, in some way, controls value-added activities in more than one country”.3
However, there are other people, who set some criteria that make the company multinational. Alan
Shapiro, for example, believes that if the firm operates in more than one country then it can be
considered as MNC. Also, he is of the opinion that a MNC is a company that its operations are
made on international level, with the assistance of so called subsidiaries, offices, or production
facilities in 2 countries or more.4 Ghertman supports that a MNC is a company that has
headquarters and a minimum of two subsidiaries in two different countries. The turnover in these
two countries must be at least 10% of the whole company’s turnover.5
2
BARLETT, C. and SUMANTRA G. Transnational Management: Text, Cases, and Readings in Cross-border
Management. 5th ed., 1995, Chicago, 387 p. ISBN – 007-802-939-2
3
DUNNING, J. and LUNDAN S. Multinational Enterprises and the Global Economy. 2nd ed. Cheltenham: Edward
Elgar, 2008. 920 p. ISBN – 184-72012-29
4
SHAPIRO, A. Multinational Financial Management. 10th ed. New York: J. Wiley & Sons, 2006. 736 p. ISBN- 978-
1118572382
5
GHERTMAN, M. International Corporations. 1st ed. Prague: HZ, 1996, 117 p. ISBN - 80-86009-06-8
12
According to Dunning and Lundan the features of a Multinational Corporation therefore are the
following:
a) “It accesses, organizes and coordinates multiple value added activities across national
boundaries and
b) It internalizes at least some of the cross-border markets for the intermediate products
arising from these activities. No other institution engages in both cross-border production
and transactions“.6
1.2 Types of Multinational Companies
The classification of MNCs can be done based on various criteria. I will present one criterion, that
is, the relationship between the parent company and the subsidiaries.7 Generally speaking, the
individual firms, which bestir themselves in a given country and act on national level only, have
fewer advantages than MNCs. These advantages that the MNC has, can be for instance the ability
to make economies of scale or to conduct research and development, in one place, which will be
served for all firms that are part of the Group.8 It is obvious therefore that a national level firm can
have huge motivation to expand across borders in order to become a MNC and “acquire” these
advantages.
The main types of MNCs are the following:
International
The one-direction flow of information from the parent company to its subsidiary is the main
characteristic of this type of MNC. The competencies of minor importance are transferred to the
subsidiaries, whereas the main competencies are centralized. Moreover, the research and
development is initially carried out at the parent company and it is transferred to the subsidiaries
afterwards. It can be said that in this category belong firms, which operate with lower number of
decentralized subsidiaries or they have “export department” only, and they do not plan to expand
abroad.9
6
DUNNING, J. and LUNDAN S. Multinational Enterprises and the Global Economy. 2nd ed. Cheltenham: Edward
Elgar, 2008. 76 p. ISBN – 184-72012-29
7
8
GOODERHAM, Paul N a Odd NORDHAUG. International management: cross-boundary challenges. Malden, MA:
Blackwell Pub., 2003, xiii, 473 p. ISBN 06-312-3342-3.
9
13
Global
The tight bond between the parent company and the subsidiary is the main characteristic of this
type of MNC. Furthermore, the elements that compose the ownership structure are linked with one
another but in practice the subsidiaries are directed by the parent company. As far as the research
and development, it looks quite similar to the “International” model. To be more particular, the
research and development is carried out at the parent company. The parent company has the utmost
power, since it is the one, who decides about the plans and the goals of each subsidiary. Global
structure is used by large MNCs, which own subsidiaries all over the world.10
Multidomestic
The two aforementioned MNCs are more centralized than multidomestic MNCs. Every subsidiary
acts in a particular segment and due to this fact, the subsidiary is given autonomy, as a result the
subsidiary can monitor its partial contributions itself. As for research and development, it can be
carried out in each subsidiary in every country separately. This allows the appropriate adjustment
of the products or services to the concrete market (in order to match with the culture, to comply
with the given socioeconomic situation and so on). The individual subsidiaries not only
communicate with each other but they also cooperate occasionally.11
Transnational
The transnational model is a little bit different than the rest presented types. This model presents a
specific system, in which the individual subsidiaries are assigned to a particular goal or an activity,
which they develop for the rest of the subsidiaries in the Group. The research and development is
carried out in every subsidiary and it is shared among all subsidiaries, including the parent
company. In other words, the flow of information is not only from the subsidiaries to the parent
company but also there is flow of information from subsidiary A to subsidiary B.12
10
11
12
14
Figure 1-Types of MNCs
Tight Bond Headquarters

Independent Subsidiary
Relationship
Source: STRACH, Pavel, International Management, 1st ed. Prague: Grada, 167 p. 2009, Expert
(Grada). ISBN 978-80-247-2987-9, edited by the author.
The European corporations usually use the “international” and the “multidomestic” models,
whereas the American corporations prefer the “global” model. Nevertheless, the fact that there are
four categories does not mean that they cannot be combined. What I am trying to say is that one
MNC can use more than one type of relationships/bonds based on the segment or/and the market
situation. A characteristic example would be that a subsidiary, which is situated in a developing
country, will be using cheap workforce and it will be sending the products back to the parent
company, while it will be deriving the know-how from the parent company.13
13
STRACH, Pavel, International Management, 1st ed. Prague: Grada, 2009, 167 p. Expert (Grada). ISBN 978-80-
15
To summarize, judging from the above chapters it is visible that the MNC type depends on the
industry that it conducts business and based on the parent company. The parent company is the
one, who will actually determine what relationship bonds it will have with the subsidiaries. Also
it is important to mention that European companies are considered more “conservative” than
American according to the above passage.
1.3 Foreign Market Entry
There are two options, from which the firm can choose during the foreign market entry process.
The first option is the so called capital-free (company does not invest any capital) category. This
category is materialized by exporting, licensing and franchising. The second option is called
capital investment (company invests some sort of capital) category, which includes modes such as
joint ventures and subsidiaries. Gooderham and Nordhaug note that the fully owned subsidiaries
(so called Greenfield venture) are product of either merger or acquisitions.14
The selection of the category depends on many factors such as: the sophistication of the
investment, the available resources, the level of risk of the foreign market and so on.15
Pichanic mentions that between acquisitions and building new capacities, 90% of the firms opt for
acquisitions. On top of that, the firms require to buy the whole subsidiary – thus, fully owned
subsidiary – because it allows them to manage it in many ways.16
It is logical to opt for acquisitions because the acquired firm has already experience with the market
and the know-how that will be transferred to the new firm is valuable. In other words, the brand
name, the staff as well as the infrastructure will make the new firm’s life easier.
The professor of leadership Mason A. Carpenter and the president of Atma Global, Sanjyot P.
Dunning, sum up five entry modes that are mentioned in the introduction of this chapter, which
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GOODERHAM and NORDHAUG, N. International management: crossboundary challenges. 1st ed. Malden:
Blackwell, 2003. xiii, 473. ISBN 0-631-23341-5.
15
MACHKOVÁ, Hana. International Marketing: new trends and changes‘ reflection in the world, 1st ed. Prague:
Grada, c2009, 74 p. Expert (Grada). ISBN 9788024729862.
16
PICHANIC, Mikulas, International Management, 1st ed. Prague: C. H. Beck, 2004 xi, 53 p. ISBN 80-717-9886-
X.,
16
are the most common used by multinational corporations. In the below table, there are described
these 5 entry modes and the advantages-disadvantages that are entailed, when they are used.
Table 1-Foreign Entry Modes
Type of Entry Advantages Disadvantages

Low control, low local knowledge,
Exporting Fast entry, low risk potential negative environmental impact
of transportation
Less control, licensee may become a
competitor, legal and regulatory
Licensing & Franchising Fast entry, low cost, low risk
environment (IP and contract law) must
be sound
Shared costs reduce investment Higher cost than exporting, licensing, or
Partnering and Strategic
needed, reduced risk, seen as franchising; integration problems
Alliance
local entity between two corporate cultures
Fast entry; known, established High cost, integration issues with home
Acquisition
operations office
Greenfield Venture Gain local market knowledge;
(Launch of a new, can be seen as insider who High cost, high risk due to unknowns,
wholly owned employs locals; maximum slow entry due to setup time
subsidiary) control
Source: STRACH, Pavel, International Management, 1st ed. Prague: Grada, 2009, 169 p. Expert
(Grada). ISBN 978-80-247-2987-9, edited by the author (According to Pan, Y., The hierarchical
model of market entries, 2000, Journal of International business, 535 p.)
Capital-free entry modes

The easiest of all entry modes is exporting, which is basically when a firm sells to the abroad the
products that are produced domestically. What is a must, when using this kind of entry mode, is
the fact that the firm must make contractual agreements with a local company or distributor in
order to market their products in their new country. 17 What is more, indirect export is the phase,
when the corporation is introduced to the international market via intermediaries, who are usually
domestic firms and they are responsible for exporting the product/service abroad. As all aspects in
international trade, Strach says that indirect export has advantages and disadvantages. On the
bright side, Strach points out that there are low costs, there is no need for specialists and there is
low risk of investment. The other side of the coin is that the firm is not in contact with the customer,
which does not give the firm the opportunity to get to know what the situation is in the abroad.
The last disadvantage that Strach presents is the anonymity of the producer and the low level of
17
CARPENTER, A. and JANYOT D. International Business. 1st ed. 2011, London, 78 p. ISBN – 145-3-31-2994
17
controls over its product.18 It is obvious that the anonymity of the producer can make the customer
wondering about the credibility of the producer.
Franchising is basically when the firm sells its goodwill. By this, the one who bought the goodwill
can take advantage of the “prestigious” name of the company, which will attract the customers. In
turn, the owner must pay an annual fee to the company that sold him its goodwill.19 By being
franchised, the subscriber will also get the know-how from the main firm, including the systems
and the security that the services will be provided. Additionally, the subscriber is asked to keep
and respect the policies and the values of the organization. In this particular entry mode, the main
concept is to transfer the concept of the business model from the provider to the subscriber. The
upsides of this entry mode are the low level of investment, the quick entry in the market and the
brand that the subscriber acquires. On the other hand, the downsides are that the subscriber cannot
control the management, which is a possible threat to the quality of products and services.20
Therefore, it is double edged knife due to the fact that the providers usually use one-size-fits-all
model and this cannot be suitable to all markets.
Capital Investment entry modes

As far as partnering and alliances are concerned, Carpenter and Sanjyot state that “A strategic
alliance involves a contractual agreement between two or more enterprises stipulating that the
involved parties will cooperate in a certain way for a certain time to achieve a common purpose.
To determine if the alliance approach is suitable for the firm, the firm must decide what value the
partner could bring to the venture in terms of both tangible and intangible aspects.” 21 Typically,
the most common way that this entry mode is done is when the MNC connects with a local firm.
This strategy is suitable, when the firm wants to expand quickly to a new market and with the
association of the local firm, which has already created the distribution channels in the new market,
it is effortless for the MNC. It is remarkable to mention that the MNC “takes advantage” of the
local firm in the sense that the local firm has better knowledge of the local market and it also has
its subscriber network. The advantages of this entry mode is the creation of a firm, which provides
certainty and the sharing of the know-how, whose costs are low since the MNC does not own the
50% of the local firm.22
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In addition, the fourth in row entry mode is acquisition. Carpenter and Sanjyot claim that “an
acquisition is a transaction in which a firm gains control of another firm by purchasing its stock,
exchanging the stock for its own, or, in the case of a private firm, paying the owners a purchase
price. In our increasingly flat world, cross-border acquisitions have risen dramatically.” And they
add by saying “Acquisitions are appealing because they give the company quick, established
access to a new market. However, they are expensive, which in the past had put them out of reach
as a strategy for companies in the undeveloped world to pursue.”23 There are three types of
acquisitions. The first type is the horizontal, the second is the vertical and the third is the cross-
selling acquisition. To begin with the horizontal, it is when the firm acquires a firm, which operates
in the same industry and horizontally, it is its competitor. The reason of doing this is the reduction
of costs for production (cost-based synergy). Another reason is the increase of the revenues, which
can be achieved by integrating the resources of the two firms. Next is the vertical acquisition,
which is when a firm acquires a firm that operates in the same industry but on a different level.
Usually it is when supplier acquires the subscriber or vice versa. The reason for doing that is the
control of the product from its production until its sale. Last but not least, there is the cross-selling
acquisition, which has no relationship neither with the horizontal nor with the vertical acquisitions.
Cross-selling acquisitions are done due to financial reasons as well as reasons in order to improve
the portfolio.24 Also by acquiring firms from different industries, the firms can exchange the know-
how over some processes or technologies and the market share of the firm is increased.
The ultimate entry mode is a wholly owned, new subsidiary. The opening of a subsidiary abroad
is usually associated with risks and costs while the establishment of new business operations in
the new country are “in action”. The other side of the coin is that the subsidiary can provide above-
average returns. Carpenter and Sanjyot point that “The firm may have to acquire the knowledge
and expertise of the existing market by hiring either host-country nationals—possibly from
competitive firms—or costly consultants”.25 A critical point that cannot be overlooked is that the
parent company must own above 50% of the share of the subsidiary in order to be considered as
“subsidiary”. Otherwise, if the parent company owns below 50% then it is considered as an
affiliate. So according to the type of the “subsidiary” the name is taken or kept. In the case of
subsidiary, the name is taken from the parent company while in the case of affiliates the name is
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PICHANIC, Mikulas, International Management, 1st ed. Prague: C. H. Beck, 2004 xi, 57 p. ISBN 80-717-9886-
X.,
25
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kept as it is.26 This indicates how much the parent company appreciates the firms. Of course, the
criteria that the parent company uses in order to classify the firm into these two categories are
many but two of them are the potential of the firm in the given market and its current profitability.
In addition to the criteria that are mentioned in the beginning of this chapter, the extra criteria
based on which the company decides to select one of the above entry modes are: company size,
the attitude of the management towards risk, market share targets, profit targets, market barriers,
industry feasibility and the characteristics of the overseas’ country business environment.27
1.4 Level of Internationalization
Due to the fact that T-Mobile Czech Republic a.s. is part of the Deutsche Telekom (DT from now
on) Group and due to the fact that there will be mentioned some information about DT, I decided
to include this chapter and describe some information briefly.
The following five points are the steps that the firm must include in its process of
internationalization, if it wants to be successful:
1. To define clearly the mission, this must have realistic expectations.
2. To be able to recognize and quickly adjust to the new customers’ preferences as well as
to the new market conditions, so that the firm will gain the competitive advantage.
3. To comply with the different tastes of the consumers, who are from different cultural
backgrounds.
4. To create a product of high quality and constantly improving it, in order to outplace the
competitors in the domestic as well as in the foreign markets.
5. Conduct surveys over the markets, since they are dynamic and change frequently.28
As far as the level of internationalization is concerned, it can be calculated in different ways. The
simplest indicator is the Internationalization Index (II), which shows the share of the foreign
subsidiaries to the total number of subsidiaries.29
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KOCH, A. Factors Influencing Market and Entry Mode Selection: Developing the MEMS Model : Marketing
Intelligence & Planning 19.5 (2001): 351-61. General Science Abstracts. Ib. 11 Feb. 2015.
28
KUBÍČKOVÁ, Lea a Šárka MARKOVÁ. Key success factor identification when small and medium firms
internationalize. ECONOMIC AND MANAGEMENT TRENDS. 2012, 9th edition, 24-32 p. ISSN 1802-8527
Available at World Wide Web: https://dspace.vutbr.cz/bitstream/handle/11012/19603/09_02.pdf?sequence=1
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STRACH, Pavel, International Management, 1st ed. Prague: Grada, 2009, 34 p. Expert (Grada). ISBN 978-80-247-
2987-9
20
𝐹𝑜𝑟𝑒𝑖𝑔𝑛 𝑆𝑢𝑏𝑠𝑖𝑑𝑖𝑎𝑟𝑖𝑒𝑠
II =
𝐴𝑙𝑙 𝑠𝑢𝑏𝑠𝑖𝑑𝑖𝑎𝑟𝑖𝑒𝑠
The most complicated indicator is the Transionality Index (TNI), which shows the share of the
activities of the company at the foreign countries. It presents two averages. The first average is:
a) The average of the three following indicators:
i) The volume of the foreign assets to the total volume of assets
ii) The volume of the foreign sales to the total volume sales
iii) The number of the employees working abroad to the number of the total employees
b) The average of the four following shares:
i) The influx of the direct international investments (DII) in comparison with the share
of the gross fixed domestic capital
ii) The value that is added by the subsidiaries as a percentage of the whole value added
iii) The volume of the internal DII as a percentage of the GDP
iv) The number of the employees working abroad to the number of the total employees30
2 ORGANIZATIONAL STRUCTURE
2.1 Organizational Structure characteristics
According to Luthans, the organizational structures of MNCs are defined by four characteristics:31
 Formalization
 Specialization
 Centralization & Decentralization
 Levels in the hierarchy – Span of control
In addition, Blazek adds two more characteristics32:

