MGMT 2130008Term Paper on Facebook CompanyEnoc VelazquezAlyanna

MGMT 2130-008

Term Paper on Facebook Company

Enoc Velazquez

Alyanna Hernal

March 26, 2019

Term Paper on Facebook Company

This term paper will both analyze the company of Facebook, Inc. (Facebook). It will look at the main issue from the case study that Facebook is facing, and a research will be conducted to connect course materials learned at Management 2130 that is applicable in this term paper. Lastly, there will be an outline of recommendations for the company of Facebook.

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ICD Research (2016) published a company profile about Facebook (p.

1). Facebook provides different social networking sites such as, “… Facebook, Instagram, Messenger and WhatsApp” (p. 16). The specific site of Facebook let users find and share posts such as thoughts, comments, images and videos and have a form of communication with others by using their cellphone gadgets or computers (ICD Research, 2016, p.

16). In addition, Facebook does advertisements for marketing which includes different brands that ranges from small to medium sized businesses (ICD Research, 2016, p.16). Advertisements and payments or other fees are two sources of revenue that Facebook acquires (ICD Research, 2016, p.16).

The company of Facebook competes in the industry of social networking sites through online (Cheung, 2018, para. 1). Cheung (2018) stated five competitors of Facebook, and this includes Instagram, Snapchat, LinkedIn, Google and Twitter. ICD Research (2016) also stated companies that competes with Facebook, and this major companies are Apple Inc., Eniro AB, Everyday Health, Inc., Google Inc., Microsoft Corporation, mixi, Inc., MySpace Inc., Skype Communications SARL, Twitter, Inc., and Yahoo Inc. (p. 27).

Analysis of Facebook’s Environment

In this part of the paper, there are two tools that will be used to analyze the company of Facebook. These two kinds of tools are PESTI analysis and SWOT analysis. The first analysis that we will looked at is the PESTI Analysis or “general environment” (Jones, George, & Haddad, 2016, p. 45).

PESTI Analysis. PESTI refers to the environmental factors that either direct or indirect impact a company with these following forces, political, environmental, socio-cultural, technological, international/global (Jones et al., 2016, p. 45).

Political forces. Roose (2018) talked about how Facebook banned hate speech on their platform even there were past information found by people that stated discriminates people (para. 4). Texas senator named, Ted Cruz stated that Facebook is transforming into political speech judge (Roose, 2018, para. 11).

Economic forces. Kapko (2015) stated Facebook’s revenue is $3.2 billion and profited $1.4 billion in the prior fiscal quarter (para. 1). Deloitte published a report in 2015 about Facebook’s economic output worldwide in the year 2014, and the company produced $227 billion and gave 4.5 million jobs globally (as cited in Kapko, 2015, para. 1).

Socio-cultural forces. There are billion of users of Facebook, but it seemed to have a role to play in human’s lives (Jarrett, 2015, para. 1). Jarret (2015) wrote in the article that there are negative impact done by Facebook to its users (para. 13). There is a study in the year 2013 done by Kross et al. found that when users use Facebook, they feel negatively and users’ satisfaction in life decreases (as cited in Jarrett, 2015, para. 13). A study in 2012 done by Chou and Edge concluded that Facebook users who spend their time using the social media thought that life is unfair and other people were happier (as cited in Jarrett, 2015, para. 14).

Technological forces. ICD Research (2016) stated that Facebook put an investment on their research and development in order to see growth in both old and new services (p. 17). The company uses its resource to look at projects that involves artificial intelligence (ICD Research, 2016, p.17). Facebook also produced a product in 2016 called, “Oculus Rift,” which is a virtual reality headset that shows new of its kind innovative device (Fast Company, n.d., para. 2).

International/global forces. Liao (2018) stated in the article about an interview done by Mark Zuckerberg with Recode, that Zuckerberg doubts Facebook will be able to operate in China (para. 6). Zuckerberg stated that Facebook is “blocked” in China, and there is no solution at the moment because of the policies in place in the country (Liao, 2018, para. 6).

