Running head: FACEBOOK’S GLOBAL ENVIRONMENT 1
FACEBOOK’S GLOBAL ENVIRONMENT
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FACEBOOK’S GLOBAL ENVIRONMENT 2
FACEBOOK’S GLOBAL ENVIRONMENT
Never previously has business traversed the world as it does today and will most likely
do so in the future. Many businesses are going global in search of new markets to expand their
operations. As they do so, the environment in which they operate becomes complicated,
requiring an understanding of how to maneuver through the global forces. Facebook Inc. is
among the largest companies with vast global operations. Its internet-enabled platforms allow the
company to have a global presence without physical barriers, such as establishing physical
premises for business operations. Facebook users can access its services remotely from wherever
they are provided they have internet connection. The rapid development of internet technologies
has enabled many users globally to access social networking sites. Nevertheless, Facebook's
global presence demands an understanding of its business environments because global forces
influence different jurisdictions differently. For instance, Facebook must comply with user
privacy laws of specific countries in which it operates. Therefore, the current paper analyzes
Facebook's global business environment, notably the United Kingdom (UK) and India.
Company Profile
Facebook Inc. is a US global technology company developing products that allow people
to interact virtually and share through electronic devices, such as computers and mobile devices.
Mark Zuckerberg and colleagues founded the company in 2004. By 2012, Facebook was the
largest social media site globally, with over one billion users. The organization is headquartered
in Menlo Park, California. About half of the users used the service daily. Its products range from
Facebook and Messenger to WhatsApp and Instagram. The corporation facilitates
communication among users globally through its virtual features ("About Facebook," 2021),
such as messaging capabilities. People freely access the site, and the company generates its
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income from advertisements of other businesses, which pay for the service. New users can
establish personal or group profiles, join existing groups, upload content (texts, photos, and
videos). The platform has several elements, such as Timeline – allowing people to post content
on others' pages, and Status – enabling people to alert their network of friends regarding their
situation or location.
Instagram is a social networking site where people express their identities and ideas via
videos, photos, and messages. They can also connect with their network of friends and shop from
businesses that create product-related content for marketing purposes. Messenger is a place
where people can send and receive messages, photos, videos, and files. People can also connect
through messaging, audio calling, and video calling. WhatsApp is also a messaging site that
allows users to share messages, photos, videos, and audio content. The application also enables
users to record audio and share it with friends. Many businesses worldwide are now utilizing all
four applications to do business. Due to their large customer base globally, many organizations
can reach vast customer targets. Facebook’s Reality Labs provides augment and virtual reality
offerings, such as Oculus virtual reality features and content platforms ("Facebook Reality
Labs," 2021).
Countries Profile
USA
The US is a sovereign nation situated in North America. The US enjoys political stability,
which provides an ample climate for businesses like Facebook, which is a platform that may be
suppressed in countries without such stability. Political stability in the US positively affects
Facebook business. It also reinforces consumer confidence; hence it has a broader positive effect
on the US economy. The US is continuously ranked among the best globally for its general
FACEBOOK’S GLOBAL ENVIRONMENT 4
competitiveness, including ease of conducting business, ranking 6th globally (World Bank, 2021).
Supported by a regulatory atmosphere with conduciveness for beginning and running a business,
the US business environment supports free enterprise and competition. The country is a stable
democracy characterized by a transparent and foreseeable legal system. All businesses in the
country compete on a level playing ground. The World Bank's report regarding conducting
business assesses business regulations in critical global markets – beginning with how easy it is
to commence a business by connecting to utilities, obtaining credit, facilitating contracts, and
trading beyond borders (World Bank, 2021). World Bank ranks the country first among nations
with over 100 million people (World Bank, 2021). The US is also among nations where there is
press freedom guaranteed in the constitution.
The UK
The UK is an island state sitting north-western Europe. It has a monarchical government
system, where the queen heads the state, and the prime minister heads the government. It is
among the most politically stable nations globally. It has a highly developed free-market system,
offering local and foreign businesses opportunities to flourish. The UK ranks 8th in ease of doing
business, depicting that it is among the best places to undertake business. It is the second-best
place to do business among the G7 countries, following the US and Denmark in Western Europe.
The UK has a long historical custom of press freedom, but its constitution does not assure media
freedom.
