Facebook Inc. Company’s Case
Business organizations are established to fill the existing markets gaps, and in turn, generate revenue for the company. One such organization is Facebook Inc. that defined a market problem in connecting people in the world and established an equilibrium theory that governs its operations. The company was incorporated in 2004 and primarily focused on building products and initiating services that would enable people to stay connected. Such connections were made possible through any internet surface. The business has a defined organizational structure led by executive leadership that helps in managing and coordinating activities in the company. Also, the firm has a mission and core values that form the basis of the organization. Also, the company’s strength and weaknesses help define the industry. The situation analysis focuses on the elements of concern at Facebook Inc. that represents the company. The focus and stability strategies employed by the management of Facebook have enabled it to achieve the desired competitive advantages in the world of technology while adhering to its mission and vision statements.
Company’s Motivation
The company’s motivation is inclined towards building a connection among people, helping businesses expand their market base through online interactions and the CEO’s aggression is the reason Facebook Inc.’s prosperity. The company is anchored upon its mission and vision that helps in maintaining its aggression in the market of social networking. Facebook Inc.’s mission proclamation is “to give people the power to build community and bring the world closer together” (Facebook Newsroom). The mission’s components can be simplified into three major elements that are to enable people, community building, and linking the world. Empowerment comes from giving people the power to communicate online by providing social and networking tools.
The communications among people lead to community building through the sharing of ideas, opinions and useful information at the convenience of the users. Thus, real-time communications and sharing lead to a global community that is closer together. The company has no clearly defined vision. However, the company’s profile and service offerings provide sufficient information that can help in conceptualizing the company visualization of the future (Hann, 28). The elements of the firm’s vision include having a global market scope that refers to the need to connect all users in the world. Also, it highlights the social platform as an instrument for communication, discovery and creativity because it is the enabling link between the users. Sharing of personal ideas at will with the world provides a learning opportunity for other account owners that leads to innovation and accumulation of knowledge.
Vision and Mission Statements
Mission: to give the absolute power to build a community and eventually bring the world closer.
Vision: People use the Facebook platform to stay connected with friends and families, and to discover the happenings in the real world. This would enable them to share their experiences and express their maters to them.
Company’s Leadership
Senior leadership at Facebook consists of the chief executive officer and the board of directors. Mark Zuckerberg is the founder and chief executive officer (CEO) at the corporation and lead designer of the underlying technology and infrastructure for the business (Facebook Newsroom). Zuckerberg role at Facebook is setting the general perspective of the firm, product and service delivery plans. The chief operations officer (COO) at Facebook Inc. is Sheryl Sandberg tasked with the duty to manage the commercial operations at the firm. Chief financial officer David Wehner who is in charge of information technology, the company’s finance and facilities teams (Facebook Newsroom).
The Chief technology officer is Mike Schroepfer whose role is leading the advancement of technology strategies that includes artificial intelligence technology and incorporation of cybernetic reality. Also, Schroepfer leads the teams that make connectivity and communications on the social platform across the world possible. The board of directors is composed of Zuckerberg, the CEO, Susan Desmond-Hellmann, Sandberg, and the COO (Facebook Newsroom). The role of the member of the board is ensuring the firm fulfils its objectives and company goals while protecting the interests of the shareholders. Through transformational leadership, Facebook Inc. has availed innovative solutions to social networking challenges and has devised methods of monetizing services such as news feeds that helps it fulfil its business goals.
Company’s Inspiration
Facebook was initially inspired by the need to have a social platform where people could exchange ideas no matter the distance. Therefore, Facebook was a firm created to provide a social networking platform as well as providing a distinctive competition in being the top valuable online resource. With these ideas in mind, the CEO of Facebook Zuckerberg founded the platform in 2004 as an interactive social platform for Harvard University students (Abu-Khater, 201). At that time, such online social platforms were rare resources. The later stages of development of Facebook involved the other co-founders who were the college mates to Zuckerberg. They ventured into retrenchment strategies, which enabled the social networking services to expand more in 2006. Nevertheless, there was strategic dissonance when implementing the final developmental stages. As a result of this dissonance, Facebook for a long time has been thought to have been developed by Zuckerberg, when there was a team of technicians and programmers. Another source of inspiration was the ethical behaviours of the chief consumers. Facebook initially targeted youths in colleges (Abu-Khater, 202). Majority of its customers were youths who majored in using portable devices such as personal computers, tablets, and smartphones. All these devices used internet connectivity from where the users would get to connect with their peers.
