Strategic Management Report: Facebook's Evaluation and Analysis

This report provides a comprehensive strategic analysis of Facebook, examining its current strategies, including a critical evaluation and recommendations for improvement. It delves into the external environment using PESTLE and SWOT analyses, assessing political, economic, social, technological, legal, and environmental factors impacting the company. The report evaluates Facebook's risk management processes within strategic planning, particularly focusing on data protection. It also explores stakeholder theory, identifying and analyzing relationships with various stakeholders, and examines Facebook's Corporate Social Responsibility (CSR) strategy. The analysis provides insights into Facebook's operations, challenges, and opportunities for strategic enhancement.

Strategic
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
1 A) Re-evaluating Strategy of Facebook, Its Critically Analysis and Considering the
Optimum Approach for Facebook..............................................................................................1
1 B) Analysis of External Environment of Facebook.................................................................3
2 Critical Evaluation of Facebook's Risk Management in the Strategic Planning Process........5
3 A Stakeholders Theory, Identification and Justification of each Stakeholder and Critical
Analysis of their Relationships...................................................................................................6
3 B Explanation of Corporate Social Responsibility and Explanation of Facebook's CSR
Strategy Framework....................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic Management can be defined as the continuous process of planning, monitoring,
controlling, analysing and undertaking all those necessary activities which helps the organisation
in achieving their goals and objectives. The following assignment is based on the Case Study of
Face book Company which was founded in the year 2004 and is headquartered in Cambridge.
The is company is providing Facebook Messenger which provides the facility of interaction to
people with others in the whole world. This assignment will focus on evaluating the current
strategy to data protection of Facebook and will also critically evaluate it. It will also provide an
optimum approach which the company can make use of for filling the loopholes I their earlier
approaches (Aguinis, Edwards and Bradley, 2017). In addition to this, the assignment will also
focus on the external environment of the organisation and make the reader aware about the
impact of these factors on the working of the organisation. Further the assignment will also focus
on the critical evaluation of the company;s risk management in the strategic planning process.
Moreover the assignment will also provide an understanding about the stakeholder theory and
will provide justification about the stakeholders of the company. It will also critically analyse the
relationship of the company with their stakeholders. At last the assignment will put into light the
Corporate Social Responsibility of Facebook and will critically analyse it.
MAIN BODY
1 A) Re-evaluating Strategy of Facebook, Its Critically Analysis and Considering the Optimum
Approach for Facebook
Facebook is currently making use of Top Down Approach in order to deal with the
situations that the company comes across and to ensure proper and smooth working of an
organisation. In accordance with this approach, the planning is done on centralised base where
all the right to make decisions are in the hands of main head (Ansoff and et. al., 2019). This
process is followed in a centralise company and in a decentralised the company the main head
provides divisions and guidelines to lower level managers and asks from them about plans.
Advantages:
 Easy and quick implementation of decisions.
 Helps in aligning the project goals with that of organisation's strategic goals.
 Enhances the team work and coordination among them
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 It also makes improvement in the communication and team building of the team members
and as well as employees.
Disadvantages:
 Lack of team involvement in Planning
 This approach is insufficient to deal with emergent situations in which the company
needs immediate actions.
 Planning phase is very time and cost consuming (Baumgartner and Rauter, 2017).
Due to these ill effects of the approach, the company is unable to provide their users with
sufficient facilities and is also not capable of dealing to emergent situations. In this regard, the
recommendation is given to the company about the use of a different approach which consists of
all approaches which hare planned, emergent and incremental.
Planned Approach: The following approach clearly sees the difference between the present and
desired state, along with this it also provides the way by which the future objective could be
achieved or task can be completed. For example, Facebook can make use of planned approaches
in its working to make possible the growth and development of the organisation.
Emergent Approach: The following approach is about developing strategies to deal with
unpredictable situations. This approach can be applied to the situations in which the company
needs to take immediate actions as in the case when the data was breached and company took the
action of logging out all the users from their account.
Incremental Approach: In this approach, the changes are made according to goals and
objectives and strategies in relation to current operations. This approach makes changes in the
operations of the organisation in accordance with the change in their goals and objectives.
The new approach which can be adopted by Facebook in relation to their strategy development is
explained as under:
Process Approach: The following approach can be adopted by the company in their working
which will help the company in formulating more and better strategies so that the problems faced
by Facebook recently may not repeat again. Under this process, planning and strategy is done by
a series of activities performed in an organisation. On the very basis the related problems are also
assessed. The focus and main scope of this approach is to include all the activities leading to the
identification of the strategy as well as choosing the right strategy also.