India
India is a sovereign and independent South Asian country, ranking as the 7th largest with
its land covering over 1.2 million square miles. The nation perpetuated a protectionist approach
influenced by the socialist economies till 1991. State policies and intervention were rampant at
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the time, and it protected its economy from the outer world. However, in 1991 India liberalized
its economy following the persistent payment imbalances, which resulted in an economic crisis.
The nation has become a free market economy since then. Direct investment inflows and FDI
became the country’s emphasis. India is known to be the largest democracy globally, with a
relatively stable political climate. Nevertheless, India’s conflict with Pakistan remains a concern
of grave political uncertainty. India’s constitution legally protects media freedom, and the law
protects moral principles to establish a hybrid constitutional style of independent journalism.
Therefore, Indian Facebook users enjoy the freedom of expression. It ranks 71st in ease of doing
business globally.
Competitive Nature of the Industry
The social networking field is massive as it incorporates numerous organizations from
whole feature organizations like Google and other new entrants like Tik-Tok. Considering that
Facebook is not only a social networking organization, it currently faces competition from
advertising organizations. The heightened competition in the industry reduces the average time
utilized by members on Facebook, as the other companies offer other unique features. Emerging
social media organizations such as Tik-Tok and Snap chat are video-sharing apps that allow
users to share short videos with other users making the organizations more unique and exciting
than Facebook (Young, 2018). In America, Facebook's most significant competitor is Google.
Google is a multinational tech organization that focuses on internet-related services and
products, for example, search engine tech, advertising, and cloud computing. It offers services
like instant video chat, video sharing through YouTube, blog publishing through Blogger. The
wide range of services that Google offers is unique compared to the services provided by
Facebook. Also, new entrants such as Tik-Tok threaten Facebook. Tik-Tok is ranked as the
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fastest growing social media as it is valued at over 140$ billion, one of the most valuable startups
(CBINSIGHTS, 2020). Tik-Tok has managed to grasp new users since it's addictive, making
more people spend much time on Tik-Tok than on Facebook.
In India, Facebook is firmly considered the most outstanding social media organization
out beating the likes of YouTube, Pinterest, and Twitter since they are not frequently used in the
nation. According to statistics, Facebook runs about 62.7% of the social media industry,
followed by YouTube at 17.37% in 2019 (StatsCounter, 2019). In The United Kingdom,
Facebook has held a steady dominance over the social media industry.
Bargaining Power of Customers
Customers are the platform users using the platform for different purposes like
advertising or connecting with friends. The bargaining power of Facebook is high due to
intensified competition, making the platform the most dominant social media platform in India,
the USA, and United Kingdom. The company has to remain innovative and follow new trends to
provide exceptional services to its customers, attracting more users. The high competition in the
industry makes switching costs very low, insinuating that users can effortlessly change to other
platforms (Young, 2018). Facebook's popularity and its accurate ad-targeting feature make the
platform more unique and admirable by many people; this raises its bargaining power with
advertisers but keeps the prices reasonable and within reach. Customers can easily associate
themselves with the platform since it also increases their bargaining power by utilizing excellent
and unique features that suit them.
Threats of Substitute Products
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Increased development of different mobile apps and development features in rival
competitors offer an alternative to users; many of the platforms provide sharing information
which can be a suitable alternative for Facebook. For instance, in America and the United
Kingdom, Google can be a better platform for sharing videos through YouTube compared to
Facebook. Also, other mobile applications offer customized services, for instance, gaming which
attract a specific segment of customers (Young, 2018). The force of substitute products in India,
America, and the United Kingdom represents a threat to Facebook as more users can leave the
platform.
External Business Environment
Externally analyzing a business environment enables us to get insights into factors that
affect growth and operation. The ease of using Facebook is practical in politically stable nations,
like India, the US, and the UK. Some governments have implemented lesser stricter policies on
Facebook. In contrast, others have prohibited the use of Facebook in their nations primarily to
support their organizations, making it hard for Facebook to conduct its business. However, in
America, United Kingdom, and India, the organization is fully supported by the government. In
America, the government has created stricter policies for competitors, such as Tik-Tok, allowing
Facebook to maintain its dominance (Harwell & Romm, 2019). Also, fake news about social
media platforms has brought about heated discussions in various nations making the government
intervene. For example, Indian policymakers had to grill Facebook and several other platforms
due to the escalated falsehood; hence, a company such as Facebook has to follow the rules to
efficiently conduct their businesses in India.
