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Comprehensive Exam

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ARAB ACADEMY GRADUATE SCHOOL OF BUSINESS – SMART VILLAGE

COMPREHENSIVE EXAM

December 2021
Congratulations on being one step away from earning your degree!

Dear Students, Graduate School of Business (Smart Village campus) wishes you; your family and
your loved ones to be all safe and well. Based on the online newly implemented system in
alignment with the government precautionary procedures a new assessment has been
developed for your comprehensive exam.

Please read carefully the description, the deliverables and the academic integrity policy.
Description

The comprehensive examination is an open resources exam. It is a comprehensive case followed


by six questions based upon the program objectives. Please note that you will need a minimum
of 60% to be granted an overall grade of “Pass” and successfully pass your exam.

DELIVERABLES

1- You will receive your exam via email, from: exam.gsbsv@gmail.com; on Friday 24
December 2021, at 10:00 am
2- Deadline of acceptance Monday 27 December 2021 10:00am, based on which your
exam is 72 hours for your convenience. After which no paper will be accepted
3- Based on points 1 and 2 it is your responsibility to ensure a stable PC and a good
internet connection
4- Cover page should include: comprehensive exam, December 2021, student name
5- Papers without references will not be evaluated
6- Papers should be typed, Times New Roman, font 12, please ensure titles and subtitles
are font 16 - 14
7- Please close your answers in PDF
8- Please make sure to return your exam only to the following address:
exam.gsbsv@gmail.com
9- Return email title should include: comprehensive exam, December 2021, full student
name

Failing to comply with any of the exam requirement will lead to an automatic F.

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Dear MBA students,

The Comprehensive Exam, as in AA GSB SV practice, it is designed for you based on


100% real business events and data enabling your exam exercise to be founded and
correct.

As you might all know Facebook has been in the news consistently, however, more than
ever during the month of October 2021; too many controversies: court laws, fines to be
paid, human resource restructure, mega marketing and reposition plans, social and
political questionable ethics.

We are presenting you in this case with the following structure: starting with an updated
brief history of Facebook, followed by a series of CNN and BBC business news
publication in the time line of the company business news events from 18 to 30 of
October 2021.

Based on the provided storyline and business updated you will find 6 business strategic
questions to answer.

All information used below is sourced; however we highly encourage you to continue
your online search to close any needed information gap in your answers.

A Brief History of Facebook, Its Major


Milestones
Facebook is used by billions of people every day, but its founders could never have
dreamed how big it would become.

By Christopher McFadden, Jul 07, 2020

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Facebook is one of the giants of the Internet today. But its founders may not have
dreamed of this success when they started building it from scratch in their university
dorm room.

Here, we briefly explore how Facebook started, and uncover the origins of its name, as
well as detail some of Facebook's major milestones.

RELATED: 7 THINGS YOU SHOULD KNOW ABOUT FACEBOOK'S NEW


CRYPTOCURRENCY LIBRA

What was the original purpose of Facebook?

The original purpose of Facebook, or "The Facebook" as it was known then, was to allow
Harvard students to use their ".edu" email addresses and photos to connect with other
students at the school.

Then-student Mark Zuckerberg foresaw a way of bringing the existing social experience
of college onto the Internet. He wanted to create a place that could help college students
connect with one another.

Why did Mark Zuckerberg make Facebook?

In January of 2004, Mark Zuckerberg began writing the code for the new site that would
eventually become Facebook. The inspiration for it came from an editorial in The
Harvard Crimson on Facebook's controversial forerunner, "FaceMash."

This site compared the pictures of different Havard student's faces and allowed users to
rate them for attractiveness. Almost overnight, it proved quite popular, attracting 22,000
views in just 4 hours.

Unfortunately for Zuckerberg, the site violated Harvard's policy by hacking into the
school's security system and copying student ID images used to access dormitories to
acquire the photos needed for the site, not to mention being in dubious taste. It was shut
down by the university within days.

Zuckerberg, astonishingly, managed to escape expulsion. A close call, but a useful one.

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His experience with "FaceMash" helped spark the idea for a new site -- a social
networking site where students at Harvard could use their ".edu" email addresses and
photos to connect with other students at the school.

Now all he needed was a catchy name.

The site's name was taken, by all accounts, from the sheets of paper distributed to the
freshman that profiled students and staff at Harvard.

Facebook was subsequently founded in 2004 by Mark Zuckerberg, Eduardo


Saverin, Dustin Moskovitz, and Chris Hughes — all of whom were students at Harvard
University. Soon after the new site was launched under the URL thefacebook.com.

The site was an immediate hit, and within just 24 hours of launch, around 1,200
students had signed up. Within one month, around half of all Harvard undergraduates
had a profile.