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The following approach is chosen because it eradicates the problems which the company
was foreseeing in the last approach used (Bergh and et. al., 2016). As the approach takes into
consideration all the activities related to strategy so it also comes to know about its results in
future and by this it will be able to future strategies also in case of any emergent situation.
1 B) Analysis of External Environment of Facebook
In order to analyse the impact of external environment on the working of Facebook, the
use of PESTLE Analysis will be done. This framework is used in order to analyse the impact of
macro environmental factors on the working of an organisation. The explanation of which is
provided as under:
Political Factors:
These are the factors which impacts upon the working of an organisation due to
intervention of government. The factors which are included are political instability or stability,
corruption, tax policy, labour law, trade restrictions. For example, the use of Facebook is banned
in countries like China and North Korea so as to prevent the people from being united. It creates
negative impact upon Facebook as the source of income of the company is adversely affected.
Users and government have been expressing privacy concerns which could harm the company's
strategy to use users information to deliver effective advertisement. Due to political stability in
UK, it has been widely accepted by the people of that country which is a positive impact on the
working of Facebook.
Economical Factors:
These are the factors which are impacts upon the working of an organisation due to
changes in interest rates, inflation rates, exchange rates, disposable income of customers and
unemployment rates. For example, the company is having years recorded strong growth rates in
different countries and they also highlights the company's capability to drive growth and being
the leader of market it has also made its platform for social network advertising (Certo and et. al.,
2016).
Social Factors:
These factors includes the impact of social factors on the working of an organisation. It
includes belief,s moral values, ethics, cultures of the people living in a society. For example,
factors such as education level of majority of the population of an area or society will affect the
use of Facebook as the educated ones will know about the use of this social media app but the
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illiterate ones will not aware about its uses. As the company is having opportunity to provide
high quality services to their users and can also increase its contribution towards corporate social
responsibility.
Technological Factors:
When due to some change in the technology whether positive or negative, the impact
created by this incident on the working of an organisation is covered under Technological
Factors. For example, it is an opportunity for the company to adopt the ongoing trends in the
market so that it become convenient for the customers to make their access possible to Facebook
(Engert, Rauter and Baumgartner, 2016). Hence, it will increases revenues of the company. The
increase in use of mobile devices is an opportunity for the company as it will positively impact
on the company but on the other side diversification of online retail firms and increase in the
number of social media firms is a threat for Facebook.
Legal Factors:
These are some special rules and regulations which are made by the government of a
country over any specific industry or businesses. So in order to avoid government intervention in
the working it is important for the organisations to follow rules and regulations laid down. For
example, improvement in patent laws and increment in the regulatory support to Wi-Fi is an
opportunity for the company which will increase the use and number of users of Facebook. in
the business of Facebook, the most important aspect is of data protection, so it is an opportunity
for the company to adopt those policies which saves data of user from being leaked. This will not
only increase the faith of users but will also reduce the intervention of government in the
working of organisations. So the increasing regulations on online data is a threat for Facebook.
Environmental Factors:
These factors relate to the influence on the surrounding environment and ecological
aspects due to the operations carried out by an organisation. Due to rising importance of
Corporate Social Responsibility, it become important for all the companies such as Facebook to
look over these aspects and make their operations in relation to the legislations made. The
business model of Facebook should incorporate the sustainability model so that it can make their
contribution towards the environment. However, it is an online network, so it does not create
much effect on the environment and also on the revenues of the company but participation in
conservation projects can help the company in gaining a good brand name and image.
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SWOT Analysis
The following analysis is used in order to know about the internal capabilities and
position of the country. The following are explained as under:
Strengths:
 Facebook is the leader of social media platform in the world.
 The number of active users of Facebook is around 2 million and still rising so this is also
included in its strength.
Weaknesses:
 Adoption of GDPR Bill has become the weakness for the company as the costs for both
the users and company has risen.
 Data Protection issues faced by the company are also included in the weakness of the
company as people lost their trust from this app.
Opportunities:
 Diversification made by the company has increased opportunities for them such as the
acceptance of new offerings on its platform.
 Ads produced by the company are also an opportunity for the company to increase their
revenues and incomes.
Threats:
 The company is having threats from Google as this is the first and foremost preference
for giving ads.
 Data breaching incidents has increased the chances of possible threats for the company
from other social media sites.
2 Critical Evaluation of Facebook's Risk Management in the Strategic Planning Process
Risk Management can be defined as the process of reducing and minimising the threat
related to any task or work of the organisation. the following process starts with the identification
and evaluation of the risk followed by making the optimum use of resources to monitor and
minimise the same. Risk arises mainly from the uncertainty and in case of companies, the risks in
the marketplace can be of demand, supply, accidents, disasters and many more. So it becomes
important for the companies to make identification of risks and also make those policies which
help the companies in reducing and minimising the risks.
