The internationalization of Portugal telecom and its impact on the company's organizational structure

Manoel Justiniano Melo da Fonseca, Joaquim Ramos Silva, Ana Maria Ferreira Menezes


Foreign direct investment (FDI) inflows have been expanding in Brazil since the mid-1990s. Portuguese enterprises have been prominent in this activity, most notably exemplified by the acquisition of Telesp Celular by Portugal Telecom (PT) in July 1998. PT's process of internationalization has been characterized by its entry into new markets in which strong linguistic and cultural ties with Portugal exist. The organizational structure is established on a basis that aims to achieve the goals of the firm that derive from its strategy. Therefore, it follows that strategy and organizational structure are closely interconnected. PT has clearly defined its internationalization strategy, and it is highly illustrative, in global terms, to observe how this strategy has influenced the organizational structure. The main objective of the present study is thus to analyze the changes in the organizational structure of PT deriving from its internationalization. Firstly, we will investigate the process of internationalization of PT to Brazil from the perspective of this country's economic and institutional context. Secondly, we attempt to conceptualize the organizational structure of an internationalized firm. Thirdly, we analyze how PT has embedded its internationalization strategy within its organizational structure. It is clear that the PT Group has continued the process of corporate restructuring, embarked upon in 1997, with the aim of making its organization more flexible, and thereby better equipped to reap more benefits from the internationalization. Fourthly and finally, we present some concluding remarks on the link between PT's internationalization strategy and changes in its organizational structure.



Internationalization strategy, Organizational structure, Foreign direct investment, Portugal Telecom Group.

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