It soon spread to three other college campuses in the U.S. — Yale, Columbia, and
Stanford.

"It became Facebook.com in August 2005 after the address was purchased for $200,000.
US high schools could sign up from September 2005, then it began to spread worldwide,
reaching UK universities the following month," according to the Guardian.

How did Mark Zuckerberg come up with the idea?

As we have already seen, the idea for Facebook came from existing practices at Harvard
for freshman students. He was, in his own words, trying to solve a problem he saw
around him and not build a multi-million dollar enterprise.

“Yeah, well, I never started this to build a company,” Mark Zuckerberg


told Freakonomics Radio as part of its six-week series called “The Secret Life of CEOs.”

"Ten years ago, you know, I was just trying to help connect people at colleges and a few
schools."

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"That was a basic need, where I looked around at the Internet and there were services for
a lot of things that you wanted," Zuckerberg added.

"You could find music; you could find news; you could find information, but you
couldn’t find and connect with the people that you cared about, which as people is
actually the most important thing. So that seemed like a pretty big hole that needed to get
filled."

As we all know today, Facebook exploded beyond all expectations for Zuckerberg and
other Founders.

Today, the social media giant has a market capitalization of more than $600 Billion, and
had annual revenue of around $70.7 Billion in 2019. It has more than 2.5 billion monthly
active users and has made Zuckerberg one of the richest men in the world.

However, the history of Facebook has not been without controversy. For example,
anyone who has watched "The Social Network", may remember an apparent problem
with the Winklevoss twins.

Almost as soon as Facebook was launched it was mired in legal issues. Twins Cameron
and Tyler Winklevoss, along with Divya Narendra, claimed that Mark Zuckerberg had
reneged on an agreement to help them build their own social media site at Harvard.

Allegedly, they claimed that Zuckerberg used their idea and his code to build Facebook
instead of their own venture. This was disputed for years until a legal case was settled in
2008 for $65 million in cash and Facebook stock.

But this was not the only lawsuit against the fledgling social media site. A New York-
based, former wood-pellet salesman called Paul Ceglia also claimed that he was owed a
large amount of Facebook stock from a 2003 contract with Zuckerberg.

According to Ceglia's claim, back in 2003, he hired Zuckerberg (then an 18-year old
freshman at Havard) to complete some coding for a site called Streetfax, later
Streetdelivery. Allegedly Zuckerberg was paid $1,000 for the work.

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Ceglia also claimed that he invested $1,000 into Zuckerberg's "The Face Book" project.
Ceglia claimed that he was now owed a large chunk on Facebook shares based on that
investment.

At the time, Facebook suggested the claim was "fraudulent" and used Ceglia's history of
fraud as evidence. They pointed out that Ceglia had been arrested and charged with
criminal fraud and grand larceny in 2009 when his wood-pellet company failed to honor
delivery of over $200,000 in orders.

But the case then got more interesting. The actual founder of StreetDelivery, Andrew
Logan, confirmed that Ceglia had indeed worked there in 2003, and that Zuckerberg had
been employed to write the code for Streetfax.

The case, however, was dismissed by a federal judge when the findings of a magistrate
judge were upheld showing that the evidence provided by Ceglia had, indeed, been
faked.

Facebook is no stranger to controversies

No talk about Facebook would be complete wıth a discussion on the company's various
controversies throughout its history. While we have already touched on some of the early
lawsuits against the company, Facebook has also taken fire for a few other, allegedly
suspect, activities.

One major bone of contention surrounding Facebook is its apparent dissemination of


"fake news". Coming to the attention of journalists during the 2016 U.S. presidential
election, Facebook has been accused of allowing fake Russian Facebook accounts to
purchase hundreds of thousands of dollars in paid ads to spread propaganda, with the
aim of influencing the election results.

According to these claims, these ads both contributed to and influenced the outcome of
the elections. Whether you personally believe this or not, the accusations continue to
damage public attitude towards the company.

In a statement directly addressing this issue, Zuckerberg stated:

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"The problems here are complex, both technically and philosophically," Zuckerberg
wrote after the 2016 election.

"We believe in giving people a voice, which means erring on the side of letting people
share what they want whenever possible. We need to be careful not to discourage sharing
of opinions or to mistakenly restrict accurate content."

However, Facebook is still mired in claims that it allows fake news and dangerous
propaganda to be disseminated on its site. More recently, Facebook, and Zuckerberg in
particular, have been accused of doing nothing to reign in dangerous hate speech on the
site, and even of, allegedly, encouraging the dissemination of such speech through
company policy. In June 2020, Facebook began shedding advertisers, who claimed they
no longer wanted their ads to appear next to posts from hate groups.