Core Products and Services
The core products and services at Facebook Inc. aim at enhancing connectivity and making the world a global village. It empowers individuals to become closer to each other through online communication that enables them to share ideas, photos, and videos with friends and family. Moreover, the individuals can share with the public depending on their privacy preference. Some of the products owned by the business are Facebook and messenger including the mobile application. Other products owned through acquisitions are Oculus, Instagram, and Whatsapp that includes their applications. Additional products are Audience Network, Facebook Mentions, software, and technological tools offered by the company alongside Spark AR Studio and other applications (Facebook.com). The services offered include communications and advertisement platforms that allow businesses to connect with the customers online depending on their age, preferences and gender. Advertisements appear in different places such as in Facebook news feeds, and Instagram’s photo feeds.
Customer Demographics
Statistics show that the online social network has over two billion users with about 1.5 billion of them as active daily users. The platform attracts over 500 million mobile users and over 100 million connectivity among the users (Facebook.com). Also, photo uploads are over the two billion marks and continue to rise with the increasing number of active users. As a result, Facebook Inc. has attained a sustainable competitive advantage over the new entrants to the market. The highest number of users recorded are from the Asia-Pacific region with more than 900 million active users followed by Europe at 350 million, the United States at 200 million and the rest of the areas at 700 million. Thus, Facebook is one of the most trusted service providers of an online social interactive platform used by individuals and businesses in the world.
Organizational Structure
The organizational structure at Facebook Inc. can be described as a hybrid because it combines certain elements of divisional and hierarchical structures (Musonera, 138). The hybrid structure allows the company to employ various differentiation strategies that enable it to have distinctive competence in the market. At the top of Facebook Inc. organizational structure is the chief executive officer. Other senior leaders follow in the hierarchy then the board of directors. Then, the company’s structure is broken down into significant departments that are further subdivided into divisions that cover specific roles (Abu-Khater, 220). The major departments include Operations, Finance Center, Information Security, Marketing Center, Business Development, Legal and Engineering. Finance Center is divided into treasury, audit, tax, and risks while Information Security subdivisions include consumer service, privacy and security.
Marketing center covers advertisements, international marketing, communications advertisements and public relations. Other divisions in the department include consumer analysis unit and product promotions (Facebook.com). Business development department is subdivided into corporation strategies unit, business management, organizational behaviour and business partnerships. The Legal division covers public policy while the Engineering department is responsible for software development, research, information, and technology (Musonera, 139). Operations department subdivisions include human resource, remote applications, and sales. In the mid-level management, the company has no clearly defined roles and encourages autonomy among the employees with less supervision. However, the business is free from hierarchy distinctions to promote a free flow of information (Facebook Newsroom). The global presence of the company with sixteen subsidiaries attracted adoption of a decentralized decision-making criterion.
Facebook Inc. Organizational Chart
SWOT Analysis
Strengths
Facebook Inc. as all other organizations has the strengths that help it maintain its position in the international market as the largest social online networking service provider. The first strength is the strong brand image maintained by the company since its launching to the present day (Young). Facebook is a trusted social networking service provider that caters for the needs of both individuals and businesses that leads to other benefits. The second factor is the steady rise in advertising revenue that serves as a source of capital for investment in long-term growth projects. The third strength is the presence of an innovative culture in the company that encourages and values new ideas that would improve service delivery (Young). The social media and social networking market is fast-paced and requires constant delivery of new products and improved products in the market that gives the organization a sustainable competitive advantage.
Weaknesses
The company has some shortcomings, which are ethical concerns emanating from the protection of personal data. This weakness poses security threats to Facebook users. Many of the product and services rendered by Facebook are interconnected. For instance, when opening an Instagram account, one can do so using his or her Facebook credentials. It becomes security if such personal data are not fully protected. The weaknesses lead to the current issues the Company is facing.
The Equilibrium Theory
Equilibrium theory seeks to prove that the interactions between supply and demand will result in a state of balance. Facebook Inc. is in business to empower people, build a community that brings the world closer together by use of technology for online communications (Haan, 22). The company achieves this objective by providing various social networking platforms such as Facebook, Messenger, Instagram, WhatsApp, and Oculus that that hugely attract the bargaining power of the consumers. Facebook provides News Feed, which displays stories and advertisements customized to suit an individual’s needs and preferences. Instagram allows sharing of photos or videos with additional tools that enable the user to tailor them and share them with friends.
