We have a /24 IP Address range for PCs containing 240 allocated addresses at the moment.
Our company is planing for expansion of another 50 PCs, our existing IP range is 192.168.8.0/24
Do we add on another /24 (192.168.7.0/24) on the router? or Do we subnet 192.168.8.0/23 (255.255.254.0) on the router instead?
I would like to know which is the best option for our network.
Since networking experience is lacking at your shop (or you wouldn't have to ask the question), your best option is to increase the subnet to a /23. That will give you a subnet with 256 additional addresses.
General rule of thumb is that you don't want more than a /24* on the same subnet, as you can run into problems with too many hosts on the same broadcast domain, so don't expand it to a /22. But there won't be any noticeable difference between ~240 hosts and ~290 hosts, so you should be fine. If you get to the point where you need the additional address space afforded by a /22, you really need to hire someone with networking experience to administer your network (at least as a part time role).
*:Academic (?) article with Cisco's maximum recommended number of hosts per subnet, based on protocols running in the broadcast domain. 500 for IP, 300 for Netware, 200 for AppleTalk, NetBIOS or Mixed. (NetBIOS is used by Windows, of course.)
*:Also, seems that the CCDA books now make their recommendation based on percentage of broadcast traffic, rather than host counts, and they state that subnets should be designed such that the amount of broadcast traffic does not exceed 20%. Might be a bit much for the OP to implement such testing.
By having a new subnet:
Instead of changing the netmask, you could switch another private ip-address range, like 172.16.x.y .. 172.31.x.y to have about 65000 hosts. Your users won't notice any change, just update the dhcp-server and optionally change your DNS.