Management Perspectives on Facebook Inc.: A Case Study (MGMT 11)

This report presents a case study on the management of Facebook Inc., examining its corporate governance, leadership, and operational challenges. The report begins with an overview of Facebook, its mission, and products, followed by a justification for selecting Facebook as the subject of the case study, highlighting its significant impact on society and the ethical concerns surrounding data privacy and misinformation. The methodology section outlines the qualitative research approach, including literature reviews and company document analysis. The study then delves into the roles and functions of management within Facebook, focusing on the responsibilities of key executives and the structure of the board of directors. The report identifies critical management problems, such as information security breaches, the spread of misinformation, and ethical lapses, attributing these issues to a lack of foresight and an overemphasis on growth. The analysis extends to Facebook's ethical conduct and diversity initiatives, noting shortcomings in the representation of women and minority groups at the leadership level. The report concludes with recommendations to address these issues, including updating ethical guidelines, sharing power more equitably, increasing diversity in top management, improving information security, and proactively managing risks associated with propaganda and misinformation. This report is a valuable resource for students studying leadership management, corporate governance, and ethics in the digital age.

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Management Perspectives
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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Company Overview: Facebook Inc........................................................................................2
Justification for choice...........................................................................................................3
Methodology..........................................................................................................................3
Research method................................................................................................................3
Data collection technique...................................................................................................4
Data analysis and interpretation.........................................................................................4
Role and functions of management in Facebook Inc.............................................................4
Management problem in Facebook Inc..................................................................................5
Ethics and Diversity in Facebook Inc....................................................................................6
Recommendations..................................................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
Management of a company is not limited to the day-to-day running of the
organization’s work or managing the people or any crisis (Ahlquist, 2014). It also includes
foreseeing any possible damage or risk that the company might me facing in near future.
Successful leadership lies in the fact that the managers are able to foresee any impending
doom and act accordingly (Summerfield, 2014). With the advancement of technology, social
media has become one of the most powerful entity in the world and among them Facebook is
the most popular social media platform in the world. Mark Zuckerberg and some of his
associates founded Facebook Inc. in the year 2004. The company’s mission is to build
community and bring people closer. In this report, a case study has been developed on the
management of Facebook and the problems regarding governance, management, security and
diversity that are underlying there and recommendations have been made.
Discussion
Company Overview: Facebook Inc.
Billions of people all over the world use Facebook to connect with their friends and
family they get regular updates and news about the recent changes in the world. They also
share their experience and interests with people through it. They have more than thirty nine
thousand employees. Their products include Facebook, Instagram, WhatsApp and
Messenger. More than 2.1 billion people use these products all over the world to stay
connected (Company Info | Facebook Newsroom., 2019). Their headquarters is located in
California. They have several offices all over the world and many other data centers. Their
organizational culture is to create platforms for people to share their thoughts, interests and
emotions. The teams in Facebook work constantly to solve any problem that arise, keep the

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system updated and ensure data safety. Mark Zuckerberg, the founder, Sheryl Sandberg, the
Chief Operating Officer, David Wehner, the Chief Financial Officer and Mike Schroepfer,
the Chief Technology officer, lead the company. Peggy Alford of PayPal Holdings, Marc
Andreessen of Andreessen Horowitz, Kenneth Chenault, the general director of General
Catalyst, Susan Desmond-Hellmann of Bill and Melinda Gates Foundation, Peter Thiel of
Founders Fund and Jeffrey Zients of The Cranemere Group are also included in the board of
directors, though, Zuckerberg holds the greatest voting rights and powers.
Justification for choice
Facebook Inc. has been chosen for the case study because the company has immense
effect in the recent trends and market. It has the ability to change people’s views and opinions
drastically (Bollmer, 2016). The company also handles a vast amount of people’s personal
data and information for which the company has faced many ethical issues over the decade.
Moreover, many organizations use the business platforms of Facebook to promote their
products and services for which it has become an important media for business
communication (Baldonado, 2015). As the company grows, the management and the
governance face many issues, as is the case of Facebook.
Methodology
Research method
Qualitative Research is adopted for the case study. The study is an exploration of
different journals and articles as well as company documents through which a deeper
understanding of the subject is achieved. This research method enables one to understand the
problems inside the company, its governance and management. The method of qualitative
research adopted here is a case study research, which focuses directly into the inner workings
of the company and tries to determine the issues related to it. Quantitative research is not