Due to the nature of Facebook's business model, it is also regularly accused of


questionable data harvesting scandals. One of the most notable occurred in 2018, when
they were engulfed in the Cambridge Analytica scandal.

Allegedly, the data firm was improperly using personal data of Facebook users to create
psychological profiles of them for later political use. This data, so the claim goes, was
then used, in part, to help influence elections in the US and UK.

Other tenuous links were made to Russian ne'er-do-wells too.

This ultimately led to Zuckerberg being called before the U.S. Congress to testify in
Facebook's defense. Facebook was also investigated by the Federal Trade Commission
over the allegations.

This, in turn, led the U.S. government to consider potential legislation to help rein in
companies like Facebook, to prevent them from having carte blanche with users' personal
data.

"It's clear now that we didn't do enough to prevent these tools from being used for harm
as well," Zuckerberg told Congress. "And that goes for 'fake news,' for foreign
interference in elections and hate speech, as well as [for] developers and data privacy. It
was my mistake, and I'm sorry."

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It was also announced that Facebook could face a $5 billion fine payable the FTC.

It is unlikely that Facebook will radically change the way they gather and sell user data in
the future, as this is the basis for how their Facebook ads, Facebook Marketplace,
and Facebook Business Manager services work. For the vast majority of cases, this
enables companies to target ads to specific demographics who are most likely to buy their
products.

Given the growing controversy and advertiser backlash, Facebook itself is taking pains to
seem to be in favor of some form of regulation. So long as it is the "right kind" of
regulation -- though recent evidence to their lobbying activities against data privacy laws
may prove the contrary.

Sadly for Facebook, their troubles weren't over with the data harvesting scandal of 2018.
The same year, Facebook publically announced a hack that affected over 50 million of its
users.

The largest hack the company had ever experienced at the time, it apparently gave
hackers access to sensitive data and account information, as well as, any apps users had
logged into through Facebook.

All affected users were requested to log back into their accounts and were notified of the
breach.

But these are just some of the many, many controversies and unethical practices leveled
against Facebook. Given the size of the company, and the nature of their business, this is
unlikely to change anytime soon.

What were some of the major milestones in Facebook's history?

Here is a brief history of some of the major milestones and news events in Facebook's
history. This list is far from exhaustive (after all time and tide wait for now man): -

 February 2004 - Facebook (then called "thefacebook") was founded by students


Zuckerberg, Moskovitz, Saverin, and Hughes.

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 March 2004 - Facebook spreads to three other college campuses - Yale,
Columbia, and Stanford.
 June 2004 - Facebook moves its headquarters to Palo Alto, California.
 September 2004 - The site launches the now-infamous "wall" - which allows
users to post things and receive messages on their own page.
 December 2004 - Facebook hits 1 million users.
 May 2005 - Facebook expands to more than 800 college campuses.

 September 2005 - The site expands to high school networks. It also drops the
"the" to become just "Facebook."
 October 2005 - Facebook adds photos and goes international.
 December 2005 - Facebook has more than 6 million users.
 April 2006 - Facebook goes mobile.
 September 2006 - Anyone can now join Facebook.
 December 2006 - Membership increases to 12 million.
 June 2007 - Video capability launches.
 December 2007 - Membership increases to 58 million.
 July 2008 - Launch of Facebook for iPhone.
 February 2009 - The "like" button is introduced.
 July 2010 - Over 500 million users are active on Facebook.
 August 2010 - A Facebook engineering center is opened in Seattle.
 October 2010 - Groups are launched.
 April 2011 - Datacenter opens in Prineville, Oregon.
 July 2011 - Video calling is launched.
 April 2012 - Acquisition of Instagram is announced.

 May 2012 - Facebook releases its IPO - which raised $16 billion and gave the
company a $102.4 billion market value for its Facebook stock.
 October 2012 - Membership hits the 1 billion mark.
 February 2013 - Acquisition of Atlas is announced.
 June 2013 - Facebook's acquisition, Instagram, launches video capability.
 February 2014 - Acquisition of WhatsApp is announced.

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 March 2014 - Acquisition of Oculus is announced.
 April 2014 - Facebook's Business Manager service is launched.
 November 2014 - Groups App is announced.
 April 2015 - Over 40 million small business pages are now on Facebook.
 June 2015 - Facebook's AI Research group opens in Paris.

 February 2016 - Facebook's Reactions launches.