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Data Protection can be defined as making safe and secure data of users or individuals and
restricting its access to others from being misused. With the help of social media apps, people
from all over the world interacts with each other. As the following assignment is based on
Facebook so it will only focus on the Data Protection policies of Facebook. In today's world,
data protection is of due to importance for all (Ethiraj, Gambardella and Helfat, 2016). In case of
Facebook, the belief of users of this app has been going down tremendously because in this year
this is the third time when company is covered under this issue of leaking data of their users. In
current the company is having 1.47 billion online active mobile users and the question is about
the safety of and security of data of all the users. The following incident has also impacted badly
on the image of Facebook as well. After these incidents, the faith of people in using Facebook
tend to decrease. The company has also made its strategies to save the data of their users by
making their data safe and secure. As in the case of when the data of the company was leaked
and the impacted upon the accounts 50 million users. The attackers were able to see everything
in the profile of the users and the company logged out all the users from their devices in order to
save the data. The following action taken by the company shows that the company has something
to do in riskier situations. This action not only protect the data of the users from being leaked but
also their save them from being misused by the attackers. They also provide knowledge about
their users about the situation in their News Feed at the time when they will log in to their
accounts back.
However, this not sufficient in the following case as the data of Facebook users can
further also be breached. The hackers can make misuse of this data and the breach was also done
with a bad intention into mind. Some issues may also relate to the untrained employees as they
do not know about the way of working and to deal with these emergent situations. It is also a
negative aspect pointing on the data protection policies of the company. The employees should
also be trained to deal with emergent situations to deal with by which they can provide more and
better safety to their users. Doing the work carelessly will result in spoiling the image and
reputation of the brand.
The social media companies are not related and concerned only to data protection but the
companies which hare diversified in their businesses are also a threat to the company. For
example, some social media companies are also providing advertising of different products on
their social media apps. But it is necessary for them to know about the complete background of
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the company and the qualities they are providing and saying about their products. This analysis
will help in preventing the users from being cheated by those companies. Overall it will impact
badly on the image and reputation of the brand. On the one hand it is a source of revenue for the
company while on the other hand it also have several disadvantages which impacts upon the use
of those social media apps. Facebook should also provide only those advertisement in their apps
about whom the company is having all and correct information to save and maintain the image
and reputation of the company. Another negative impact is about the users. Presenting the
advertisement of other companies by Facebook on their apps may not be liked by some of their
users and there are also chances that the users may buy some product from them and the quality
of that product may not up to the mark so this incident will also impact upon the reputation and
image of the company (Gallus and Frey, 2016).
Additional feature other than chatting can also be provided by Facebook to their users
which can also provide benefit to the company such as Video Calling on chats which will be an
additional feature to be provided by the company to their users. In this way this facility can also
help the company in achieving more attention from their users. But it also have disadvantage
because this facility will make other users in trouble such as some users will make video calls to
unknown people which will create problem for them. It also leads to spoiling the brand image of
the company as due these circumstances people will start leaving Facebook which is
disadvantageous to the company.
Other than data protection ,the company is making use of Search Engine Optimisation
(SEO) through which the company can increase the traffic of users in their website. It is a type of
promotion technique which increases the quantity and quality of traffic in the website of a
company by making use of organic search engine results. It is beneficial for the company as it
will help the company in generating revenues. Another advantage of using SEO is it helps in
increasing the sales and leads of the products of an organisation. On the other hand it is also
disadvantageous to the users as it will distract and trouble to those people for whom the site is
not a filed of interest. In this way this action can also spoil the image and reputation of the
company. In addition to this, it also do have some disadvantages such as due to the increase in
traffic in the sites, the time taken to load the page increases which also reduces the chances of
making use of the site again.
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3 A Stakeholders Theory, Identification and Justification of each Stakeholder and Critical
Analysis of their Relationships
Stakeholders are the persons who have their own particular interest in the organisation. These
individuals or group of individuals got effected from the actions, objectives and decisions made
by any company in relation to any task or work. Some examples of stakeholders are creditors,
directors, managers, government, owners, suppliers, etc. Stakeholders are also of two types
which are Internal and External Stakeholders (Gans and Ryall, 2017). Internal Stakeholders are
the stakeholders which have their own particular interest in the organisation internally such as
managers, employees internal customers, etc. External Stakeholders are the one who have their
interest in the organisation externally such as external customers, suppliers, government, etc.