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possible in this case as sample size and collection of data will be too obstructive and difficult
to gain.
Data collection technique
In order to build the case study a literature review has been conducted. Several
academic journals have been analyzed and the opinions have been integrated into the case
study. Moreover, company documents and memorandums have been explored in order to
understand the mission and vision of the company (Noble & Smith, 2014). The roles and
responsibilities of the management and the ethics and diversity of the organization. The
company website gives the necessary statistics and recent changes in the organization, which
adds to the relevancy of the case study. This method of data collection is suitable for the
development of a case study as it gives an in-depth knowledge of the company and its
underlying problems.
Data analysis and interpretation
Content analysis has been chosen as the data analysis method. It is a widely used
method of qualitative research. The articles, journals and company documents have been
analyzed with this method in order to interpret the meanings and the opinions presented by
different experts (Finfgeld-Connett, 2014). Through the thematic and content analysis of the
journals and articles we have tried to determine the underlying problems in the governance of
the company, the management issues and the leadership problems. Moreover, the corporate
governance of the company is also analyzed to determine the extent to which they have
diversity and ethics ingrained into their governance.
Role and functions of management in Facebook Inc.
The corporate governance guidelines of the company has been prepared in such a way
that it shows a commitment towards good practices (Banerjee, 2015). The company

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encourages effective practices in policy and decision-making. The corporate governance of
the company is created in such a way that the interest of the stakeholders are upheld. The
board of the directors have several functions. They are the advisors of the management team
and they monitor the performance of the management. The chairperson, Zuckerberg, sets up
the overall direction as well as product strategy (Syed, 2017). He leads the development and
design department and is the head of technological division as well. Sandberg is the
supervisor of the business operations of the firm. Wehner leads the finance, facilities as well
as information technology. Mike leads the teams that enable the users to connect to the world
as well as the technological division (Hoffmann, Proferes & Zimmer, 2018). Most of the
decision-making power lies with the Chairman. There is also a lead independent director who
is responsible for conducting board meetings, liaison with the chairperson, management by
communicating and giving him proper feedback, overseeing the meeting agendas,
communicating with the stockholders, leading the board and retaining the advisors. We saw
that the selection of board members is done through election though; the major stockholder
Zuckerberg has the greatest control over the decision (Gio & Yazdanifard, 2015). The
performance of each board member is conducted annually through a self-assessment process,
led by the Lead Independent Director. The policies and guidelines of the corporate
governance and Audit and Risk are reviewed each year and updated as per necessity.
Management problem in Facebook Inc.
The most crucial problem that Facebook encounters now is the question of
information security and misinformation. Recently the company was accused of deliberate
overlooking regarding the user’s personal information and failure to stop or control the
spread of misinformation and propaganda (KANTER, 2018). The leaders of the company,
Mark Zuckerberg and Sheryl Sandberg explained the scenario as innocent mistakes or naiveté
to us and everybody else. They said that they were optimistic leaders who did not see how the