 July 2016 - There are now more than 1 billion users of Messenger a month.
 October 2016 - Facebook Marketplace launches - allowing users to buy and sell
products.
 April 2017 - F8 developer's conference is held in San Jose by Facebook.
 September 2017 - News emerges that Facebook, and Microsoft, have completed
work on a new trans-Atlantic data cable.
 March 2018 - Facebook is sued by shareholders, following stock plummet.
 May 2018 - Facebook trial a new technology to help stop "revenge porn," by
asking users to provide naked pictures of themselves.
 April 2018 - Zuckerberg testifies before Congress regarding concerns over data
and privacy breaches.
 September 2018 - Facebook COO Sheryl Sandberg testifies before Congress.
 October 2018 - Facebook announces the launch of the new Facebook Portal: a
hands-free video calling device.
 December 2018 - Facebook announced the launch of "Stablecoin", a blockchain
version in India.
 January 2019 - Facebook invest $7.5 million to help launch a TUM Institute for
Ethics in Artificial Intelligence.
 April 2019 - Facebook reportedly set aside billions to cover potential future FTC
fines.
 May 2019 - Facebook deletes large amounts of fake accounts from its site.
 June 2019 - Facebook shareholders vote to remove Zuckerberg as Facebook
chairman. 68% agree with the motion.

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 June 2019 - Facebook begins blocking Huawei from pre-installing its app on their
smart devices.
 June 2019 - Facebook launches its news digital wallet and currency called
Calibra.
 July 2019 - It is announced that Facebook is helping to map roads using deep
learning and AI-focussed tools.

 August 2019 - Facebook file lawsuits against various Hong Kong and Singapore
app developers because of their so-called "click injection" fraudulent activities.
 September 2019 - Facebook launch their Tinder-like dating feature, that also
comes with Instagram integration.
 September 2019 - Facebook acquire the mind-reading startup CTRL-labs for $1
billion.
 December 2019 - Facebook announces yet another major security breach.
 April 2020 - Facebook announces the cancellation of all major public events until
2021 amid COVID-19 fears.
 May 2020 - Facebook purchases GIPHY for hundreds of millions of dollars.
 June 2020 - Facebook unveil their new AI tool to transform 2D images into 3D
models.
 June 2020 - Companies begin to pull ads from Facebook in a boycott over "hate
speech". Facebook stock takes a massive hit.
 June 2020 - The company announces its new "Dark Mode" for mobile devices.

Facebook to hire 10,000 in EU to


work on metaverse
Published BBC Business News 18 October 2021

Facebook is planning to hire 10,000 people in the European Union to develop a so-called
metaverse.

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A metaverse is an online world where people can game, work and communicate in a
virtual environment, often using VR headsets.

Facebook CEO Mark Zuckerberg has been a leading voice on the concept.

The announcement comes as Facebook deals with the fallout of a damaging scandal and
faces increased calls for regulation to curb its influence.

What is the metaverse?

"The metaverse has the potential to help unlock access to new creative, social, and
economic opportunities. And Europeans will be shaping it right from the start," Facebook
said in a blog post.

The new jobs being created over the next five years will include "highly specialised
engineers".

Investing in the EU offered many advantages, including access to a large consumer


market, first-class universities and high-quality talent, Facebook said.

Facebook has made building the metaverse one of its big priorities.

Despite its history of buying up rivals, Facebook claims the metaverse "won't be built
overnight by a single company" and has promised to collaborate.

It recently invested $50m (£36.3m) in funding non-profit groups to help "build the
metaverse responsibly".

But it thinks the true metaverse idea will take another 10 to 15 years.

Some critics say this latest announcement is designed to re-establish the company's
reputation and divert attention, after a series of damaging scandals in recent months.

This included revelations from whistleblower Frances Haugen, who worked as a product
manager on the civic integrity team at Facebook.

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Internal research by Facebook found that Instagram, which it owns, was affecting the
mental health of teenagers. But Facebook did not share its findings when they suggested
that the platform was a "toxic" place for many youngsters.

Facebook settles US worker


discrimination claims
Published BBC Business News / 19 October

Facebook has agreed to pay a record $14.5m (£10.1m) to settle claims it


discriminated against US workers in its hiring practices.
The US Department of Justice (DOJ) had claimed the tech giant routinely overlooked US
workers in favour of foreign ones on temporary visas.
It is the biggest penalty of its kind issued by the DOJ's Civil Rights Division.
Facebook said it "strongly believes" it met the federal government's standards.
"Facebook is not above the law, and must comply with our nation's federal civil rights
laws, which prohibit discriminatory recruitment and hiring practices," said Assistant
Attorney General Kristen Clarke of the DOJ.
"Companies cannot set aside certain positions for temporary visa holders because of their
citizenship or immigration status."
The US tech sector often uses temporary visas, including the H-1B, to bring highly
skilled foreign guest workers to the US. It argues they are vital, because there are not
enough American science and engineering graduates to fill the jobs available in areas
such as artificial intelligence.
But critics say the laws governing temporary visas are lax, and make it too easy to
replace US workers with cheaper foreign labour - something US law prohibits.
In October last year, the Trump administration tightened the requirements for H-1Bs -
something some interpreted as being an attempt to deter foreign workers.
 US tightens temporary worker visa rules
 Facebook to hire 10,000 in EU to work on metaverse
 Facebook denies failings on hate speech removal