 Division of labor
 Division of competencies
30
DVOŘÁČEK, Jiří. The company and its environment: How to survive in a competent evironment. 1st edition.
Prague: C. H. Beck, 2012, 173 p. Beckova edice ekonomie. ISBN 9788074002243
31
LUTHANS, F., DOH, J. P. International management: culture, strategy, and behavior. 9th edition. McGraw-
Hill/Irwin, 2009. 304 p. ISBN-10: 0077862449
32
BLAŽEK, Ladislav. Management: organization, decision, influence. 1st ed. Prague: Grada, 2011, 56 p. Expert
(Grada). ISBN 978-80-247-3275-6.
21
Division of labor
The total volume of labor, which the organization must carry out in order to reach its goals, is a
wide variety of activities. These activities must be classified optimally in order to create the unit
structure. Furthermore, the classification is done based on two principles: 1) The functional
specialization and 2) the subject/product specialization.
During the functional specialization the unit structure is set up in a way that every department is
created based on the activities that it makes. The main goal is to concentrate all the activities in
order to increase the productivity.
On the other hand, during the product specialization, there are created subsystems, which serve
for the production of products or services. The main goal is to make the management simpler in
order to decrease the cooperation.
Division of competencies
To begin with, when dividing the competencies there might arise staff departments, which are
classified in three categories: 1) personal staff department, 2) general staff department and 3)
specialized staff department.
Under the personal staff department name is understood the manager’s assistant or secretary.
The assistant’s role is to help the manager with all the administration work. The general staff
department appears only at higher level in the hierarchical structure. For example, there are
general staff departments, who are associates of the managing director. Their role is to solve
complex issues, which cannot be passed to the specialized staff departments. Last but not least, the
specialized staff department solves problems and processes inputs of various departments. This
type of department staff works on its own based on the long term set program.33
Also, it is not unnecessary to mention two types of authorities. The first is the controlling
authority, which allows the staff departments to control the realization of various processes. The
second is the instruction/decision authority, which allows the staff departments to make
decisions over the subordinate departments. The level of authority of the staff department in this
case is at the same level as the line manager’s.34
33
BLAŽEK, Ladislav. Management: organization, decision, influence. 1st ed. Prague: Grada, 2011, 191 p. Expert (Grada).
ISBN 978-80-247-3275-6.
34
ISBN 978-80-247-3275-6.
22
Formalization
Formalization is a system, whose content is the decision process, communication and control
systems. Furthermore, the employees act based on the organization’s policies, procedures, job
descriptions, and rules, which are in written form and they are obeyed. The written rules control
the employee’s behavior as a result he loses his autonomy. When formalization in the
organizational structure exists, then one could notice that the employees’ behavior become more
predictable. For instance, the employees turn to a handbook or a procedure guideline, when a
problem at work arises.35
Nevertheless, it has disadvantages as well. Despite the fact that the ambiguity is reduced, a high
degree of formalization can lead to reduced innovativeness because employees have adopted a
certain type of style while working and they stick to it. In addition, when there is high degree of
formalization, the employees usually are less motivated and less satisfied with their work. High
formalization is used in departments such as finance and sales whereas low formalization is used
in departments such as research and development and marketing.36
Specialization
Specialization is the process of assigning specific and well defined tasks to the individual
employees.37 The horizontal specialization is when assigning particular tasks to individual
employees by setting limits, which cannot be bypassed. On the other hand, the vertical
specialization is assigning tasks to groups, where the employees are altogether responsible for the
performance of the group.38
Levels in the hierarchy

Tall structures are the structures, which have several layers between the CEO and the frontline
employees while flat structures are wider and do not have as many layers as tall structures. In tall
structures there is small scope of control and this allows the manager to have good view of what
his subordinates do. Also, the communication between the subordinate and the manager is simpler
and their cooperation is narrower. However, the costs in tall structures are higher because they
35
ISBN 978-80-247-3275-6.
36
MILES, R.E. a SNOW, C.C.: Organizational strategy, structure, and process, McGraw-Hill., New York, 1978.
37
MILES, R.E. a SNOW, C.C.: Organizational strategy, structure, and process, McGraw-Hill., New York, 1978.
38
ISBN 978-80-247-3275-6.
23
need managers, who will supervise them and their salaries are higher than the average. Ultimately,
when the message passes across many levels it can be filtered and its context and meaning can be
different than it was supposed to be, which can result in slower and in an inflexible management.39
Flat structures in contrast have bigger scope of control. Its advantage is that the communication is
shorter among the management levels and that it has low costs as for the managers and the
supervisors. In this case, the emphasis is put on quality, where the requirements are high. This can
result that the employees might become exhausted and the manager can lose its control over what
his subordinates do. What is more, the manager spends less and less time with his subordinates,
which can lead to the total degradation of the system.40
Two elements are associated with the levels of hierarchy:
 Span of control
To begin with, span of control indicates the maximum number of subordinates that a
supervisor can have.41 Many variables, such as the ability of the direct supervisor,
determine how effective the span of control is. 42 At the same time, what is true is that “the
more subordinates a supervisor has, the more flat the pyramid is and the less levels of
management there are, whereas the less subordinates an individual has, the more steep the
pyramid is and the more levels of management there are.” 43
The optimal number of subordinates at higher levels is from four to eight subordinates,
whereas the manager can have from eight to fifteen subordinates at the lower levels. These
data should not be taken dogmatically, since they can vary in firms that operate in different
industries.
The intensity of the span of control is calculated by the following formula:
39
PHATAK, A. V., BHAGAT, R. S., KASHLAK, R. J. International management : managing in a diverse and dynamic global
environment. 2. vyd. Boston : McGraw-Hill/Irwin, 2009. 540 p. ISBN 978-00-732-1057-5.
40
PHATAK, A. V., BHAGAT, R. S., KASHLAK, R. J. International management : managing in a diverse and dynamic global
environment. 2. vyd. Boston : McGraw-Hill/Irwin, 2009. 540 s. ISBN 978-00-732-1057-5.
41
(Grada). ISBN 978-80-247-3275-6.
42
VÁGNER, Ivan. Management System. 2nd ed. Brno: Masaryk univerzity, 2007, 432 p. Faculy of Law Masaryk
Univerzity Brno, No. 393. ISBN 978-802-1042-643.
43
VEBER, Jaromír et al. Management: basics, prosperity, globalization. 1st ed. Prague: Management Press, 2000, 411
p. ISBN 80-726-1029-5.
24
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑚𝑎𝑛𝑎𝑔𝑖𝑛𝑔 𝑝𝑜𝑠𝑖𝑡𝑖𝑜𝑛𝑠
Intensity:
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑒𝑟𝑓𝑜𝑟𝑚𝑖𝑛𝑔 𝑝𝑜𝑠𝑖𝑡𝑖𝑜𝑛𝑠
 Management levels
Management levels behave as supplement to span of control and indicate how many layers
the organizational structure has. Every management layer shows its hierarchical level and
if two management layers are on the same level, then they have completely identical
characteristics.44 However, there are some organizational structures, which are asymmetric
and this means that one of the “sides” of the organizational structure is at higher level than
the rest layers of the organizational structure. 45
Blazek points out that by having tall organizational structures, and thus small span of control, the
management is harder, the flow of the information is slower and the content of the information is
not clear. On the other hand, flat organizational structures, and thus big span of control, are less
costly, the management is more flexible and the flow of information is faster.
All in all, according to Blazek, tall structures with small span of control are less appropriate than
flat structures with big span of control because:
a) They require more managers/supervisors –high costs-

b) Management is carried out on many levels –thus the content of the information from point A to
point B can be changed-
Centralization & Decentralization

