Socio-Economic-Legal Environment of Facebook

Running Head: SOCIO-ECONOMIC-LEGAL ENVIRONMENT
0
Facebook
SOCIO-ECONOMIC-LEGAL ENVIRONMENT
6/1/2019

The report has been prepared so that the socio economic and the legal implications of the Facebook
can be ascertained. There are many factors that are affecting the growth and the development of the
Facebook. In this report there are the various factors has explained and through which it is evaluated
that the political factors affecting the business at the large context. If any policies made by the
government is in the favor of the company then growth can be seen and if not then vice versa. It has
been evaluated that Facebook Inc. has taking the high growth so there are many economic trends and
the conditions which affect the company. There are various economic drivers which affects the
business activities. The platform of the Facebook is very huge which contributes to the economy of
the country. It operates various functions so it affects the economic conditions of the Facebook. The
Facebook has improved its quality standards of the services and also satisfying their customers by
displaying the advertising services. The company can also earn the high profit through the retail sales
marketing as increasing online business. There are many factors that affects the political market such
as the risk of the military invasion, political stability in the economy, level of corruption in the
country, intellectual property protection,. Trade regulations, taxation rates incentives, etc. The
performance of the organization is also get affected by the big and the small political factors.

Contents
Introduction......................................................................................................................................3
Literature Review on Knowledge economy and various drivers of economic change...................5
Macro and micro factors that affects the business...........................................................................7
Impact of the legal framework and political factors........................................................................7
The political factors that affect Facebook.......................................................................................9
Implications of ‘sharing economy’ for your chosen organization.................................................11
Formal and informal legal systems and anti-trust laws.................................................................12
Impact of the social factors on the development and the growth of the Facebook.......................13
Case study......................................................................................................................................15
References......................................................................................................................................18

Introduction
Facebook is the social networking sites which were founded on February 4, 2004. In Cambridge,
Massachusetts, the company was founded 15 years ago. The company has the headquartered in
Menio Park, California, the U.S. The services of Facebook are served globally in the worldwide
area. The founder of the company was Mark Zuckerberg who is the Chairman and the CEO. It is
the social media company which is considered as the fourth biggest technology company
(Rauniar, et al, 2014).
Earlier when the company was founded, the website's membership is given to the limited people
such as Harvard students and subsequently to the Columbia students. But later on, it has
expanded to the Ivy League schools, MIT, etc. IN the year 2006, any user any register to the
Facebook who has the age of the 13 years old. The company held its IPO in 2012 and the value
of the company at $104 billion. With the connectivity of the internet, only Facebook can be
accessed. The users can reveal their personal information and create a customized profile. The
company has a huge operating profit in the year 2018 with US$24.913 billion. The revenue of
the company was US$55.838 billion.
There is the positive and the negative impact of the socioeconomic trend in the country such as
Facebook is very helpful in maintaining the relationship with the friends and family but it also
gas the negative impact that it has created the health problems for the users who use Facebook in
the excess manner (Hamari, et al, 2016). The low academic performance has also seen through
Facebook. In the global economy, Facebook is creating jobs for many people and also providing
much important information through social media sources. To reach a large number of people it
is the best social media source but if the people use it frequently then they can become
narcissistic. So there are many socio-economic trends which affect Facebook which will be
explained in this report.
In this report, the implication of the sharing economy on Facebook will be explained. In this
report, for the economic growth and the development of the company many political factors will
be explained which has to be complied with the company to achieve higher profits. As the
company is rising so there was a lot of the economic issues which the company has to face so
they incurred a huge loss which cost millions in the foreign currencies (Van Dijck, 2013). Due to

the increase in the demand of the mobile services the use of the internet has also increased which
helps in increasing the economic growth of the company. The saving rate, inflation rate, interest
rate, foreign exchange rate, and the economic cycle affect Facebook. The personal information of
the people is getting disclose through Facebook so the legal issues are also taken against that.

Literature Review on Knowledge economy and various drivers of economic change
In the economy, Facebook Inc. has to take high growth so there are many economic trends and
the conditions which affect the company. There are various economic drivers which affect the
business activities which are stated below:
Increasing stability of the developing countries: As per the author (Bakir and McStay, 2018),
the Company has increased its market penetration which results in increasing their stability. The
platform of Facebook is very huge which contributes to the economy of the country. It operates
various functions so it affects the economic conditions of Facebook. Facebook also get affected
by the purchasing power and the consumer pattern in the country. As now developing countries
have enough money that they are using Facebook and have the ability to use the device of
Facebook. The global market is influenced by the environment so the economic growth in the
company can be seen when Facebook will enhance more.
The rapid economic growth of the countries: As per the author (Kenney and Zysman,2016),
there are many countries which are developed and there are still some countries which are
developing so the use of the Facebook in those countries are done at the huge level. Through
Facebook, many important data and information can be accessed and it is the main sources
through which a large number of the sectors can be gathered. So it also helps in increasing the
rapid growth of the country (Nadkarni and Hofmann, 2012).
Increasing disposable incomes: When the disposables incomes of the person increase in the
economy then they start using the income in the different sources. So when the income of the
person rises they start using in accessing Facebook. At the free time, they used to scroll the
social media to contact their friends and to know about what is happening in the country. So
increasing disposable incomes has increased the use of Facebook which also leads to the
economic growth of the country.
Losses of $100 million USD: According to the author (Eesley and Miller, 2018), the Company
has lost the US $100 Million worlds widely. As the company, Facebook continues to rise so they
have incurred many expenses and the cost. As the company is rising so there was a lot of the