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The Department of Justice (DOJ) alleged that from January 2018 until September 2019,
Facebook had "refused" to recruit, consider or hire US workers for more than 2,600 jobs.
It also claimed Facebook used recruiting methods "designed to deter US workers from
applying to certain positions", such as requiring applications to be submitted by post
only.
The DOJ said this violated the Immigration and Nationality Act (INA), which prohibits
employers from discriminating against workers because of their citizenship or
immigration status.
Those who allegedly missed out included US citizens, US nationals, asylees, refugees
and lawful permanent residents, it said.
'Hiring the best'
Under the settlement, Facebook will pay a civil penalty of $4.75m to the US government,
and up to $9.5m to eligible victims of the alleged discrimination.
The tech giant will also be required to conduct "more expansive advertising and
recruitment for its job opportunities" and accept electronic CVs or applications from all
US workers who apply.
It will also be subject to ongoing audits by the US Department of Labor.
"While we strongly believe we met the federal government's standards in our permanent
labour certification practices, we've reached agreements to end the ongoing litigation and
move forward," a Facebook spokesperson said.
They added that the company intends to "continue our focus on hiring the best builders
from both the US and around the world."

Facebook earns $9bn despite


whistleblower scandal
By Daniel Thomas
Business reporter, New YorkPublished, 26 October 2021

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Facebook has posted better-than-expected profits for the third quarter, as it
continues to face bad press over leaked internal documents.
The social media giant made $9bn (£6.5bn) of profit in the three months to September, up
from $7.8bn last year.
However, it was hit by a new privacy update to Apple's iOS 14 operating system, which
made it harder for brands to target ads at specific users.
It comes amid fresh claims of unethical behaviour made by a former employee.
Frances Haugen has released a cache of internal documents to the public, alleging that
Facebook put profit before user safety.
Multiple media reports say the documents show Facebook struggled to moderate content
that promoted hate speech and sex trafficking outside of the US.
On Monday, Facebook chief executive Mark Zuckerburg told investors on a conference
call: "What we are seeing is a coordinated effort to selectively use leaked documents to
paint a false picture of our company."
'Headwinds'
In the 12 months to 30 September, the social media giant said its monthly user-base had
grown 6% to 2.91 billion.
However, despite its strong profits, its revenue slightly undershot analyst expectations,
amid "headwinds" caused by Apple's privacy rules.
Facebook said the privacy update would also have an impact on its digital business in the
final quarter of the year, but that it expected to adjust to the changes in time.
The firm said it would spend some $10bn on its metaverse division this year - known as
Facebook Reality Labs - which is tasked with creating augmented and virtual reality
hardware, software and content.
 Facebook is making hate worse, whistleblower says
 Facebook under fire over secret teen research

The world's largest social media network is under scrutiny from global lawmakers and
regulators, including from the Federal Trade Commission, which has filed an antitrust
lawsuit alleging anticompetitive practices.

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Media caption, Watch: Frances Haugen tells MPs that Facebook "unquestionably" makes
hate worse

The whistleblower documents, which were first reported by the Wall Street Journal, have
only intensified that pressure.
They include internal research about Instagram's effects on teen mental health; whether
Facebook's platforms stoke division; and the social media giant's handling of the 6
January Capitol riot.
At a hearing on Monday, Ms Haugen told UK MPs that Facebook is "unquestionably
making hate worse".
She said Facebook safety teams were under-resourced, and that "Facebook has been
unwilling to accept even little slivers of profit being sacrificed for safety".
The MPs are considering what new rules to impose on big social networks under the
planned Online Safety Bill.
But on his conference call, Mr Zuckerberg hit back: "Good faith criticism helps us get
better, but my view is that we are seeing a coordinated effort to selectively use leaked
documents to paint a false picture of our company.
"The reality is that we have an open culture that encourages discussion and research on
our work so we can make progress on many complex issues that are not specific to just
us."
Despite the allegations, shares in Facebook climbed by 1.3% in after hours trading on
Monday. The firm's stock is up by about 20% so far this year.

Frances Haugen says Facebook is


'making hate worse'
BBC Published 27 October 2021

Whistleblower Frances Haugen has told MPs Facebook is "unquestionably making


hate worse", as they consider what new rules to impose on big social networks.
Ms Haugen was talking to the Online Safety Bill committee in London.