SWOT Analysis. SWOT refers to strengths (S), weaknesses (W), opportunities (O), and threats (T) of the company that needed to be identify by the management to help plan for the future of the organization (Jones et al., 2016, p. 139). ICD Research (2016) conducted their own SWOT analysis on Facebook (p. 17).

Strengths. According to ICD Research (2016), the strength of the Facebook company includes the advertising revenue, and the innovation capability of the company (p. 17). In addition to this, Fast Company (2017) ranked Facebook as the top 6th of the Most Innovative Company in the year 2017, and it got the first rank on advertising and marketing innovation on the same site. The worldwide “Monthly Active Users” (MAU) of Facebook is approximately over 2.32 billion (Zephoria, 2019, para. 2).

Weaknesses. Weissman (2019) stated in the article that the Facebook company was aware of the data breached by Cambridge Analytica earlier than people knew (para. 1). This seemed to portray Facebook in a negative light to the public.

Opportunities. According to Fast Company (n.d.), the acquisition of Instagram in the year 2012 and acquisition of both Oculus VR and WhatsApp in the year 2014 increased the public impact of the Facebook company in technological advances and social media (para. 2).

Threats. The negative image of Facebook were being publish to the public due to the threats of privacy and security. McCracken (2019) talked about in an article about how Facebook was involved with mining information with Cambridge Analytica from users for the purpose of politics (para. 12). Ghosh (2018) talked about how Facebook is providing data to Partner Categories for marketing that unfortunately threatens the user’s privacy of the social media platform because people who uses is not clear about how Facebook uses data collected (para. 4). Chen (2019) wrote in an article that Facebook did not store securely the account’s passwords of the people who use it, and it could let employees of the company to see and abuse users’ passwords (para. 1).

Focal Issue of Facebook

From the environmental analysis stated above, there seemed to be primary themes found that the company is facing at the moment, and the main issue is Facebook’s negative image to users, public and countries because of many controversies involving the company with its security and privacy policies. Molla and Wagner (2018) wrote about McGinn’s survey about the Facebook’s “negative impact on society” (para. 4). Many residents in U.S. that is approximately 32 percent of Americans says that Facebook has negative impact in society (Molla & Wagner, 2018, para. 5). The Economist published an article titled “Facebook Should Heed the Lessons of Internet History” (2018) about Facebook that stated in the beginning of the year, the company had been involved with many issues such as the Russia’s involvement with United States 2016 election, Facebook users in total of 50 million people were also affected by a data breach, the company of Facebook confessed that it took a part in sharing personal data of 90 million users to third party organization without authorization of the users (para. 2).

Course Analysis of Facebook

The company of Facebook seemed to be encountering an ethical decision regarding their account users’ privacy and security. Let us look at the controversy regarding data mining Cambridge Analytica that involves Facebook. Weissman (2019) stated that a court report was filled that proves Facebook knew about Cambridge Analytica misuse of data even before the media reported about it (para. 3).

Jones et al. (2016) talked about making ethical decisions, and there are policies that penalized whoever broke these policies (p. 106). An article published by The Economist titled, “The EU’s New Privacy Law is Starting to Bite Facebook” (2018), expresses the investigation started by the Data Protection Commision because of the data breach that happened in Facebook in Europe, and the company has to comply with the General Data Protection Regulation (GDPR) by notifying them about the security breach (para. 3). It seemed that Facebook will face many restrictions because of the issues the company is facing (“The EU’s New Privacy Law is Starting to Bite Facebook,” 2018, para. 7).