The citation that defines this chapter is “Think global, act local” from J.P. Morgan. In other words,
it is important to take into account the individual countries, due to the fact that each of them
represent something unique, as a result each of them have different habits, culture and traditions.
Moreover, as time goes by, globalization becomes more repulsive and that is why people stick to
traditional products more than ever.46
The degree of centralization is basically the scope of the parent company towards its subsidiaries.
44
(Grada). ISBN 978-80-247-3275-6.
45
(Grada). ISBN 978-80-247-3275-6.
46
KISLINGEROVÁ, Eva a Ivan NOVÝ. Corporate behaviour in a global environment. 1st ed. Prague: C.H. Beck,
2005, xxvii, 22 p. ISBN 8071798479.
25
The higher the degree of centralization there is, the more the subsidiaries are controlled as a result
they lack in creativity and innovation. It is remarkable to mention that innovation is highly valued
nowadays due to the fact that it influences positively the competencies of the firm. Thus, the parent
company should regulate an optimal degree of centralization (or decentralization).47 Richter’s
research shows that firms have successful organizational structures, when the centralization &
decentralization are balanced. However, other authors such as Soucek believes that if a firm wants
to be successful in 21st century, then they must rely on the centralization principle. The
substantiation for this argument is the information technology, which gives the opportunity to
manage the processes from distance. According to Soucek, the whole Group needs to be managed
as one, because this is the only way to achieve synergetic effects. Every process should be carried
out only once and as far as the place is concerned, it should be carried out there, where it is the
most beneficial for the whole Group.48
On the other hand, the second principle for a firm to be successful is to be customer-oriented.49 As
mentioned in earlier chapters, in order for a firm to be customer-oriented the firm needs to adapt
to the local markets, which can be achieved with decentralized structure.
In reality, one could face MNCs, which are characterized by high degree of centralization but also
MNCs, whose subsidiaries are relatively independent. The MNCs that strive only for profit are
those, whose financial management is centralized. What is more, if everything goes according to
the plan, the parent company does not intervene in the other subsidiaries’ activities. In addition,
cooperation among subsidiaries, capital and financial flows as well as transfer of know-how are
key activities of highly centralized Groups. A highly centralized MNC gives us the impression of
one corporation, which acts as one.50
Centralization should not be regarded as a means, which sets the rules for the other subsidiaries.
Centralization must be regarded as a tool, which helps the company to be managed efficiently.
Thus, it is visible that many MNCs spread the main services that the given MNC offers across all
subsidiaries. In this cases, it is common that there are created special subsidiaries, which provide
47
BLAŽEK, Ladislav a Alena ŠAFROVÁ DRÁŠILOVÁ. MNCs in the Czech Republic. Development trends,
Organization and Management, Culture and responsibility. 1st ed. Prague : C. H. Beck, 2013, xxi, 78 p. ISBN 978-
80-7400-478-0.
48
SOUČEK, Zdeněk. The firm in the 21st century: (We will beat them all!). 1st ed. Prague: Professional Publishing,
2005, 153 p. ISBN 80-86419-88-6.
49
SOUČEK, Zdeněk. The firm in the 21st century: (We will beat them all!). 1st ed. Prague: Professional Publishing,
2005, 17 p. ISBN 80-86419-88-6.
50
BLAŽEK, Ladislav & col. MNCs in the Czech Republic 1. Brno: Masaryk univerzity, 2010. 78 p. ISBN 978-80-
210-5327-4.
26
the service to the whole MNC. The reason, why it is done like this, is because by using the special
subsidiaries the processes become more effective and the costs are reduced. This model is used the
most by transnational MNCs.51
Finally, if we pay attention to the centralization on particular branches, we can see that the most
centralized branches are the information systems, product portfolios and financial management.
On the other side, the least centralized branches are the suppliers, customers and HR/personnel
management.52
2.2 Types of Organizational Structures
A tool, which is used for managing the MNC’s performance, is the organizational structure.
Organizational structure arises during the process of organization and the goal of the board is to
increase the value of the firm. This can be achieved by performing at maximum level and
organizational structure is one of the many elements, which helps to achieve high performance. 53
2.2.1 Basic Types
Process structure - This type of structure describes the employees’ activities, what their
creations are and to whom to forward the tasks that they were assigned.
Furthermore, process structure might include activities, which are related
with the oral transfer of information or activities that are transferred via
electronic communication.54
Unit structure - The next structure, which is classified in “basic types”, is the unit structure.
This concrete structure shows us the tangible structure of the firm. In other
words it shows the classification of the employees, the classification of jobs,
the hierarchy and so on. Unit structure is not considered as significant as the
51
BLAŽEK, Ladislav a Alena ŠAFROVÁ DRÁŠILOVÁ. MNCs in the Czech Republic. Development trends,
Organization and Management, Culture and responsibility. 1st ed. Prague : C. H. Beck, 2013, xxi, 66 p. ISBN 978-
80-7400-478-0.
52
BLAŽEK, Ladislav & col. MNCs in the Czech Republic 2. 1st ed. Brno: Masaryk univerzity, 2011. 41-42 p. ISBN
978-80-210-5677-0.
53
SYNEK, Miloslav. Corpotate economics. 3rd ed. Prague: C. H. Beck, 2002, xxv, 479 s. Beck’s economic materials.
ISBN 80-717-9736-7.
54
(Grada). ISBN 978-80-247-3275-6.
27
process structure, due to the fact that firms plan the process structure in the
first place and unit structure in the second place. Unit structure is famous
for one of its principles that represent this structure, which is that “for every
employee, there should be at least one supervisor above him/her”. This rule-
principle makes the formation of this structure looking like a pyramid.55
Linear organizational structure – The linear bonds as well as the linear elements constitute the
linear structure. Every supervisor has one subordinate and this
makes it more beneficial and simple when assigning tasks.
Although, this type of structure is not used in bigger and more
complicated organizations.56
Figure 2-Linear Organizational Structure
Source: Linear organizational structure, ManagementMania. [online]. 2014 [cit. 11.10.2015] Available at World
Web: <https://managementmania.com/en/linear-organizational-structure>
Functional organizational structure - This type of structure is derived from division of labor by
assigning tasks (or functions) to one employee. The multiple
bonds, where some subordinates have more than one
supervisor, who specializes in a particular field, are the main
characteristics of this particular type.57
55
(Grada). ISBN 978-80-247-3275-6.
56
VEBER, Jaromír et al. Management: basics, prosperity, globalization. 1st ed. Prague: Management Press, 2000,
423 p. ISBN 80-726-1029-5.
57
425 p. ISBN 80-726-1029-5.
28
Figure 3-Functional Organizational Structure
Source: Functional organizational structure, ManagementMania. [online]. 2014 [cit. 11.10.2015] Available at World
Web: <https://managementmania.com/en/functional-organizational-structure>
Staff & Line organizational structure – The main goal of the aforementioned organizational
structure is not to get rid of the functional specializations
and simultaneously to define clearly the bonds between
the supervisor and the subordinates.
The solution to that is the creation of a group of specialists
on a specific department (i.e. HR, sales, marketing etc.),
who are given some authorities. However, all the
decisions are made by the corresponding director.58 This
group can be divided in two categories. The first one is the
general staff department, which helps the director with
minor importance tasks and the second one is the
specialized staff department, which performs specific
58
428 p. ISBN 80-726-1029-5.
29
tasks for the whole corporation (i.e. lawyers).59
Figure 4-Staff & Line Organizational Structure
Source: Staff & Line organizational structure, ManagementMania. [online]. 2014 [cit. 11.10.2015] Available at
World Web: <https://managementmania.com/en/staff-line-organizational-structure>
In addition, there are organizational structures, which emphasize the job content of the individual
employees and categorize them into departments. This classification can be done either strictly or
in a more light way by setting some criteria. The strict classification would be if we classified let’s
say all the salesmen into one department, whereas the more light way classification would be if
we would put them into different divisions. The next paragraphs will describe better all of the
above.
Functional structure - Functional structure is formulated based on the functions that each employee
“owns”. Every segment is created based on the concentrated employees’
functions.60
What is more, the small and the medium size firms usually make use of this
concrete structure, due to the fact that large size firms use more complex
structures. Due to the fact that the director can supervise clearly the activities
of the departments, the span of control is high. Another reason, why the span
of control is high is because the director can easily coordinate his
59
MÁCHAL, Jan a Marek VOCHOZKA. Corporate Management, 1st ed.. Prague: Grada Publishing a.s., 2013, 319
p. ISBN 978-80-247-4642-5
60
432 p. ISBN 80-726-1029-5.
30
subordinates.61
Figure 5-Functional Organizational Structure
CEO
Finance Marketing Sales HR
Staff Staff Staff Staff
Staff Staff Staff Staff
Source: Functional organizational structure, Tutorials point. [online]. 2014 [cit. 11.10.2015] Available at World Web:
< http://www.tutorialspoint.com/management_concepts/organizational_structures.htm> Edited by the author
Divisional structure - When the functional structure does not satisfy the needs of the firm
anymore then the divisional structure is used. Divisional structure
divides the organizational structure based on some criteria. For
instance, a criterion could be the place where the firm conducts
business (Greece, south Greece, north Greece etc.) or type of
customer (i.e. B2B, B2C).62
Hybrid structure - When there is a combination of the above organizational structures

(i.e. functional & divisional structure as one) then this structure is
called hybrid and it is a product of the constant evolution of one
organizational structure.63
Within the hybrid structures, there are created functional structures,
which are usually situated at the top of the structure (under the CEO)
and after there might be divisional structures, just like it was
mentioned above. The divisional structure is formulated by creating
appropriate departments, which provide same services to the whole
61
Types of organizational structures. Managementmania.com [online] 2015 [cit. 2015-9-27]. Available at:
<https://managementmania.com/en/functional-organizational-structure>
62
439p. ISBN 80-726-1029-5.
63
KUBÍČKOVÁ, Lea a Karel RAIS. Change management in the firms and in other organizations. 1st ed. Prague:
Grada, 2012, 133 p. Expert (Grada). ISBN 978-80-247-4564-0.
31
firm so that all parts of firm can use the organizational structure and
none part of the firm will be harmed.64
Figure 6-Hybrid Organizational Structure
Source: Hybrid organizational structure, shareyouressays. [online]. 2014 [cit. 11.10.2015] Available at World Web:
< http://www.shareyouressays.com/117014/difference-between-hybrid-structure-and-matrix-structure-of
departmentalization>
Matrix structure - Matrix structures are also considered as flexible structures. A flexible
structure is the structure, which combines the three aforementioned
structures but also adds a new, extra element. Furthermore, the
matrix structure is basically a staff & line organizational structure
but in enriched version (Picture No. 7 & 8). Concretely, the teams
consist of the employees and the team leader and they are
constructed in a way to implement and finish the project on time and
successfully. The members of the team are employees from different
departments as a result they have different supervisors. Having
finished the project, the team is dismissed and the employees are
automatically returned back to their previous departments to their
previous supervisors. The biggest pros of this structure are the
64
446 p. ISBN 80-726-1029-5.
32
already mentioned flexibility and adaptability to the uprising needs
– teams can be created fast, without making radical changes on the
organizational structure. In case there happens to be a change on an
ongoing project then thanks to the flexibility of the matrix structure
the specialist of the team can be replaced quickly by another one.
Another advantage of the matrix structure is the experience that the
specialists gain. More particularly, by participating in different
projects they face different problems and also meet other specialists,
with whom they exchange their knowledge. Nevertheless, matrix
structure has also its cons. The other side of the coin is that in the
matrix structure the principle of “one and only supervisor” is
violated and this can have negative consequences since the linear
manager can give different orders than the team leader. In addition,
matrix structure costs more due to the fact that firms must first train
their employees to comply with other opinions and cope with them.65
Matrix structure is used by corporations, which operate

unpredictably. The production processes that these corporations use
are not routine and there is need for new ideas and innovation.
Moreover, it is used by medium size corporations because on the one
hand it is too complicated for small size firms and on the other hand
it is hard to find specialists in the bigger size firms.66
65
455 p. ISBN 80-726-1029-5.
66
MALLYA, Thaddeus. Basics of strategic management and decision making. 1st ed. Prague: Grada, 2007, 246 p.
ISBN 978-80-247-1911-5.
33
Figure 7-Matrix Structure
Source: Matrix organizational structure, ManagementMania. [online]. 2014 [cit. 11.10.2015] Available at World
Web: < https://managementmania.com/en/matrix-organizational-structure >
Figure 8-Matrix Structure
Source: Matrix organizational structure, shareyouressays. [online]. 2014 [cit. 11.10.2015] Available at World Web:
34
< http://www.shareyouressays.com/117014/difference-between-hybrid-structure-and-matrix-structure-of
departmentalization>
Nevertheless, there arise new organizational structures, which shove the firms into technological
innovation. Firms or small parts of the firms create small units that are connected electronically.
These units are temporal and they are created when they agree to do something in common. Having
done this common activity they disappear and they make space for new units, which will be used
when new opportunities arise. This creation is called business unit.67
Front-end and Back-end structures arise when the firms emphasize their customers. In one end
there are performed activities such as service or sales and on the other end there are performed
activities, which are related with research, development and production. These activities are
performed by teams, who have the necessary capacity and knowledge to perform them.68
2.2.2 Multinational Company Organizational Structures
Due to the ownership relationships and the personnel management system, the organizational
structures of multinational companies are complex. Also, sometimes they are so complex to the
point that they are badly-arranged.69
Multinational companies expand their limits to abroad with different organizational structures,
which assist them in conducting the operations that they want. Of course, selecting and
implementing correctly the appropriate organizational structure is not the only problem. Apart
from that consequently, firms must take into consideration parameters such as sociocultural,
technological, legal, political and economic aspects. Likewise, these methods may be at odds with
the company’s existing methods and that is why “Multinational organizational structures must
accommodate the realities of doing business in foreign markets while still furthering the company’s
overall strategy”, according to Sophie Johnson. Sophie Johnson also notes that “The structure
demands a setup that simultaneously organizes work and personnel along three lines: geography,
functional activities such as marketing, and product or service.”70
67
PICHANIC, Mikulas. International management and globalization. 1 st ed. Prague: HC Beck, 2004, 79 p. ISBN
978-80-7179-886-6
68
PICHANIC, Mikulas. International management and globalization. 1st ed. Prague: HC Beck, 2004, 79 p. ISBN
978-80-7179-886-6
69
BLAŽEK, Ladislav. Multinational companies in the Czech Republic. 1st ed. Brno: Masaryk univerzity, 2010, 189
p. ISBN 978-802-1053-274.
70
JOHNSON, S. SmallBusiness [online]. c.2012, [cit. 14th February 2015] Available at World Wide Web: <
http://smallbusiness.chron.com/multinational-organizational-structure-59004.html>
35
The combinations of the organizational structures that were mentioned in the previous chapter are
a way of organizing a multinational corporation. In companies of such size, it is crucial to adapt
the organizational structures to the local conditions. The most frequent organizational structures
that multinational companies use are the product organizational structure, the geographical
organizational structure and the functional organizational structure.
Product structure
Product structure is used by corporations, which offer a wide variety of products or services. Every
product makes its own “department” and it creates the different branches below it, such as
marketing, finance, production, development. The upside of the given type is that it concentrates
all the necessary resources on marketing as well as production so that one could easily assign
responsibility to a manager of the particular department. Despite the positives, the negatives of
product structure can be the unnecessary overconcentration on one product, which might not
belong among the customers’ first preferences.71
Figure 9-Product Structure
Source: Product organizational structure, study.com [online]. 2014 [cit. 11.10.2015] Available at World Web: <
http://study.com/academy/lesson/what-is-organizational-structure-of-management-types-examples-quiz.html>
Geographic structure
Another OS that MNCs use is the Geographic structure. Geographic structure is used is used by
corporations, which conduct business in many markets. Thus, the departments are created based
71
PICHANIČ, Mikuláš. International Management and Globalization. 1st ed. Prague: C. H. Beck, 2004, xi, 176 p.
ISBN 80-717-9886-X.
36
on the locations/countries/continents and what is also remarkable about this structure is that the
subsidiaries have high degree of autonomy.72
More concretely, this structure is used, when the markets are quite different and the demand for
the products varies due to the different tastes, culture and traditions in the given country. Also, the
process of planning and the process of monitoring the progress are done based on the classified
regions.
Figure 10-Geographic Structure
Parent
Company
Region A Region B Region C
Source: PICHANIC, Mikulas, International Management, 1st ed. Prague: C. H. Beck, 2004 xi, 176 p. ISBN 80-717-
9886-X., edited by the author
Functional structure
The ultimate structure that the theory presents as “Multinational Company Organizational
Structure” is the functional structure. The corporations that specialize in one segment utilize this
type of structure. Therefore, each function creates one department, which is responsible for a
specialization for the whole firm. “In a functional organizational structure, an organization's
reporting relationships are grouped based on specialty, or functional area. For example, there
might be separate departments for marketing, accounting, and engineering. Generally, all the
functional heads will report directly to the company president or CEO.” Carol Woods says.73
72
PICHANIČ, Mikuláš. International Management and Globalization. 1st ed. Prague: C. H. Beck, 2004, xi, 176 p.
ISBN 80-717-9886-X.
73
WOODS C. Study.com, Functional organizational structure [online] c. 2013, [1st October 2015] Available at
World Wide Web: <http://study.com/academy/lesson/functional-structure-of-an-organization-advantages-
disadvantages-example.html>
37
PRACTICAL PART
3 T-Mobile Czech Republic a.s.
3.1 General Information
T-Mobile is the brand of the Deutsche Telekom Group, which specializes in mobile services. The
German Group owns 100% of the T-Mobile CZ. Before DT came into play, T-Mobile’s name was
Radiomobil a.s. As far as the operator name is concerned, RadioMobil a.s. used the name “Paegas”.
74
Nowadays however, T-Mobile is the name of the company as well as the name of the operator. In
other words, T-Mobile operates with the same name in contrast with the past, when RadioMobil
used the name “Paegas” as the operator’s name. The name “Paegas” was used until 2002, when
CMobil’s consortium acquired a small portion of shares from Czech Radio Communication
Company and increased its shares to 60.77% a couple years later. Thus, Czech Radio
Communication Company became minor shareholder. When DT acquired the 100% of
RadioMobil a.s. then the name “Paegas” was changed almost immediately to T-Mobile. 75
Analytically, according to the official website of Deutsche Telekom:
“Since 1996, Deutsche Telekom has been offering mobile communications services in the Czech
Republic through its local T-Mobile subsidiary. A top player among three global operators, T-
Mobile has the largest customer base in the Czech Republic and is considered a pioneer in
telecommunications.
Since its establishment, the company has placed emphasis on the quality of offered services,
excellent customer service and proper conduct towards business partners, employees, and the
environment. Deutsche Telekom has decided to harmonize its activities in the Czech market by
moving towards converged solutions that combine fixed and mobile communications with IT
services.
74
TMCZ intranet
75
TMCZ intranet
38
T-Mobile Czech Republic a.s.
T-Mobile Czech Republic has been operating in the Czech market since 1996, and has been a
member of the international telecommunications group Deutsche Telekom since 2002. As of 31
December 2014, 6 million customers were using the operator’s mobile services; T-Mobile thus
remains the number-one operator in the Czech mobile market.
 Core business:
The company is an integrated operator: in addition to mobile and fixed-line
telecommunications services, it offers a broad portfolio of IT services and systems-
integration solutions for business customers and public administration authorities. T-
Mobile has always focused on the quality of its services. Independent tests have repeatedly
confirmed that T-Mobile is the quality leader in 2G and 3G (UMTS FDD) and LTE data
services, as well as GSM voice services. The company has also received a number of
specialist awards for innovative ICT solutions, for example within the IT Project of the Year
survey.
 Stake held by DT (indirectly/directly): 100 percent
 Customers: 6 million (as of 31 December 2014)
 Revenue: 874 million euros (as of December 31, 2014)
 Employees: 3,600 (as of December 31, 2014)
 Highlights:
Since its establishment, the company has placed emphasis on taking a responsible
approach to business and society. T-Mobile has received, among other awards, Employer
of the Year, Employer of the Decade, Company of the Year: Equal Opportunities, and the
VIA Bona award for the involvement of its employees in philanthropic and volunteer
activities.
T-Mobile is the proud organizer of Rozjezdy, the nation-wide support program for beginning
entrepreneurs. Activities intended primarily for non-profit organisations are carried out under the
auspices of the T-Mobile Fund program.”76
76
Deutsche Telekom in the Czech Republic, Telekom.com [online] 2015 [c. 19th October 2015] Available at World
Web: < http://www.telekom.com/company/worldwide/60742>
39
Bodies of the company77
The Bodies of the company are:
- General Meeting
- Board of Directors
- Supervisory Board
General Meeting
Its function:
-Decides to change the share capital and authorizes the Board to increase the
share capital
-Decides on issuing either convertible or priority bonds
-Elects or removes the functional directors
-Decides on distributing the profit
-Decides on “cancelling” the company
-Selects the liquidator
-Verifies the cessation of a department
Board of Directors
Its function:
-Carries out the management processes and the business activities
-Assembles the General Meeting
-Submits the matters that are related with the General Meeting
-Secures the proper management of the accounting
-Selects the audit company
-Decides about the investment budget as well as operational budget
-Sets the long term concepts for the company’s development
-Organizes the elections of the supervisory board
-Reports to the General Meeting the business activities as well as the status
of the assets.
77
TMCZ intranet
40
Supervisory Board
The supervisory board monitors the performance of the Board of Directors and secures the
realization of the business activities.
T-Mobile as brand
This brand implies unified companies (One Company), which share among themselves not only
the same mission but also the unified global brand “T”. T-Mobile’s values are customer oriented
and they try to offer: 1) credibility 2) simplicity and 3) inspiration.
3.2 Financial Results
Table 2-TMCZ Financial Results 2011-2014
2011 2012 2013 2014

