CALL US 24/7

02086 387100

CHAT OR CALL

07441 4196205

Business Environment Analysis on Facebook

Business Environment Analysis on Facebook

1. Introduction

Leadership has always been of utmost importance- from the smallest gathering to the largest nation. Business organisations are no different. But from time to time, leadership has been viewed from a different perspective, and there is no accurate way to define leadership. For example, John Maxwell defines leadership as only influence, nothing more or less (Maxwell, 2007). But this is somewhat vague. A more accurate definition is that leadership is the process that makes the best use of the efforts of others towards attaining a specific goal by using social influence.

In this report, one of the most innovative leaders of our time, CEO of Facebook, Mark Zuckerberg’s leadership strategies, will be identified and analysed. Later on, Hofstede’s five cultural dimensions will be demonstrated through Facebook.

 

2. Leadership: Style and Advantage

To demonstrate leadership style and its different views and advantages, I have selected one of the youngest and creative entrepreneurs of our time, Mark Zuckerberg. 

2.1 Mark Zuckerberg

At the age of 29, Mark Zuckerberg is the co-founder, Chairman and CEO, Facebook and currently ranked 24th in Forbes most powerful people list (Mashable, 2013). Zuckerberg can be best described as a prodigy. He wrote his first program at the age of 12. He enrolled at Harvard but didn’t complete his education to work for Facebook. Though Facebook wasn’t his original idea, he was the mastermind behind it. Cameron Winklevoss, Tyler Winklevoss, and Divya Narendra accused him of stealing their idea in building Facebook. Later on, he lost a file suit against them and had to give those three shares worth $300m (Insider, 2013). Currently, Facebook has over 1billion users. 

2.2 Zuckerberg’s Leadership Approach
  1. Focused: Even from the beginning, Zuckerberg knew what he was doing. He knew what type of company he wanted and where he wanted it. Since Facemash (Facebook’s predecessor), he has been working steadily on refining, which has given birth to today’s Facebook. This clear focus has given Facebook the ability to reshape people’s social behaviour worldwide and has become a huge ad revenue generator (mensxp.com, 2013).
  2. Values employee’s idea: It is said that good bosses follow their instinct, but great bosses listen to their employees. And by this scale, Zuckerberg is a great boss. But back in 2005, he was busy meeting with venture capitalists for funding and was known to be out of touch with the company. This left the employees guidance less, and gradually they started to become demoralised. One of the top managements’ noticed this and advised him to change this behaviour. He listened to that employee and appointed a mentor for himself to increase his communication skill. Now he is highly popular among employees as he keeps them up to date about the company.
  3. Believes in the product: Since the beginning of Facebook, many tech giants like Google, Viacom, Yahoo have offered to buy Facebook for millions of dollars. In 2007 Microsoft even offered $15billion for Facebook (Biro, 2013). But Zuckerberg didn’t heed them any attention. He believed in his product and its future. And his belief did come true. Now all those offers seem petty from Facebook’s position today’s position.
  4. Transparent about the company’s direction: Zuckerberg is quite infamous for firing people. On the other hand, he is more famous for hiring the right people (Walter, 2013). And once he finds the right people and builds a great team, he shares his vision with them. From his viewpoint, to ensure a company’s advancement, it is necessary to work in the same direction, which is impossible without sharing its vision. He is known to share his vision even with his shareholders, which is unique.
  5. Has uncanny time sense: Key to all great businesses is taking the right decision at the right time, and in recent times, probably none has done it as Zuckerberg has. His decision not to sell Facebook has made him one of the topmost influential persons in the world. Moreover, he is currently standing in the 66th position in the billionaire chart of Forbes. His timing in buying Instagram at half of its asking price proves that he also knows when to move and grab the prize.
  6. Can build priceless partnerships: The Mark Zuckerberg-Sheryl Sandberg partnership is perhaps the most famous business duo in contemporary time. Sandberg’s joining Facebook increased its revenue dramatically (Miguel Helft, 2013). Zuckerberg himself has admitted that he is not exactly a businessman. Rather he is an innovator and visionary person with extraordinary instinct. What he lacked in business skills was fulfilled by Sandberg, and that’s what made them such an extraordinary team.
2.3 Comparative Advantage of Zuckerberg

To illustrate this, I’ll compare Zuckerberg’s leadership traits with one of the most successful but controversial business people of our time- Rupert Murdoch.

