Why Facebook Is Worth So Much Business Essay

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What is the secret hidden behind that makes Facebook valued more than $50billion after launching for seven years? What are the managerial skills possessed by Zuckerberg which the other seven billion people are lack of? Technical skills, human skills and conceptual skills are the key components that enable Zuckerberg to manage the organization well. An ideal combination among these skills shapes a competent leader.

At the age of 12, Zuckerberg successfully created a home family computer network named ZuckNet and wrote computer games in middle school (Ewhoknow, n.d.). This is a sign of his gifted talent in programming. Utilising his outstanding technical skills, Zuckerberg began his exploration and finally introduced Facebook. Zuckerberg's technical skills are in fact, a stepping stone that brings him further in his career.

From the perspective of implementation of human skills when interacting with employees, Zuckerberg did a great job. He motivates, facilitates, coordinates, leads and communicates with employees. He concerns about their benefits by providing free meals with limitless snacks and dry cleaning services (Gallaugher, 2010). Thus, Facebook's employee satisfaction leads to their emotional attachment to the organisation. However, he seems either unable or unwilling to give a satisfying feedback to the public. During his interview with Lesley Stahl, Zuckerberg seems to be reluctant to reveal the current issues regarding Facebook (CBS News, 2010). This goes against Facebook's concept of sharing information.

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Conceptual skills are the most critical component in Zuckerberg's achievement. Without it, Zuckerberg would not be able to foresee the future trends of networking and discover the human nature - curiosity. Hence, Facebook was born. Since Zuckerberg studied psychology, he understands the human behaviour of having unlimited desires. This encourages him to continuously add on additional applications such as F8 platform that gives developers to generate applications and tools for users (Scribd, n.d.). So, this increases Facebook's incomes. Nonetheless, Zuckerberg's flawed conceptual skills causes him unable to visualise the consequences of launching Beacon. Zuckerberg should learn to first attack his idea from all directions by asking questions and launch it only when it is matured.

As a monitor, Zuckerberg seeks and receives current information to have a thorough understanding of organization. For instance, he identifies his employees' thoughts through the public question-and-answer session. Besides, Zuckerberg visited China to seek possibilities in launching Facebook in China since Facebook is being banned in the country. He went to China for "information exchange on the Chinese Internet market" with Sina Chief Executive Officer, Charles Chao (Yihang, 2010).

Moreover, as a leader, Zuckerberg encompasses relationship with employees and motivates them. A research shows that Facebook's employees rate their company at an average score of 4.6 out of 5, claiming that Facebook is an ideal company to work (Ibtime, 2010). The employees describe Facebook as an extremely compassionate, enthusiastic and enjoyable place to work. These had increased employees' passion for work to help company maximise its productivity and subsequently profits.

Lastly, as a CEO, Zuckerberg needs to decide on the feasibility of an idea and assigns responsibilities. Zuckerberg plays the entrepreneur role by merging the concept of The Facebook (old version of Facebook) with large-scale networking sites like Friendster and My space (Entrepreneur, 2008). He continuously improves his service both financially and usability. Hence, Facebook had spread all over the world.

Facebook's mission is to give people the power to share and make the world more open and connected. Before achieving its mission, Facebook has to soar through the rough tides brought by external environment.

Facebook does not own the whole social network industry even though it is successful. Facebook has tight competitions with Google, Twitter and MySpace as they belong to the same industry. Therefore, Facebook will have to keep on coming out with more creative ideas and special features to preserve its leading position. For instance, Microsoft combines both Facebook “like” button with Bing, a search engine to help people with better decision making to compete with Google. Users can know which products and services are best recommended when using Bing as it will shows thumbs-up “like” results from friends in Facebook at the same time (Greene, 2011). At this circumstance, Google tends to be in disadvantage as Bing appears to have a more friendly approach to the users. Furthermore, Bing also strengthens the bond between Facebook and the users as the results mostly link them back to Facebook.

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However, there are some arguments that Facebook brings negative effects to the society. Many people tend to misuse Facebook as a platform to provide false information and invade others privacy. Some even exploit Facebook as a tool to express their inner feelings and voices their intention to commit suicide. This indirectly encourages others to do the same thing. Some crafty people tend to take advantages of this negative phenomenon, using the Facebook's domino effect to achieve their attempt to be one of the players in the fame game. Sky, a person from Penang, is the best representative of this trend (Kwong Wah, 15 December 2010). From all these indicators, it can be said that the initial intention of setting up Facebook to connect everyone together has been distorted. Moreover, the case of Facebook scam is gaining its momentum. Pam Aughe, one of the victims that have to bear the consequences of the unethical scammer who hacked her account and borrowed money from her friends (Smith, 2011). This proves that the Facebook's security is vulnerable and ineffective to stop those unethical hackers from invading others' privacy.