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A nation’s economy has a significant impact on businesses. Facebook has dramatically
boosted the economies of most nations, but the economic situation of a country greatly affects
Facebook. A strong economy such as America’s or United Kingdom's contributes to the fast
growth of Facebook. Furthermore, many civilians from the nations will benefit from the
organization. On the other hand, countries with a sluggish economy like India affect the
company's growth as most people will not have the capability to purchase gadgets to access the
platform.
Literacy levels and attitudes towards Facebook is a great factor affecting the growth of
the company. High educational levels in a national champion are the usability and the admiration
of networking oneself also gain more information. Without-a-doubt Facebook is mostly
consumed by the younger generation hence nations with an aging population like India may have
less usage of Facebook. From statistics, India has a lower percentage of people using Facebook
as 25% of its population uses it (Keelery, 2021). This is considerably low compared with the
United Kingdom and America, which have a rate of 67% and 66%. Less usage of Facebook, in
this case, can directly be associated with educational levels and an aging population in India. In
comparison, greater use is championed by a younger nation that is well educated.
Facebook's popularity is still steadily growing. It is widely utilized across America, India,
and the United Kingdom. Undoubtedly the organization is an overall winner compared to its
competitors; this is because it continuously changes with the evolving world introducing new
interesting features to the user, out-beating rivals. Generally, the support that Facebook gets
along with its policies will allow the company to continuously grow to maintain dominance in
India, America, and the UK.
FACEBOOK’S GLOBAL ENVIRONMENT 9
Natural Resources and Environmental Sustainability
USA
Natural resources are vital to economic development. The US enjoys abundant natural
resources that have been the foundation of its economic development for years. It has the largest
coal reserves globally (Select USA, 2021). The abundant energy sources, including gas and oil,
saw the country through the Industrial Revolution. It became a manufacturing and technology
hub shaping the global economy through its industrial productivity. The country’s easily
accessible oil reserves facilitated several innovations, including vehicles and fuel-powered
machines.
The impact of climate change has triggered America’s efforts toward environmental
sustainability. The US is among the leading countries globally taking steps toward reducing
overreliance on nonrenewable energy sources, such as fossil fuels. It is focusing on utilizing
more renewable energy sources, such as wind and solar energy. It has attractive incentives for
private entities investing in producing and distributing renewable energy. The country has
legislated policies to ensure companies reduce their carbon footprint to minimize the greenhouse
effect that stimulates global warming – a significant cause of climate change.
The UK
The UK is rich with abundant natural resources. Its geological resources include coal, oil,
and natural gas. It has vast gas and oil reserves, with primary production of these resources
accounting for a significant proportion of the UK economy and constituting one of the largest
percentages of industrialized economies. The nation also has metallic natural resources, such as
silica, iron ore, gold, and lead. Agricultural resources include arable land, barley, and wheat. It
FACEBOOK’S GLOBAL ENVIRONMENT 10
has enormous potential for generating electrical energy because of its island situation. It utilizes
tidal and waves energies, even though the nation is yet to exploit this power form commercially.
The UK recognizes environmental protection as a pillar of economic sustainability. Its
sustainability program is meant to protect the environment from the impact of previous mining
activities (Sustainability Plan, 2021). It ensures that the part they play protects the public and
improves the environment, and preserves biodiversity. UK's sustainability initiative outlines how
the nation is going to attain its sustainability objectives. It also details critical government plans
like the 25-year environmental sustainability program and clean growth strategy. The initiative
highlights the country's Corporate 5-year program, as well as its recently adopted people, plan to
show how it delivers it. The UK has set itself ambitious objectives to play its part in addressing
global sustainability challenges, including decreasing greenhouse gas emissions, responding to
climate change, reducing waste, and reinforcing biodiversity.
India
India is endowed with many natural resources. Its leading mineral resource is coal,
priding for having some of the largest coal reserves globally (Natural Resources, 2021). Other
mineral resources include iron and manganese ores, mica, diamonds, and bauxite. The country
also has natural gas and oil reserves. The country's arable land supports many agricultural
activities, some of which are exported to other nations.
India is among the least wasteful economies (Sajeev & Kaur, 2020). The nation has
regularly received acknowledgment by different international environmental stakeholders for
promoting efforts to combat climate change for environmental sustainability. It has done so via
environmental policies, particularly following India's emergence as a critical participant in
driving the Paris Agreement. It has also facilitated discussions between countries and taken
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decisive actions to support environmental sustainability. The country is among major economies
that have implemented energy-efficient strategies.