  • Ideology: Zuckerberg is quite idealistic about his products and other beliefs. On the other hand, Murdoch can be quoted as ‘Ideology is for amateurs’ (Reuters, 2013). This can create a huge difference when gaining the company’s stakeholders’ trust.
  • Acceptance of mistakes: On different occasions, Zuckerberg accepted his mistakes and later worked on developing that. For example, when Facebook introduced a new newsfeed system, a group named ‘Students against Facebook’ formed and quickly gained over 750,000 members. Zuckerberg apologised to its chief personally and made him his friend (Quora, 2013). On the other hand, Murdoch only apologises when he is out of options and most of the time, he is known to fake an apology. 
  • Employee Management: Murdoch is quite infamous for his employee management. He is heard to say that only those people should be hired who feel grateful about being hired. In his opinion, it is easier to control such employees. But Zuckerberg is the exact opposite, and that allows him to bring the best out of employees and make them work for the company’s vision willingly. 
  • Selfishness: Murdoch believes a fortune can be made out of selfishness, and people should centre their business on that (Trainingzone.co.uk, 2012). On the other hand, Zuckerberg always puts Facebook’s users first. In his opinion, Facebook exists to serve its users, not the other way around. This approach is the key to Zuckerberg’s immense popularity and Facebook’s success. 
2.4 Motivation: Zuckerberg and his Employees 

Zuckerberg is motivated by his vision to change the world. After acquiring more than 1billion users, he has now set a goal to expand it into a site of 5million users. His target to change the way people interact virtually and bring people closer by developing new technology is constantly motivating him to work relentlessly.

Facebook’s employees are motivated by Zuckerberg’s transparent and friendly behaviour. He listens to his employees and values their opinions. He always makes sure to share his visions about the company with the employees to understand where the company is standing right now and where it should be after the time being. Even the Facebook headquarter is a huge open space inside a giant building which promotes Facebook’s openness. All these things make the employees feel like they are wanted and a part of a giant family. 

2.5 Difference from other businesspersons:

The key difference that can be noted is that Zuckerberg is quite unconventional compared to other CEOs. He is passionate, bold and has integrity. These virtues are getting rarer among businesspersons today. But in the last few decades, business environments have changed a lot. But most of the businesspersons can’t recognise or adopt it. And in these situations, CEOs like Zuckerberg are making a difference with their unusual thinking. They are not waiting for the change; they are making the change.

 

3.0 Applying Hofstede’s Cultural Dimension Theory on Facebook

In order to understand how Hofstede’s five cultural dimensions can aid a social network giant like Facebook to assimilate its diverse workforce into a well-motivated team that contributes to the corporate strategic objective, first, it is essential to know what Hofstede’s theory states.

3.1 Hofstede’s cultural dimension theory:

Developed by Dr Geert Hofstede in the 1970s, Hofstede’s cultural dimension theory is a framework for cross-cultural communication that describes how the value sense of the members of a society is affected by its culture and how these values are connected to individual behaviours by using a structure that is derived from the factor analysis (Hofstede and Hofstede, 2005). This theory is widely used for research works, mostly in international management and cross-cultural psychology analysis.

Dr Hofstede performed his research on IBM employees, which allowed him to gather a huge database enriched with high cultural diversity (Geert-hofstede.com, 2013).  Thus this allowed his research to eliminate the adverse effect of company culture highly.

Armed with a large database of cultural statistics, Dr Hofstede analysed them and found patterns of similarities and differences amid the responses along five dimensions. These dimensions are:

  1. Power distance 4. Uncertainty and,
  2. Individualism 5. Long term orientation.
  3. Masculinity

In the following section, the characteristics of these five dimensions and their role in aiding the diverse workforce of the Facebook team are explained.

