Organizational Behaviour: Facebook-WhatsApp Acquisition Case Study

This case study examines the Facebook-WhatsApp acquisition, focusing on organizational behavior and leadership management. It analyzes the acquisition's strategic motivations, including market expansion and user base growth. The study delves into the cultural impacts of the acquisition, discussing the effects on employees, management challenges, recruitment problems, and employee benefits. A SWOT analysis of Facebook is provided, highlighting strengths, weaknesses, opportunities, and threats. The case study explores motivation theories, such as Belbin's theory, to improve the working environment and ease the transition post-acquisition. The study also examines strategies for a smooth acquisition, including clear communication, cultural ambassadors, and talent assessment. The analysis covers the importance of addressing potential employee fears and the need for robust orientation programs. This document is contributed by a student to be published on the website Desklib, a platform which provides all the necessary AI based study tools for students.

ORGANISATIONAL
BEHAVIOUR

TABLE OF CONTENTS
PART1: CASE STUDY...................................................................................................................1
Facebook and WhatsApp acquisition.....................................................................................1
PART 2: ARTICLE.........................................................................................................................7
Team dynamics and organisational behaviours for the next issue.........................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

PART1: CASE STUDY
Facebook and WhatsApp acquisition
The case study includes the discussion on the acquisition of two companies Facebook and
WhatsApp. In order to grow quick, the organisation have adopted the buying and selling strategy
by taking over a company by the other is acquisition. It is considered as an activity taken into
account by the company in which purchase of ownership stakes is being considered. It allows
acquiring a control of the targeted organisation. Acquisitions are often made for the growth
strategy of the organisation and to acquire an existing firm it is more beneficial for the venture
that operations in a much better way to expand their business. Cash or stock are the basis on
which Acquisitions is made or a combination of both (Arnulf and et.al., 2014). The recent
acquisition of Facebook is WhatsApp which was acquired on 19 February 2014. The main
purpose of the acquisition was to understand the aim of the price tag $19 billion which was paid
by Mark Zuckerberg which was clean enough for the acquired company. The Facebook had EPS
after the purchase on the key days, a balance appraisal was made and obtained for the discussion.
The results after discussion suggested that the price tags can be reasonable. However, it can be
said seen that the industries in both companies are dealing has an intense competition, therefore
Facebook should assess this deal in a long-term perceptive. The Facebook announced to
purchase WhatsApp WhatsApp and decided to keep it as different service. This deal was the
biggest news for all IT companies and also was big stake for them who seemed to turn its model
of business to mobile social network market by continuously purchasing the mobile applications
which later included Instagram app.
However, Facebook has gained huge success and holds 1 billion progressive users, but
not everything in the Facebook business goes properly. As the data shows that recently that the
different mobile application is growing especially in youngsters are turning towards social
application such as WhatsApp. WhatsApp is a social site which helps to send messages through
internet, combining the traditional channels with social network (Blanco Ramírez, 2013). This
application also helps to send instant text messages, voice notes, pictures and some interesting
emotions and even multimedia files. The main reasons for this acquisition was to change the
business model and future market. Facebook acquired WhatsApp to access new market as it said
earlier that the organisation was eager to grab the different opportunity in mobile market. With
the development of 3G and 4G networks in upcoming years, fast up-gradation of mobile. Newly
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mobile and social apps are doing rapid growth. Second aim to acquire WhatsApp was to access
more users as it was clear that the acquisition will help Facebook to cut into more users. In
addition to this Facebook can also extend its market by bringing back the old users in the market.
Both the companies have different groups who are using which are not related to each other. The
third reason for the acquisition was to get access to have diverse information from WhatsApp to
other things that matter a lot for Facebook or can affect it. The use of applications can help
companies to earn money in large amount (Carlos Pinho and et.al., 2014). Personal information
of an individual can be secured or can be customised as customers demand.
Culture, values and power relationship
 Culture: It is consisted of shared values, assumption, beliefs of the venture. By having
such consideration the support to employees can be advanced effectively. It impacts
directly on the behavioural aspects and allows to improve communication.
 Power: In this, authorities are being shared with specific member to meet the objectives.
Using such values the motivation can be influenced in diverse manner. Application of
power can be positive if needs are being identified properly.
Another strategy was taken to analyse internal environment was to follow the SWOT.
This will help to get the better knowledge of company.
Strengths Weaknesses
 A large number of active users over 1
billion in 2014 were integrated in using
this application.
 Very flexible and excellent user with
the experience to give the profitability
to the company after choosing the
strategies.
 The company had very good cash flow
and high volume of revenue generation.
 It gives the chance to normal people or
 There is no sufficient clicks to the
advertisements on the Facebook.
 The dependency on the advertisement
is higher with a very bad customisation.
 The company is still facing problems
related to the technology thus is
incapacity to earn profits.
 The personal data of an individual is not
secure and safe of the Facebook as it
has poor security level.
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the users to interact with celebrities or
their favourites (Issever, Soyuk and
Sengun, 2016).
 There is no strong competitors of the
company.
 The company frequently changes its
layout to attract more users with new
and attractive graphics.
