Facebook Inc. supports its social media business through corporate social responsibility (CSR) programs that address stakeholders’ interests. In Archie B. Carroll’s theory of corporate citizenship, businesses affect stakeholders, and vice versa. In this business analysis case of Facebook, the stakeholders are diverse because of the global reach and nature of the social network. As one of the largest social media businesses in the international market, the company affects billions of online users as stakeholders. These online users include individuals, groups, and businesses. Facebook Inc. needs to ensure that its corporate social responsibility programs and policies are satisfactory in addressing stakeholders’ concerns. Doing so supports customer loyalty and business competitive advantages, such as the strengths identified in the SWOT analysis of Facebook Inc. The company needs corporate citizenship initiatives that prioritize the most significant of these stakeholders. In this way, the corporate responsibility approach recognizes resource limits while strategically enhancing business image and competence.
A stakeholder analysis of Facebook Inc. underscores the significance of comprehensive corporate social responsibility (CSR) initiatives and programs. The company’s corporate citizenship strategy satisfies stakeholders’ concerns while also supporting Facebook’s business strategic objectives in the multinational online social media market. This corporate responsibility approach helps protect the business against the competitive effects of the CSR programs of other online advertising companies like Google LLC (parent company of YouTube LLC), Snap Inc. (Snapchat), Twitter Inc., and Amazon.com Inc.
Facebook’s Stakeholder Groups & CSR Initiatives
Facebook’s social media business affects stakeholders around the world. This situation requires global standards for the company’s corporate social responsibility initiatives to satisfy stakeholders’ interests. For example, the company must maintain privacy policies that satisfy various standards and expectations among users and governments. Facebook Inc. has the following stakeholder groups relevant to corporate citizenship, arranged according to importance in its CSR strategy:
- Users/Members (most important)
Users/Members. Facebook’s online social media service has billions of monthly active users. These users or members of the social network are the stakeholder group that receives the company’s top prioritization in corporate citizenship, considering Facebook Inc.’s mission and vision statements. Users are significant in CSR because they determine the popularity and attractiveness of the company’s display advertising service. For example, advertisers are more likely to pay for such service as the online social network gains more users or members. Thus, the business aims to continually grow its user base, which aligns with Facebook’s generic competitive strategy and intensive growth strategies. As stakeholders, users are interested in the ease of using the firm’s social media services and in the privacy and security of personal information. The company faces criticism on the ethics of addressing this stakeholder group because of data privacy and security concerns such as those involving Cambridge Analytica. However, Facebook’s corporate citizenship approach continues to improve its social networking website and mobile apps to make it easier for users to protect the privacy of their accounts. Moreover, the company is the primary participant in the launch of Internet.org in 2013, which aims to make the company’s platform and other online resources more accessible in the developing world. Nonetheless, Internet.org faces criticism regarding net neutrality. Thus, even though Facebook Inc.’s corporate social responsibility strategy satisfies the main interests of users or members as stakeholders, further improvement is needed in this area.
Advertisers. Advertisers are the chief source of Facebook’s income. Thus, this stakeholder group is significant because it directly influences the company’s financial status. The CSR interests of these stakeholders include effective and efficient advertising service, as well as accurate data from the company. In its corporate social responsibility efforts, Facebook Inc. addresses these interests through automated reporting to minimize human intervention in the advertising process. Also, the provision of options for advertisers to target specific audiences on the online social network maximizes the benefits of the advertising service and contributes to the fulfillment of corporate citizenship in this area. Therefore, Facebook’s corporate social responsibility strategy addresses the interests of this stakeholder group.
Employees. Facebook Inc. values employees in terms of their contributions to the social media business. These corporate citizenship stakeholders are significant in affecting the company’s evolution, especially in developing and improving products. The CSR interests of employees include high compensation and career development. Facebook’s corporate social responsibility programs directly address these interests through competitive human resource policies. For example, the company gives some of the highest salaries in the industry, especially as a way of attracting talent while competing against firms like Google in the labor market. Such efforts show that the company satisfies corporate social responsibilities in considering the interests of employees as a major stakeholder group. Addressing this stakeholder group’s concerns influences Facebook’s corporate culture, which shapes employees’ behaviors.
Governments. Governments are significant CSR stakeholders because they impose requirements on the social media business, as shown in the PESTEL/PESTLE analysis of Facebook Inc. This influence keeps the company in compliance with governmental policies and interests, which include regulatory requirements. Facebook’s corporate social responsibility strategy involves negotiations and partnerships with governments to show support for governmental efforts and programs. In the case of China, for example, Facebook continues to participate in education programs as a corporate citizenship approach to convince the government to open the market to the online social network.
Communities. Facebook Inc.’s corporate citizenship efforts give the least priority to communities as a stakeholder group. These stakeholders significantly affect the company by influencing the perception of users/members and advertisers. Communities are interested in developmental support from companies. Facebook addresses such CSR interests through green technology and Internet.org, which was launched in 2013 as a way to increase online access in developing countries. However, critics argue that Internet.org violates net neutrality and is just another way to promote the company’s online social network over competitors. Also, a limited Ph.D. fellowship program allows students to work with the company, and for the corporation to find new hires. These efforts show that Facebook Inc.’s corporate social responsibility strategy is weak in satisfying the interests of communities as a stakeholder group.
Facebook Inc.’s CSR Performance in Addressing Stakeholders’ Interests
As the leading social media company, Facebook Inc. has corporate social responsibility policies and programs that satisfy the interests of some of its major stakeholders. For example, the interests of advertisers, employees, and governments are satisfied. These programs partly support public relations in Facebook’s marketing mix or 4P. However, the company’s CSR strategy neglects to provide satisfactory support for the interests of communities as stakeholders. Also, the company faces issues in fulfilling corporate citizenship goals pertaining to the users/members of its social network. Facebook Inc., together with other firms, launched Internet.org, but this effort is criticized as a violation of net neutrality and as having hidden proprietary motives.
Based on these CSR challenges, it is recommended that Facebook Inc. enhance its corporate citizenship initiatives to satisfy the concerns of communities, especially through sustainability and ecological community development programs, which are two of the firm’s corporate social responsibilities. In addition, it is recommended that the company develop more stringent data privacy and security policies for strict compliance. This recommendation addresses the interests of users/members and communities, while contributing to business competitive advantage to counteract the moderate competitive forces shown in the Porter’s Five Forces analysis of Facebook Inc.
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