Assets 33.158 32.940 32.700 34.411
Turnover (in Mio CZK) 26.519 25.533 22.952 24.072
EBITDA (in Mio CZK) 9.160 8.663 7.161 6.590
Number of clients (in 3.5 4.1 5.3 6
Mio)
Number of employees 2.944 2.847 3.362 3.168
The numbers and the statistics that are depicted above are interesting but also controversial. If we
take a look at the assets, we can see that there is an increase in 2014 due to the integration with the
T-Systems. Although, in 2012 and in 2013 the assets are lower than in 2011 due to the fact that the
economic crises stroke the Czech telecommunication market. On top of that, the paradox is that
despite the fact that the number of clients is growing, we can notice that the turnover and the
EBITDA is decreasing. There are two reasons for that. The first reason is that from 2011 until 2013
the crisis prevailed the market as a result we see the decrease in the turnover and in EBITDA and
the second reason is that from 2013 there were introduced the unlimited tariffs. This means that
from 2013 the telecommunication market has a “maximum ceiling”, which cannot be bypassed.
From 2013 the B2C market in the Czech telecommunication market became saturated and that is
why DT as well as T-Mobile emphasized the B2B market. In the further chapters there will be
described the two acquisitions, whose ultimate goal was to emphasize the B2B market.
Last but not least there are fluctuations in the number of employees especially in 2014 and the
explanation behind that is the integration of T-Systems with T-Mobile.
41
3.3 Branches
Louny & Hradec Kralove Branches
The two main branches that TMCZ possesses is one in the city of Louny and another one in Hradec
Kralove. These two branches are very similar, since both of them are info link and data centers. In
other words, there are teams, which are responsible for the shops, for the active market channels
and finally for the support and the development of residential sales.
What is more, the difference that lies between them is that the branch in Louny deals with the
prepaid customers, whereas the Hradec Kralove branch deals with the postpaid customers. What
they also have in common is that both of them are call centers (ss. Centers, which make calls with
the only purpose to offer a service or product). So for instance if a new product is introduced, these
teams are responsible for promoting it to the B2C market. This can be done via massive calling or
by calling selectively (target calling).
Finally, these branches also include complaint centers, where the customers can call either if they
have any questions about something or if they want to buy a service or if they want to report a
problem. The main aim of these teams is to fulfill customer satisfaction as well as to fulfill the
goals of the B2C sales department.
3.4 Deutsche Telekom
3.4.1 Type of MNC
The current type of DT can be defined as Multidomestic, due to the fact that when DT acquired
the foreign subsidiaries, each subsidiary had its own policy/strategy and thus DT had to adjust
them to their respective market. In the beginning, the subsidiaries had the freedom of moves (they
were the one who set their prices on their own, they had their own tariffs, they had their own
software systems as well as their own infrastructure such as SMS & voicemail platforms, Ed.).
The only requirement from DT to the firms was to deliver the agreed EBITDA. The Multidomestic
phase lasts from the time when DT made the acquisitions of the subsidiaries but as time goes by,
it tends to shift to Transnational model. More concretely, every aforementioned aspect (i.e.
platforms) was decentralized until today, but in the near future it is planned to be centralized and
integrated.
42
Figure 11-Graphic representation of DT during the Multinational phase
DT
Firms
Nevertheless, the goal of DT is to become transnational so that it can function as one Group. This
will be achieved by making competency centers in every country. Every firm will have its own
competence center, which will provide its services to the other subsidiaries (i.e. concentrated
platforms in Bratislava, accounting in Prague etc.). Also, another method that this will be achieved
is to get rid of the weak subsidiaries from the Group. The subsidiaries that do not have big potential
and are not competent will be sold. The process has started already since UK and the Netherlands
is already sold and is about to be sold respectively. As a result, the goal of DT is to have strong
subsidiaries, with classified competence centers to each one, which will be overseen by the parent
company.
Figure 12-Graphic representation of DT during the Transnational phase
DT
Firms
3.4.2 Level of Internationalization
DT is a telecommunication company and as expected, its organizational structure is adopted to the

core of its business. The below picture briefly portraits how the organizational structure of the
whole Group is arranged.
43
Figure 13-DT OS classification
Source: DT official website
“Organization: Four operating segments. Our financial reporting conforms with the Group
strategy and is based on the following organizational structure. The Group is broken down into
four operating segments whose business activities are assigned in three segments by region and in
one segment by customer and product.
Germany
The Germany operating segment comprises all fixed-network and mobile activities in Germany.
In addition, the operating segment provides wholesale telecommunications services for the
Group’s other operating segments.
USA
The United States operating segment combines all mobile activities in the U.S. market.
Europe
The Europe operating segment comprises all fixed-network and mobile operations of the national
companies in Greece, Romania, Hungary, Poland, the Czech Republic, Croatia, the Netherlands,
Slovakia, Austria, Bulgaria, Albania, the F.Y.R.O. Macedonia, and Montenegro, as well as the UK
joint venture. In addition, various national companies also offer ICTInfo solutions to business
customers. The Europe operating segment also includes the International CarrierInfo Sales &
Solutions unit, which mainly provides wholesale telecommunications services for the Group’s other
operating segments.
Systems Solutions
The Systems Solutions operating segment bundles business with ICT products and solutions for
44
large multinational corporations under the T-Systems brand. It offers its customers information
and communication technology from a single source and develops and operates infrastructure and
industry solutions for multinational corporations and public institutions. Its products and services
offered range from standard products and IPInfo-based high-performance networks through to
complete ICT solutions.
Group Headquarters & Shared Services

Group Headquarters & Shared Services comprises all Group units that cannot be allocated
directly to one of the operating segments. Group Headquarters is responsible for strategic and
cross-segment management functions. The Shared Services unit, which provides services primarily
in Germany, is responsible for all other operating functions not directly related to the operating
segments’ core business activities. In addition to typical services such as financial accounting,
human resources services, and operational procurement, Shared Services also includes Vivento,
which is responsible for providing employees with new employment opportunities as part of the
workforce restructuring program, Real Estate Services, and the Mobility Solutions unit, a full-
service provider of fleet management and mobility services.”78
All aspects are covered by the Germany and the Europe section, whereas the United States and the
Systems Solutions’ functions are limited and filtered.
Over the past 15 years, DT expanded all over the world either via Mobile communications or via
T-Systems. In 2002, Austria became part of the Group and two years later Czech Republic joined
the Group as well. It is remarkable to mention that the form of the expansion that DT selected was
the acquisitions. In other words, DT already bought an existing operator in the given country,
which means that the positives tilted the scales.
78
DT official website
45
The below picture shows DT’s today imperium:
Figure 14-Countries, where DT is engaged
Source: DT official website
All in all, DT Group possesses 40 firms and 2 of them are in Germany. Therefore, if we want to
count the internationalization level with the Internationalization Index then we conclude to the fact
that:
38
II = = 0.95
40
This indicates that 95% of DT is integrated in the global economy. In other words, the Group is
very “international” since the majority of its subsidiaries are in Europe and in America.
Taking everything into account, in picture No 13. in Europe section there is Czech Republic, which
is the subsidiary that I will analyze.
4 Brief Description of the problematic
4.1 Introduction to the problematic
In 2013, T-Mobile in order to put more emphasis on the B2B market, it acquired T-Systems, which
46
was number one (concerning B2B market) in the Czech market at that time. Therefore this
horizontal acquisition brought about many changes. More particularly, T-Systems employees
moved from their workplace (Vyšehrad) to Roztyly, where T-Mobile’s headquarters are situated.
Another change that occurred is the integration of people as well as the integration of the T-
Systems’ processes, since their target group was different than the T-Mobile’s target group.
4.2 Methodology
The way how I will analyze the changes is VP by VP, I will number the changes and present the
facts in the row that they occurred. Meanwhile, I want to stress that TMCZ made changes to the
Organizational structure during the acquisition due to strategy reasons. Thus, these changes will
be mentioned but they will not be analyzed, since the goal of this diploma thesis is to analyze the
changes that occurred in the organizational structure caused by the acquisition. Many departments
changed name not because they were merged with other departments, but because the processes
within them changed and thus the new name arose. Also, I will present the old organizational
structure first and second the new organizational structure. I will use the pink color to indicate new
created departments and orange color to indicate that the department changed its name. One last
point is that the squares that include the word “Department” indicate that this is not a team but
only one person (There are some exceptions that will be mentioned during the analysis, Ed.). On
the other hand, the squares that include the word “Unit” indicate that in this department there is
one supervisor and his/her subordinates. All the aforementioned principles will be applied in the
following chapters.
As far as the changes in competencies are concerned, I will control if they changed via TMCZ
intranet and by asking the managers themselves. The way how I will control them via intranet is
that I will check what is the maximum value of the order they can approve. There are four packages
of orders that are made in TMCZ:
i) 1000 – 5.000.000 CZK: If the value of the order scales between these values then the SH must
approve it.
ii) 5.000.000 – 20.000.000 CZK: If the value of the order scales between these values then the VP
must approve it.
iii) 20.000.000 – 50.000.000 CZK: If the value of the order scales between these values then the
EVP must approve it.
iv) 50.000.000 and over: If the value of the order scales between these values then the Managing
Director must approve it.
47
5 Analysis
5.1 T-Mobile 2013 Organizational Structure
The TMCZ organizational structure did not subsist any changes as regards its type. From the time
that RadioMobil was acquired by DT, TMCZ’s structure remained functional (or hybrid if we see
B2B and B2C separately). If we take a look at the later chapters, we will easily conclude to the
fact that it is divided in 5 functions (if we exclude the managing director department).
As for the positions, I will use the firm’s terminology while describing them. The following section
shows us the hierarchy of the positions:
 Managing director (4th level)

 Executive Vice President aka EVP (3rd level)
 Vice President aka VP (2nd level)
 Senior Head aka SH (1st level)
Despite the fact that TMCZ has over 3000 employees, its organizational structure varies across
departments. In other departments we have taller structures and in some other we observe flatter
structures. Thus, the span of control varies across the departments as well.
Figure 15-TMCZ OS
Managing
Director
Technology Finance
B2B EVP B2C EVP HR EVP
EVP EVP
VPs VPs VPs VPs
SHs SHs SHs SHs
Source: Organizational Structure as of 31.12.2013: FUCO79. Internal documents, edited by the

author
79
Full Company
48
5.1.1 Managing Director Department
Figure 16-Managing Director's Department OS 2013
Managing
Director
Assistant Assistant
Strategy, Proj. Transformation Legal, Programme Corporate

Facility Services
O. & Bus. Ex. & Integration Regulatory & Management Communication
Unit
Department Department Ext. Affairs Dep. Department Unit
Information & Legal Services &