Economic and Social Economic Forces
USA
The US prides itself as the largest economy globally, as determined by nominal GDP of
USD 20.94 trillion (Gross Domestic Product, 2021). It also has one of the highest GDP per
capita worldwide at USD 63,543 in 2020, ranking third after Ireland and Norway (GDP Per
Capita, 2021). It is the home to the most influential companies shaping the world economy,
including Facebook, Google, Apple, and Microsoft, giving Facebook an ample economic
climate. The US economic system is highly developed and harnesses its strength from its
services and manufacturing sectors. The internet-enabled service providers, such as social
networking companies like Facebook, benefit significantly from the nation's robust economy.
However, the world's economic landscape is fast evolving, which challenges the US's global
economic position.
The US is the 3rd most populous state globally, with over 329 million people. It has one
of the best education systems worldwide. It also has one of the best health care systems
worldwide. This system has been a reason for its aging population – people who are unlikely to
use social media as much as young people. An aging population also threatens the supply of
labor.
Americans are generally technologically informed. Some of the most advanced
inventions originate from the US, including social media networking sites like Facebook. Many
use social media sites for business and social networking; hence Facebook enjoys a vast pool of
social media users online. Even though most Americans have a liberal mindset, the nation has
FACEBOOK’S GLOBAL ENVIRONMENT 12
experienced racial tensions recently due to racial profiling among the US public institutions, such
as the police. Many Americans use Facebook as a platform to voice their concerns over social
injustices.
The UK
The UK is at the fifth position globally in the economy by nominal GDP, reporting over
USD 5B in 2020 GDP (Gross Domestic Product, 2021). It is also the second-largest economy in
Europe after Germany. Its economy has grown steadily over the past five years except in 2020
due to the coronavirus pandemic. However, rising household savings depict that the UK
economy is recovering. In 2020, it had a GDP per capita of USD 40,406, ranking 22nd
worldwide. For years, the UK has been a destination for foreign direct investment. Companies
from the globe, such as Facebook, can operate in the UK. Its large and growing population
allows profitability for all businesses, including small markets. The UK economy is highly
diverse with the large public as well as private sectors provided there is valued added and market
demand. Economic diversity is a significant reason for UK prosperity. Characterized by a diverse
culture, the UK attracts FDI from other countries worldwide.
The UK prides itself on a vast consumer market, with over 67 million people according to
World Bank's 2020 report (Population Total, 2021). UK births continue to surpass deaths, and
the population is predicted to grow exponentially in the future. This massive market offers
Facebook a vast market of social media users. However, its population is aging, threatening the
labor supply. The UK population is multiethnic and multicultural, even though it has historically
been impacted by social classes. It is among the top nations globally with the most educated
people. It also has many technologically informed people in the world.
Financial Forces
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USA
As the USD becomes stronger, Facebook is expected to be negatively impacted in its
international business compared to the American market – its domestic market. A stronger dollar
implies rising exchange rates, which translates to foreign exchange losses in Facebook's
international business. Therefore, this financial force is likely to favor or disfavor Facebook
based on USD strength and the international or domestic market.
The UK
Another critical financial aspect is foreign exchange gain resulting from fluctuating
exchange rates. The exchange rate affects Facebook's performance in the UK due to its effect on
inflation and the job market. For instance, when the UK currency is stronger than the US dollar,
companies such as Facebook are expected to be favorably impacted in their UK operations
compared to the American market – their home market. A stronger sterling pound depicts lower
exchange rates, which result in foreign exchange gains in Facebook's UK business. Therefore,
the foreign exchange rate is likely to favor or disfavor Facebook according to whether the USD
is stronger or weaker relative to the UK.
India
Facebook’s Indian operations are affected by the exchange rate between the US dollar
and the Indian rupee. Changes in exchange rates are likely to impact Facebook's Indian business.
For instance, a rise in the value of Indian rupees is likely to lead to foreign exchange gains. On
the other hand, if the Indian Rupee erodes in value, Facebook India would incur foreign
exchange losses.
Comparing the US, UK, and India
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Significant salient attributes are observed in the US, UK, and India from the above
findings. and Facebook’s There are several political factors in the US that significantly favor
Facebook’s operations in the US. The US, UK, and India are politically stable nations, which
favor Facebook’s operations in the countries. The three business environments promote free
enterprise and competition, offering a conducive space for beginning and running a business.