Stakeholders Theory:
The following theory was cam into existence due to issues related to fulfilment of the
concerns of other parties that shareholders. These are not the only ones who have their interest in
the companies but also several other individuals and groups have their won interest in the
organisation. These interests are completed with the help of this theory which takes into account
onto only the interest of shareholders but also of others. The following theory was propounded
by Dr. Edward Freeman's which was widely accepted and applied in today's world by businesses.
In accordance with this theory, it suggests that the business should not only consider the interest
of shareholders but should create value for stakeholders such as by considering customers,
suppliers, government, employees, society, shareholders. The theory further suggests that the
purpose of every business is create as much value as they can create for their stakeholders. In
order to make business successful, it is necessary for every company to give the same direction
to the interests of stakeholders as a whole.
Identification and Justification for Stakeholders of Facebook Company
In accordance with corporate citizenship, the company is having following groups of
stakeholder. The justification for why they are considered as the stakeholders of the company is
also provided as under:
Users: These are one of the most important stakeholders for the Facebook Company. Its online
services have billions of online users active monthly. These users are the stakeholders group of
Facebook that receives the companies top prioritization in corporate citizenship considering the
vision and mission of the company (Goldfarb and King, 2016). The justification behind them as
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the stakeholders is because the users are the one by whom the company can determine the
popularity and attractiveness of company's services all over the world. They are those individuals
or groups which makes possible the successful running of business in the market. As people
wants to make use of safe and secure things and also they are the source of income for the
company. So it is necessary for company to make their users happy by providing them with high
quality services so that they can make use of this social media app easily.
Employees: These are the individuals who works for and performs the task provided to them in
an organisation. They are also important to take into consideration because the growth and
development of an organisation lies in the hands of employees. So it is necessary to take into
account the interest of employees also so that they could work at their own wish and contribute
towards making the business successful.
Government: These are also an important stakeholder for every company as their proper
working of companies will make less intervention of government. They influences the
companies to make their working in relation to the rules and policies laid down by the
government including the regulatory requirements (Harrison and et. al., 2017). Government is a
stakeholder of every company because working according to the rules and regulations will
provide good response for the government also such as subsidy in taxes from the government
and the non fulfilment of those rules and regulations can adversely impact upon the working of
organisations such as it can result in high penalties charged from government and may also lead
to shutting down of the business forever. So due to this reason government is considered as
stakeholder and it is important for the companies to follow guidelines provided by them.
Critical Analysis of Organisation's Relation with Stakeholders
The relation of Facebook with their users is good which is clear from the popularity of
this social media app in the people. However, due to some issues regarding the data security
breach, people lost their trust from this social media app. The same incident occurred third time
which impacted badly on the relation in between the Facebook and their users. These incidents
related to data breach made government to intervene in the working of Facebook and also made
the relation with Government complicated and has increased the pressure on the company to
resolve the issues as early as possible. So the relation in between Facebook and governments are
not much good due to the issues faced by their users. With their employees, Facebook is having
very good relation by providing them a free workplace to work. Another reason is also because
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of the working with modern methods which increased the efficiency of their workers. It is
beneficial for the company and employees both as well because good relation can lead
prosperous development of both the company and their employees. But on the other hand, this
free environment can also lead to leisure and decrease dedication to work. So it is important to
provide them with sufficient freedom to maintain their motivation and level of efficiency.
3 B Explanation of Corporate Social Responsibility and Explanation of Facebook's CSR Strategy
Framework
Corporate Social Responsibility is the continuous improvement made by organisations to
behave ethically and their contribution towards economic development (Definitions of corporate
social responsibility - What is CSR?, 2019). It also focuses on making improvement in the life of
the workforce and their families and also to the community and society as well. It ensures that
companies conduct their business operations in ethical way by taking into account their social,
environmental and economical impact including the human rights (Hittm and Duane Ireland,
2017).
Critical Analysis of Facebook's CSR Framework
Facebook does not have any official CSR Program and does not provide and CSR
Reports. However the company is participating in a lot of CSR Activities. The critical analysis of
Facebook's CSR Framework is done with the under-described dimensions:
Environmental Dimension:
Facebook has devoted a page to the environment where it influences the people by
developing programs and initiatives to get engaged in environmental issues and solutions. It can
be considered as a good step taken by Facebook by which it is influencing many people and is
also effective by covering large number of people through this. As the operations of the company
do not impact upon the environment in any bad way. It is because the company do not carries out
any production process so the environment is not impacted at all. But the contribution made by
the company towards the environment will help it in increasing its brand awareness and creating
good image in the minds of their customers. The contribution towards environment could be
made by engaging with some other companies in environmental development programs or by
starting a new program.
Social Dimension:
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