Business Legal Unit -CSS, Regulatory
Assistant Physical Compliance
Security Unit Corp. Fin Affairs Unit
Security Unit Unit
Source: Organizational Structure as of 31.12.2013: Managing Director Division. Internal documents,

edited by the author
The managing director’s department is the department, where all the instructions from the parent
company are processed and they are sent to the subordinate levels afterwards. A striking
characteristic about this department is that the “Transformation & Integration Department” was
created in order to carry out the acquisitions of T-Systems (and later the GTS). Also, another
characteristic of this structure is that the “Legal, Regulatory & External Affairs Department”
belongs in this department and not in Finance, as it is in T-Systems.
The organizational structure of the given department can be characterized as flat since it has only
3 levels. It is the “Legal, Regulatory & External Affairs Department” that gives “height” to the
organizational structure. As for the span of control is also wide since the value is 5.5. Total FTE
for Managing Director are 197.
49
5.1.2 Human Resources Department
Figure 17-HR Department OS
Human Resources
Director
Assistant
HR Compensations, HR Business
HR Development
Benefits & Planning Partnering
Department
Dpt. Department
HR IS & Payroll Unit
Source: Organizational Structure as of 31.12.2013: Human Resources Division. Internal

documents, edited by the author
Human Resources Department consists of small number of people and thus its structure is not
complex. Again here, there are 3 levels of hierarchy. An important point that should be mentioned
is the “HR IS & Payroll department”, which is situated in HR and not in Finance department, as
many firms use to have it. Thus, in this structure there is only one VP. This is similar to T-System’s
structure and here there is visible the influence of the parent company (Deutsche Telekom), which
basically imposes this department (HR IS & Payroll department) to belong in HR. The span of
control is narrow, because as mentioned earlier, the number of people is low. Its concrete value is
2. Total FTE for Human Resources are 59.2.
50
5.1.3 Finance Department
Figure 18-Finance Department OS 2013
Finance Director
Assistant
Purchasing & Internal Audit & Accounting &

Tax Methodology Customer Finance
Logistics Treasury Unit Risk Management Controlling
Unit Department
Department Unit Department
Marketing &
Revenue Assurance
General Assistant
& Billing Unit
Procurement Unit
Finance Corporate
Fraud
Information Controlling & Cost
Management Unit
Systems Unit Manag. Unit
IS & Mobile
Credit Risk & Fixed Assets
Services
Analysis Unit Accounting Unit
Procurement Unit
Customer
Procurerment Commercial
Payments &
Operations Unit Controlling Unit
Collection Unit
Network Technology
Procurement Unit Controlling Unit
Accounting Unit
Source: Organizational Structure as of 31.12.2013: Finance Division. Internal documents, edited by the
author
This is the tallest structure that we face so far. Even though, in comparison with other structures
such as with the Technology’s structure, this structure is flat. From the above chart we can
distinguish 3 VPs namely Purchasing & Logistics Department, Customer Finance Department and
Accounting & Controlling department, which have 5, 3 and 5 subordinate departments
respectively. Even though the structure seems tall from the chart, which makes it confusing, it is
actually not tall, because the output from Microsoft Visio is in this form since if it the subordinate
SHs would be in a horizontal form, then the whole structure would not fit in the screen. Thus, ever
SH is directly subordinate to each VP here. The Tax Methodology, Treasury Unit and Internal audit
& Risk Management are SHs and they are direct subordinates of the EVP.
51
Furthermore, the levels of hierarchy are 3 and the span of control is wider than the previous
department. Particularly the average value is 5. Total FTE for Finance are 335.
5.1.4 B2C Department
Figure 19-B2C Department OS 2013
B2C Director
CS Market Online Resident CSS Chan. Second Innovations Category &

Residential
Operations Communicatio Communicatio Marketing Develop. & Brand Transfor. Product
Sales n Unit
Department n Department Department Supply Chain Department Customer Serv. Management
Department
Dpt. Departm. Department
Pricing
Assistant Assistant Strategy & CSS Inbound Ch.
Analysis Control & Assistant
Unit Quality
Shops CS Operation
CRM & Planning &
Unit- Top Customer Controlling-
Consumer LongTermLEave Mobile &
Experience
Unit Fixed
CSS Channel Services
Management Unit Unit
CS Operation Segment
& Proposition
Coordination Manageme CSS Outbound Ch.
Unit nt Unit Control & Quality Unit
Terminals &
VAS Unit
Non-Voice & VAS
Post-sale Support Logistics &
Unit outsourc.
Partners Mg. Unit
CS Operation Unit
- Business
Campaign & CSS Ch.
Supply Mg. Unit
CS Operation
Unit - Consumer
Sales Purchasing &
Aftersales Service Unit
Source: Organizational Structure as of 31.12.2013: Residential Segment Division. Internal documents,

Before the acquisition, T-Mobile’s target group was by default the mass market or in other words,
the B2C market. Inevitably, this is reflected on the organizational structure, where there are more
VPs than the previous department and much many specializations. Particularly, we see 4 SHs, who
are direct subordinates of the EVP and 5 VPs, who are also direct subordinates of the EVP. Despite
the fact that there are many specializations here, the structure has again 3 levels and the span of
52
control is less wide than the in the finance department. The value of the span of control is 4.5.
Total FTE for B2C sector are 730.6.
53
5.1.5 B2B Department
Figure 20- B2B Department OS 2013
B2B Director
Assistant
Wholesale Business Business Sales Customer Services SME/VSE Sales

Department Marketing Department & Sales Department
Department Department
Reg. SME Sales
Assistant Assistant Unit
Interconncection & Assistant
Roaming Unit
SME/VSE Business
Sales Solutions
Market Segment Regional LE Sales CE Sales Unit-Fin., CSS Training Unit
Management Unit Govern & Assoc. Know. & Info
- SME Mgmt Unit
Business Sales
Back Office Dev. Global Acc. Mgmt Fix & VAS
Market Segment unit Unit Services Unit
Mgt Unit
CE Group Unit LE Group Unit Mobile Services

Unit
Business Projects CE Sales Unit - Frame Contract

& Bid Mgmt Unit Industry & Wholesales
Proc. Unit
Business Sales Customers
Serv. & Inter. Partnership Mgmt
Unit Suggestions.Comp
Sales Unit lain&Termin Unit
Business Sales CE Sales Unit- Customer

Calculation Unit Trade & Services Processes & User
test Unit
Business Sales
Solutions Unit Customer
Contract
Processes Unit
Long Term Leave

Unit
Processes &
Systems Dev Unit
CSS Project. Man.

& App. Dev. Unit
Contractual
Relationship
Administr. Unit
Source: Organizational Structure as of 31.12.2013: Business Segment Division. Internal

The contrast between B2C and B2B is visible. The specializations as well as the SHs on the 2nd
level here are less, whereas the number of the VPs is the same. In this department I will calculate
54
the span of control by uniting all Reg. LE Sales department as one and also uniting the Reg. SME
Sales departments as one in order to make a fair comparison with the B2C market, since I applied
the same principle on the previous department too. Thus, the number of levels is 3 and the span of
control is wider by one unit (5.5). Total FTE for B2B sector are 710.8.
5.1.6 Technology Department
Figure 21-Technology Department OS 2013
Technology
Director
Assistant
Solutions &
Service Service TD Strategy & Network
Services
Operations Excellence Services Unit Development
Department
Assistant Assistant Assistant Assistant
Technology Network Dev.

Voice Messaging Project Mgmt TD Quality Supplier Mgmt
Communication
Unit Unit Assurance Unit Unit
Team
Supplier & Sec. Consulting Packet Core

Process Mgmt Demand Mgmt Product Quality
Serv. Unit - DR Networks
Unit Unit Testing Unit
SSC Engineering Unit
Operational Customer International

SMS & Access Architecture Network Engin.
Security Unit-DR Experience
Network unit Unit & Strategy Unit
SSC Mgmt Unit
Data Reliance
Property Mgmt System Research &
Shared Serv.
Unit Integration Unit Trials Unit
Center Unit
Service & Business Syst. Mobile Plat. Voice & Data

Network Design & Dev. Dev. & Proj. Networks Dev.
Support Unit Unit Mgmt unit unit
Enabling Solution Factory Customer

Services Unit Unit Solutions Unit
Mediation Access &

Prop. & Prod. Transport Netw.
Shared Services
Des. Dev. Unit Dev. Unit
Unit
International Service Delivery International RN

Portal Dev. Unit Center Unit Dev. Unit
Source: Organizational Structure as of 31.12.2013: Technology Division. Internal documents,

55
The technology department is the respective “production” department that would be found in an
automotive company. The variety of the products and services that TMCZ offers is big and as a
result the “production” or in our case, the Technology Department has many specializations on the
first level. There are 4 VPs and one SH, who are the subordinates of the EVP. There are 3
management levels and the value of the span of control is 7.4, which is considered wide span of
control. Total FTE for Technology are 631.8.
5.2 T-Systems 2013 Organizational Structure
Figure 22- T-Systems‘ OS
Managing
Director
Marketing HR PQIT Finance Sales Delivery
Source: Organizational Structure as of 31.12.2013: T-Systems Organizational Structure. Internal

Since T-Systems used to belong in the same Group as TMCZ, it is inevitable that the organizational
structure will look like TMCZ’s organizational structure, if not be exactly the same. Here we
observe that more or less the organizational structure is the same with the main characteristic that
both of them are functional (Even though TMCZ’s can be considered hybrid if we look at it from
a different perspective, Ed.). The only difference that we see is that if Marketing and PQIT would
be in TMCZ’s organizational structure, they would belong in Sales and Delivery respectively.
Nevertheless, here they are alone and act separately. The 3 VPs are the boxes that are surrounded
by the solid line (Finance, Sales, Delivery), whereas there are 3 SHs, which are not surrounded by
any line (Marketing, HR, PQIT)
56
5.2.1 Marketing, HR & PQIT
Figure 23-Marketing, HR & PQIT OS (T-Systems)
Managing
Director
Marketing HR PQIT
Payroll Internal IS
PQ Team
Team Team
Source: Organizational Structure as of 31.12.2013: Corporate functions. Internal documents, edited by

the author
To begin with, I would like to point out that the depicted squares in the organizational structure
imply a team. In other words, a square indicates a supervisor and his subordinates. However, the
way that I will calculate the span of control is that I will exclude the 0 level and I will take into
account SH level and above, due to the fact that I do not have the exact number of the employees
of the zero hierarchical level.
Marketing, HR and PQIT (Process Quality Internal IT) are characterized as “corporate functions”
by the ex-T-Systems employees. That is the basic reason that I grouped and presented them
together. It is remarkable to mention that all the above departments are SH and not VPs.
To begin from left to right, marketing is the respective TMCZ’s Internal and External
Communication. The HR department has exactly the same structure as TMCZ’s HR structure. Here
we see the influence of their common parent company, DT, who is the one that imposed this model.
The hierarchical levels in this department are 2 and the value of the span of control is 1. Finally,
the last corporate function that we meet is the PQIT department, which is responsible for the whole
firm’s processes. The corresponding SH has two subordinate teams (and thus 2 management –
hierarchical- levels) and the span of control is 2. Total FTE of the three departments are 20.2.
57
5.2.2 Finance department
In the below graph, we see the second largest department of T-Systems. According to the graph,
we see the first VP with 5 SH, who are his subordinates. Initially, we can notice the department of
Finance and judging from T-System’s size and number of employees, it is expected that some parts
of T-System’s organizational structure will be different than TMCZ’s structure. In this case, the
most noticeable difference that we observe is the Legal department, which is situated here, whereas
in TMCZ’s structure it is situated as subordinate to Managing Director. And the last difference
that I noticed is that the Finance VP does not have assistant in contrast to TMCZ’s Finance Director,
who has.
Figure 24-Finance Department OS (T-Systems)
Finance VP
Finance Controlling Facility Mgmt Procurement Legal
Invoicing Car Fleet Warehousing Internal Legal

Team Team Team Team
Reception
Team
Source: Organizational Structure as of 31.12.2013: Finance Division T-Systems. Internal

The Finance square indicates the accounting department. The department with the widest span of
control is the Facility Management whereas the departments with the narrowest span of control
are the Legal and the Finance (Accounting) departments. The structure here is not tall, since the
management levels reach the number of 3. Total FTE for Finance are 55.7.
5.2.3 Sales
Sales department is the third largest department and the second VP that we meet so far. Below the
Sales, there are 5 SHs. Only the “Local Sales & Support” increases the total average span of
58
control, since it is the only department that has subordinate teams. The hierarchical levels in Sales
are 3 and the average span of control is 4.
The T-System’s Sales structure is a customer based structure. More particularly, the first
department (from left to right) implies that it sells the services to local firms. In addition, the second
department sells the services to public firms (i.e. hospitals). The third department specializes on
selling software licenses, thanks to the agreement that T-Systems used to have with a well-known
software firm over this issue. The last two departments provided their services to a large car
company and to a large telecommunication company respectively. Total FTE for Sales are 54.9.
Figure 25-Sales Department OS (T-Systems)
Sales VP
Global Accounts
Local Sales & Local Public & Local License Global Accounts
Sales-Comm. &
Support Healthcare Service Sales Sales-Automotive
Utilities
Local Telco
Major Accounts
WholeSale
Business
Operations Sales
Source: Organizational Structure as of 31.12.2013: Sales Division T-Systems. Internal

5.2.4 Delivery
Last but not least, there is presented the Delivery department. Delivery is the corresponding
“Technology” of TMCZ, which means in other words the department, where the services are
“produced”. This is the third and the last VP that we meet in T-Systems organizational structure.
To begin with the comparison with TMCZ’s Technology department, Delivery has fewer
employees and consequently this is reflected on the number of SHs. Also, the division of labor (it
will be mentioned in the later chapters) is based on product specializations and not based on
59
functional specializations as in TMCZ. Although, the only similarity is the fact that both VPs have
assistants.
CSS (Computing Services & Solutions) and DSS (Desktop Services & Solutions) constitute the IT
production. In other words, they provide services such as Cloud, applications and PCs. On the
other hand, the TSS (Telco Services & Solutions) provide services concerning the fixed phones.
Service Delivery Management is basically the department, which listens to the clients’ feedback
and it dispatches it to the CSS, DSS and TSS in order to satisfy the customers’ requests.
Figure 26-Delivery OS (T-Systems)
Delivery VP
Assistant
Quality, Process
Service Delivery
CSS TSS DSS & Tool SI
Management
Management
Production
SDM
Cloud TSSI Solution & Support Product
Telecommunica SDM Telco Field Services
Architecture Implementation Systems & Lifecycle Mgmt
tions & Utilities
Performance
Process &
Customer
Project Central End Quality and Application Dev.
GCU Telco PSD Solution
Management User Services DeEscalation & Support
Operations
Mgmt
International
TSS Network Platform
GDU DPS SDM SI Team Service Desk
Provisioning Operations
Mgmt Team
DP DHL Service Competence

