Question

Explain the major responsibilities of Facebook to society using the Pyramid of Corporate Social Responsibility. In your discussion, explain what some of the tensions among the components (e.g., economic, legal, etc) of the CSR pyramid for Facebook are and Facebook's plan to manage these tensions going forward.

Answer 1

There is no introduction required for Facebook. Most of us are using it or may have used it someday in our life. Today Facebook ranks 5th under Forbes most valuable brand valued at $88.9b which is a step above Coca-Cola.

Some Interesting facts about Facebook:

• It has nearly 2.2 billion users spread around the world. Steep higher than Instagram(300million); WhatsApp(700million).
• Facebook adds around 7200 users every 15 minutes
• A 100,000 friend request every 10 minutes
• 500,000 likes very minute
• The company generates $1.4 million in revenue every hour
• An average user spends at least 21 minutes on Facebook

Even with all these fascinating numbers Facebook has faced lot of criticism how social media influences daily life and its role in politics. With the rising pressure Facebook has been trying to improve its image as a responsible organization which wants to work for the betterment of the society. Its CSR programs are structure to improve its transparency with its key stakeholders which includes (individual/group/business online users).

Facebook CSR activities:

1. Facebook has committed to supporting operations with 100% renewal energy by 2020. It has also adapted sustainable features of the infrastructure that should power Facebook platforms worldwide.
2. It has created a supply program that provides suppliers with a framework of standards. These standards include responsible business alliance code of conduct, which addresses issues related to labor, environment, health and safety ethics. Facebook also strictly complies with the Anti-Slavery and Human Trafficking statement; which opposes any forms of human trafficking.
3. Facebook also has partnered with the government to show support for government programs.
4. The company initiated a fundraiser program which is non-profit. It can be listed by any charitable organization or individual on Facebook.

CSR Pyramid Facebook:

1. Economic: Facebook CSR can only succeed if the company remains profitable. Thus, for the company to remain profitable it needs to add in more users to make its advertisers interested. In 2018, Facebook reported its Q2 reporting less than the market was anticipating. The stock prices have declined by almost 20% even though they added around 22 million users during that quarter. Growth has been stagnant in key market such U.S, Europe and Canada from where most of its revenue is generated.
2. Legal: Privacy concern has dented the image of Facebook as whole. The lack of clear communication has also resulted in this process as they are unable to bring clarity on the user privacy norms. Things got worse when a former employee from Cambridge Analytics broke news that how Facebook was influencing U.S elections by collecting information for building psychological profiles. This pushed the company to face its biggest challenge in its 14-year history. Even the congress has been interested in increasing regulation on Facebook due to its size and growing influence. The company was later fined for $5billion as breach of trust. Similar cases were held in other countries such as India, Brazil and U.K.
3. Ethical: Facebook promotes diverse owned companies to do business with Facebook. The company believes that having diverse suppliers help build better products for the community. The company in 2018 itself spend $400 million with certified diverse supplier which was increase of a whopping 73% from 2017. They have also built relationship with Veteran/Disability/Minority/LGBT/Women and have added them in their procurement network.

5. Philanthropic: Mark Zuckerberg in one of the events stated that Facebook doesn’t need any to focus on charity as the company is already doing a lot in that field. Moreover, Mark Zuckerberg and his wife Priscilla Chan have pledged to donate 99% of their Facebook shares to the cause of human advancement. They also are aiming to raise $3 billion in coming 10 years which will be used for charity purpose. He hasn’t been always vocal about the key issues in the U.S such as healthcare, education or guns. But he strongly believes that charity should be done in the field of technology, i.e. technology not only improve our lives but also help in creating values. Chan-Zuckerberg initiative is a long-term approach that looks to improving education, advancing science and fight for justice.

Challenges:

Facebook programs are intended to satisfy the need of some stakeholders. But even with a wide user base of 2.2 billion it is unable to communicate with most of them. Based on its current CSR it needs to led the path for the betterment of the society as Facebook is not just a social media platform but also a tempted need nowadays. The company needs to adopt more security measures on data privacy as this has deeply dented the image. In terms of revenue generation more than 75% of the revenue is generated through Facebook advertisement. But the company is still unable to create a revenue model for its private messaging app. As I previously indicated that a profitable firm can only think about its social responsibility thus Facebook needs to closely monitor its balance sheet.