Messenger enables communication among people and businesses over a wide range of devices. WhatsApp is a messaging application available for a wide range of devices that allows users to communicate via text messages, send pictures, and videos across the world. Oculus is a virtual reality technology that will enable people to interact in a simulated environment, share information, and play games. Facebook maintains a unique culture which serves to rewards impact (Facebook.com) Thus, its mode of operation is identifiable with Barnard’s organizational equilibrium theory which holds that an organization will only survive if it makes incentive payments that are equivalent to their contributions (Monden, 22). Facebook relies on the developers and users as its valuable resource.
Current Issues
Facebook faces major ethical concerns as to its current issues. In a recent case, the Cambridge Analytical jab presented what was termed as the biggest security threats to Facebook users, some of which were viewed as workplace deviance. In the Cambridge Analytics jibe, personal data from Facebook were retrieved and used without their consent (Peruzzi, 765). As a result, huge political deviance struck the management of Facebook, and some political leaders in the US demanded the CEO to explain the association Facebook had in the general elections in the US. The ethical behaviour of the management of Facebook was thus questioned on their commitment to protecting personal data (Peruzzi, 765). The proximity effect of the Cambridge Analytica Scandal could not be estimated. Some countries in Africa such as Kenya also had its Ethics and Anti-Corruption Commission question the involvement of Cambridge Analytica in the presidential election of 2013. Big online users’ data were believed to have been siphoned from Facebook.
A district court in Oakland ruled in 2015 that Facebook should be subjected to trial on charges related to unauthorized scanning of user messages (Facebook Inc.). Another issue is a data breach that raises cybersecurity concerns. Unavailability of proper user data protection strategies leads to cybercriminals targeting user accounts and stealing valuable data. Also, data mining has led to companies using artificial intelligence in gathering consumer information used in decision-making processes (Peruzzi, 765). The two cases led to employee shrinkage in some departments such as the legal, security, and engineering departments.
Conclusion
Since its development, Facebook has been on the limelight as the leading online platform, which offers social networking options as focus strategies. The company is consistent in updating their products according to the technological trends in the social networking market. Thus, Facebook has an equilibrium theory focused on rewarding impacts. The company’s success is based on the organizational structure, innovative culture, global market presence, mission and vision of the business. Availability of human and other resources has enabled the firm to expand and diversify their scope of business from only connecting people to earning money from it. Although the firm makes high revenues from its competitive products and services, it faces various challenges that include cybersecurity and user privacy. Despite the issues of Cambridge Analytica and the case at Oakland District Court, the management of Facebook has tried to remain firm and develop strategies to secure users’ data and privacy.
Works Cited
Abu-Khater, Haneen, et al. “Technology Management: Case of Facebook.” Research and Development Management. Springer, Cham, 2017. 199-225.
Facebook Inc.: Technology and Communications – Company Profile, SWOT & Financial Analysis. GlobalData plc, London, 2016. ProQuest, https://search.proquest.com/docview/1820187545?accountid=45049
Facebook Newsroom. “Company Info.” Facebook Newsroom, newsroom.fb.com/company-info/. Accessed 4 May 2019.
Facebook.com. “Facebook Careers.” Facebook.Com, 2019, www.facebook.com/pg/facebookcareers/about/?ref=page_internal. Accessed 4 May. 2019.
Haan, Sarah C. “Facebook’s Alternative Facts.” Virginia Law Review, vol. 105, 2019, pp. 18-36. ProQuest, https://search.proquest.com/docview/2194492848?accountid=45049.
Monden, Yasuhiro. Management of Enterprise Crises in Japan. New Jersey, World Scientific, 2014. Pp. 19-78
Musonera, Etienne, and J. Michael Weber. “Analysis of Marketing Strategies in the Social Media: Facebook Case Analysis.” Journal of Marketing Development & Competitiveness 12.1 (2018).
Peruzzi, Antonio, et al. “How News May Affect Markets’ Complex Structure: The Case of Cambridge Analytica.” Entropy 20.10 (2018): 765.
Young, Justin. “Facebook Inc. SWOT Analysis & Recommendations.” Panmore Institute, 14 June 2018, panmore.com/facebook-inc-swot-analysis-recommendations. Accessed 4 May 2019.