University Strategic Leadership Analysis: Facebook Case Study Report

This report offers a comprehensive strategic leadership analysis of Facebook, focusing on the Cambridge Analytica scandal and its repercussions. It begins with an executive summary and table of contents, followed by an introduction that profiles Facebook's business, the scandal, and societal concerns. The analysis includes an external analysis of factors impacting leadership decisions, a detailed examination of Facebook's six-point plan, and a SWOT analysis. The report also investigates the role of leaders within the organization, discusses internal strategy recommendations, and concludes with a summary of the findings. The report examines the legal, ethical, and economic issues, and the leadership's role in addressing the challenges. The report provides an overview of the company's response to the scandal and the steps taken to regain user trust and improve data security. References are included to support the analysis.

Running head: STRATEGIC LEADERSHIP ANALYSIS
STRATEGIC LEADERSHIP ANALYSIS
Name of the Student
Name of the University
Author Note

1STRATEGIC LEADERSHIP ANALYSIS
Executive Summary
The report is based on the analysis of the concerns that have been raised in Facebook due to the
Cambridge Analytica scandal. External analysis has been completed with respect to various
factors that have an impact on the decisions that are made by the leaders. The six-point plan
implemented by Facebook has been analyzed in the report in detail. Internal environment of
Facebook has been discussed with the help of SWOT matrix and the examination of legal, ethical
and various economic issues as well. The role played by the leaders in the organization is also an
important part of the discussion made in this report.

2STRATEGIC LEADERSHIP ANALYSIS
Table of Contents
Introduction......................................................................................................................................3
Analysis of the organization............................................................................................................3
External analysis..........................................................................................................................3
Six-point plan of the organization...............................................................................................5
SWOT analysis of the organization.............................................................................................7
Analysis of the strategic leadership role in the organization.......................................................8
Recommendations of the internal strategy making...................................................................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................12

3STRATEGIC LEADERSHIP ANALYSIS
Introduction
Facebook had received the position of leading social media platform in the year 2018 and
had developed an ability of influencing huge number of people as well. The platform based on
social media was also blamed for the unexpected result of presidential election in US in the year
2016. The issue was mainly raised with respect to the organization named Cambridge Analytica
that was funded by the former CEO of hedge fund and billionaire Robert Mercer (Cândido &
Santos, 2015). The advisor who had been appointed by Donald Trump with the name of Steve
Bannon had gained knowledge related to data that had been obtained from 87 million users of
Facebook. The impact on this issue and public outrage was quite high on the share prices of
Facebook and the trust levels of the customers as well (Boddy & Dominelli, 2017).
Corporate accountability can be defined as the performance that is depicted by a publicly
traded organization in the various non-financial areas like sustainability, social responsibility and
the environmental performance as well. The financial performance of an organization is also
influenced in a huge manner by the corporate accountability. The issue faced by Facebook that
has been analyzed in the case study is also based on the lack of proper corporate accountability
of the firm (Chell et al., 2016). The major aim of the report is to analyze the external and internal
environment of the firm and the six point plan that has been formed as well. The
recommendations will be based on the future internal strategies of the firm in the industry.
Analysis of the organization
External analysis
Facebook had started its operations in the industry as a Harvard dorm in the year 2004 for
providing social networking based facilities to the students of Harvard. The platform had gained

4STRATEGIC LEADERSHIP ANALYSIS
major levels of popularity among the students and had faced major competition from MySpace
that was the leader of social media platforms at that time. The first mobile site of Facebook was
developed in the year 2007. The platform was then launched in the same year that had enabled
the developers to form applications that are integrated within the website itself (Crane et al.,
2019).
The changes that had taken in the external environment and rise in competition for
Facebook led to the development of partnerships in order to manage the firm effectively.
Facebook then formed a partnership with Google for the purpose of managing the revenues of
the firm. The major stakeholders of Facebook were the users of the platform and requirement for
security and privacy had increased within the year 2010. The inclusion of third party apps had
been able to play a major role in development of high security within the platform (Dalsgaard,
2016). The acquisitions that had been made by Facebook of the competing platforms had led to
the loss of visibility of MySpace in the industry. The acquisition of Instagram has been the most
important step that had been implemented by Facebook (Dodgson, 2018).
Google and Facebook had been successful in the development of a digital duopoly and
they together accounted for around half of the global spending on advertisements. The user base
that has been developed by Facebook is affected by the changes that have taken place in the
usage of social media in the last few years. The increasing importance of advertisements
enhanced the revenues based on mobile ads up to 40.7 Billion Dollars within the year 2017. The
increasing interest in predictive analysis and machine learning has also influenced the operations
of Facebook in a huge manner (Ersoy et al., 2018). Facebook is now being used for the purpose
of influencing politics and the political environment as well. The presidential campaign

