Case Study:
Facebook CEO Is Being Pushed to Take the Company Public Most everyone in Silicon Valley and on Wall Street agrees: The eventual IPO of social-networking site Facebook could make its founder the world's richest twenty-something. Yet Chief Executive Mark Zuckerberg, now 25, seems intent on deferring that multibillion-dollar payday. He's huddled with executives like Intel CEO Paul Otellini and Oracle Corp. President Charles Phillips-the goal being to extract wisdom about how to better run his independent company. He set up a dual-class voting structure that would make him less beholden to any public shareholders .... "We're going to go public eventually, because that's the contract that we have with our investors and our employees," Mr. Zuckerberg said during a recent interview. But, he added, "we are definitely in no rush." ... Zuck, as he's known to most, lives in a modest house in Palo Alto and often walks to the office. Employees say he's a demanding boss-one who loves to engage in debate but isn't big on lavishing individual praise. According to one engineer, who wrote an internal memo called "Working with Zuck," it is unwise to "expect acknowledgement for your role in moving the discussion forward; getting the product right should be its own reward." To the young CEO, Face book, with its 400-millionplus users, is more than just another tech cog in the cultural landscape. The company's promise, he believes, has to do with facilitating people's ability to share almost any and everything with anyone, at any time-via Web sites, mobile phones, even videogames. In an era of obsessive communication, "this push towards things becoming more open is probably the most powerful and transformative social.
For Discussion change " barring an event such as a war, he says. "We may be the company that really leads this movement. .. . It's not clear that anyone else is going to manage it correctly." ... A micromanager, Mr. Zuckerberg has cut down on his meeting obligations and now delegates to senior-level staffers so that he can spend more time mulling Facebook's broader, strategic game plan .... He still has the final work on most product decisions and readily abandons concepts a year or more in the making. "A lot of companies can go off course because of corporate pressures," says Mr. Zuckerberg. "I don't know what we are going to be building five years from now. I don't know what we are going to be building three years from now." ... In the company's early days, Mr. Zuckerberg had an artist paint a mural evoking children taking over the world with laptops. He ended meetings by pumping his fist in the air and leading employees in a chant of "domination." ... More recently, Mr. Zuckerberg-who himself is the subject of a forthcoming feature film-has used movie lines to cue employees that they are engaged in something greater than getting rich. At a meeting last spring, Mr. Zuckerberg quoted from the movie Troy before hundreds of employees .. .. He recounted the scene where a messenger tells Achilles how scared he would be to confront the giant Thessalonia, whom Achilles was preparing to battle. "That's why no one will remember your name!" Zuckerberg shouted. When potential hires ask why they should join Facebook, Mr. Zuckerberg said, "Tell them: because people will remember your name." The company has had its fair share of management gaffes. Late last year [2009], Facebook came under fire for redesigning its privacy controls in a way that caused users to make more of their account data public .... Last week, the company acknowledgedthat a "small number of users" had received private messages intended for other members. Facebook executives regularly stress that they are committed to giving users tools to protect their privacy .... Mr. Zuckerberg has passed up several opportunities to sell and make a killing .... By early 2008, Mr. Zucker berg began to take steps to help prepare the company to go public. He expanded his management team, hiring Google executive Sheryl Sandberg as his No. 2 in March of that year. He sought new perspectives by inviting Netscape cofounder Marc Andreessen and Washington Post Co. Chairman Donald Graham to join his board. He kept voting control over their seats, however. "The company is definitely set up in a way where myself and the other founders have a lot of control over it," he says .... Any IPO timing is squarely in Mr. Zuckerberg's hands. He owns more than a quarter of Facebook's stock and controls votes for three of five board seats, say people familiar with the matter .... To distract employees from the buzz of an IPO, he pressed them to focus on building a bigger company. He led a toga party to celebrate Facebook's 1 00-millionuser mark. He bought a gong for the office, which employees bang when they launch new products. In late 2007, he and the board changed the types of shares granted to employees, significantly lessening the pressure on the company to go public and giving him more control over the timing of such an event. The switch, which the board agreed to, was to pay employees in restricted-stock units instead of options. Holders of RSUs generally can't become shareholders until the company goes public .... So the move allowed the company to stay under 500 shareholders, the point at which the Securities and Exchange Commission requires companies to disclose more financial information .... The ranks, though, were still anxious for a payday. Some began to seek private buyers of their shares, complicating the company's internal valuation for employee stock options. Their moves aggravated Mr. Zuckerberg, who often bragged to employees that he had a special capacity for delayed gratification ... He hammered home this idea to his management team at an offsite meeting, recounting a story about how he was good at waiting for things as a teenager. By early 2009, he had changed his own boyish look. Mr. Zuckerberg, who once sported sandals to major meetings, traded his daily uniform of a T-shirt and jeans for a button-down shirt and tie.
Q1. How many of the five sources of power is Mark Zuckerberg using? Explain.
Q2. Which of the eight influence tactics is Zuckerberg using?
Q3. Which different leadership traits and styles does Zuckerberg display? Cite examples and discuss.
Q4. To what extent is Zuckerberg using the full range model of leadership? Explain.
Q5. Is Zuckerberg exhibiting any negative leadership traits, styles, or behaviors? Discuss.
Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.