 The company has generated more
employment and has made comfortable
to the employees of the acquired
company.
 The company has made slow entry in
the computing sector
 There are too many advertisements on
home pager of the Facebook which
creates difficulty in operating.
 The page cannot be customised
properly or faster way as per the
requirements.
Opportunity Threats
 The company has many opportunities
to expand its business overseas market.
 Increased modification of profits
foundations has increased use of
internet on mobiles.
 Cumulative acceptance of clients using
social networks, both in normal and the
non-mainstream has increased
potentiality chances of providing the
opportunity to the technology used by
costumes to do the business.
 There is increase in the number of
people who use smart phones that had
made the Facebook to highlight the
 Facebook is banned in the China as per
rules and norms of Chinese
government.
 Online advertisement is slow which
reduces customers.
 Future growth of users is limited and
slow (Mullins and Christy, 2013.)
 The ad block extension which can be
used by the segmented function
overlapping from other large IT
companies for the technical growth
 The uncertainty of advertisers can be a
threat to the Facebook as it can affect
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technology part. its growth as well the revenue
generation.
The SWOT of Facebook shows that it has a very strong position in the market can beat its
competitors. The major problem in growing the market is that is has limited products, which are
not consisted with their future business strategies with the diversification and differentiation of
the products. The future profits generated by IT sector is mainly dependent on mobile internet.
With the help of current trend, venture can gain competitive advantage in the business of mobile
internet. The company Facebook acquired WhatsApp which has big number of consumers.
Impact on the culture
 Effects on the employees of Targeted Company are as follows : The uncertainty of the
acquisition of the Facebook and WhatsApp signals risk to targeted company employees
has affected the performance of the worker (Coccia, 2014). This uncertainness might feel
unhealthy ways if the worker disapproved the conversion as they can be shocked by such
sudden decision of the two companies. It has been noticed that number of employees are
there who feel threatened or scared. Such kind of factors and feeling among employees
impacts the overall development in negative manner. Along with this, operational
efficiency has also been influenced due to such factors. After this acquisition of Facebook
and Target Company workers must recognise policies and cultural aspects in order to
have better sustainability.
 Management problems: If new management struggles to communicate adequately and
aid in this transition, discontent among the ranks can be expected (Frederick, 2014).
Unexpected acquisition can also be the reason of stress, loss of jobs which can increase
the competitiveness in the market. It is the hardest item for the employees to lose their
jobs after acquisition deal was final by the companies ‘Facebook and WhatsApp.
 Recruitment and selection problem: The employees must be informed to search new
jobs if there are possibility of staff reduction. The existing employee should not anticipate
unfamiliar behaviour with the new employees or the employees of the acquired company.
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 Employee benefits: Many benefits provided by the company to the employees of the
acquired company to make them comfortable: employees are offered benefits such as
employees retirement income security act which helps in protection of retirement
incomes and other welfares which are essential after retirement. The acquiring firm
knows that protection of the loyalty and reassurance of employees of targeted company.
The action of retirement tactics is an intricate matter and the gaining business ‘Facebook
and WhatsApp' needs to consider this heavily before finalising a deal. It often turns to be
very difficult to transfer existing targeted companies’ assets of employee to a new
appointment system. In most of the condition, the workers of the new created
organisation or the acquired company receives new stock decisions such as an worker
stock possession strategy or other welfares as a remuneration and motivation (Fullerton,
2014).
Motivation and hurdles to the venture after the acquisition of Facebook and WhatsApp
When the company is acquired by the other, it is natural that the employees will be in fear
as they don't know the employees of the company (Karsh and et.al., 2014). The employees will
be nervous and will show some unwillingness to work. The unavoidable nervousness and the
aggregate disorder with fear may be seen. Side of the acquisition does not matter to the
WhatsApp was on, there are many things that the company can create to ease the transition.
 Clarifying the upcoming situation: The smooth acquisition is to be communicated
clearly and on the regular basis. The roles, benefits and the compensation should be
clarified to the employees (both existing as well as the new or acquired company
employees).
 The cultural ambassadors should be specific: When the company Facebook acquired
WhatsApp the founder Jan koum helped the team to guide the acquisition of Facebook
while guarantee that WhatsApp should maintain its independence and culture (Kaur,
2013).
 The important things should be addressed at the priority: the more established companies
bring the start-ups with their employees of the acquired company to know the lost
company is been acquired as in case of Facebook and WhatsApp.
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 Assessment of the talents in an individual: When the company get acquired by the
other company, the employees need to think about where they are lacking in their talents
and should work on it to make the required growth of the company (Kitchin, 2017). The
proper evaluation is needed.
 Development of the robust orientation program: on the bases of the acquisition the job
title, compensation and the benefits will be decided to be followed by the acquired
company that are introduced in company by the employees or the higher authorities. The
recruiters should beware of the new hires as they can create the problems for the
company.