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She said Facebook safety teams were under-resourced, and "Facebook has been unwilling
to accept even little slivers of profit being sacrificed for safety".
And she warned that Instagram was "more dangerous than other forms of social media".
While other social networks were about performance, play, or an exchange of ideas,
"Instagram is about social comparison and about bodies... about people's lifestyles, and
that's what ends up being worse for kids", she told a joint committee of MPs and Lords.
She said Facebook's own research described one problem as "an addict's narrative" -
where children are unhappy, can't control their use of the app, but feel like they cannot
stop using it.
"I am deeply worried that it may not be possible to make Instagram safe for a 14-year-
old, and I sincerely doubt that it is possible to make it safe for a 10-year-old," she said.
The committee is fine-tuning a proposed law that will place new duties on large social
networks and subject them to checks by the media regulator Ofcom.
Asked if the law was "keeping Mark Zuckerberg awake at night", Ms Haugen said she
was "incredibly proud of the UK for taking such a world-leading stance".
"The UK has a tradition of leading policy in ways that are followed around the world.
"I can't imagine Mark isn't paying attention to what you're doing."

British English problem


Ms Haugen also warned that Facebook was unable to police content in multiple
languages around the world - something which should worry UK officials, she said.
"UK English is sufficiently different that I would be unsurprised if the safety systems that
they developed primarily for American English were actually under-enforcing in the
UK," she said.
And she said that dangerous misinformation in other languages affects people in Britain.
 Facebook earns $9bn despite whistleblower scandal
 Online safety plans need more clarity, says Twitter
 Facebook fined £50m by UK competition watchdog

"Those people are also living in the UK, and being fed misinformation that is dangerous,
that radicalises people," she warned.

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Ms Haugen also urged the committee to include paid-for advertising in its new rules,
saying the current system was "literally subsidising hate on these platforms" because of
their algorithmic ranking.
"It is substantially cheaper to run an angry hateful divisive ad than it is to run a
compassionate, empathetic ad," she said.
And she also urged MPs to require a breakdown of who is harmed by content, rather than
an average figure - suggesting Facebook is "very good at dancing with data", but pushes
people towards "extreme content".

"The median experience on Facebook is a pretty good experience," she said.


"The real danger is that 20% of the population has a horrible experience or an experience
that is dangerous," she said.
"Accept under-resourcing"
She warned that employees were unable to report internal concerns at Facebook -
something she called a "huge weak spot".
"When I worked on counter-espionage, I saw things where I was concerned about
national security, and I had no idea how to escalate those because I didn't have faith in
my chain of command at that point," she told the committee.
And she warned: "We were told to accept under-resourcing."
Similar problems plague Facebook's Oversight Board, which can overturn the company's
decisions on content, she said. She repeated her claim that Facebook has repeatedly lied
to its own watchdog, and said this is a "defining moment" for the Oversight Board to
"step up".
"I don't know what the purpose of the Oversight Board is," she said.
Media caption,Facebook's Monika Bickert: "It's in our financial interest to make sure that
people have a good experience on our site"
It comes as several news outlets published fresh stories based on the thousands of leaked
documents Ms Haugen took with her when she left Facebook.
Facebook has characterised previous reporting as misleading, and at one point referred to
the leaked documents as "stolen".

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"Contrary to what was discussed at the hearing, we've always had the commercial
incentive to remove harmful content from our sites," a spokesperson said, after Ms
Haugen finished giving evidence.
"People don't want to see it when they use our apps, and advertisers don't want their ads
next to it. That's why we've invested $13bn (£9.4bn) and hired 40,000 people to do one
job: keep people safe on our apps. "
The company said that over the last three quarters it has halved the amount of hate speech
seen on Facebook, which it claims now accounts for only 0.05% of all content viewed.
"While we have rules against harmful content and publish regular transparency reports,
we agree we need regulation for the whole industry so that businesses like ours aren't
making these decisions on our own," the spokesperson said.
"The UK is one of the countries leading the way and we're pleased the Online Safety Bill
is moving forward."

An avalanche of information emerged on Monday from leaked Facebook documents -


and it was hard to keep up.

Allegations include that the social media giant is aware of its role in inciting violence all
around the world, or causing harm to its users from US and UK to India and Ethiopia.
A common theme runs through each of the stories. They all suggest a tension between
employees raising the alarm about their concerns and a corporate machine that does not
appear to be using this to inform its policies.
Reporters and journalists have been highlighting many of these same concerns, especially
for the past 18 months. I've investigated the human cost of online
disinformation and abuse again and again and exposed the damage being done to real
people offline using these sites.
But until these documents were released by Ms Haugen, it was very difficult to know
how aware Facebook was of that damage.
These latest leaks reinforce the idea that it is conscious of it - although it refutes a number
of the claims.