Besides, Facebook is continuously facing legal cases with the Winklevoss brothers. Although the Winklevoss brothers had lost in their latest legal battle with Facebook, they are attempting to appeal again. They claimed that the previous valuation of Facebook worth $65million is imprecise as Facebook's current value is more than $50billion (Reisinger, 2011). Therefore, the Winklevosses insisted that they deserved to receive more compensation from Zuckerberg. End of 2010, Facebook took legal actions against three advertising companies for deceiving users by forging accounts to increase their companies' profits (Cutler, 2010). Even though Facebook is the leader among social network sites, it does not have a positive social image as Facebook is flooded with never-ending court cases. Facebook should put equal emphasis in both maintaining its business reputation and efforts on regaining its social image.

In short, to put opposition and pressure from the public to an end, Facebook should not just keep on moving forward blindly. It should also solve the problems arises along Facebook's progression. Innovation without sorting out the solutions to the problems will not bring Facebook any closer in achieving its mission.

One of the key factors contributing to Facebook's success is its strong corporate culture. Zuckerberg has implemented, communicated and practiced unique corporate culture throughout the workplace which fit into environmental needs and company's goals thereby increasing their competitive advantage.

Open working environment is the most noticeable corporate culture in the workplace. In most companies, employees are required to follow commands and approvals from the top managers to do certain projects. However, Facebook practices freedom, flexibility and comfortable working environment as Zuckerberg treats all employees equally and gives them opportunities to express their feelings and opinions. For instance, employees are given chances to voice out their ideas and Zuckerberg will listen sincerely to any ideas presented. Furthermore, unlike most companies, Facebook promotes the no-dress-code culture in the office. Employees are also allowed to wear casual attires to work as Zuckerberg always did.

Another Facebook culture is concerned with employees. Facebook considered every employee as their most valuable asset. For example, Facebook offered free dry cleaning services for the employees. Zuckerberg believes that contented employees perform better. Therefore, in order to satisfy the employees, Facebook provides free flow of awesome foods and snacks as well as cozy couch for a short nap (Rodriguez, G., 2011).

Facebook is basically shaped by the involvement culture. Facebook is a flat-structured organization whereby status differences are avoided and employees report directly to top management. For instance, Zuckerberg personally practiced the culture by working with his employees in an open office space (Universum Communications, 2011). This enables him to play well with his employees as a team. Therefore, it increases management efficiency and effectiveness. Moreover, he thinks open working environment can enhance team collaboration and productivity. He takes the lead in demonstrating the culture. Moreover, Zuckerberg believes that being bold in taking challenges can build great things in a fast-moving pace. Zuckerberg allows room to grow and encourages employees to think creatively. Zuckerberg quoted, “Move fast and break things. Unless you are breaking stuff, you are not moving fast enough.” (Businessinsider, 2010). For instance, the current engineering manager, Pedram Keyani (2010) said that he was given task to solve complex bug in News Feed on the second day he worked in Facebook even he is lack of experience. Zuckerberg appreciates him with a big smile. This shows Zuckerberg is a good culture leader who appreciates employees' efforts. This indirectly motivates employees to work innovatively in a faster pace.

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Facebook is now in the process of taking over the Internet. Zuckerberg is changing the way Internet work as Internet was used for working purpose in decades ago and now, people are using it to share information and play games. For instance, a company called Zynga, creates games in Facebook which attracts almost everyone to play its game. Zynga's investor values are becoming higher due to its popularity in Facebook (Grossman, 2010). Moreover, Zuckerberg changes the Internet world into a friendly world where everyone is treated as family members. Through Facebook, Zuckerberg's vision will be realised where you can see your friends when you go online. (Grossman, 2010).

In Facebook, employees are expected to manage emotions and develop skills by themselves as Zuckerberg is a leader who seeks for high competencies (Wong, 2010). Although independency is highly required in Facebook's culture, employees are willing to adapt to the culture. They understand the rewarding outcomes from this culture implemented by Zuckerberg.

In short, Zuckerberg is successful because he is able to make his employees fit into the cultures.

Question 4

Being one of the most popular networking sites in the world, Facebook performs good management practice to maintain its leading position in the cyber world. As a young organization, Facebook starts off by applying the combination of both traditional and current management thinking in managing the company.

Zuckerberg believes and understands the importance of the Humanistic Perspective theory and applied it to his company. For instance, various employee benefits are provided including free meals and snacks and dry cleaning services as a catalyst to stimulate their productivity. However, Zuckerberg depends too much on the human relations movement and human resources perspective. This can be seen from his emphasis on employees' satisfaction rather than their performance. Too much of freedom and enjoyment might probably cause the employees to rest on their laurels, consequently incapable to come out with a thorough solution regarding the privacy issues or improvise the system.

