Analysis of Facebook's Cambridge Analytica Data Scandal.

This case study delves deep into the approaches undertaken toward practicing corporate strategic management in the Facebook-Cambridge Analytica Data Scandal. It discusses the insight into the scandal, process, news coverage, handling of the issue, critical response, conclusion, and recommendations.

Running head: MANAGEMENT
Analysis of the hot topic related to corporate strategic management: A case study of
Facebook’s Cambridge Analytica Data Scandal
Name of the student:
Name of the university:
Author note:

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Table of contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Insight into the scandal...........................................................................................................2
Process....................................................................................................................................2
News coverage.......................................................................................................................3
Handling of the issue..............................................................................................................4
Critical Response...................................................................................................................5
Conclusion..................................................................................................................................5
Recommendations......................................................................................................................5
References..................................................................................................................................7

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Introduction
Scandals degrade the reputation of the companies and organizations. As a matter of
specification, scandals spoil the stability in the relationship between the personnel with the
stakeholders and shareholders. The approach stains the parameter of Public Relations (PR),
shunning the chances of getting aids, assistance and support towards restoring the lost
honour, justice and respect (Bbc.com 2019). Scandals attaining the media coverage indicates
the incapability of the managers in controlling the operations. Moreover, it reflects the non-
compliance towards the employment legislations. This assignment takes up the issue of
Facebook- Cambridge Analytica Data Scandal for delving deep into the approaches
undertaken toward practising corporate strategic management.
Discussion
Insight into the scandal
Facebook-Cambridge Analytica Data Scandal degraded the stability in the political
parameter in the era of 2018. The scandal took place after the accusation regarding forcibly
using the personal data of the Facebook customers without their consent. The personal data of
the customers were used for political purposes, which reflects deceives from the promises and
assurances (Theguardian.com 2019). This deceive contradicts the aspect of public welfare in
terms of the understanding related to preservation of privacy, security and confidential within
the data. As a result of these claims and accusations, there was noticeable decline in the
shares and stock prices of Facebook. Decline in the shares compelled the government to
impose strict regulations regarding the usage of data within the workplace.
Process
The instance of illegal utilization of data first came to the limelight in the era of 2015
by Harry Davies, a journalist of The Guardian (Theguardian.com 2019). According to his

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reports, Cambridge Analytica worked for US Senator Ted Cruz by hacking the personal
Facebook accounts of millions of customers. The management of Facebook complete expose
lackadaisical approach in terms of contentment at the investigation process. As a sequential
step, the incident of scandal found its mention in the reports of Swiss publication, Das
Magazin, The Guardian and The Intercept. As per the revelations of Businessinsider.in
(2019), none of the articles upholds the claims of Facebook personnel.
In the era of 2018, the issue assumed the shape of a scandal through the misdeeds of a
whistleblower, an ex-Cambridge Analytica employee, Christopher Wylie. Until the Brexit
issue, he remained anonymous. On March 17, 2018, the news came to the forefront through
the publications of three news organizations, which has mixed reactions in the public.
Facebook encountered a loss of $100 billion in the share price (Washingtonpost.com 2019).
The politicians in UK and USA demanded concrete answers from Mark Zuckerberg
regarding the future course of actions for handling the situation. The scandal pressurized him
towards agreeing to the United States Congress.
News coverage
According to the BBC revelations, Cambridge Analytica attains the status of a
“scapegoat”. The claims and accusations within this was the violation of the Facebook
policies. Cambridge Analytica, who worked under the election campaign of Donald Trump
approached the Conservatives, who worked under David Cameron’s leadership (Ft.com
2019). The party rejected the claims and accusations at the initial stage. Cambridge Analytica
indulged in contract with the Ministry of Defence, Home Office and Foreign Office. One of
the fortunate issues was that the contract ended before the scandal, which is an indication
towards preservation of the reputation of these Offices.

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Mention can be made of one of the claims of a Facebook employee regarding the
“wild west approach”, which is against the caring and understanding approach needed for
catering to the wellbeing of the public (Cnbc.com 2019). Upon investigation, it was found
that the control measures, in case of the Digital, Culture, Media and Sports were limited in
terms of discovering abuse or dealing with the malice of abuse. Secret methods were used by
Channel 4 for recording the suspension of Alexander Nix, the firm’s chief executive. The
claims and accusations in this case was that the firm possessed alliance with the digital
campaign run by Donald Trump in the elections of 2016.
In the interview of Radio 4, the shocking instances, as a result of the programs gains
limelight. Dr Kogan grabs the attention of the readers regarding his treatment as a
“scapegoat” from Facebook and Cambridge Analytica. According to him, this is illegal in
terms of the plans for doing something creative (Theverge.com 2019). Assurance from
Cambridge Analytica regarding the smooth functioning of the activities nullifies the
transparency, which is crucial for gaining trust, loyalty and dependence from the clients.
Handling of the issue
Mark Zuckerberg apologized at an interview with CNN stating that the scandal was a
“breach of trust.” In addition to this, he made Cambridge Analytica realize the importance of
right to access in case of utilizing the data. Other Facebook officials proposed arguments
regarding the breach of data, as the officials consented for disseminating the information to
the personnel taking the quiz. Zuckerberg promised for reforms in the security policies for
averting the risks of such breaches in the future (Theconversation.com 2019). On March 25,
2018 Zuckerberg proposed his apology in the form a letter to the newspaper agencies. In
April, decisions regarding implementation of European Union General Data Protection
Regulation were carried out on all the operation areas.