The three countries are politically stable characterized by a transparent legal system. Facebook in
these countries competes on a level playing ground. However, based on the World Bank's ease of
conducting business ranking, it is easier for Facebook to do business in the US (ranked 6th) and
UK (ranked 8th) than in India by far (ranked 71st). The World Bank’s World Bank ranks the
country first among nations over 100 million people. Globally, the World Bank ranked it 6th in
ease of conducting business (World Bank, 2021).
Media freedom in the three countries is also present. However, unlike the US and India,
press freedom is not protected in the UK constitution. Facebook offers people a platform to voice
their opinions, and with media freedom, consumers have confidence in airing their views on
Facebook, which increases the company’s online traffic. Memon and Memon (2017) found that
press freedom has a significant and desirable effect on political stability. Therefore, political
stability enables Facebook to undertake business effectively in the three countries.
The three countries are well endowed will natural resources. They mainly have natural
gas and oil. They also have arable land for agricultural activities. However, India and the US
have more extensive land, unlike the UK, which is relatively smaller. Therefore, the UK and the
US have more agricultural productivity than the UK. Nonetheless, the UK prides itself on many
metallic mineral resources like bauxite and iron ore. These resources are the countries' economic
foundation, enabling them to offer an economically conducive environment for Facebook to
FACEBOOK’S GLOBAL ENVIRONMENT 15
flourish since it depends on people's economic welfare to provide its social networking services.
The three nations have also made significant steps towards environmental sustainability. They
have established plans to maintain biodiversity, reduce carbon footprint, and combat climate
change.
The three countries are all among the largest economies in the world – all fall top ten,
with the US leading followed by the UK and then India. GDP per capita for the US and UK also
depicts higher economic development than in India. However, the US economy is by far larger
than the UK and India’s. It is almost four times UK’s and six times India’s. It means the US has
a more significant positive economic effect on Facebook’s operations in the UK and India. The
two nations have massive markets determined by their large population by global comparisons.
However, India's market, with a population of over one billion, is more massive compared to the
US and UK.
The most significant financial force on Facebook’s international operations is the
exchange rate. The US dollar exchanges with fewer starling pounds. Contrary, the US dollar
exchanges with more Indian rupees. Changes in exchange rates result in foreign exchange losses
or gains according to the currencies in question. The USD is stronger and competes against the
sterling pound more closely than a weaker Indian rupee.
Political forces&
Facebook Company faces the same challenges in the United States, United Kingdom, and
India due to political forces. In the United States, Facebook has faced political heat for
accusations of being partisan and allowing hate speech and fake news to thrive. The election of
2016 generated immense political heat, especially with the accusation that Russia used it to
meddle in the election. In the United Kingdom, the major issues that have elicited calls for more
FACEBOOK’S GLOBAL ENVIRONMENT 16
regulation are the use of Facebook by political parties and the spread of misinformation. India’s
significant issue with Facebook is its alleged favoritism of politicians allied to Modi, a supposed
bias that disadvantages small parties.K
Integration of faith and learning&
In all three countries, Facebook’s integration of faith and learning in their platforms has
been instrumental in faith-based activities by religious institutions. During the pandemic,
streaming tools have been crucial in hosting lives services from churches in the US and UK and
temples in India.K
Legal forces
The biggest issue affecting Facebook’s business environment is data protection and
privacy laws in all three countries. In the US, the FTC sued Facebook over its acquisition of
Instagram and Whatsapp, a move they said violates the country’s competition laws. In the UK,
lawmakers question Facebook’s overriding of users’ data protection to increase revenue and
called for greater regulation to make them accountable. In India, the government passed
regulations to help it ask for posts and content they deem unlawful taken down. Such an
environment puts Facebook at loggerheads with its consumers, especially on the issues of end-to-
end encryption that Whatsapp has to violate to reveal users’ identities.K K
Global Business Environment for Facebook
Facebook is the largest social media network with over 2.89 billion monthly active users.
Facebook is a global company that operates in several countries globally because of its usage in
connecting people around the world. Facebook is a business organization, and like all other
FACEBOOK’S GLOBAL ENVIRONMENT 17
global businesses, it needs a healthy business environment to thrive. Various countries have
varying economic, legal, and political environments that influence how Facebook operates. The
environment determines the success rate of the company, and each environment influences
Facebook differently. This paper analyzes the business environment for Facebook in three
different countries, i.e., the United States of America, the United Kingdom, and India.