Some motivation theories chosen to improve the working or the acquisition of the Facebook
on WhatsApp are: Belbin theory: Different people or the employees have different tendency to behave
while working with other people, which does not means that they will always behave in
the same manner. This theory is based on the views of Meredith Belbin with his
employees who found that they all are clusters of behaviours which are stable enough to
be separately identified. Everybody or every employee have different liking for more of
these Team Roles when act naturally (Martins, 2016). If a particular employee has more
than one role, then the employees can control between them if they select or like to, and
this will serve as a useful knowledge if a worker ever wants to fill a various role in a
team. Tuckman theory: The model explains that the team has developed ability to establish the
relationship, e leadership style and the beginning of the direct style which help in
moving from coaching then participating to finish the delegating and almost detached
(Organisational behaviour, 2017).
 Hard and soft skills' theory: the combination of skills by the different people, social
skills and communication skills and career attributes with the social intelligence and
emotional intelligence quotients with the other team members. These skills can include
the social graces, communication abilities teamwork and the leadership traits (McShane,
Olekalns and Travaglione, 2013.). A study was conducted in which it was shown that in
an individual there are 80% of soft skills and 20% of hard skills.
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Analysis of the organisations
The company Facebook has followed the Porters generic strategies and SWOT to
analysis the profits or the losses of the company. Before making the decision to acquire the
WhatsApp the company Facebook. Three types strategies used in the porter’s generic strategies
are as follows: cost, leadership, focus and differentiation strategies. Before 2009 Facebook had
its focus on the model of business of the organisation which was the internet site of Facebook
provided as a big level where the other companies paid money to the organisation to display their
advertisement on their website for creating awareness and promoting products among the people
(Hyde, Harris and Boaden, 2013). Using this model, the company began to make profits in 2009
and 2010, the users grew more than 15 % and the number reached to 500 million. The
improvement of the Facebook was very much same as the google that both of them started with
only one business model and after the realisation they inaugurated to distinguish their business
activities. Willingness to change business model Facebook had focused on diverse functional
values in order to have operating as online systems, creating its own home for Facebook and
obtaining simulated realness expertise company Oculus VR. To earn more incomes and to
enhance the reasonable advantages the several options were included by the company providing
more products and services to make easy entry in the new market.
Content theory of motivation
Maslow's need hierarchy theory
Physiological needs is initial stage which allows member to focus on food, water, shelter,
rest etc. After this, member need to consider safety as critical aspect in terms of job and
responsibility. Social needs allows member to consider have better accomplishment in the
society with some specific recognition. Esteem is a position where member focus on self-
actualisation needs. It allows improving the overall morale through accomplishing different
needs. In this theory is one of the most important part and make some changes in overall
development to improve growth rate and increase market share. The company Facebook has
followed Maslow's need hierarchy theory. There are 7 steps must be follow are as follows ;-
 Biological need :- In this need is to be focus on basic need, which is more important and
make some change in overall work.
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 Safety need ;- In safety need protection of any illegal work in done or provide safety and
securities. Some law must be follow by organisation.
 Belongingness need :- Trust, friendship, love and affection is must be used in internal
working environment. This factor must be including in internal work place and make
some changes are productivity must be improved and make some changes in overall
working environment.
 Esteem need :- The desire for reputation or respect from other and for respect or
reputation is most important for children and adolescents.
 Self-actualisation need :- In this motivational need must be important in overall working
environment and increase market share. On the other hand, seeking personal growth and
peak experiences.
Process theory of motivation
Adams’ Equity Theory
John Stacey Adams has provided motivation theory in order to ensure about the
employees morale. This theory is presented on the basis of diverse facts such as efforts and
loyalty. Along with this, improvement in skills and commitment level is also essential to have
better development. Trust among members is also need to be advanced for better satisfaction.
The theory is built-on the content that worker become de-motivated, both in abstraction
to their job and their leader, if they feel as though their input signal are greater than the outputs.
Worker can be expected to respond to this is various ways, including de-motivation generally to
the extent the employee perceives the disparity between the inputs and the outputs exist, reduced
effort, becoming disgruntled, or, in more extreme cases, perhaps even disruptive.
Team development theories
Forming
It is the fist phase in which employees have no knowledge about their role and
responsibilities. They have to highly depended upon their managers for getting direction. People
perform their duties as per the given direction of team leader. In this stage employees are
unaware with role, responsibility, purpose, culture of the company. They make efforts to
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understand the expectation of team member and make some changes in overall development in
market.
Storming
In this, members focuses on the issues resolution practice by having focus on
identification of perception, thinking, motivation etc. They also resolve the issues related to the
role of the individual in the group.
Norming
In this, communication within team is essential so that better outcome can be taken into
account for long term sustainability. In this, factors identified must be shared for effective
decision making and work allocation. At this stage, cooperative feelings develop among the team
members. Members trust each other and extend their full cooperation for the achievement of the
group goal.
Performing:
At last, application of strategies is essential in order to ensure that roles and
responsibilities are being shared with members properly. In this, monitoring and performing the
activities is essential to be refer for sustainability.
Motivation is one of the about crucial part and brand whatsoever changes in overall
development in market. It is help to improve team carrying into action and make some occurrent
in overall improvement in market.
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PART 2: ARTICLE
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