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social media could be used to twist and misuse information and opinion. This is actually is
not the case. It is evident to me that leaders like Zuckerberg and Sandberg would not be that
naïve not to think about the possible repercussions of the data that they were collecting.
Neither is it commendable action for them to be that optimistic and trusting that nobody
would do any harm (Facebook’s Leaders Didn’t Get It and Still Don’t., 2019). The issue of
information security should have been their prime concern. What really happened at
Facebook Inc. is a great failure of their management.
Facebook Inc. has always focused on growth. They have been able to achieve that in
just a decade with their competitive polices, highly upgraded designs and appealing to the
people’s inherent hunger to stay connected. While pursuing these goals they have overlooked
the most important factor that makes or breaks a business, that is, trust. Due to this, Facebook
was used by Russian Propagandists to disrupt election campaigns. This disaster created a
break of trust among the people and users felt betrayed that they personal information has
been jeopardized as such. The top management failed at first to take heed of the warnings that
were there in their plain sights. Later on when it seemed that this might get them into trouble
they concealed the warnings and failed to contain the situation or minimize risks (Frenkel et
al., 2018). The important decisions related to security and policy were passed on to
subordinate managers, as the leaders got busy with their pet projects. When accused, they
tried to mask the severity of the situation and deflected blame. Facebook has been used
repeatedly for hate and racial propaganda, which should have warned them long ago. The
problem remains with the management’s inability to stand up to their responsibilities.
Ethics and Diversity in Facebook Inc.
The code of conduct for the corporate governance of the company states that all the
employees and the directors were expected to act lawfully and ethically. Issues like public

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disclosure of information on Facebook and its users, financial integrity, confidentiality, data
protection, asset protection and retaliation prohibition falls under this code of conduct
(Georgalou, 2016). Despite the detailed and seemingly long ethical guideline, the company
failed to prevail as the top managers overlooked the ethical issues related to information
security and propaganda in order to achieve growth. The top executives also behaved harshly
with any of the directors or management that had tried to address the issue when it occurred.
The 2019 diversity report of Facebook claims that they are working to create diversity
in their workforce. They have included more people from colored background, different
experiences and backgrounds, more minority community people in the company (Facebook
2019 Diversity Report: Advancing Diversity and Inclusion | Facebook Newsroom. 2019).
That being said, the composition of the board of directors and top executive shows a different
picture. Among the four top executives, there is only one women representative while in the
board of directors there are only three women representative among eight people. This clearly
indicates that they are far from achieving actual diversity in their top management.
Recommendations
Looking at the scenario in Facebook and their present situation in ethical practices
and corporate governance the following recommendations can be made:
 The company should review and update the ethical guideline and code of conduct in
order to revisit the visions that they had set themselves (Brown, 2018).
 The power should be shared more equally. Directors should have more power or say
over important issues. Centering power in to one hand, Zuckerberg in this case, leads
to chaos and mismanagement (McCahery, Vermeulen & Hisatake, 2013).
 The representation of women at the top executive level should be increased. This will
ensure that a more diverse management system id guiding the company.

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 There have been much uproar on removing Sandberg from the chief executive
position. Changing some of the top executives and retaining the loyal members might
be beneficial for the company.
 Creating a more secure system to protect information of the users will help them gain
their trust (Gorwa, 2019).
 Owning up to their mistakes and creating a risk management plan in order to ensure
that the social media site is not used for propaganda should be ensured.
 The executives must remain vigilant at all times about any warning signs. As they are
dealing with a lot of sensitive information they must ensure that they remain secure
(Matamoros-Fernández, 2017).
Conclusion
From the above discussion, it is evident that despite being the leader in the social
media sector, Facebook remains far behind when it comes to governance and information
security. As the users all over the world grows restless and distrustful towards them, it is high
time that they create a viable and transparent code of conduct as well as risk mitigation plans
so that the disasters can be minimized. They must also ensure that they improve their
standing in ethical governance and diversity. Creating such changes will create positive
impact for the organization.

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References
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Brown, G. (2018). Facebook's light approach to corporate governance. LSE Business Review.
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https://newsroom.fb.com/company-info/
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(2019). Retrieved 21 October 2019, from
https://newsroom.fb.com/news/2019/07/2019-diversity-report/
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sandberg-didn-t-get-it-and-still-don-t
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Frenkel, S., Confessore, N., Kang, C., Rosenberg, M., & Nicas, J. (2018). Delay, deny and
deflect: How Facebook’s leaders fought through crisis. New York: New York Times
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