Description of the organization
This paper is aimed at examining the functioning of such a company as Facebook, Inc. This organization maintains a social networking site that is accessible in various regions of the world. Currently, the number of their active subscribers equals approximately 1.11 billion (Hubbard, Rice, & Galvin, 2014, p. 3). The primary goal of this enterprise is to help users communicate with one another. In particular, this corporation can support the needs of people who have common interests or backgrounds.
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In particular, these individuals have opportunities for sharing videos, text messages, music files, photographs, and so forth. They can also talk to each other with the help of VoIP (Voice over IP) applications. In this case, one can refer to the mission statement of Facebook. According to it, the company strives to “give people the power to share and make the world more open and connected” (Hubbard et al., 2014, p. 3).
Additionally, this corporation wants to extend the range of services that are available to the clients. So, the company has made some valuable acquisitions such as WhatsApp or Instagram. These actions are supposed to intensify the further growth of this organization. Facebook derives its revenues primarily from advertisers who rely on this website to promote their goods or services to various target audiences.
One can distinguish several leadership practices adopted in Facebook. They are advocated by Mark Zuckerberg, who is the current CEO of this corporation. At first, he stresses the need to empower employees. This practice can take different forms. For instance, the employees are encouraged to take risks and even depart from the standards or conventions that are set for web designers or software engineers. This approach is important for identifying those people can offer innovative solutions. Additionally, in many cases, software designers can select the projects that are of great interest to them. Therefore, they can have a greater control over their workplace activities. As a rule, this opportunity contributes to the improved performance of these workers.
Additionally, the senior executives of this company adopt the meritocratic approach to leadership. In particular, the primary source of a person’s power in this organization is his/her expertise and ability to achieve good results. This criterion is used to determine if this individual can play the role of a leader. Furthermore, it profoundly affects the promotion decision taken by Mark Zuckerberg and other executives. Therefore, a newcomer can take the position of people who worked in a company for a longer time. This approach is supposed to ensure that the most talented individuals can rise in the organization if they consistently reach and surpass the standards set by the management.
Finally, Mark Zuckerberg argues that leaders should be open and accessible to workers. In other words, they should involve employees in decision-making. Furthermore, they should ensure that other people can fully understand the objectives that the company tries to attain. This principle is reflected in various practices. For instance, there are weekly meetings during which workers and senior executives can discuss the tasks that should be carried out. Moreover, employees can suggest new technological solutions or recommendations that might not be initially considered by the management.
One can state that leadership practices have profound effects on the culture of this enterprise. In particular, openness and transparency can be regarded as the essential attributes of this organization. As a result, workers and senior executives can regularly interact with one another. For instance, one should note that Mark Zuckerberg’s office is not physically separated from the tables of employees because the workspace is not divided into cubicles. Additionally, Facebook can be characterized by high internal competitiveness and mobility of workers. Finally, one should mention that the interactions between employees tend to be less formal. Furthermore, many bureaucratic procedures are eliminated.
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Such a method as SWOT analysis can be helpful to evaluate the performance of this organization.
One can distinguish significant strengths of this organization. At first, it is necessary to mention that this company has created a well-recognized brand that is familiar to many people throughout the world. Thus, Facebook can be rightly called a global corporation. As it has been said before, this social networking website has about 1.1 billion subscribers. Moreover, many of these people believe that the use of this online resource is a significant part of their daily activities. In turn, this resource can give the company a competitive advantage over other businesses. Certainly, this position cannot be permanent.
It can be sustained only if the employees continuously improve the services offered to the users and advertisers. Nevertheless, the popularity of the brand can give Facebook more time to adjust to new trends. In part, this strength can be related to the process of globalization that enables businesses to operate across borders. Moreover, it originates from the role in which people use information technologies. These tools are applied to support the social life of many individuals. These tendencies are helpful for explaining the global popularity of Facebook.