Zuckerberg runs Facebook using total quality management (TQM). The four significant elements of quality management are employee involvement, focus on the customer, benchmarking and continuous improvement (Daft, 2010). Customers' satisfactions are the motivation for Facebook's employees to explore its potential. For instance, Facebook simplified the procedures by setting up a learning lab consist of some videos and additional information to guide advertisers (Vara, 2011). Instead of imitating others to improve, Facebook decided to unmask the way it works to the public recently so that everyone can learn from it. Moreover, Zuckerberg believes that there will be better outcomes as different people have different ideas.

Being a newborn but already a leading networking site in the industry, Facebook still stays humble, willing to learn, to make corrections and to improve itself. The Beacon is the best representation of Facebook's learn-from-mistake attitude. Zuckerberg apologized for his negligence and amends the privacy settings for not allowing posts published without acknowledging the users (Tartakoff, 2010). Moreover, employees meet up every Friday to express their ideas or doubts. Sufficient communication enabled employees to have a better understanding on the company's condition to continuously solve, adapt and change accordingly to the ever-changing business world.

Zuckerberg focused on Facebook's sustainability rather than its profitability. He believes that users are the most powerful assets to maintain its long-term sustainability. Thus, he tries hard to maintain close relationship with the users and increase their satisfaction by applying customer relationship management (CRM). For instance, Customer Support Team interacts, communicates with the users, collects feedback and then resolves the identified problems with engineering team and Product Designers. To deal with privacy issue, Zuckerberg created privacy setting which is easier to control.

Furthermore, Facebook is a technology-driven workplace as it relies mainly on the Internet. The world was connected through Facebook. Businesses also use Facebook to connect with their customers to understand market needs. For example, businesses can know more about customers' opinions on their products; identify products' popularity among the customers and even increase sales by advertising their products in Facebook. They can even publish their company's latest news or catalogue information to keep the customers updated (Meyer, 2007).

In short, Facebook successfully survives and thrives in the unpredictable business world because Zuckerberg was able to understand, match and apply the appropriate management theories into his business. Knowledge is powerful but the ability to make use of our knowledge will eventually be the trump card that enables us to win the business game.

Question 5

Zuckerberg is the only son among his siblings in the family. This tends to influence him to become more introvert as he seems to have difficulty exposing himself to his family members. Therefore, Zuckerberg yearned to strengthen the family bond. So, he decided to create a computer programme - Zucknet, to connect the Zuckerbergs together. Realising his son's hidden talent, Edward Zuckerberg cultivate his son by hiring private computer tutor to widen his knowledge, hoping that his son will excel in computer programming. Zuckerberg was influenced by others' expectations. He then established his self-image and believed himself by the ways others categorised him which later sculpt his vision. Zuckerberg's passion towards computer programming is undeniable. This can be seen from his creation at the age of 12, from Zucknet, various computer games, Synapse, Facemash until today - Facebook.

Zuckerberg's main purpose of developing Facebook is to make the world more connected. For him, the existence of Facebook is to focus on website development rather than just making profit. Besides, he cares less about the negative issues against him. Zuckerberg's management style is mainly centered on the four core values:move fast, be bold, take risks and do not worry about getting everything right (Dana et.al., 2011). Zuckerberg perceives mistakes as the chance to improve. However, people believe that as a multinational company, every decision made will bring huge impact to the society, not only to Facebook. Therefore, Facebook should not and could not afford to make a single mistake.

Empowerment, decentralization and authority delegation are Zuckerberg's leadership style. Being a democratic leader, he generously gives freedom to his subordinates to carry out their tasks. Performance are optimised because employees feel being trusted, valued and appreciated as well as being treated as part of the organisation. As an interactive leader, Zuckerberg works in the common place with the employees to be closer with them which promote collaboration and inclusion. Subsequently, gaps between Zuckerberg and employees are narrowed. Zuckerberg stressed more on the selling style which highlights more on both people and tasks. He values employees' opinions regarding the tasks. Opinions will be considered if it suits the tasks (Wong, 2010).

Zuckerberg's most cherished value is his passion towards his dream. Since young, his dream is to connect the world. He has strong determination and has put in a lot of efforts to realise his dream. With special yet strong feeling towards Facebook, he turned down the “distracting” offers by big companies like Microsoft and Google to buy Facebook (Business Biographies, 2008). Moreover, Zuckerberg thinks that if Facebook is acquired, the acquirer may exploit Facebook merely as a money generator. No one will have such passion and dream as he did. Therefore, he wants to be the one in charge of Facebook and build something that can sustain over a long period (Giorgia, 2010).

Facebook's employees characterised Zuckerberg as a CEO who focuses on making Facebook achieving its mission. Although he is a tough leader who puts performance before others' feeling, employees approved Zuckerberg with a 96 percent rating (Kim, 2010). Thinking that Zuckerberg is demanding in terms of product quality instead of money, many engineers who look for innovation other than money are attracted. Since Zuckerberg and his employees shared common goals, they are emotionally attached to each other. Hence, a strong relationship was built on the basis of Zuckerberg's passion towards his dream.

MGT1014 CS Mar 2011-Team No.59 1