MBA 501

Student Name: vinayreddy musku

Subject code : 501

The Stakeholder Management of Facebook

Introduction

Facebook is the world’s most well-known profound social media website that there is. It has completely changed the way how people around the world interact and communicate with each other. With more than 1.2 billion monthly active users, Facebook is a go-to investment for many stakeholders. As will be mentioned later, this lets stakeholders advertise and share their contents efficiently and rapidly to the population. With social media continually growing, social media networks have a tremendous influence on the way companies engage and build relationships with their stakeholders.

Popular social media networks such as Instagram, Twitter, and Facebook have changed a one-way communication between organizations and stakeholders, to a two-way process communication(Kaya, T., & Bicen, H., 2016). Traditional one-way communication tools only allowed companies to talk to their stakeholders. Social media has introduced two-way communication in the sense that companies have less control over what is being said about them, as the relationship between companies and the population has become an interactive process.

In the early 2000s when social media was just starting out, like any new invention, companies were skeptical at first in adopting online platforms as a way to communicate. But it became clear right away that this was going to be the new wave. As I mentioned before, with social media continually growing, companies keep adapting new various strategies to get their message across to a targeted group. Fortune 500 companies are the most successful companies there are in the world and have used their resources to improve their communication process to meet their goals. Several studies on Fortune 500 companies that show that these companies are continuously implementing online communication strategies to enhance stakeholder relationships. These social media platforms positively impact online relationship as it provides opportunities to build strong connections with their stakeholders. Successfully implementing an online presence strategy gives companies an advantage in the market and helps them to stand out.

The Stakeholder Management of Facebook

While Facebook has been able to strengthen or maintain their relationships with their stakeholders, other companies are having trouble finding the right approach to communicating with their stakeholders through social media. One personal example that has happened to me recently displayed this problem. I have a friend named Luis who is a plastic surgeon, and he went to a conference in Idaho with other plastic surgeons. When he came back from the conference, he told me that the biggest problem other plastic surgeons were having was growing their social media platform. Most of the plastic surgeons that were there were in their 40's and 50's, and the majority of them knew how to use the basic features of social media, but not enough to be able to continuously update and grow their social media following(Mhamdi, 2018). My friend Luis actually has a young secretary that's still in college and has her run all his social media accounts. He suggested to the other doctors that they hire a part-time college student so that they can run their social media accounts. Another plus he added was that you don't really have to train college students on how to use social media because most of them are already very familiar with it through everyday use. But for those companies that aren't able to expand their online presence, this means that they are missing out on the potential that these social media sites offer for communication. However, this doesn't mean that these companies don't have the resources to have an online following, it just means that they have to use different strategies.

Given that some big retailers such as JCPenney and Macy’s have closed down 206 stores in 2017 due to online shopping becoming more popular, it is almost necessary for companies to adapt so that they can effectively communicate on an online platform to their stakeholders and customers. With that, it is also necessary that companies understand which strategies work best for them to reach their goals, and if they don’t, then consider hiring an employee or small team who is dedicated just for that reason.

Currently, Facebook has around 2.4 billion shares outstanding, all of which are distributed to its users/members, advertisers, employees, governments, and communities. The following is a table with the most significant owners in Facebook with what percent they own as well as the top 8 individuals with the most value in the company.

Founder and CEO Mark Zuckerberg who owns 533 million shares; worth around $24 billion dollars.

Jim Breyer, a partner at Accel venture capital firm, owns 201.4 million shares; worth around $8.5 billion dollars.

Dustin Moskovitz, Zuckerberg’s college roommate, owns 133.8 million shares; worth $5.1 billion dollars.

Peter Thiel, the PayPal co-founder, owns 44.7 million shares; worth $2.13 billion dollars.

David Choe, graffiti artist, owns 3.77 million shares; worth $142.9 million dollars.

Marc Andreessen, co-found or Netscape and creator or Mosaic, owns 3.6 million shares’ worth $225 million dollars.

Sheryl Sandberg, Google’s ex-vice president, owns 1.9 million shares; worth 86 million dollars.