5STRATEGIC LEADERSHIP ANALYSIS
developed by Barrack Obama had invited the users to download the app of the firm (Flick,
2016).
The Obama campaign was transparent in nature and the users were also provided with
access to the information. The Trump campaign that was developed in the year 2018 had
however raised major issues related to “Breach of Trust”. The transparency levels in the
campaign were low and many legal and ethical issues had been raised as well. Facebook had
faced major allegations based on fake news that had been communicated with the help of the
platform (Frynas & Mellahi, 2015). The response that was provided to Facebook based on the
situation that had occurred due to breach of trust was mainly based on the development of plans
with respect to the demands of the users. The development of trust levels was also a major part
of the response that had been provided by Facebook. The company also aimed at bringing some
changes in the business model with the interests of users (Fuchs, 2017).
Six-point plan of the organization
The development of a six-point plan was a major aspect related to the responses that have
been provided by Facebook to the situation that had occurred after the Cambridge Analytica
scandal. The company aimed at reducing the levels of abuse to the platform. The company had
been harmed in many ways due to an adverse effect of the issue on its reputation in the industry.
Facebook aimed at increasing the levels of the control of data of the customers in order to reduce
the breach of trust. Some of the steps that are a part of the six-point plan include “Review our
platform” and some specific steps like “Turn off access for unused apps” (Aguinis, Edwards &
Bradley, 2017).

6STRATEGIC LEADERSHIP ANALYSIS
The feedback that is provided to Facebook from the various stakeholder communities
affected by the company including investors, users, lawmakers and the advertisers have been
taken into consideration in the plan. Broad statements that had been made by the company are a
part of the plan along with the specific efforts that are initiated by the organization. The company
had closed many fake accounts and the Partner Categories program also enabled the third party
based data brokers so that they can access information. The privacy settings that have been
developed by the organization are a part of the “Privacy Shortcuts” policies (Golder et al., 2017).
The Six-point plan developed by Facebook are based on the following major aspects,
Reviewing the platform – The apps will be investigated and the access to
information can be increased.
Telling people of the misuse of data – The users will be informed about the
misuse of data by the apps.
Turning off the access for unused apps – The access to the apps that are not used
will be reduced.
Restricting Login data of Facebook – The data requested by the app during Login
will be reduced.
Encouraging people to manage the apps that they use – The individuals are
informed about the accounts to which they are connected.
Rewarding people who find the vulnerabilities – The bug bounty program of
Facebook will be expanded (Fuchs, 2017).

7STRATEGIC LEADERSHIP ANALYSIS
SWOT analysis of the organization
Strengths – Facebook had started a social media platform that was only used by the
students of Harvard in order to communicate with each other. The company was able to develop
a large user base within some years of the start of its operations in the industry. Facebook also
started earning revenues from the advertisements after the formation of a huge customer base in
different parts of the world (Golder et al., 2017). The app developers and advertisers had been
able to play a major role in the ways by which Facebook gained revenues in the industry. The
market shares and revenues of Facebook had increased from the year 2003 to 2015. The mobile
browser of Facebook was also able to increase the users of the organization within a short period
of time (Hajli, 2018).
Weaknesses – The Cambridge Analytica scandal is a major example of the lack of proper
data security measures implemented by Facebook. The organization had been used in a wrong
way in order to develop political influences during the Presidential election of Trump. Facebook
lost the trust of customers due to the scandal that had taken place. The shareholders of Facebook
were also harmed in this situation and the firm started losing levels of revenues as well. Society
and users of Facebook had been affected in a negative manner by the Cambridge Analytica
scandal. The privacy issues had been able to reduce the trust levels of customers on the
organization (Helfat & Martin, 2015).
Opportunities – The major opportunities that have been provided to Facebook were to
implement major steps for the purpose of gaining back its reputation in the social media industry.
The organization is also aiming at proper improvement of the privacy settings in order to regain
trust of the customers. Facebook already has a huge customer base in order to improve the
revenues and the analysts have also predicted that the temporary reduction in market share will