Many controversies involving Facebook challenges the image of “Code of Ethics” portrayed by the company in the eyes of public (Jones et al., 2016, p. 108). Jones et al. (2016), identified “societal ethics” as set of guidelines dealing with topics about human rights, equality, scarcity and egalitarianism (p. 109). In the case study for the term paper written by Roose (2018), talked about how Facebook ban certain posts that shows hate speech (para. 5). However, the American constitution assures the right to free speech to its citizens (Roose, 2018, para. 6).

The article published by The Economist titled, “Facebook Should Heed the Lessons of Internet History” (2018), compared Facebook to Yahoo that was successful before now declined rapidly (para. 1). There are similar observations with Facebook that happened to Yahoo that caused it downfall, and the first one is employee turnover in executive positions (“Facebook Should Heed the Lessons of Internet History,” 2018, para. 5). There are also many unfavourable news that is negatively affecting the state of mind of Facebook’s employees (“Facebook Should Heed the Lessons of Internet History,” 2018, para. 6).

Recommendations

It seems Facebook company should develop a strategy to address the issue with security and privacy policies in their service. According to Jones et al. (2016), “developing strategy” should be decided after analyzing the environment factors affecting the company, the management should develop strategies (p. 145). There are two recommendations that could help solve the issue facing the company. The first one is “Reducing the Impact of Environment Forces,” where the top level management develop plan and strategies to combat threats that could affect the company (Jones et al., 2016, p. 63). The second feasible solution could be the “organization change”(Jones et al., 2016, p. 451).

Assessing the Need for Change. The first step in managing organizational change is assessing the need for change (Jones et al., 2016, p. 453). Facebook should look into their privacy and security policies to protect the consumers. The second step is deciding on the change the company has to make (Jones et al., 2016, p. 454). In this part, Facebook should decide what policies the should in place in order to address the issue of protecting their users. The the third step is introducing the change to the company (Jones et al., 2016, p. 455). The Facebook have to implement the policies to their company and clearly outline it to their consumers. The last step will be evaluating the change made (Jones et al., 2016, p. 455). The company of Facebook will have to work with evaluating their policies with countries by abiding its laws and consumers to know if the services they are providing is better than the present one.

Conclusion

In this paper, the company of Facebook was introduced and analyze through SWOT and PESTI analyzing tool. There was a central issue that the company is facing which is negative image of Facebook regarding their security and privacy services to its users. There are many controversies surrounding Facebook for the past few years. In the present time, the company is facing to make ethical decision to protect the security and privacy of its consumers. At the end of this paper, it seemed better to do a major change in the company’s policies, specifically, in the security and privacy regulations.

Self-Reflection

i) The field of management is not what I expected it to be because it seems more complicated than I thought. In the very first chapter of our textbook, management is defined as “The planning, organizing, leading, and controlling or resources to achieve organizational goals effectively and efficiently” (Jones et al., 2016, p. 5).

ii) There were a couple of topics that I was very interested in. The first topic I liked doing was analyzing an organization with SWOT analysis because I am interested in learning about the strengths, weakness, opportunities and threats of a program in particular (Jones et al., 2016, p. 139). I took a Child Studies course about program and planning a couple of years ago, and our class evaluated non-profit programs to help organizations improve on their human services. I became interested in this because during that time I was interested in managing a childcare centre. There are different programs out there, and program evaluation is a key in succeeding in that field. I was also interested in the leadership, so I looked forward studying about chapter nine or Managing Leadership (Jones et al., 2016, p. 338). Leadership is a skill I am wanted to improve on. I want to learn motivate and influence around me because I wanted to be a director of a childcare centre.

iii) I think the chapter I was not particularly interested in was chapter 5 which is Managing Organizational Structure (Jones et al., 2016, p. 176). The reason for it was because a childcare centre program does not need a complicated organization structure. It was easy to talk to the management in my job and make quick decisions for the daily needs of the centre.

iv) I am currently working at a childcare centre. I have a passion working with children and giving back to the community. The reason I took this management class was due to my interest in managing a childcare centre in the future. I think I will take more management course in the future because I want to be an efficient and effective manager.