Bono, rock musician and lead singer on U2, owns 39.5 million shares; worth 1.5 billion dollars.

Amongst the stakeholders, Facebook's mission implies that their users/members are their top priority. Facebook's mission statement says, "to give people the power to build community and bring the world closer together." Being that Facebook has over one billion monthly active users, its users play the biggest role in determining the popularity and attractiveness of Facebook. Because of this, they create a trickledown effect. For example, if advertisers notice that the number of users on Facebook is high, they are likely to pay for more advertisements to be shown(Miron, E., & Ravid, G., 2015). According to panmore.com, stakeholder users are more interested in the ease of using the app and security/privacy of personal information. Facebook is constantly improving its privacy and security services, and even though there will most likely always be flaws, it shows that they care for their users which satisfies the corporate social responsibility for this group.

Advertisers are where the bulk of Facebook’s income comes from. Because of this, they can directly affect the company’s financial status, so you know they are almost of the same importance as the users. To address corporate social responsibility, Facebook uses automated reporting to minimizing human intervention in the advertising process. Just like the users, Facebook also addresses options for its advertisers in their settings so that they can maximize their efforts by being able to target certain audiences in whatever their advertising. Due to popular demand by the users, Facebook's user-friendly settings allow people to easily customize their profile to receive notifications or updates from certain companies. Moreover, people are able to interact with companies by either liking, sharing, or commenting on the company's posts. This is a great way for companies to get feedback as well as expand their presence because people are sharing their posts with other people. Because of the user-friendly options that Facebook gives their advertisers, this addresses the interests of this stakeholder group.

Next up are the employees. Just like the previous two stakeholders, Facebook values its employees because of their contribution to the company, and without them, the company wouldn't be able to function. The employees play a critical role in being a stakeholder because they develop and improve the social media platform, which helps Facebook to continually evolve and grow. Facebook makes sure that its employees have good benefits and high compensation. Facebook addresses its corporate social responsibility towards employees through competitive human resource policies. An example is that Facebook pays its employees some of the best salaries when compared to other big internet companies. Because of this they are able to attract a large diversity of applicants and are able to choose the best of the best(Plantin, 2018). The process that Facebook goes through to get their employees, as well as show appreciation towards them, satisfies the corporate social responsibility for this stakeholder group.

Coming up on the last two types of stakeholders, governments is number four. It's important that Facebook complies with this stakeholder group because they are the ones who impose laws and requirements on the social media business. To keep on good terms with the governments worldwide as well as address corporate social responsibility, Facebook, of course, abide by their laws, but also partners up with them and shows support to their communities. An example of this was demonstrated in early 2018, where Facebook gave a total of $10 million dollars to community leaders for services that will “bring people closer together.”

The last group of Facebook’s stakeholder group is the communities. Although they are at the bottom of the priority list for Facebook’s stakeholders, they can influence the perception of its advertisers and users which can affect the company. These communities are interested in how Facebook can help them or what Facebook is doing to help preserve the planet. An example of Facebook addressing this interest group is that back in 2013, Facebook started to use green technology so that they can be eco-friendly to the environment. This shows Facebook’s corporate social responsibility towards this group; however, the social responsibility is weak in satisfying this group because you can never please everybody and it’s hard to please a group that doesn’t care so much about the company but more about how the company can help them.

While everything talked about Facebook so far sounds positive, there have been some negative views and legal issues facing the company. Facebook’s corporate mission is “ to give people the power to build community and bring the world closer together. ” This new mission statement was implemented in the midst of data privacy and security issues involving Cambridge Analytica and other parties. In early 2017, the company’s corporate mission was “ to give people the power to share and make the world more open and connected. ” In this regard, the new corporate mission shows that the company now focuses on making its social networking web site an important part of community development.

I’m pretty sure we’ve all heard people talk about Facebook releasing private data to other companies. Some argue that they didn’t give Facebook permission to make their personal data available for others, and how is Facebook responding to these people? Below is a timeline of some of the most infamous Facebook issues when it comes to privacy issues.