8STRATEGIC LEADERSHIP ANALYSIS
not be able to influence the organization in a huge manner. The privacy based rights of the users
have to be restored by Facebook in order to improve the reputation (Jarzabkowski & Kaplan,
2015).
Threats – Competition from the other social media platforms like MySpace had been a
major threat to Facebook from the start of its operations. The ethical issues had been able to
provide major threat with respect to the lack of privacy of customers in the organization. Fall in
the revenues of Facebook in the last few years can be considered as a major threat related to
economic aspects of the organization. Facebook had faced many legal issues with respect to the
compromise security of the users (Lipschultz, 2017). The investors have also started losing faith
on Facebook and investments have slowed in various operations of the firm. Different issues that
have been faced by Facebook include, Fines from 2011 Consent Decree, Passing Honest Ads
Act, implementation of data protection based legislation, creating digital Protection agency and
looking at antitrust. The legal aspects have been able to provide a major threat to the operations
of Facebook (Kosinski et al., 2015).
Analysis of the strategic leadership role in the organization
The leadership of Facebook has been able to play a major role in solving the issues faced
due to the scandal of Cambridge Analytica. The leak and breach of information is considered to
be an important factor that has been considered by the management of the organization.
Zuckerberg and Sandberg have taken major steps in order to enhance the levels of trust of
investors. The management of the organization had developed a statement related to the breach
of trust between Cambridge Analytica, Kogan and Facebook and breach based on data of the
users (Maheshwari et al., 2017). The leaders have aimed to improve the security levels of the app
in order to provide maximum trust to the users in Facebook. The regulations have been

9STRATEGIC LEADERSHIP ANALYSIS
developed by the management of Facebook for providing best services to the users (Markham,
Tiidenberg & Herman, 2018).
The collection of personal information of the users has an impact on the privacy levels
and their rights as well. The concerns of the users have been provided with maximum levels of
importance by the management or leadership of Facebook. The organization had faced major
issues based on admonishing by Amazon, Apple and Samsung due to the lack of trust. The
management team and leadership of Facebook including Sandberg and Zuckerberg have fought
with major issues in the organization (Schober et al., 2016). The employees in Facebook and
their voices have been able to influence the situation that has occurred due to breach of privacy
in a huge manner. The Russian interference in the US election is a major factor that has been
considered by the management and leaders of Facebook in order to control the situation
(Townsend & Wallace, 2016).
The external factors have a major influence on the strategic decisions that have been
taken by the leaders. The independent Review Boards and Privacy Advocates are considered two
major external forces that have an impact on Facebook. The legal factors are also able to
influence decision making process of Sandberg and Zuckerberg related to development of
solutions based on the situation and concerns of the organization. The regulators and lawyers
have a major influence on the future opportunities and operations of Facebook (Townsend &
Wallace, 2017). The leaders have aimed at solving the issues based on legal rights of users by
settling the suits that had been faced by Facebook after the scandal. The Honest Ads Act is a
major concern that is related to the decisions made by leaders of Facebook (Trevino & Nelson,
2016).

10STRATEGIC LEADERSHIP ANALYSIS
Data protection legislations have an impact on various aspects related to the situation in
Facebook. Zuckerberg and Sandberg had made the decision to develop a Digital Protection
Agency in order to regulate the powers of Facebook. The legal and regulatory factors have been
considered by Zuckerberg and Sandberg in order to control the situation that has taken place in
the organization after the scandal. The leadership style that has been used by the leaders of
Facebook can be considered as transformational leadership. The visions of the leaders have been
able to play a major role in the strategic decisions that have been made by them (Wolf & Floyd,
2017).
Recommendations of the internal strategy making
The major recommendations that can be provided to Facebook in order to develop the
strategy making process are as follows,
The Privacy settings that have been developed by Facebook have to be based on
the needs and demands of the users and their rights as well.
The trust of investors can be gained by Facebook with the support that is provided
by the high levels of transparency within the operations.
The internal strategy development process will be related to the changes that are
taking place in the external environment.
The shareholders of Facebook will be taken into consideration by the organization
in order to make the decisions related to the operations.
Conclusion
The report can be concluded by stating that the situation that had taken place in Facebook
was able to influence the image and reputation of the organization. The external environment

11STRATEGIC LEADERSHIP ANALYSIS
based factors have a major impact on the operations of Facebook in the last few years. The
Cambridge Analytica scandal had an influence on the privacy based aspects of the organization.
The six-point plan that has been formed by Facebook with respect to the analysis of pressure
provided by the stakeholders is also an important part of the activities related to solving the
issues. SWOT analysis framework has been used in order to examine the internal environment of
Facebook. The leadership role that has been played by the management is considered to be an
important aspect based on solving the concerns raised by the users due to Cambridge Analytica
scandal.