Furthermore, this business can efficiently adjust to the changing lifestyles of users and new technological trends. For instance, this company has quickly adapted its website to the needs of people who are willing to use Facebook with the help of mobile phones. Apart from that, this organization has been willing to integrate innovative products and services. In some cases, this goal is attained with the help of acquisitions. For instance, it is possible to mention the purchase of Instagram and WhatsApp. To a large degree, this situation can be explained by the leadership and communication practices adopted in this company.
As it has been said before, workers are encouraged to take initiatives. Moreover, they do not have to cope with bureaucratic barriers such as red tape. Furthermore, the management continuously monitors various quantitative indicators that can cast a light on the performance of this corporation in comparison with other social networks. Admittedly, there are other important strengths of this corporation; nevertheless, these two capabilities can make this corporation more resilient to various external stressors.
At the same time, the management should recognize some deficiencies. In particular, the largest part of the company’s revenues is derived from only one source, namely, advertising. In particular, this source accounts for more than 80 percent of the profits obtained by this corporation (Investor Relations, 2015). In turn, less than 20 percent of their revenues can be related to other operations such as marketing online games (Investor Relations, 2015).
This problem can make the company extremely vulnerable, especially in the long term. This weakness can become crucial if a new enterprise creates a breakthrough social network that will appeal to many users. Therefore, businesses may decide to use other online resources to advertise their products. Thus, Facebook may lose a significant portion of its revenues. Admittedly, this probability of this event is not very high because this company strives to innovate its website and improve the services offered to clients. Nevertheless, this risk should not be overlooked because it can have a profound effect on the financial performance of this enterprise.
Thus, one should diversify the revenues of this corporation. This strategy is adopted by many businesses that represent the IT industry. This economic sector is driven by disruptive innovation and volatility. Under such circumstances, the financial performance of an enterprise can be endangered almost at any time.
Furthermore, the click-through rate or CTR of advertisements placed at Facebook is not very high. It means that many people, who view a certain commercial, choose to disregard it. They do not click on the link and decide not to proceed to the website of the advertiser. One should mention that the CTR of Facebook is lower in comparison with Google. As a result, many entrepreneurs believe that they should not cooperate with Facebook.
Thus, this deficiency should not be disregarded because it can make this company more vulnerable to various threats. Much attention should be paid to the changing attitudes of advertisers who want to ensure their investment in online commercials is justified. In part, this problem is caused by the communication practices of Internet users. When they communicate with the help of social networking websites, they strive to share their opinions or impressions with one another. They want to learn about the experiences of people who are closely familiar to them. In turn, the search of commercial information is not their primary motive.
This company can benefit from several external factors. In particular, the management should consider the growing popularity of mobile advertising. The organization can derive substantial revenues from this trend. However, they need to develop efficient strategies for adjusting online commercials to the needs of people who access Facebook via various portable devices such as tablet computers, smartphones, or laptops. In part, this trend can be explained by the economic growth that can be observed in various advanced and developing countries. Moreover, one should consider the growing purchasing power of many consumers. Additionally, these people want to ensure that online communication is always accessible to them. Therefore, the company should make use of this opportunity.
Additionally, many businesses want to rely on the Internet as the principal medium for advertising their goods and services. Moreover, they are less willing to rely on conventional channels such as television, press, or radio. In their opinion, the investment in Internet marketing is a more optimal approach because it enables companies to reach potential clients in a better way. Additionally, this method is useful for anticipating the needs of customers. Thus, advertisers want to interact with various online companies. These tendencies contribute to the growth of various IT companies such as Facebook or Google. However, it is necessary to improve the click-through rate of this online resource because this task can increase the profits of this corporation.
In turn, the external environment can pose some threats to the performance of this business. For instance, managers should be aware of such a risk as the increasing governmental regulation of social networks. These companies are often required to disclose the information about the identity of users. This trend has already affected Facebook, especially the reputation of this company. For instance, this organization has cooperated with the National Security Administration that required information about some Internet users. Additionally, Facebook was often contacted by the governmental intuitions from other countries.