SAP E.ON Services
Delivery Mgmt Center Via
Administration CZ
Team Home Team
License Expert
Services Team
60
Source: Organizational Structure as of 31.12.2013: Delivery Division T-Systems. Internal documents,
What is left is the SI (System Integration), which is responsible in developing applications and
integrating them to the clients’ firm and the Quality, Process & Tool Management, which controls
the quality of the services/systems that are sold to the clients. The management levels in this VP
are 3 and the average span of control is 4.5. Total FTE for Delivery are 534.5.
5.3 T-Mobile’s Organizational Structure evolution from 2013-2014
5.3.1 Changes after acquisition in Manager Director’s Department
Managing
Director
Assistant Assistant
Strategy, Proj. Transformation Legal, Programme Corporate

Facility Services
O. & Bus. Ex. & Integration Regulatory & Management Communication
Unit
Department Department Ext. Affairs Dep. Department Unit
Information & Legal Services &

Business Legal Unit -CSS, Regulatory
Assistant Physical Compliance
Security Unit Corp. Fin Affairs Unit
Security Unit Unit

61
Figure 27-Changes in Managing Director's OS
Managing
Director
Assistant Assistant
Strategy, Proj. O. Transformation & Legal, Corporate Internal

CRM NG Facility Services
& Bus. Ex. Programme Manag. Regulatory & Communication Communication
Department Unit
Department Department Ext. Affairs Dep. Unit Unit
Information &
Assistant Project Physical Security
Management Unit
Unit
Legal Services &

Compliance Unit
Business
Security Unit
Legal Unit -B2B,

B2C, Fin.
Regulatory
Affairs & Data
Privacy Unit
Legal Unit - ICT,

FIX

Changes in the structure

By the integration of T-Systems we behold minor changes in the Managing Directors’ department.
The first change is that the Internal Communication was created, which is basically responsible
for the intranet and informing the employees about certain events.
The second change is that the Project Management moved from Technology to Transformation.
Furthermore, the Legal departments that are related with B2B customers are from T-Systems and
they are reflected as subordinates of the Legal, Regulatory & External affairs department. Last but
not least, an acquisition brings changes not only in the organizational structure but also in systems.
One of the systems is the Customer Relationship Management (CRM), which is in the processes
of upgrade. The department that is responsible for it is reflected also here. The reason why it is
here and not in technology is that CRM is a software that will be used for internal purposes,
whereas all the products that are used for external purposes (selling purposes, Ed.) are situated in
62
Technology department.
Table 3-Changes in Managing Director's OS
Managing Director department TOTAL

Before After Δ
Δ in the # of departments 11 14 +3
Δ in the # of management 3 3 0
levels
Δ in the # span of control 11 14 +3
#FTE 197 230 +33
ASSESSMENT
No significant changes occurred in this department. From the theoretical standpoint, I assess that
it is a positive change since the span of control increased, which correlates with the theoretical
part.
5.3.2 Changes after acquisition in Human Resources Department
Human Resources
Director
Assistant
HR Development
Benefits & Planning Partnering
Department
Dpt. Department
Source: Organizational Structure as of 31.12.2013: Human Resources Division. Internal documents,

63
Figure 28-Changes in HR's OS
Human Resources
Director
HR Development
Benefits & Planning Partnering CSS Training Unit
Department
Dpt. Department
Source: Organizational Structure as of 31.12.2014: Human Resources Division. Internal documents,

The Human Resources department is the department with the least changes and that is the reason
that not so much attention will be paid to that. The only difference that we can distinguish if we
observe the organizational structures from 2013 and 2014 is that the CSS Training Unit was added,
which basically trains the employees, who are about to start working in a shop.
Table 4-Changes in HR's OS
Human Resources department TOTAL

Before After Δ
levels
#FTE 59.2 76.7 +17.5
ASSESSMENT
The same thing applies to HR division as no significant changes occurred here either. The span of
control became wider and thus I assess it as positive change.
64
5.3.3 Changes after acquisition in Finance Department
Finance Director
Assistant
Purchasing & Internal Audit & Accounting &

Tax Methodology Customer Finance
Logistics Treasury Unit Risk Management Controlling
Unit Department
Department Unit Department
Marketing &
Revenue Assurance
General Assistant
& Billing Unit
Procurement Unit
Finance Corporate
Fraud
Information Controlling & Cost
Management Unit
Systems Unit Manag. Unit
IS & Mobile
Credit Risk & Fixed Assets
Services
Analysis Unit Accounting Unit
Procurement Unit
Customer
Procurerment Commercial
Payments &
Operations Unit Controlling Unit
Collection Unit
Network Technology
Procurement Unit Controlling Unit
Accounting Unit
Source: Organizational Structure as of 31.12.2013: Finance Division. Internal documents, edited

by the author
65
Figure 29-Changes in Finance OS
Finance Director
Assistant
Purchasing & Customer Internal Audit & Accounting & B2B Finance
Tax Methodology
Logistics Treasury Unit Finance Risk Management Controlling Support
Unit
Department Department Unit Department Department
Finance Revenue
Information Assurance & Assistant Assistant
Systems Unit Billing Unit
Fraud Corporate
Procurerment
Management Controlling & Invoicing Unit
Operations Unit
Unit Cost Manag. Unit
Technology Credit Risk & Fixed Assets

Procurement Analysis Unit Accounting Unit
Unit
Customer
Commercial
Tact. Sourcing & Payments &
Controlling Unit
Mar. & Ind. Collection Unit
Procur. Unit
Technology
Controlling Unit
Accounting Unit
Source: Organizational Structure as of 31.12.2014: Finance Division. Internal documents, edited by the
author
As we can notice, the Finance structure did not subsist radical changes either. The intuition behind
it is that the corresponding T-Systems’ organizational structure is small, so that is why we do not
note any big changes here.
 Purchasing & Logistics Department

Changes in structure
1. Tact. Sourcing & Mar. & Ind. Procur Unit: Marketing & General Procurement Unit (TMCZ)
and IS & Mobile Services Procurement Unit (TMCZ) merged and created this department.
2. Technology Procurement Unit: Network Procurement Unit (TMCZ) and Procurement (T-
Systems) merged and created this department.
66
 B2B Finance Support Department
1.Invoicing Unit: It came from T-Systems Finance department
Table 5-Changes in Finance OS
FINANCE TOTAL
Before After Δ
levels
#FTE 335 326 -9
ASSESSMENT
Once again, due to the fact that small departments were analyzed so far, the changes are of minor
importance and the space for analysis is not big. Here however, in contrast with the first two
divisions, we notice that the synergetic effect in FTE is in place. Also the span of control became
wider and the number of the subordinates that each VP has is at optimal level, which signifies a
positive change all in all.
67
5.3.4 Changes after acquisition in B2C Department
B2C Director
Residential CS Market Online Resident CSS Chan. Second Innovations

Operations Communicati Communicati Marketing Category &
Sales Develop. & Brand Transfor.
Departmen on on Unit Department Customer Serv.
Product
Departmen Supply Chain Department
t Department Departm. Management
t Dpt.
Department
Pricing
Assistant Assistant Strategy & CSS Inbound
Analysis Ch. Control & Assistant
Unit Quality
Shops
CS Operation Planning &
Unit- Top CRM & Mobile &
Controlling-
Consumer Customer LongTermLEave Fixed
Experience Services
Unit Unit
CSS Channel
Management Unit
CS Operation
Segment
& Proposition
Terminals
Coordination CSS Outbound Ch. & VAS Unit
Manageme
Unit Control & Quality Unit
nt Unit
Logistics &
Non-Voice & outsourc.
VAS Post-sale Partners Mg.
Support Unit Unit
CS Operation Campaign & CSS Ch.

Unit - Business Supply Mg. Unit
CS Operation Sales Purchasing &

Unit - Aftersales Service
Consumer Unit

68
Figure 30-Changes in B2C OS
B2C Director
Assistant
B2C CS CSS Chan.

Residential Dev. & Category & Innovation & Resident eBusiness
Operations & Market
Sales Dep. Supply Chain Product Transform. Marketing Dep.
Support Dep. Communicati
Dep. Management Customer Dep. on Dep.
Dep. Ser. Dep.
Logistics &
Outsourc.
Assistant Assistant Partners Segment
Mgmt Unit Proposition
Assistant Mgmt
B2C
CSS App.
Telesales &
Shops Dev. & UAT Pricing
Retention
Unit CSS Strategy &
Unit Mobile &
Outbound Fixed Analysis Unit
Ch. Control Services Unit
Quality Unit
Projects &
CS Dev. &
Services
Processes
Implem. Unit
Unit Sales CRM Unit
- Mobil
Purchasing & Terminals &
Aftersales VAS Unit
Service Unit
Frame,
Customer
Contract &
Experience
Cus. Sol. Campaign & Second
Mgmt Unit
Process Unit CSS Ch. Brand Unit
Supply Mgmt
Unit
Customer
CSO-Long Contract
Term Leave Processes
Unit Planning &
Controlling-
LongTermLea
ve
B2C
CS Operation
Customer
Mgmt Unit
Service Unit
Inbound Ch.
Control &
Quality Unit
Projects &
Services CSS Back
Implement. Office Unit
Unit-FIX CSS Ch.
Mgmt Unit

69
The only changes that we see in the B2C department is that a new VP was added (B2C CS
Operations & Support Department) otherwise everything else remained more or less the same.
This department was shifted from B2B to B2C. Furthermore, the Second Brand Unit became
subordinate to the VP, while it was direct subordinate to the EVP. Also the CRM Unit changed
name due to the fact that some internal processes were amended. The eBusiness Department is the
new version of Online Communication Unit.
• B2C CS Operations & Support Dep
1. CSS App. Development & UAT Unit: It is the new version of CSS Project Man. & App.
Development Unit from B2B
2. B2C Telesales & Retention Unit: Fix & VAS Services Unit was split into two halves. This one
is the VAS half
3. Projects & Services Implem. Unit – Mobil: It came from B2B, particularly it is the new version
of Mobile Services Unit
4. CS Development & Processes Unit: It is the new version of Processes & Systems Development
Unit
5. Frame Contract & Cus. Sol. Process Unit: It came from B2B
6. Customer Experience Management Unit: Customers Suggestions, Complain & Termin Unit was
split into two halves. This is the “suggestion” half.
7. CSO – Long Term Leave: It came from B2B
8. Customer Contract Processes: It came from B2B
9. B2C Customer Service Unit: Customers Suggestions, Complain & Termin Unit was split into
two halves. This is the “complain & termin” half.
10. CS Operation Management Unit: It is the new version of CSS Training Know. & Inform.
Manag. Unit.
11. Projects & Services Implement. Unit – FIX: Fix & VAS Services Unit was split into two halves.
This one is the FIX half
12. CSS Back Office Unit: The Business Sales Back Office was split into two halves. This is the
second half.
70
Changes in the competencies
No changes in competencies occurred in B2C department. Every management level is in the

correct package and thus there are no imbalances in authorities/competencies. This was also
confirmed by all VPs, whom I asked whether they have a department, which serves as a supervisor
(department staff, Ed.) or gives instructions to other departments and their answers to that were
negative.
Table 6-Changes in B2C OS
Residential Segment TOTAL

Before After Δ
Δ in the # of departments 37* 46* +9
levels
Δ in the # span of control 37* 46* +9
#FTE 730.6 882 +151.4
*11 shops -2013 (before)
14 shops – 2014 (after)
ASSESSMENT
Apart from some shifts from VP to VP and some department renaming we observe that the most
striking change is that almost the whole Customer Services & Sales Depart. shifted from B2B to
B2C. I evaluate this change as positive for the following three reasons:
1) The two CRMs are getting integrated and thus they are under construction. Due to the fact
that during the process of the integration it is expected it the new CRM will have many
falls and thus the number of complaints (from the B2C customers) is expected to be higher
than the standard. Therefore, it is crucial to reinforce this department with people, who will
help the firm to lose as few customers as possible.
2) The B2B brought acquired specialized personnel from T-Systems in this branch anyway,
so basically these people would have been sacked due to the fact that they will be regarded
as “unnecessary” according to the Czech law.
3) It is easier, faster and it costs less to train people from your own firm rather than recruiting
people from the “outside world”.
71
From the theoretical perspective, the span of control increased, which makes the flow of
information and in general the communication much easier. Also, the number of the subordinates
that each management level has, is in correlation with the limits that the theory sets and
consequently, I assess it as positive change.
5.3.5 Changes after acquisition in B2B Department
B2B Director
Assistant
Wholesale Business Business Sales Customer SME/VSE Sales

Department Marketing Department Services & Sales Department
Department Department
Reg. SME Sales
Assistant Assistant Unit
Interconncection & Assistant
Roaming Unit
SME/VSE
Business Sales
Market Segment Regional LE Sales CE Sales Unit-Fin., CSS Training Solutions Unit
Management Govern & Assoc. Know. & Info
Unit - SME Mgmt Unit
Business Sales
Back Office Dev. Global Acc. Fix & VAS
Market Segment
unit Mgmt Unit Services Unit
Mgt Unit
CE Group Unit LE Group Unit Mobile Services

Unit
Business Frame Contract

Projects & Bid & Wholesales
CE Sales Unit -
Mgmt Unit Proc. Unit
Industry
Customers
Business Sales
Partnership Suggestions.Com
Serv. & Inter. plain&Termin
Sales Unit Mgmt Unit
Unit
Business Sales
Calculation CE Sales Unit- Customer
Unit Trade & Services Processes & User
test Unit
Business Sales
Solutions Unit Customer
Contract
Processes Unit
Long Term Leave

Unit
Processes &
Systems Dev Unit
CSS Project.
Man. & App.
Dev. Unit
Contractual
Relationship
Administr. Unit
Source: Organizational Structure as of 31.12.2013: Business Segment Division. Internal

72
Figure 31-Changes in B2B OS
B2B Director
Assistant
B2B Presales Business B2B Cust. Corporate

SME/VSE Large Acc. B2B Service WholeSale
& Cust. Solut. Marketing & Serv. Oper. & Sales & Public
Sales Dep. Sales Dep. Del. Dep. Dep.
Design. Dep. MNC Dep. Support. Dep. Dep.
Projects & Interconnectio Business Sales License

Reg. SME Segment Electronics
Service Mgmt Reg, LE Sales CAx Unit n & Roaming Operations Competence
Sales Mgmt Unit Unit
Unit Unit Unit Center unit
Portfolio
Service Design SME.VSE Competence Data CS Operations Business
Comm. & Indirect Sales Automotive
& Provision Business Sales & Innovation WholeSale Unit-Top Projects & Bid
Camp. Mgmt Unit Delivery Unit
Unit Sol. Unit Unit Unit Business Mgmt Unit
Unit
Digital Factory Voice Business Sales

IT Projects ICT Product Dealer Mgmt ICT Business
& PLM System WholeSale Calculations
Mgmt Unit Mgmt Unit Unit Dev. Unit
Unit Unit Support Unit
B2B Solutions
Customer CE Sales Unit-
Telco Projects Commercial Cons. & CS Operations
Interaction Trade &
Mgmt Unit Reporting Business Dev. Unit. Business
Center Unit Services
Team Unit
Advance CE Sales Unit-

SQS Quality
Presales Unit Planning Banking &
Unit
Solutions Unit Finance
CE Sales Unit-
Transition & Expert Sol. &
Dev. Unit Automotive &
Transf. Unit Innov. Unit
Captive
Product
Service mgmt Public Sales
Lifecycle
Unit Unit
Mgmt Unit

Solutions Industry &
Design Unit Utilities
Source: Organizational Structure as of 31.12.2014: Business Segment Division. Internal documents,

 B2B Presales & Cust. Solut. Design Dep.