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And it means pressure is mounting on policymakers around the world to do something
about it.

Zuckerberg's power makes him


untouchable

Analysis by Allison Morrow, CNN Business

Updated 1405 GMT (2205 HKT) October 27, 2021

New York (CNN Business)Throughout thousands of pages of leaked Facebook


documents, there's an uncomfortable refrain echoing from the company's own employees:
Something must be done.

The documents make clear that senior leadership, including CEO Mark Zuckerberg, were
made aware of the potential for real-world harms from its various platforms —
amplifying hate speech, encouraging eating disorders in teens, inciting violence — and
did nothing about it.

There's little, if anything, in the revelations that looks good for Zuckerberg, the 37-year-
old founder who built Facebook from a dorm room project into a nearly trillion-dollar
company on the mantra "move fast and break things." Outraged activists, pundits and
lawmakers are demanding Zuckerberg take responsibility — the fish rots from the head
down, after all. But holding Zuckerberg accountable is much easier said than done.

20 | P a g e
For its part, Facebook has pushed back on many of the reports leaked to the media,
saying they are misleading and mischaracterize its research and actions. On an earnings
call Monday, Zuckerberg sought to reframe the so-called Facebook Papers as a
"coordinated effort to selectively use leaked documents to paint a false picture of our
company."

Toothless shareholders
Facebook's tiered stock structure makes ousting Zuckerberg practically impossible.
Although he owns less than half the company's stock, the class of shares Zuckerberg
holds vote with much more power than common stock.

That means Zuckerberg controls a majority of the company's voting shares. Even if the
board and every shareholder united against him, Zuckerberg would still be able to get his
way.

"He's a king, he's not a CEO," former Facebook employee Yael Eisenstat told
Time earlier this month.

His powerful position at the helm of Facebook, Instagram and WhatsApp gives
Zuckerberg "unilateral control over 3 billion people," Frances Haugen, the Facebook
whistleblower, told UK lawmakers on Monday.

And shareholders aren't likely to complain too much anyway. Facebook, for all its faults,
has made them immensely wealthy. Although Facebook stock has lagged behind tech
competitors like Apple and Google, shares are up nearly 75% since October 2019.

On Friday, a consortium of 17 US news organizations began publishing a series of stories


— collectively called "The Facebook Papers" — based on a trove of hundreds of internal
company documents which were included in disclosures made to the Securities and
Exchange Commission and provided to Congress in redacted form by Haugen's legal
counsel. The consortium, which includes CNN, reviewed the redacted versions received
by Congress.

21 | P a g e
Wall Street shrugged Monday, as scathing headlines based on the Facebook Papers
spread across the internet. But Tuesday, following Facebook's earnings report in which it
missed analysts' expectations for sales, its stock fell 4% Tuesday. Investors care only
about dollars and cents.

Gridlock in DC
In Washington, lawmakers have been playing catch-up to try to regulate a company that
has easily sidestepped government oversight. Lawmakers have introduced several pieces
of bipartisan antitrust legislation in the House targeting Big Tech broadly. But Facebook's
structure is uniquely murky, even among tech companies, according to Haugen.

"At other large tech companies like Google, any independent researcher can download
from the Internet the company's search results and write papers about what they find,"
Haugen told Congress earlier this month. "But Facebook hides behind walls that keep
researchers and regulators from understanding the true dynamics of their system."

In other words, it's a complex problem that'd be hard to solve even if Congress weren't
hobbled by its own internal squabbling.

The antitrust angle is slow-going, too. Over the summer, a federal judge tossed out the
Federal Trade Commission's case arguing that Facebook was a monopoly, citing lack of
evidence. The FTC refiled its case, and Facebook again filed a motion to dismiss it earlier
this month.

Some have proposed an entirely new regulatory body focused on tech giants.

"Digital companies complain (not without some merit) that current regulation with its
rigid rules is incompatible with rapid technology developments," writes Tom Wheeler, a
former chairman of the Federal Communications Commission. "Oversight of digital
platforms should not be a bolt-on to an existing agency but requires full-time specialized
focus."

Tech leaders, including Zuckerberg, have expressed openness to the idea in the past. Of
course, it's easy to say yes to a hypothetical. And not everyone's buying it.

22 | P a g e
Facebook may countenance the idea of external regulation, but "at the same time it is
fighting that regulation tooth and nail, day and night, with armies of lawyers, millions of
dollars in lobbying," said Senator Richard Blumenthal on CNN's "Reliable Sources"
Sunday. "Facebook saying it wants regulation is the height of disingenuousness."