Admittedly, the disclosure of this information could be vital to the prevention of many crimes. However, the protection of confidential data is one of the top priorities for the users of social networks. Therefore, these people may look for alternative online communities. This problem can become more dangerous if there are more stringent regulations requiring companies to change their privacy policies. Admittedly, this problem cannot be attributed to the inefficient internal policies of Facebook. In this case, more attention should be paid to external pressures. So, this company will need to resolve an ethical dilemma or a conflict between the needs of users and requirements of governmental officials. They may need to develop more transparent privacy policies explaining how the information will be used.
Additionally, senior executives should take into account the potential impacts of the competition. One should keep in mind that many social networking websites have emerged during the last decade. They can serve the needs of users who can differ in terms of their interests, lifestyles, and values. For instance, one can mention such companies as LinkedIn, Reddit, Twitter, Tumblr and many others. Indeed, none of them can compete with Facebook in terms of the market share.
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Nevertheless, these sites diminish the revenues of this corporation. Moreover, it is possible that a new company can enter this industry, and it can change the standards of social networking. Therefore, it is possible that this organization will eventually erode the market share of Facebook. Again, one should keep in mind that this industry is extremely changeable, and businesses should focus on innovation to remain sustainable. At a certain point, Facebook displaced MySpace that was the most popular social networking site. So, the management of this corporation should not overlook this danger.
To a large degree, these examples suggest that the senior executives of Facebook should ensure that the company retains such an attribute as resilience. This quality can be described as the ability to withstand various external stressors. It is essential for minimizing potential impacts of external threats. In part, this goal can be achieved by diversifying the sources of revenues. Furthermore, they should demonstrate that their company can create value for advertisers.
Evaluation of leadership practices
Strengths of leadership practices
At this point, one should assess the leadership practices adopted by Mark Zuckerberg. It is possible to apply the functional leadership theory. According to this model, researchers should not focus on the inherent traits of people who run various organizations (Behling & Rauch, 1985, p. 51). Instead, more attention should be paid to the roles that these individuals should play (Behling & Rauch, 1985, p. 51). At first, leaders should focus on the tasks that are essential for the proper performance of an enterprise. They should remember that this goal cannot be achieved only one person. In the majority of cases, he/she requires the assistance of followers.
So, this professional should ensure that the group can operate efficiently. The leaders should focus on such aspects as identification of goals, synergizing the skills of workers, motivating these people, and acting as role models (Behling & Rauch, 1985, p. 51). This framework can apply to the practices adopted by Mark Zuckerberg and his colleagues.
One can distinguish several positive aspects of the method adopted by this organization. At first, much attention should be paid to the empowerment of workers. In particular, this approach is useful for ensuring that each employee can demonstrate his/her skills and talents. Moreover, these practices help this business make the necessary improvements as soon as possible. However, the main positive effect is that the management can integrate the skills of different participants. It is one of the priorities included in the functional leadership theory.
There are other positive impacts of this approach. The employees of Facebook can feel more motivated and satisfied with their jobs. This outcome can also be attributed to the policy of empowerment. In particular, they will see that their creative initiatives will not give rise to the criticisms of senior executives. In part, this result can also be attributed to the meritocratic approach advocated by Mark Zuckerberg.
The employees can see that their contributions will not be overlooked by the management. This opportunity is of great importance to talented candidates who want to join the company. One should note that these people do not assess only the compensation offered by employers. They also take into account the competitive environment of these businesses. From a functional perspective, work environment should be one of the main issues for leaders (Behling & Rauch, 1985, p. 51).
Finally, the practices adopted by Mark Zuckerberg can result in the creation of a shared culture. It means that workers and business administrators have common values, goals, and attitudes. This outcome can be explained by the openness of leaders and their regular interactions with workers. In addition to that, employees can fully understand the objectives that senior executives set. Facebook can be regarded as a flat organization in which high-standing managers and workers are not separated by bureaucratic barriers. Overall, these outcomes are consistent with the principles included in the functional theory of leadership. Thus, it is possible to say that leadership practices of Mark Zuckerberg have brought considerable benefits to this corporation.