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Critical Response
Being a public social networking service provider, Facebook takes pride in sharing
the same place along with the four major technology companies- Amazon, Apple and
Google. Attaining the status of a market leader, indulge in such scandals is a huge loss for the
productivity. Instead, it puts the security of the customers’ data at stake, aggravating the
complexities of the cybercrimes (Theverge.com 2019). Alliances are vital in terms of
expanding the scope and arena of the business. However, it needs to be executed according to
the terms and conditions of the contracts. Transparency helps brands like Facebook to indulge
in fair competition with the contemporary brands like Google, Amazon and Apple. This
transparency seems to be missing in case of the alliance with Cambridge Analytica, which
assumed the shape of a scandal. This scandal, degraded the hard earned reputation, resulting
in noticeable decline in the share prices (Ft.com 2019).
Conclusion
The scandal of Cambridge Analytica degraded the reputation of Facebook in the form
of declining stock prices. Most importantly, the loss was in the personal data of the
customers, nullifying the aspects of security, privacy and confidentiality. Breaching the anti-
trust laws reflects negligence towards ensuring the welfare of the customers. One of the
striking features in this is the misutilization of customer data for political purposes, shunning
the aspects of trust, loyalty and dependence in case of the customers. This is an unethical
approach, indicative of destruction of stability in the public relations.
Recommendations
In order to avoid such scandals, adherence to the terms and conditions is required.
Mention can be made of Data Protection Act (1998), which would act assistance in
preserving the confidentiality in the responses of the clients and the customers. Along with

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this, reference can be cited of Computer Misuse Act, which would avert misutilization of the
properties. Inspections from the board panel would be a wise step towards inspecting the
systems. Maintaining consistency in these inspections would act as a cornerstone in averting
the instances of virus attacks and malfunctions.

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References
Bbc.com 2019. Facebook data row: Cambridge Analytica academic a 'scapegoat'. Available
at: https://www.bbc.com/news/uk-43480978 [Accesed on 29th Jan 2019]
Businessinsider.in 2019. Facebook approved fake political ads 'paid for' by Cambridge
Analytica. Available at: https://www.businessinsider.in/Facebook-approved-fake-political-
ads-paid-for-by-Cambridge-Analytica/articleshow/66447635.cms [Accessed on 29th Jan
2019]
Cnbc.com 2019. Facebook-Cambridge Analytica: A timeline of the data hijacking scandal.
Available at: https://www.cnbc.com/2018/04/10/facebook-cambridge-analytica-a-timeline-of-
the-data-hijacking-scandal.html [Accessed on 29th Jan 2019]
Ft.com 2019. Facebook formally fined £500,000 for Cambridge Analytica scandal. Available
at: https://www.ft.com/content/2f4593ee-d832-11e8-ab8e-6be0dcf18713 [Accessed on 29th
Jan 2019]
Theconversation.com 2019. Cambridge Analytica scandal: Facebook’s user engagement and
trust decline. Available at: http://theconversation.com/cambridge-analytica-scandal-
facebooks-user-engagement-and-trust-decline-93814 [Accessed on 29th Jan 2019]
Theguardian.com 2019. Facebook fined for data breaches in Cambridge Analytica scandal.
Available at: https://www.theguardian.com/technology/2018/jul/11/facebook-fined-for-data-
breaches-in-cambridge-analytica-scandal [Accessed on 29th Jan 2019]
Theverge.com 2019. Cambridge Analytica: all the news about Facebook’s data privacy
scandal. Available at: https://www.theverge.com/2018/3/19/17141266/facebook-cambridge-
analytica-user-data-donald-trump-campaign-2016-election [Accessed on 29th Jan 2019]

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Washingtonpost.com 2019. It’s about time’: Facebook faces first lawsuit from U.S.
regulators after Cambridge Analytica scandal. Available at:
https://www.washingtonpost.com/technology/2018/12/19/dc-attorney-general-sues-facebook-
over-alleged-privacy-violations-cambridge-analytica-scandal/?
noredirect=on&utm_term=.ac1321028ea6 [Accessed on 29th Jan 2019]