3.2 Power Distance:

Power distance means the degree of equality/inequality in power that exists and is accepted by the members of society. High power distance in a society means that the members of that particular society accept unequal power distribution. As opposed, low power distance means power is well dispersed, shared almost equally between the members. Characteristics of organisations with high and low power distance are (Lussier and Achua, 2010):

Power distance

Organisation Characteristics

High

  • Centralised
  • The large gap in Authority and Compensation 
  • Strong Hierarchy

Low

  • Decentralised
  • A small gap in authority

In the early days of Facebook, Mark Zuckerberg tried to maintain a high power distance within the Facebook team, where he called the shots. When in 2005, several corporate giants were trying to buy Facebook, and Zuckerberg was not making any statement to his staff, unrest grew between the employees. Employees were willing to provoke a mutiny against him. After that incident, Zuckerberg understood the importance of low power distance within his team. Since then, Facebook has operated as an organisation that believes in inequality.


3.3 Individualism:

Individualism refers to the strength of ties that the members of a community have within themselves. Higher Individualism means a lack of interpersonal communication, very little sharing of duties within the community. Low individualism leads to stronger group cohesion, loyalty and tremendous respect for members. Characteristics of organisations with different degrees of individualism are given below:

Individualism

Organisation Characteristics

High

  • The high valuation of an individual’s time and freedom
  • Excitement in challenges
  • The expectation of reward for hard work
  • Privacy is secured

Low

  • Intrinsic reward is important here.
  • Harmony is valued more than honesty.

Mark Zuckerberg tries to maintain moderate individualism in his team. His team thrives for the challenge, as he quoted, “The riskiest thing is to take no risks.” And there is a high expectation for a reward for all that hard work. However, they also value harmony within their community, as it is essential for them to recruit employees globally. 


3.4 Masculinity

This dimension refers to how rigidly a society values the traditional male and female roles. High masculinity is found in societies that expect men to be strong, tough and the provider. Here the woman is expected to have different professions (Neck, 2006). In Low masculinity societies, these roles are not that distinctive. Characteristics of organisation based on a different degree of masculinity are shown in the figure below:

Masculinity

Characteristics

High

  • Men and women are expected to be masculine and feminine, respectively.
  • Distinguishable difference between works for different genders.

Low

  • The work of men and women are quite similar.
  • Powerful and successful women are well respected.

There is very low masculinity in the Facebook team culture. It is to be expected as this is a social network giant that will recruit anyone as long as they are highly motivated and talented at his/her work. So maintaining low masculinity is essential and beneficial for Facebook.

3.5 Uncertainty Avoidance Index

Uncertainty avoidance index refers to the tendency of society to avoid uncertain situations. Societies scoring high in UAI feel very anxious when in uncertain situations, so they avoid the unknown as much as possible. Low UAI scores indicate that members of society are more susceptible to uncertainty and risk. Characteristics of an organisation with different degrees of uncertainty avoidance index are shown below.

Uncertainty Avoidance Index

Organisation Characteristics

High

  • Lots of rules and norms.
  • Need for guided structure
  • uncertainty causes emotional turmoil
  • Differences are usually avoided

Low

  • Organisations are informal in culture
  • Focuses on long term goals rather than short term
  • Accepts uncertainty with ease.

Facebook scores very low in the uncertainty avoidance index. At the beginning of his journey, Zuckerberg told his coworkers boldly, “It may not make you comfortable to hear me saying this, but I’m sort of learning on the job here.” This attitude marks his acceptance of uncertainty. Also, the Facebook team is very informal in culture, as it is necessary to flow new ideas. Their goals are basically for the long term, so they try as much as possible to cope up with the current uncertainty.