This is a completely new VP, which was caused by the acquisition.
1. Projects & Service Management Unit: People were recruited in order to form this department.
73
2. Service Design & Provision Unit: The creation of this department was not driven by the
acquisition.
3. IT Projects Management Unit: The Project Management from Service Delivery Management
was split in two halves and the first half created this department.
4. Telco Projects Management Unit: This is the second half from Project Management from
Service Delivery Management.
5. Presales Unit: The creation of this department was not driven by the acquisition.
6. Transition & Transformation Unit: External employees were hired in order to run this
department.
7. Service Management Unit: Service Management team IT and Service Management team Telco
were merged (both from Delivery) and created this department.
8. Customer Solutions Design Unit: People were recruited in order to form this department.
 SME/VSE Sales Department

Apart from the new region that was added (North Moravia, Ed.), we observe no radical changes in
this department.
 Business Marketing & MNC department

The changes in this department were not driven by the acquisition.
 Large Accounts Sales department

This is a new department, whose VP comes from T-Systems’ Sales and particularly from the Major
Accounts department. New regions were added so that the variety of the customers becomes wider.
All of the subordinate departments came from Business Sales (TMCZ).

1. Indirect Sales Unit: It is the new version of Business Sales Serv. & Inter. Sales Unit
 Wholesale department
The changes in this department were not driven by the acquisition.
74
 B2B Service Delivery department
This is a completely new department, which came from T-Systems. It consists of two departments.
The first one is the Systems Integration and the second one is the Service Delivery Management
(both from Delivery, Ed.). The VP from Service Delivery became VP here and the VP from
Systems Integration degraded and became his subordinate by becoming SH.
Changes in competencies
I found out that this department does not have one supervisor but two. The second person, who is
authorized to control and give instructions to this VP (and therefore all his subordinates) is the
Technology Director or in our terminology the Technology EVP. Therefore the Staff & Line
organizational structure looks like this.
Figure 32-Changes in Service Delivery's competencies
B2B EVP Technology EVP
B2B Service Delivery

Department VP
 B2B Cust. Serv. Oper. & Support Dep.

Another new created department. Its subordinate departments come from Business Sales, which
basically was split among the B2B Presales & Cust. Solut. Design Dep., the Large Accounts Sales
Department and this one.
1. Business Sales Operations Unit: The second half of Business Sales Back Office Develop. Unit
75
and Business Sales Solutions Unit were merged and created this department.
2. Business Sales Calculations Support Unit: It came from Business Sales Department
3. CS Operations Unit – Top Business: It came from B2C
4. CS Operations Unit – Business: It came from B2C
Corporate Sales & Public Department

This department is a mix of Business Sales from TMCZ and from T-Systems’ Sales. Basically, the
aim of this department is to demonstrate the customers in categories.
1. License Competence Center Unit: It came from T-Systems’ Sales
2. Business Projects & Bid Mgmt Unit: It came from Business Sales (TMCZ)
3. ICT Business Development Unit: It came from T-Systems
4. CE Sales Unit – Trade & Services: It came from Business Sales (TMCZ)
5. CE Sales Unit – Banking & Finance: It came from Business Sales (TMCZ)
6. CE Sales Unit – Automotive & Captive: It came from T-Systems’ Sales
7. Public Sales Unit: It came from T-Systems’ Sales
8. CE Sales Unit – Industry & Utilities: It came from Business Sales (TMCZ)
Table 7-Changes in B2B OS
Business Segment TOTAL

Before After Δ
Δ in the # of departments 36* 55* +19
levels
Δ in the # span of control 36* 55* +19
#FTE 710.8 1055 +344.2
*3 Regional LE Sales Units in 2013 (Before)
8 Regional LE Sales Units in 2014 (After)
ASSESSMENT
Here we can distinguish among the many changes the B2B Service Delivery Management, which
I will assess, since it is the most controversial. First of all, in my opinion it does not make sense to
bring a team, which basically specializes in production (technical department) into a department,
76
which is front office (Sales) and does not have any relationship with that. Second, my perspective
on that is that it violates the character of the department since those subordinates are technicians
and the rest are salesmen. Third, by receiving instructions by two supervisors might imply
coordination problems in the future. Due to the aforementioned reasons, I assess it as negative
change.
The other side of the coin is that we can look at the whole department from a theoretical
perspective, and we can judge it as positive since the span of control increased, the management
levels remained the same, which means that the communication channels from top to the bottom
and vice versa will become better, according to theory.
77
5.3.6 Changes after acquisition in Technology Department
Technology
Director
Assistant
Solutions &
Service Service TD Strategy & Network
Services
Operations Excellence Services Unit Development
Department
Technology Network Dev.

Voice Messaging Project Mgmt TD Quality Supplier Mgmt
Communication
Unit Unit Assurance Unit Unit
Team
Supplier & Sec. Consulting Packet Core

Process Mgmt Demand Mgmt Product Quality
Serv. Unit - DR Networks
Unit Unit Testing Unit
SSC Engineering Unit
Operational Customer International

SMS & Access Architecture Network Engin.
Security Unit-DR Experience
Network unit Unit & Strategy Unit
SSC Mgmt Unit
Data Reliance
Property Mgmt System Research &
Shared Serv.
Unit Integration Unit Trials Unit
Center Unit
Service & Business Syst. Mobile Plat. Voice & Data

Network Design & Dev. Dev. & Proj. Networks Dev.
Support Unit Unit Mgmt unit unit
Enabling Solution Factory Customer

Services Unit Unit Solutions Unit
Mediation Access &

Prop. & Prod. Transport Netw.
Shared Services
Des. Dev. Unit Dev. Unit
Unit
International Service Delivery International RN

Portal Dev. Unit Center Unit Dev. Unit
Source: Organizational Structure as of 31.12.2013: Technology Division. Internal documents, edited by

the author
78
Figure 33-Changes in Technology OS
Technology
Director
Assistant
Network Dev. &

Service Service IT Production Solutions &
Reg. Transform.
Operations Dep. Excellence Dep. Dep. Services Dep.
Dep.

Assistant
International Packet Core Service & Computing

Technology Corporate International
Network Engin. Netw. Application Services &
Communication Solutions SDP Dev.
& Strategy Engineering Testing Solutions
Desktop
Research & SSC IP SMC & Accesses Mediaiton International
TD Services Serv.,Sol. & OSS
Trials Enginnering Network Shared Services Services
Tools Oper.
Access & Service & Dynamic

Architecture TD Quality System
Transport. Netw. Network Platform Agile Factory
Unit Assurance Integration
Dev. Support Services
Applications
Operational Mobile Plat. Dev. Portfolio & IT
Networks Property Mgmt Operation
Security - DR SSC & Proj. Mgmt Solution Mgmt
Services
Sec. Consulting
Technology Messaging Enabling
Services - DR,
Security Services Services
SSC
Network Dev. International RN

Supplier Mgmt Dev.
Source: Organizational Structure as of 31.12.2014: Technology Division. Internal documents, edited by

the author
 Network Dev. & Reg. Transf. Dep. (Network Development & Regional Transformation Department)
So the first change that we see is the name changed. The reason is because the “character” of the
department changed since they entered elements, which are related with the strategy, architecture
(of platforms) and development. In 2014, TMCZ decided that the first three VPs (from left to right)
are related with NT (Network Transformation) and this particular VP is associated with its
development, the Service Operations department is associated with its service and the Service
Excellence was basically controlling the quality and made reports.
1. Operational Security Unit – DR SSC: It came from Solutions & Services department
79
2. Technology Security Unit: It is the new edition of Data Reliance Shared Service Center Unit,
which came from Solutions & Services VP
3. SSC IP Engineering Unit: Business Syst. Design & Dev. Unit and Demand Management Unit
merged and came from Solutions & Services VP
4. Architecture Unit: It came from Solutions & Services department
5. Networks Unit: Voice & Data Networks Development Unit and Customer Solutions Unit merged
6. Sec. Consulting Services Unit – DR SSC: It came from Solutions & Services department
 Service Operations Department

This particular department is responsible for the NT operation.
From the above chart the changes that occurred are at minimum level. The only change that I can
distinguish is that the Supplier & Process Management Unit was dismissed and thus it is not visible
in the second chart.
 Service Excellence department

Service excellence constitutes the last department that is associated with NT. The main function of
this department is controlling the quality and making reports.
The number of the departments remained the same but the character of the VP changed. Thus, I
notice different names of the departments. Particularly, what happened here will be described in
the following number row:
1. TD Strategy & Services Unit from 2013 changed character by specializing into controlling
budgets and thus it changed name. Furthermore, from direct subordinate to the EVP it degraded
and became direct subordinate to VP.
2. The second change is that Product Quality Testing Unit and Customer Experience Management
Unit merged and they created the Service & Application Testing Unit.
80
 IT Production department
As we move more to the right part of the organizational chart we notice a completely new created
department, the IT production department. As mentioned earlier the left part of the organizational
chart is related with NT, while the right part of the organizational chart is related with IT (T-
Systems specialization). This concrete department is responsible for the service of IT.
The intuition behind this move is that the EVP of Delivery was degraded to VP and therefore all
the management levels below him were degraded as well. Also, apart from Service Delivery
Management and Quality, Processes & Tool Management, which shifted to B2B department, all
of the rest Delivery departments are here.
In practice, the VP is the former EVP of Delivery and the first two departments (Computer Services
& Solutions Unit and Desktop Serv. Solut. & OSS Tools Oper. Unit) are the CSS and DSS
departments respectively. What is more, the Dynamic Platform Services is the Platform Operations
from T-Systems, which was one of the two departments that did not lose its hierarchical level (it
was SH and remained SH). The second one was the GCU Telco from T-Systems that was
transformed into the Applications Operation Services Unit.
 Solutions & Services Department

The Solutions & Services department served as the Development of IT. From the first glance,
there are some new added departments, which came from TSS
1. The Corporate Solutions unit is the Customer Solutions Operations (because T-Systems’
customer were only corporations).
2. The International Services is the E.ON Services –CZ.
3. The Portfolio & IT Solution Management Unit is the TSSI Solution & Implementation from T-
Systems.
4. The Messaging Services unit is basically the new version of Voice Messaging unit.
5. The Agile Factory is the new version of Solution Factory Unit from 2013.
Table 8-Changes in Technology OS
Technology TOTAL
Before After Δ
81
levels
#FTE 631.8 633.3 +1.5
ASSESSMENT
From the theoretical perspective the overall change in this department’s structure is positive since
our key indicators such as span of control is increased even though each supervisor has optimal
amount of subordinates below him. Although, another assessment that I would like to make is the
way how Delivery was added but this is closer to the third organizational structure aspect that I
take into consideration, the division of labor. Therefore, my analysis of this change will be
conducted in the next chapter.
5.4 Changes in the Division of Labor
I decided that the division of labor is an aspect of the organizational structure that it would be
appropriate to devote one chapter for it. The reason is that I would like to analyze the change in
the division of labor because T-Systems used to offer different “products” as TMCZ. Therefore,
many controversial things might arise during the analysis.
From what I can see in chapter 5.2.4 and chapter 5.2.3 T-Systems used to have product
specializations. In other words the departments were divided product based. The below picture
will give us an illustration in order to comprehend T-Systems’ product specialization.
Table 9-Changes in Division of Labor
Functions
Development Production Testing Sales
CSS A1 A2 A3 A4
Products/
Services
DSS B1 B2 B3 B4
TSS C1 C2 C3 C4
From the above table it is visible that only when it comes to sales there is functional specialization,
82
since all the products are sold together based on the type of the customer (see chapter 5.2.3). This
model was very successful since it allowed T-Systems to remain the best player in B2B
telecommunications market, where the competition is tough, not only due to the character of the
industry but also due to the entry of many other domestic as well as foreign players.
What is more, when I look at the TMCZ organizational structure after the acquisition I notice that
in the Technology department, the division of labor looks exactly the same, since they literally
copy and pasted the departments from T-Systems to TMCZ structure (see chapter 5.3.6). Although,
as I mentioned in the previous structure I assess negatively the shift of SI and SDM from Delivery
to B2B. This is basically the only drawback that I can identify. Despite this negative, I will consider
the change in the division of labor as positive change, due to the fact that TMCZ did not risk and
applied a model that was already successful. Moreover, it also correlates with the theory, which
supports that it is “trendy” to have mixed specializations (in our case the vast majority is product
or “subject” specialization and the rest is functional specialization).
5.5 Summary
5.5.1 Analysis Summary
During the analysis I described all the changes in the organizational structure, which were caused
by the acquisition. Due to the fact that the quantum is large, I will number here the most striking
changes.
1. The shift of the Customer Services & Sales Support Depart. from B2B to B2C. I assessed as
a positive change, for the reasons that I present in the analysis part.
2. The integration of Delivery (T-Systems) to Technology (TMCZ), which I assessed it as
positive change. The comments on the assessment can be found in chapter 5.4.
3. The shift of two departments (SI and SDM) from Delivery to B2B. I assess this as negative
change.
4. The change in competencies regarding the surveillance of the two departments. My comment
on that is that it can imply coordination problems in the future.
5.5.2 Answers to Research Questions
What changes occurred in the structure of the departments themselves?

