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Review a Case Study:Facebook
Facebook. Google. Zappos. No longer do we idealize the stoic, steely gaze of the chief executive officer (CEO) toward a certain horizon. Today's leaders must be nimble, less the archer than the quick-footed ball player, ever mindful of the wild, unpredictable passes that come from seemingly anywhere-even from the bleachers. In the age of crumbling hierarchy and mass democratization of information, public opinion is no longer formed by a privileged few behind closed doors and subsequently doled out to the masses. Both inside the walls of company headquarters and beyond, the people lead, and the leaders follow.
Oft-covered in the media, Facebook is both a leader and trend-setter in the world of social media and Internet-based companies more broadly. Yet despite this unique stature, Facebook is also in many ways the quintessential example of a company plunging through the unsteady waters of change in the age of information-as true of more traditional business giants like Delta Airlines and General Electric (GE) as it is to a lesser but still significant extent to the corner mom-and-pop retail shop or restaurant. For better or worse, Facebook must constantly be sensitive to the whims and moods of at least three powerful "interest groups": its users (consumers), its advertisers (its bread and butter), and its own internal team, who shape the culture and to a large degree hold the fate of the company in its hands.
External Pressures
With close to 1 billion users (nearly one-seventh of the Earth's entire population), Facebook is still determining how to cultivate and turn a profit from such rich yet fickle soil. Facebook, valued at a still startlingly rich $55 billion at the end of 2012,* has often found itself caught between pleasing its users-cultivating the soil-and its advertisers, who keep the lights on and its shareholders happy (the company went public in May 2012). But change has always been part of Facebook culture; consider that since its founding in 2004, Facebook has altered its tagline nine times, reflecting not only the "start-up mindset" but a more fundamental (if essential) fiery reverence for constant, rapid evolution tempered by a corporate sensitivity to the external environment of public opinion.
Facebook has become a conduit for broad-based activism, often to its own detriment. Here are a few of many notable examples: Users were enraged after Facebook introduced Beacon in November 2007, an advertising system in which users' purchases or activities on some 40 partner sites were revealed to their Facebook friends. The company was forced to backpedal when more than 70,000 members organized a Facebook protest group led by political activist organization MoveOn.org, and discontinued Beacon in 2009 as a result. Nonetheless, Facebook acquiesced to a $9.5-million settlement in a class action lawsuit on behalf of 3.6 million of its users, which included an agreement to finance a "digital trust fund" of over $6 million for organizations that study online privacy. Facebook CEO Mark Zuckerberg publicly apologized in 2007, though the company never formally admitted to any wrongdoing.
In 2009, Facebook again changed its tune in response to public pressure. When the website made fundamental changes to its design and terms, more than 2.5 million joined a group on Facebook's own site called "Millions Against Facebook's New Layout and Terms of Service." At the time, Facebook had deleted a provision saying that users could remove their content at any time, and added new language stating that it could retain a user's content and licenses even after he or she cancelled the account. After briefly going on the offensive, Facebook agreed to withdraw these changes, with CEO Zuckerberg announcing, "We concluded that returning to our previous terms was the right thing for now ... We need to make sure the terms reflect the principles and values of the people using the service."
Nor was 2012 immune from controversy. Kevin Systrom, a cofounder of the photo-sharing site Instagram, which Facebook purchased for $1 billion in April 2012, reacted within days of the outset of a mass protest over Instagram's announcement of changes to its service terms, which saw thousands of users, even National Geographic magazine, threatening to jump ship. Systrom apologized in a blog post, writing, "We've heard loud and clear that many users are confused and upset about what the changes mean ... I'm writing this today to let you know we're listening and to commit to you that we will be doing more to answer your questions, fix any mistakes, and eliminate the confusion."1 As Facebook and its growing family of subsidiaries continue their tightrope walk of pleasing users while courting advertisers, the Instagram embarrassment will surely not be the last of these struggles.
Internal Culture
The internal culture of Facebook is similarly indicative of management responding to new, fluid expectations of an empowered, opinionated group-its workforce. Even the workplace environment reflects a more open, less hierarchical mindset, a 57-acre campus (with a 22-acre expansion in the works) designed to please the masses of its 3,500+ employees rather than the tastes and whims of a privileged few. Gensler Architects was charged with "undesigning" this vast territory, leaving plenty of room for tree-shaded open spaces and amenities like sushi bars, barber's shops, and doctor's offices, a place in which long hours don't seem so draining, where "the employees are really happy to hang out," according to John Tenanes, director of global real estate for Facebook. The vibrant, stimulating environment is crafted to appeal to the company's diverse army of mostly young or young-ish professionals, who, like so many today, want-and expect-their career to contribute to quality of life rather than merely sustain life. It also allows for "ongoing experimentation for a culture that hasn't yet fully developed," reflected Tenanes, "We do not want to allow a rigid standards and approvals process where you end up with a cube farm and everyone is miserable."2
A freshly hired Facebook engineer provides an insider's account of the fluid acculturation and work process indicative of work and life under 21st-century management, "Before Facebook, I'd always been assigned to a team before my first interview at a company," wrote Ben Genzler in a Facebook post entitled "Bootcamp: Growing Culture at Facebook" in January 2010, reflecting on Facebook's preference to move new employees into positions after they demonstrated their strengths and preferences "live" in the Facebook team environment. "To think I had control over my own destiny at Facebook was at the same time empowering-and more than a little nerve-wracking"3
Genzler was not alone. Since 2008, every new Facebook engineer-"from software engineers right out of college to engineering directors with Ph.Ds," according to a company video-is required to attend a six-week "boot camp." Described aptly by Mike Swift in the San Jose Mercury News in 2012 as "one part employee orientation, one part software training program, and one part fraternity/sorority rush," the idea is to teach newbies Facebook's technology and practices while, perhaps most important, indoctrinating them into its progressive, risk-taking, irreverent, and collaborative culture, where anyone can change the world, and indeed is expected to do so. Within days of beginning boot camp, for example, an engineer may be pushing out new software changes-live-to several million users. The reverence to a notion Zuckerberg has labeled "hacking" is one such principal instilled by this "trial by fire." Far from the nefarious connotation that the wordhacking has earned in public discourse, "[hacking] is about being unafraid to break things in order to make them better," said Paul Buchheit, a Silicon Valley legend who was creator and lead developer of Gmail, and who was with Facebook from 2009 to 2010 after his startup FriendFeed was acquired. "The root of the hacker mind-set is ‘There's a better way,' " he says, "Just because people have been doing it the same way since the beginning of time, I'm going to make it better."4
As technology becomes more complex and the public more savvy and discerning, Facebook, like all companies navigating the new management environment, must continue to become ever more nimble and responsive in its step-while somehow retaining the "soul" upon which it was founded. This is a delicate dance for any organization, even one as change-friendly as Facebook.... And perhaps the very fact that Facebook exudes dynamism from its core will allow it to continue to thrive. As David Kirkpatrick wrote in his 2010 bookThe Facebook Effect, "Facebook know[s] that things on the Internet are constantly changing at an extremely rapid rate, and the only way any organization can stay alive is to be unbelievably dynamic." Here's hoping Facebook can keep up with the breakneck speed of progress, of which they are at once conduit, creator, and subject.
1 Discusses four "success factors" for organizations. Which of these factors do you see operating within Facebook?
2 Which of the four functions of management discussed in Chapter 1 stand out within this Facebook case?
3 Is Facebook an example of a "sustaining" type of management? Why or why not?
Your paper should be 400words, double:s paced Microsoft Word document. The word count suggested is the maximum but answers can be shorter if they are well written and concise