September 2006 - Facebook debuts News Feed. Nowadays we're used to news feeds on the platforms Facebook and Twitter, but back in 2006 when it was first released, people saw it as a big deal because they didn't want the public to be able to view their profile. How did Facebook respond? They simply told its users to "relax." Eventually, people got used to the News Feed and eventually calmed down.

December 2007 - Facebook’s first big problem with advertising privacy issues. A program called Beacon allowed other companies to track online purchases by Facebook users and then notified their Facebook friends on what they bought without their permission. Facebook’s response: They told users that they could disable the Beacon program in their settings.

June 2013 - a glitch in the mobile version allowed others to see that users contact list when they chose to upload their contact lists. The purpose of uploading the contact list was to help them easily connect with the people saved in their phone. Instead, this contact list would sometimes be made public when it shouldn't have. Facebook's response: We are constantly finding and fixing bugs and will "notify people whose information may have been exposed."

July 2014 - Facebook’s data scientists use mood-manipulation on random users. What these scientists did was select random users and alter their news feed to show either more positive or negative posts. Their reasoning was so that they could study the emotion effects spread throughout social media. Facebook’s response: Nothing, all they did was give a simple apology, nothing more. The results were published in the Proceedings of the National Academy of Sciences.

January 2018 - In May 2018, Europe passed a new strict law, the General Data Protection Regulation, which let companies store their user information and if there happened to be a breach of security, they were required to disclose the breach within 72 hours. Being that this wasn’t in the United States, Facebook had to comply with Europe’s new law and had to adjust their privacy settings for the European sector.

February 2018 - The Belgian court ordered Facebook to stop gathering private information about Belgian users and to stop tracking them. They also ordered Facebook to delete all illegally collected data from Belgian users. Belgium threatened Facebook with a fine of 100 million euros in they didn’t comply. Facebook responded saying that they already comply with the new European data privacy law and said that they would appeal to the court if Belgium kept threatening them.

March 2018 - Facebook revealed that they knew about data theft from other apps that used Facebook data and did nothing about it. Facebook’s response: CEO Mark Zuckerberg came out with a statement and vowed to do more to protect people's privacy and to only allow other apps access to a user's name, profile picture, and email.

As you can tell, Facebook's apologies are very plain. They say sorry only because they have to say something and never mention it again. The reason why they're like this and why they don't get into some serious trouble is because of us, the users. When we make an account and agree to the terms and conditions, that none of us read, we give permission to Facebook to use our data and privacy in ways that they want to. In the end, we give them permission to our information and if we don't agree with their terms and conditions then we simply can't use their social media platform.

Conclusion

As you can tell, Facebook cares about its users, stakeholder, communities, and provides a great opportunity for every single one of its shareholders to communicate effectively with others. Even though they have run into some legal issues, they handle it pretty well; and things of that nature will always arise from a company as big as they are(Plantin, 2018). From the different opportunities to the ways how Facebook adjusts to their shareholders and address their needs, it’s easy to understand why many investors want to be partnered up with this company. As it was discussed earlier, not every company knows how to effectively use this Facebook feature, but it’s starting to become a necessity so I believe it’s only a matter of time until every business is at least proficient just enough to be able to take advantage of the many features that not only Facebook has to offer, but through all the other social media platforms.  

References Kaya, T., & Bicen, H. (2016). The effects of social media on students’ behaviors; Facebook as a case study. Computers in Human Behavior, 59, 374-379. Mhamdi, C. (2018). Text mining and analytics: A case study from news channels posts on Facebook. In Intelligent Natural Language Processing: Trends and Applications (pp. 399-415). Springer, Cham. Miron, E., & Ravid, G. (2015). Facebook groups as an academic teaching aid: Case study and recommendations for educators. Journal of Educational Technology & Society, 18(4), 371-384. Plantin, J. C. (2018). Infrastructure studies meet platform studies in the age of Google and Facebook. New Media & Society, 20(1), 293-310.