Business environment in the United Kingdom&&
The United Kingdom is one of the countries with the highest number of Facebook uses in
the world. The United Kingdom has approximately 51 million users. Thus, the UK is one of the
critical countries for Facebook’s business as a corporation.
Political forces&
The role of Facebook in political campaigns and the pushing of political agenda is
significant in the United Kingdom. According to Crabtree (2017), recent elections around the
world have shown that the transparency of political parties and campaign groups’ use of
Facebook should be put into question. In the United Kingdom, Facebook’s effectiveness of
mobilizing the masses have caught regulators’ attention, some thinking the UK government
should regulate the use of Facebook by political parties and make their spending on the platform
transparent. The head of the UK’s independent authority on public information, Elizabeth
Denham, wrote in a blog post in 2017 that a formal investigation was needed into the political
campaigns ahead of the Brexit referendum.K
According to Romm (2019), British lawmakers accused Facebook of intentionally
violating its anti-competition and data privacy laws. The members of parliament accused
Facebook of allowing the spread of malicious content online. After the scathing rebuke, these
FACEBOOK’S GLOBAL ENVIRONMENT 18
lawmakers concluded that the United Kingdom should adopt new regulations that will allow
parliament to hold Facebook accountable for what they called digital misdeeds. The lawmakers
said that Facebook was behaving like digital gangsters and shouldn’t be allowed to continue
doing so under their watch.
These reports and calls for investigation into political conduct on Facebook put the
company in a position of scrutiny. While Facebook may not control what people think,
lawmakers believe they can control what these people write on their platforms. Regarding
politics, the result is that those parties that feel aggrieved by Facebook, perhaps by losing an
election over Facebook ads that targeted and successfully tainted their candidates, will continue
calling for regulations. Also, activists and non-governmental organizations in the United
Kingdom that feel Facebook is negatively influencing political campaigns or allowing political
hate speeches to be spread on their platform won’t rest until they feel substantial action against
the company has been taken.
Integration of Faith and Learning
Facebook offers a wide range of online tools for integrating faith and learning in the
United Kingdom. Facebook has enabled a virtual space where religious users can engage online
by sharing faith-based information amongst one another. In the UK, churches have created
discussion boards and websites to exchange religious, spiritual, and secular topics. About 83% of
Christians in the United Kingdom are happy about Facebook’s role in fellowship and spreading
the gospel (Brubaker and Haigh, 2017). Global media outreach, a church in the United Kingdom,
is one of the examples of churches using Facebook to livestream their services to their followers
and others on Facebook. The church leader says that Facebook is a crucial tool in evangelism,
and they couldn’t be more grateful for the company.
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Positive responses from the religious community in the United Kingdom mean that the
ground for Facebook services in religious circles in the United Kingdom is fertile. The company
enjoys high approval among the religious because of the tools that enable them to share faith-
based information with the world. This means that the company’s integration of faith and
learning in their platform has created a healthy business environment among a section of users in
the United Kingdom, and the ground for doing business is encouraging.
Legal forces
Facebook operates in the United Kingdom under their laws, especially privacy laws.
Facebook holds enormous information belonging to users in their servers, and the United
Kingdom does its part to ensure the company upholds privacy regulations. One of the challenges
Facebook has faced in the United Kingdom is questions into their data protection practices. UK
lawmakers have accused Facebook of behaving like a digital gangster, and there have been calls
by parliament for an investigation into its conduct. Romm (2019) says that lawmakers accuse
Facebook of overriding users’ privacy settings to increase the revenue from such information.
The parliamentarians said that Facebook intentionally violated anti-competition and data privacy
laws. As a result, they have been constant calls for the UK government to adopt new regulations
to enable the British parliament to hold it accountable.
Parliament and other institutions feel that Facebook is not doing enough to protect users’
data. Also, they feel Facebook is intentionally violating laws to maximize revenues derived from
users’ sensitive information. Constant calls to regulate Facebook create an unstable environment
for the company. Facebook may face stiff regulations that may negatively impact its revenues or
incur fines in billions of dollars if action is taken. The legal environment means that Facebook
has to adjust or face potential regulations that may hurt its revenues in the long run.