3.6 Long Term Orientation

This refers to how much a society values long-term goals and traditions over short-termed ones. Dr Hofstede added this dimension in the 1990s. Countries with a high score in long term orientation put more value in delivering social obligations than the others. Characteristics of an organisation with different degrees of long term orientation are shown below:

Long Term Orientation

Organisation Characteristics

High

  • Strong work ethic.
  • High value in education and training

Low

  • High level of innovation
  • Self-actualisation is sought

Mark Zuckerberg is a person who leads with a long term goal, yet he very much welcomes innovation (Pauleen, 2007). So the orientation of the Facebook team cannot be easily definable. His team needs to be very creative to cope with ever-changing global needs, yet a strong work ethic is needed. So it can be said that they try to follow the merits of long-term and short-term orientation.

 

4. Conclusion

Mark Zuckerberg is a founder, visionary and great leader. He began with the leadership style of late Steve Jobs but later developed his style. He has made some mistakes, but we should focus on the point that he has acknowledged them and has worked hard to improve himself. This trait alone sets him apart from many top businesspersons. His unconventional leading style has served him well, and it seems like it will be serving him in future too.

 

 

 

 

 

 

 

 

Reference
  1. Biro, M. 2013. Think Like Zuck: How Leadership Diversity Sparks Innovation. [online] Available at: http://www.forbes.com/sites/meghanbiro/2013/01/27/think-like-zuck-how-leadership-diversity-sparks-innovation/ [Accessed: 12 Dec 2013].
  2. Geert-hofstede.com. 2013. Applications – Geert Hofstede. [online] Available at: http://geert-hofstede.com/applications.html [Accessed: 12 Dec 2013].
  3. Hofstede, G. and Hofstede, G. 2005. Cultures and organizations. New York: McGraw-Hill.
  4. Insider, B. 2013. The Truth Behind Facebook’s Founding is Finally Revealed. [online] Available at: http://wallstcheatsheet.com/breaking-news/the-truth-behind-facebooks-founding-is-finally-revealed.html/ [Accessed: 12 Dec 2013].
  5. Lussier, R. and Achua, C. 2010. Leadership. Australia: SouthWestern/Cengage Learning.
  6. Mashable. 2013. Mark Zuckerberg. [online] Available at: http://mashable.com/category/mark-zuckerberg/ [Accessed: 12 Dec 2013].
  7. Maxwell, J. 2007. Be a people person. Colorado Springs, CO: David C Cook.
  8. Miguel Helft, S. 2013. Sheryl Sandberg: The real story. [online] Available at: http://money.cnn.com/2013/10/10/leadership/sheryl-sandberg-mpw.pr.fortune/ [Accessed: 12 Dec 2013].
  9. Neck, C. 2006. Self-leadership. Bradford, England: Emerald Group Pub..
  10. Pauleen, D. 2007. Cross-cultural perspectives on knowledge management. Westport, Conn.: Libraries Unlimited.
  11. Quora. 2013. 6 traits that define Mark Zuckerberg’s leadership style. [online] Available at: http://mzuck.quora.com/ [Accessed: 12 Dec 2013].
  12. Reuters. 2013. The leadership lessons of Chairman Rupert. [online] Available at: http://blogs.reuters.com/jackshafer/2012/06/26/the-leadership-lessons-of-chairman-rupert/ [Accessed: 12 Dec 2013].
  13. Trainingzone.co.uk. 2012. Murdoch and leadership: How not to do it | TrainingZone.co.uk. [online] Available at: http://www.trainingzone.co.uk/topic/leadership/murdoch-and-leadership-how-not-do-it/177306 [Accessed: 12 Dec 2013].
  14. Walter, E. 2013. Management Lessons You Can Learn from Mark Zuckerberg. [online] Available at: http://www.ekaterinawalter.com/2013/09/management-lessons-you-can-learn-from-mark-zuckerberg/ [Accessed: 12 Dec 2013].
  15. www.mensxp.com. 2013. 6 Leadership Lessons from Mark Zuckerberg. [online] Available at: http://www.mensxp.com/work-life/leadership/21016-6-leadership-lessons-from-mark-zuckerberg.html [Accessed: 12 Dec 2013].
Request a CallBack

Still Need Help?

Open chat
Assign Mentor
Hello!
How Can We Help You?