Indeed, the policies adopted by Facebook exemplify some of the best practices used by modern leaders. Nevertheless, it is not permissible to overlook some shortcomings of the policies taken by Mark Zuckerberg. In particular, one can speak about the failure to meet the interests of different stakeholders. One can argue that in some cases, Mark Zuckerberg departs from the conventions accepted by corporate managers.
For instance, it is possible to mention the acquisition of such businesses as Oculus Rift and WhatsApp. In the first case, Mark Zuckerberg did not even consult the board of directors. Additionally, he did not entirely explain the reasons why the company chose to pay $ 16 billion for WhatsApp. This behavior can be emulated by some executives or managers. The problem is that they can make dangerous errors. They should not forget about the so-called attribution bias. As a rule, people tend to explain their successes by focusing on their strengths, talents, and skills. They usually prefer to overlook the importance of luck (Hales & Johnson, 2014, p. 51).
In contrast, they believe that their failures are caused by some insurmountable and unpredictable circumstances. They do not accept that these results could be explained by their errors (Hales & Johnson, 2014, p. 51). In turn, these people may become convinced of their infallibility. This behavior can be emulated by other leaders of Facebook. As a result, the corporation can make investments that will not be justified in the long term. According to the functional theory, a leader should act a role model for others. However, in some cases, Mark Zuckerberg can set a negative example for his followers.
As it has been said before, the company adopts a meritocratic approach to the promotion of potential leaders. Moreover, they can quickly raise their status in the workplace hierarchy. Apart from that, these people can take the positions of managers. This rotation can lead to frequent changes in the practices and policies of business units. However, this inconsistency can adversely influence the performance of workers. The problem is that they will continuously need to adjust to changing performance standards and goals set by the management.
Admittedly, these weaknesses have not fully manifested themselves. However, these risks should be taken into consideration by the leaders. According to the functional theory, a group of people should reach a certain level of maturity to work efficiently (Behling & Rauch, 1985). In other words, employees should get used to workplace procedures and rules. Moreover, they should anticipate the requirements of leaders. Nevertheless, this maturity may not be achieved.
In turn, one can mention the third potential weakness of the leadership practices adopted by Mark Zuckerberg. This policy can lead to the lack of accountability. For instance, one can mention the rule according to which employees can choose the projects that appeal to them. Nevertheless, this practice can contribute to the lack of coordination. Additionally, it can cause conflicts among leaders and employees.
One can offer several suggestions that can maximize the success of Facebook. At first, Mark Zuckerberg and other leaders of Facebook should increase the accountability of their work. They need to explain the rationale for their decisions to the board of directors as well as potential investors. This attribute can eliminate possible mistakes and increase the compliance with various ethical rules (Ehrich, Harris, Klenovski, Smeed, & Ainscow, 2015).
Secondly, they should identify clear criteria that enable people to raise their status in the workplace hierarchy. This precaution can reduce the risk of internal conflicts in this enterprise. Finally, this organization should cooperate with various stakeholders such as advertisers and customers. In this way, they can ensure that online commercials placed at Facebook have a greater CTR.
Overall, efficient leadership practices can be viewed as critical factors that contribute to the long-term sustainability of an enterprise. The recommendations included in this paper are based on the premises incorporated in the functional leadership theory. This approach can reconcile two priorities, namely the need to empower workers and their accountability. By focusing on these goals, Mark Zuckerberg can improve the performance of Facebook.
Behling, O., & Rauch, C. (1985). A Functional Perspective on Improving Leadership Effectiveness. Organizational Dynamics, 13(4), 51-61.
Ehrich, L., Harris, J., Klenovski, V., Smeed, J., & Ainscow, M. (2015). Ethical Leadership in a Time of Increasing Accountability. Leading & Managing, 21(1), 22-35.
Hales, S., & Johnson, J. A. (2014). Luck Attributions and Cognitive Bias. Metaphilosophy, 45(4/5), 509-528.
Hubbard, G., Rice, J., & Galvin, P. (2014). Strategic Management. New York, NY: Pearson.
Investor Relations. (2015). Facebook Reports First Quarter 2015 Results. Web.