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Business environment in the United States
The Facebook Company’s home country is the United States. Its headquarters are located
in Menlo Park, California, United States. The United States has the second largest number of
Facebook users in the world. The business environment in the country is influenced by factors
like political forces, cultural forces, legal forces, etc.
Political forces&
The political environment in a country plays a significant role in the success or failure of
a company. Political stability largely augurs well for businesses, while instability is a significant
threat. Facebook essentially generates its revenue by selling advertisement placements to
marketers. Besides this product, Facebook also offers products and services like Facebook
Watch, Facebook Messenger, etc. Facebook offers users a platform to interact with one another,
make friends, and discuss various issues affecting their lives like the economy, climate change,
politics, etc. Political discussions on Facebook are common, and ads targeting political parties or
a particular political candidate can be pushed on Facebook.
The biggest challenge Facebook faces in the United States concerning politics is the
alleged spread of fake news. According to Garett (2019), the reliance on social media for
political news has grown over the years. In 2016, in the month before the election, more
Americans named Facebook as the source they rely on to get political news than they did CNN,
Fox News, and leading newspapers in the country like the New York Times. Garett (2019) notes
that this is problematic because online sites are likely to share political falsehoods. In 2016, the
New York Times newspaper editorial board published a critique of Facebook for failing to curb
the circulation of falsehoods towards the election date.
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The fake news phenomenon has taken a partisan dimension in the United States. Garett
(2019) argues that republicans held less accurate beliefs about then-President Obama than
democrats, and the reverse is true with Obama’s then challenger, Mitt Romney. The issue of
political misperceptions in the United States is a big challenge for Facebook, for its critics
believe it is responsible for the greater political divide in the country. In the 2016 elections,
Facebook users essentially got their information from Facebook than those who used other
platforms like Twitter and Instagram. Using the 2012 and 2016 elections, Facebook has played a
significant role in shaping a section of Americans’ political beliefs. Millions of Americans have
engaged with false political messages, which is a worry for Facebook because of the accusations
that the platform is not doing enough to stop this (Lee and Xenos, 2019).KK
Facebook CEO was grilled by lawmakers in the United States for not fact-checking ads
and letting political misinformation spread before the 2020 election. Lawmakers opined that
Facebook allowed Russia to meddle in the 2016 election, and for that, it was under an anti-trust
investigation. A number of democrats may generally stop trusting the company because of the
possibility that it allowed actions that led to democrats losing the 2016 presidential election (Lee
and Xenos, 2019). The political forces in the United States put Facebook at the center of
controversy. Facebook grapples with voices from either side of the political divide regarding
political ads and the spread of political disinformation on the platform. As the voices rage on, it
may get to a point where congressional action may take place on the matters the political forces
deem crucial (Lee and Xenos, 2019).KK
Integration of faith and learning&
Facebook is a social media platform for sharing amongst users, but that doesn’t stop it
from being a source for learning and faith integration. Facebook has allowed the use of its
FACEBOOK’S GLOBAL ENVIRONMENT 22
platform by religious institutions for faith-based services. Over the past few years, the company
has partnered with various faith communities like the Church of God in Christ and Assemblies of
God. The coronavirus pandemic forced religious communities to find alternative ways of
operations, and Facebook hoped to create a virtual home for faith-based learning. Dias (2021)
says that the company wants mosques, churches, and synagogues to integrate religious life into
the platform, especially when hosting church services. New products like audio and sharing are
aimed at religious communities.
Legal forces&
The legal environment for Facebook in the United States puts the platform in a position
where it has to grapple with various lawsuits. Facebook’s most prominent issues seem to stem
from its acquisitions of other tech companies. The Federal Trade Commission of the United
States sued Facebook for its 2012 acquisition of Instagram, 2014, acquisition of WhatsApp, and
rules that guide outside software developers. Sherman (2020) says Facebook’s legal woes are
based on the accusation that it takes a buy or bury approach to stifle competition from potential
rivals and enjoy a monopoly. The New York attorney general leading the suit said that no
company should have unchecked power over social interactions like Facebook does. The FTC
believes Facebook’s domination of the social media landscape was acquired illegally.
According to Sherman (2020), laws in the United States governing competition in the
business world continue to haunt Facebook as long as it remains a massive social media
company with billions of users on the platform. On its part, Facebook claims that FTC approved
the acquisitions of WhatsApp and Instagram, and it is baffling there is a legal issue concerning
acquisitions considered legal. Facebook claims that it has built strong American companies, and
FACEBOOK’S GLOBAL ENVIRONMENT 23
it is being punished for it. The suit to cleave off Whatsapp and Instagram off Facebook are a
threat to Facebook’s business environment.
