Case Analysis 2: Facebook

Facebook is the worlds largest social networking firm was founded by a Harvard dropout Mark Zuckerberg. He created the platform while attending Harvard but made it only available for Harvard students and it was known as “TheFacebook.” As it began to gain popularity, Mark decided to drop out of Harvard and fully committed his attention to the social networking platform. Mark expanded the platform to be available for other Colleges such as Ivy Leagues than onward to most universities in the U.S.

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and as well as Canada. By the start of 2007 Facebook was available to anyone with a valid email address. This pushed Facebook to become a public company in 2012 due to its immense popularity. With Facebook going public, it opened many more opportunities for them, but it also brought out some critical issues within the company.

As Facebook went public, their objective shifted from fully focusing on making the platform the best it could be for its users, to making the platform as profitable as it could be for their stakeholders. There are multiple major stakeholder groups that Facebook has an interest in. These stakeholder groups are impacted by the actions of Facebook. When it comes to the stakeholders, Facebook has both internal and external. The internal stakeholders are the ones who are there to help the company. In this case, this means the employees, managers, and subordinates. External stakeholders are those who are affected by company actions, which include partners, suppliers, clients, raw material vendors, press and media channels, retailers, and brokers and financers. Facebook separates their stakeholders into three categories, which are primary, secondary, and/or key stakeholders. The percentage of shares indicates the range of profits for the stakeholder, which helps in categorizing them. In order to manage the different stakeholders, Facebook must identify their roles, their importance, interests, and must be sure to have ethical standards in place. Facebook also must continue to have great communication with their stakeholders in order to have a well-balanced relationship with each other.

With that being said, Facebook has been in the media lately for violating some of their rights and ethical standards, which have hurt not only Facebook but its stakeholders as well. This was due to the scandal that was brought to light that stated how Facebook would steal private information from their users and sell it to third parties. Facebook went through a long legal battle over this scandal but since then, they have been able to recover from it. After this incident, Facebook must fully commit to keeping to their ethical standards and being truthful with their actions that affect the users as well as their stakeholders. If Facebook stays on the right path and focuses on connecting the world through their platform then they will continue to be the leading social networking platform for their users and stakeholders but if they commit other actions like the one they did then sooner or later it will end up destroying Facebook.

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