Applying Principles of Stakeholder Management to Analyse Organisational Practice - Essay Example

? Application of the Principles of Stakeholder Management in the case of Facebook Number and Number of Professor Date of Submission Number of Words: 1,249 Introduction Facebook was launched as a social networking site back in February 2004. With 500 million active users worldwide (Swartz, 2010), the company managed to become one of the widely used social networking site all over the world. The legitimate stakeholders of Facebook are not limited to its employees but also its active users, advertisers, and public investors. Based on the first principle of Clarkson’s principles of stakeholder management, managers are obliged to acknowledge and monitor the personal concerns of all Facebook’s legitimate stakeholders. Specifically in the case of the general public, it becomes the sole responsibility of the company to protect the privacy and security of its active and inactive users. Upon analyzing the organizational practices of Facebook, this study will not only apply Clarkson’s first principle of stakeholder management to the case of Facebook but also identify and provide concrete evidences on how Facebook continuously violates the main concern of its valuable users. Contextualization of the Issue As a social networking company, Facebook is earning its profit out of its advertising gains. Aside from its advertising business, the company is also earning large sum of revenues out of selling virtual goods like US$1 in exchange for Facebook’s electronic and personalized greeting card, etc. It means that the more active users Facebook could gather each year, the company’s ability to earn more from its investment value increases. Considering the fact that the business model of Facebook is to indirectly earn revenues from its active subscribers, Swartz (2010) revealed that Facebook is not focus on protecting the privacy of its valuable users. In exchange of the free social networking service that Facebook is offering the public, the company continuously include some ad harassment as part of its service. Keizer (2009) explained that Koobface worm is a kind of computer work that makes it possible for Facebook to gather sensitive information like the real name of each user, their password, social security number, home or office address, contact number, and credit card number (Lewton, 2011). Furthermore, the use of koobface, malware, and botnet increases the risk wherein Facebook users are at risk of other forms of computer viruses, adware, worms, spyware, crimeware, Trojan, and scareware among others (Damballa, 2010; Skoudis & Zeltser, 2004, p. 2). Since Facebook encourages its users to share their personal date to the public, its valuable users become at risk of becoming a victim of these computer viruses (Sizemore, 2010; Swartz, 2010). Aside from the risk of computer viruses, it is safe to conclude that the private information gathered by this particular social networking site are most likely being use to assist its advertisers in search for a more accurate target market. Without the knowledge of the active Facebook users, advertisers and sellers of various products and services are able to enjoy the benefit of learning more about another person’s online behaviour and personal preferences (Swartz, 2010). In worst cases, Facebook users can be at risk of becoming a victim of cybercrimes like cyber bullying or cyber terrorism (Donahue, 2010) or even increases the risk for security data breeches (Sizemore, 2010). Since there are a lot of negative consequences associated with the use of Facebook, there is a growing scrutiny about Facebook users’ privacy and security. The issue behind Facebook users’ privacy and security is an on-going concern of many people. In fact, Mui (2011) revealed that Facebook is now being considered as a “worldwide photo identification database”. For these reasons, countries like China, Iran, North Korea, Pakistan, Syria, Vietman, and Uzbekistan has already banned the use of this particular social networking site (Cooper, 2010; MacDonald, 2009; Damascus, 2008). Evaluation Failure to address this issue can jeopardize the business of Facebook. In order to handle the issue on user’s security and privacy, Facebook has already published an article entitled “10 privacy settings that every Facebook user should know” (O'Neill, 2009). Despite Facebook’s effort to educate the people about the use of necessary privacy settings, Eldon (2010) reported that the company remains to “consistently push its users to make more personal information available to the public”. As part of Facebook’s effort to protect the personal information of its valuable users, the company decided to make some changes in its official website wherein each user was given the option to choose whether or not they wish to make their personal information available to a small group of selected individuals or to everyone. By re-arranging the available user-privacy settings, some people are convinced that Facebook is somehow protecting their social and economic welfare from abusive Facebook users. By default, it remains inevitable that one’s profile cannot be hidden to anyone whom their page is already connected to (Eldon, 2010). Because of the business model of Facebook, it is difficult on the part of the company to keep all its users’ personal information available to the public. Despite the company’s effort to make its users feel safe, Eldon (2010) explained that Facebook users were given no options to hide their “General Information” which includes their real name, their profile pictures, and gender among others. This alone is a violation of one’s privacy and security. Furthermore, the process of tagging photos or videos to another person is already a process wherein the personal rights and privacy of another person is being violated. Clarkson’s Principle No. 1 states that “managers should acknowledge and actively monitor the concerns of all legitimate stakeholders, and should take their interests appropriately into account in decision-making and operations” (Carroll & Buchholtz, 2009: 112). This principle is appropriate to the case of Facebook because the company’s public users are considered an important part of its business success. Upon examining the case of Facebook, we can say that the company did acknowledge the global issue on privacy and security. In fact, the company has been closely monitoring all of its users’ major privacy concerns and was able to make use of these information when making important technical changes in their website. However, it is not fair to conclude that Facebook has indeed 100% conform to Clarkson’s 1st Principle for the reasons that its managers need to consider the business and profit interests of the company. Even though the company has actively monitored the global issue on users’ security and privacy and has shown effort in considering the primary concerns of its valuable users, it seems quite impossible on the part of the Facebook not to take advantage of using its users’ information for its profit interests. Since Facebook is earning its revenue not only from online advertisements but also its virtual products, it would be very difficult on the part of Facebook to easily search for its target consumers without secretly using the database of its users’ general information. The long-term consequences of not conforming to Clarkson’s 1st Principle could result to Facebook users’ losing trust to the company. Eventually, it may cause Facebook to suffer from declining revenues. The act of conforming to Clarkson’s 1st Principle does not free Facebook from continuous the controversy behind the issue of user privacy and security. Conclusion Although Facebook managers were able to consider and acknowledge the growing public concern on its users’ privacy and security, the effort made by the company is not enough to keep its users’ personal information secured and private. Despite the fact that this company managed to provide some options on what other people can view from their general information, some of these information will always be made available to pages whom the user is connected to. *** End *** References Carroll, A., & Buchholtz, A. (2009). Business and Society: Ethics and Stakeholder Management. Cengage Learning. Cooper, C. (2010, May 19). CBS News. 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