Facebook has to fight off the challenge that it violates US competition laws because it
believes that it has invested in growing the acquired companies and deserves to enjoy the
rewards. On the other hand, the FTC believes Facebook deliberately sniffs out completion by
buying tech companies whose potential they recognize would hurt their market share in the long
run. Sherman (2020) believes that, while Facebook continues to enjoy relative smoothness in the
business environment provided by the United States, lawsuits like that of the FTC will continue,
and the company will keep fighting back against them.
Business environment in India
India is the largest consumer of Facebook services. In 2021, there are over 340 million
users on Facebook from India. To put this enormous audience into perspective, if the Facebook
users in India were a country, it would be the 3rd largest country in the world in terms of
population.
Political forces&
As the country with the largest audience for the company, Facebook generates lots of
revenue from the Indian market. According to Horwitz (2020), an Indian politician, T Raja
Singh, threatened on Facebook to raze mosques, called Muslims traitors and said Muslim
immigrants should be shot. Facebook officials determined that the utterances violated their hate
speech rules, and he should be banned. However, Ankhi Das, Facebook’s top public-policy
executive in the country, opposed applying Facebook’s community standards to the politician
and other Indian politicians that Facebook had flagged on the same grounds. Das argued that
FACEBOOK’S GLOBAL ENVIRONMENT 24
punishing politicians from Prime Minister Modi’s party would significantly hurt Facebook’s
business prospects in India, especially since it is Facebook’s largest market.K
Critics have accused Facebook of using its rules discriminately, seemingly favoring
politicians from Modi’s party. Facebook’s primary challenge in India is accusations of favoritism
of Modi’s political allies and government regulations that influence crucial decisions. Aneja
(2020) says that Facebook is biased and accountable towards the main political parties in India,
i.e., its biggest clients, like BJP. Aneja believes India’s problem with Facebook is the political
advertising that rakes in significant revenues. Facebook is unlikely to stop it because it will
impact a significant revenue base. Competition policy is another issue that Facebook faces in
India, with calls for more significant transparency on its operations, especially on data privacy.K
Integration of faith and learning&
The coronavirus pandemic forced religious communities to find alternative ways of
operations, and some of the temples in India were not left behind. For instance, mankameshwar
temple and others in India embraced Webcast and online services. The Golden Temple resorted
to streaming their rituals on Facebook because they couldn’t physically visit the holy shrine.
Facebook’s integration of faith and learning has been helpful to religion in India.
Legal forces&
Facebook’s biggest legal issue in India is the government’s desire to legislate to have
more power over its operations in the country. According to Choudhury (2021), India announced
new sweeping reforms in February 2021 that would make Facebook and other social media users
more accountable to legal requests. These reforms mean that the Indian government would have
the power to dictate taking down content they may classify as unlawful. Also, the platforms
would be required to produce original posters of specific content, a move that would violate the
FACEBOOK’S GLOBAL ENVIRONMENT 25
end-to-end encryption that is part of the platform’s laws. India’s regulations come in the wake of
the spread of misinformation on social media, especially after a rumor that circulated on
Whatsapp three years ago reportedly got several people killed (Choudhury, 2021).K
The rules complicate Facebook’s business environment because it puts it under increased
scrutiny by the government. While the government thinks it is cutting down on misinformation
and facilitating responsible use of Facebook and other platforms, Facebook, as a company,
would find these regulations as an infringement, especially since it pushes them to violate some
of their laws like end-to-end encryption.K
Conclusion
Facebook's global business environment significantly relies on the foreign market's
socioeconomic conditions. As the company's domestic market, the US is a large economy with a
massive market, leading to significant consumer demand for Facebook's social networking
services. Like the US, the UK and India have large economies and large markets for Facebook’s
operations. The countries’ economies are backed by abundant natural resource economic
endowment. The countries have taken significant steps to support environmental sustainability
by instituting plans to reduce pollution, mitigate climate change, and encourage biodiversity. The
massive markets offer Facebook a large customer base, including potential Facebook users.
However, India’s market is more massive due to its being the second-most populous country
globally.
FACEBOOK’S GLOBAL ENVIRONMENT 26
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