Every department’s span of control became wider and consequently the overall structure became
flatter. We observe that the biggest increase is in B2B segment and the smallest increase in Finance
83
department. This was inevitable, due to the fact that the T-Systems organizational structure was
integrated in the TMCZ’s.
Moreover, the management levels remained the same and this happened by not increasing the
“height” of the organizational structure, which was logical due to the fact that all management
levels have a reasonable amount of subordinates.
Nonetheless, the most striking thing is the number of FTEs. Under normal conditions, the number
of FTEs should be 2664.4 (from TMCZ 2013, Ed.) plus 665.3 (from T-Systems, Ed.), which equals
3329.7 FTEs. By observing the number of FTEs from the tables that I present in the 5.4 chapter I
see that the number of FTEs in 2014 is 3203. It means that there is synergetic effect as regards the
salaries of the employees. There were three ways that the people left the company:
i) Voluntarily. Some employees were not satisfied by the new conditions and left by
themselves
ii) Based on the manager’s judgement. The manager was the one, who decided who
stays and who leaves.
iii) Based on external firm’s judgement. External firms were hired in order to conduct
assessment centers and in the end they recommended the most appropriate
candidate to the manager.
What changes occurred in the competencies?

Another change in competencies that I figured out, is the fact that the Service Delivery Department
(SDD) used to have one supervisor before the acquisition, whereas after the acquisition it has two
supervisors. The second supervisor is the Technology EVP. The reason, why this happened is that
SDD shifted from the “production segment” (Delivery, Ed.) to the “sales segment” (B2B, Ed.).
Therefore, the current supervisors of it are the B2B EVP and the Technology EVP.
What changes occurred in the division of labor?

According to chapter 5.4 no changes occurred in the division of labor. TMCZ’s as well as T-
System’s division of labor remained exactly the same.
6 RECOMMENDATION PLAN
In chapter 5.6.1 I summarized the most striking changes and assessed them afterwards. Obviously,
84
point 3 and point 4 are the ones, who got assessed negatively and that is why specific attention
will be paid to them in this chapter.
To begin with point 3, it does not make any sense for a technical department to move to sales. The
reasons that I am against it and I assess it as wrong are mentioned in chapter 5.3.2. Therefore my
recommendation is to shift SDM and SI departments back to Technology, where they initially
belonged. In this way, we again go according the theory (principle of one supervisor), the character
of the department will be clear and it will have one supervisor from now on. In other words, with
this shift we kill two birds with one stone. The organizational structures of B2B and Technology
after my recommendation should look like this:
85
Figure 34-New proposed changes in OS
B2B Director
Assistant
B2B Presales Business B2B Cust. Corporate

SME/VSE Large Acc. B2B Service WholeSale
& Cust. Solut. Marketing & Serv. Oper. & Sales & Public
Sales Dep. Sales Dep. Del. Dep. Dep.
Design. Dep. MNC Dep. Support. Dep. Dep.
Projects & Interconnecti Business Sales License

Reg. SME Segment Electronics
Service Mgmt Reg, LE Sales CAx Unit on & Roaming Operations Competence
Sales Mgmt Unit Unit
Unit Unit Unit Center unit
Portfolio
Service SME.VSE Competence Data CS Operations Business
Comm. & Indirect Sales Automotive
Design & Business Sales & Innovation WholeSale Unit-Top Projects & Bid
Camp. Mgmt Unit Delivery Unit
Provision Unit Sol. Unit Unit Unit Business Mgmt Unit
Unit
Digital
Voice Business Sales
IT Projects ICT Product Factory & Dealer Mgmt ICT Business
WholeSale Calculations
Mgmt Unit Mgmt Unit PLM System Unit Dev. Unit
Unit Support Unit
Unit
B2B Solutions
Telco Projects Commercial Cons. & CS Operations
Interaction Trade &
Mgmt Unit Reporting Business Dev. Unit. Business
Center Unit Services
Team Unit
Advance CE Sales Unit-

SQS Quality
Presales Unit Planning Banking &
Unit
Solutions Unit Finance
CE Sales Unit-
Transition & Expert Sol. &
Dev. Unit Automotive &
Transf. Unit Innov. Unit
Captive
Product
Service mgmt Public Sales
Lifecycle
Unit Unit
Mgmt Unit

Solutions Industry &
Design Unit Utilities
86
Figure 35-OS after my recommendation
Technology
Director
Assistant
Network Dev. &

Service Service IT Production Solutions & B2B Serv. Del.
Reg. Transform.
Operations Dep. Excellence Dep. Dep. Services Dep. Dep.
Dep.

Assistant Electronics Unit CAx Unit
International Packet Core Service & Computing Competence

Technology Corporate International Automotive
Network Engin. Netw. Application Services & and Innovation
Communication Solutions SDP Dev. Delivery Unit
& Strategy Engineering Testing Solutions Unit
Desktop Digital Favtory

Research & SSC IP SMC & Accesses Mediaiton International Dealer Mgmt
TD Services Serv.,Sol. & OSS and PLM System
Trials Enginnering Network Shared Services Services Unit
Tools Oper. Unit
Access & Service & Dynamic Customer Solutions Cons.

Architecture TD Quality System
Transport. Network Platform Agile Factory Interaction & Business Dev.
Unit Assurance Integration
Netw. Dev. Support Services Center Unit Unit
Applications Mobile Plat. Advance

Operational Portfolio & IT
Networks Property Mgmt Operation Dev. & Proj. Planning SQS Quality Unit
Security - DR SSC Solution Mgmt
Services Mgmt Solutions Unit
Sec. Consulting
Technology Messaging Enabling Expert Sol. &
Services - DR, Dev. Unit
Security Services Services Innov. Unit
SSC
Product
Network Dev. International RN
Lifecycle Mgmt
Supplier Mgmt Dev.
Unit
87
This change will have the following reflection in competencies:
Figure 36- Proposed changes in competencies
B2B EVP Technology EVP
B2B Service Delivery

Department VP
88
CONCLUSION
This diploma thesis is oriented towards a problematic, which is faced by more and more
corporations nowadays. More and more MNCs try to achieve competitive advantage by acquiring
horizontally (firm from same industry, but acquisition of a competitor) or vertically (firm from the
same industry, but acquisition of a subscriber). In our case, the acquisition was horizontal and as
it is obvious, it brought about many changes, especially in the organizational structure.
The story behind the acquisition is that TMCZ within the frames of maintaining its leader position
in Czech Republic and improve its results for the parent company, acquired T-Systems in order to
gain not only the technological know-how but also the customer base. Another reason was the
telecommunication industry in the Czech Republic itself, since the statistics show that the mass
market (B2C Segment) becomes more and more saturated and this shoves the firms for looking
opportunities in different markets.
In the introduction, I use the “productive method” according to Aristoteles’ rhetoric, where I
switch slowly from general to concrete by presenting the overall situation in international business
and I gradually slide to the problematic afterwards. In order to solve the problematic I use one
research question, which is divided in three sub questions.
In the theoretical part, I use literature as close to the problematic as possible, so that the reader is
aware of every aspect from the practical part. More particularly, I initiate the theoretical part by
defining MNCs and mention characteristics, which are associated with them. Furthermore, the next
chapter is about organizational structures themselves, where I describe the types of organizational
structures and what they aspects are. It is remarkable to mention that based on three aspects (span
of control, division of labor, competencies), I evaluated the new organizational structure that
emerged after the acquisition.
In the practical part, I demonstrate the firm (TMCZ), whose organizational structure I will analyze,
by providing information about its history, financial results and its position within the Group. Later
on, I introduce T-Systems, which was acquired and therefore integrated in TMCZs organizational
structure. The most important part of the practical part, is chapter 5, where I analyze all the changes
and critically assess them in every chapter’s end. The problem that I found lied in competencies,
where after the acquisition a department has two supervisors and not one, as it used to have. Also,
in chapters 5.6.1 and 5.6.2 I summarize all the striking changes and assess them. Those, who were
89
considered problematic, are escorted with solutions in the recommendation plan in chapter 6.
90
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LIST OF PICTURES
Figure 1-Types of MNCs ........................................................................................................................... 15
Figure 2-Linear Organizational Structure .................................................................................................. 28
Figure 3-Functional Organizational Structure ........................................................................................... 29
92
Figure 4-Staff & Line Organizational Structure ........................................................................................ 30
Figure 5-Functional Organizational Structure ........................................................................................... 31
Figure 6-Hybrid Organizational Structure ................................................................................................. 32
Figure 7-Matrix Structure .......................................................................................................................... 34
Figure 8-Matrix Structure .......................................................................................................................... 34
Figure 9-Product Structure ......................................................................................................................... 36
Figure 10-Geographic Structure ................................................................................................................ 37
Figure 11-Graphic representation of DT during the Multinational phase.................................................. 43
Figure 12-Graphic representation of DT during the Transnational phase ................................................. 43
Figure 13-DT OS classification ................................................................................................................. 44
Figure 14-Countries, where DT is engaged ............................................................................................... 46
Figure 15-TMCZ OS.................................................................................................................................. 48
Figure 16-Managing Director's Department OS 2013 ............................................................................... 49
Figure 17-HR Department OS ................................................................................................................... 50
Figure 18-Finance Department OS 2013 ................................................................................................... 51
Figure 19-B2C Department OS 2013 ........................................................................................................ 52
Figure 20- B2B Department OS 2013 ....................................................................................................... 54
Figure 21-Technology Department OS 2013 ............................................................................................. 55
Figure 22- T-Systems‘ OS.......................................................................................................................... 56
Figure 23-Marketing, HR & PQIT OS (T-Systems) .................................................................................. 57
Figure 24-Finance Department OS (T-Systems) ........................................................................................ 58
Figure 25-Sales Department OS (T-Systems) ............................................................................................ 59
Figure 26-Delivery OS (T-Systems) .......................................................................................................... 60
Figure 27-Changes in Managing Director's OS ......................................................................................... 62
Figure 28-Changes in HR's OS .................................................................................................................. 64
Figure 29-Changes in Finance OS ............................................................................................................. 66
Figure 30-Changes in B2C OS .................................................................................................................. 69
Figure 31-Changes in B2B OS .................................................................................................................. 73
Figure 32-Changes in Service Delivery's competencies ............................................................................ 75
Figure 33-Changes in Technology OS ....................................................................................................... 79
Figure 34-New proposed changes in OS ................................................................................................... 86
Figure 35-OS after my recommendation ................................................................................................... 87
Figure 36- Proposed changes in competencies .......................................................................................... 88
93
LIST OF TABLES
Table 1-Foreign Entry Modes .................................................................................................................... 17
Table 2-TMCZ Financial Results 2011-2014 ............................................................................................ 41
Table 3-Changes in Managing Director's OS ............................................................................................ 63
Table 4-Changes in HR's OS ..................................................................................................................... 64
Table 5-Changes in Finance OS ................................................................................................................ 67
Table 6-Changes in B2C OS ...................................................................................................................... 71
Table 7-Changes in B2B OS ...................................................................................................................... 76
Table 8-Changes in Technology OS .......................................................................................................... 81
Table 9-Changes in Division of Labor ...................................................................................................... 82
LIST OF ABBREVIATIONS
MNC = Multinational Company
TMCZ = T-Mobile Czech Republic
NatCo = National Company
B2B = Business 2 Business (Business to Business)
B2C = Business 2 Customer (Business to Customer)
EBITDA = Earnings Before Interest Tax Depreciation and Amortization
CZK = Czech Crown
FTE = Full Time Employee
Mgmt = Management
FUCO = Full Company
PQIT = Process Quality Internal IT
HR = Human Resources
EVP = Executive Vice President
VP = Vice President
SH = Senior Head
SME = Small Enterprises
VSE = Very Small Enterprises
OS = Organizational Structure
94
ATTACHMENTS
Picture No.11: T-International logo
Picture No.12: T-Mobile Czech Republic a.s. logo
95

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Masaryk University Faculty of Economics and

MASTER’S THESIS DESCRIPTION

Student: Bc. Nikolaos Chaliamantas

Field of Study: Business Management (Eng.)

Thesis topic: Organizational Structure of a Multinational Company

Thesis topic in English: Organizational Structure of a Multinational Company

Extent of graphics-related work: According to thesis supervisor’s instructions

Extent of thesis without supplements: 60 – 80 pages

Literature: VERBEKE, Alain. International business strategy :rethinking the foun-

Thesis supervisor: Ing. Bc. Sylva Žáková Talpová, Ph.D.

Thesis supervisor’s department: Department of Corporate Economy

In Brno, date: 2015/09/04

Furthermore, many employees consider the organizational structure as unimportant and as an

What changes occurred in the organizational structure caused by the acquisition of T-

1.1 Definition and characteristics

1.2 Types of Multinational Companies

The main types of MNCs are the following:

Tight Bond Headquarters

1.3 Foreign Market Entry

Table 1-Foreign Entry Modes

Type of Entry Advantages Disadvantages

Capital-free entry modes

Capital Investment entry modes

1.4 Level of Internationalization

2.1 Organizational Structure characteristics

In addition, Blazek adds two more characteristics32:

Levels in the hierarchy

The intensity of the span of control is calculated by the following formula:

a) They require more managers/supervisors –high costs-

Centralization & Decentralization

2.2 Types of Organizational Structures

2.2.1 Basic Types

Figure 2-Linear Organizational Structure

Finance Marketing Sales HR

Staff Staff Staff Staff

Staff Staff Staff Staff

Hybrid structure - When there is a combination of the above organizational structures

Figure 6-Hybrid Organizational Structure

Matrix structure is used by corporations, which operate

Figure 8-Matrix Structure

2.2.2 Multinational Company Organizational Structures

Figure 9-Product Structure

Figure 10-Geographic Structure

Region A Region B Region C

3 T-Mobile Czech Republic a.s.

3.1 General Information

Analytically, according to the official website of Deutsche Telekom:

3.2 Financial Results

Table 2-TMCZ Financial Results 2011-2014

2011 2012 2013 2014

Louny & Hradec Kralove Branches

3.4 Deutsche Telekom

3.4.1 Type of MNC

Figure 12-Graphic representation of DT during the Transnational phase

3.4.2 Level of Internationalization

DT is a telecommunication company and as expected, its organizational structure is adopted to the

Source: DT official website