Advertisers can't afford to leave


Big advertisers could potentially score PR points with a boycott of the site, but even that
is unlikely to make a major dent in Facebook's bottom line. That's because the vast
majority of Facebook's ad revenue comes from small businesses who can hardly afford to
leave.

In the summer of 2020, hundreds of household name brands boycotted the platform over
its handling of hate speech in the #StopHateforProfit campaign. But Facebook's stock
prices and ad revenue have only grown since then.

Facebook generated more than $28 billion in ad revenue during the third quarter alone.
That's up by 33% from a year ago.

Changes afoot?
The Facebook Papers offer some of the most damning evidence that Facebook is directly
responsible for real, tangible harm. And worse, it's been ignoring the harm for years.

Far more than any previous scandals the company has weathered, this one feels like a
turning point. But the resolution to this scandal won't be swift or simple.

If the whistleblower's documents show us anything, it's that there are meaningful
concerns among some employees, including Haugen herself -- and multiple
whistleblowers are coming forward to keep pressure on the company. But of course it's
unclear if that alone would be enough.

Washington won't be able to suddenly resolve the regulation issues, and Wall Street isn't
going to turn its back on a money-making machine. Critically, the 3 billion people using
Instagram, WhatsApp and Facebook aren't going to turn the apps off on principle. For

23 | P a g e
many, those apps have become vital tools for communication, synonymous with the
internet itself.

The company will keep spinning its own narrative and downplaying critics, and it may
even work on addressing the problems in the meantime. But given Facebook's scale —
and its track record of evading regulation while minting money for shareholders — a full-
scale reckoning seems unlikely.

—CNN Business' Clare Duffy, Paul R. La Monica and Matt Egan contributed to this
report.

Facebook changes its company name


to Meta

By Samantha Murphy Kelly, CNN Business


Updated 1452 GMT (2252 HKT) October 29, 2021

(CNN Business)Facebook is changing its company name as it shifts its focus to


the "metaverse" and confronts wide-ranging scrutiny of the real-world harms from its
various platforms after a whistleblower leaked hundreds of internal documents.

Founder Mark Zuckerberg said Thursday that Facebook will change its corporate name
to Meta, effectively demoting Facebook's namesake service to being just one of the
company's subsidiaries, alongside Instagram and WhatsApp, rather than the overarching
brand.

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The company formerly known as Facebook also said in a press release that it plans to
begin trading under the stock ticker "MVRS" on December 1.

A rebranding could be part of an effort to overhaul Facebook's reputation and turn the
page following a series of PR nightmares, including misinformation on its platforms,
content moderation failures and revelations about the negative effect its products have on
some users' mental health.

The name change, which was announced by Zuckerberg during the company's virtual
reality and augmented reality conference Facebook Connect, aligns with its growing
focus on the metaverse, which refers to efforts to combine virtual and augmented reality
technologies in a new online realm.

Why Silicon Valley is betting on making this dystopian sci-fi idea a reality

"I've been thinking a lot about our identity as we begin this next chapter. Facebook is one
of the most used products in the history of the world," Zuckerberg said on Thursday. "It
is an iconic social media brand, but increasingly it just doesn't encompass everything that
we do.

"Today we're seen as a social media company," he added, "but in our DNA, we are a
company that builds technology to connect people. And the metaverse is the next frontier
just like social networking was when we got started."

Zuckerberg, who said he loved studying classics in school, said the name was inspired by
the Greek word meta, which means "beyond." "For me, it symbolizes that there is always
more to build."

The company also replaced its corporate sign, which featured a picture of a "thumbs up,"
outside of its California, headquarters with one touting its new logo: a blue infinity sign.

Earlier this week, the company said that it would break out Facebook Reality Labs — its
division dedicated to augmented and virtual reality services — as a separate reporting
segment from its social apps. The change is set to take effect beginning in the fourth
quarter.

25 | P a g e
Facebook did not announce any executive changes on Thursday. But on
Zuckerberg's personal Facebook page, his job title was changed to: "Founder and CEO at
Meta."

When asked by The Verge if he would remain CEO at Facebook in the next 5 years, he
said: "Probably. I don't have a specific date how long I want to be doing this for. I guess
what I could say is I'm very excited about the next chapter of what we're doing."

Zuckerberg kicked off the big product event by teasing a series of new social, gaming and
workplace concepts for the metaverse -- and by acknowledging the optics of focusing on
such products amid renewed scrutiny of the company.

"I know that some people will say that this isn't a time to focus on the future, and I want
to acknowledge that there are important issues to work on in the present. There always
will be," Zuckerberg said. "So for many people, I'm just not sure there ever will be a good
time to focus on the future. But I also know that there are a lot of you who feel the same
way that I do."

"We live for what we're building," Zuckerberg added. "And while we make mistakes, we
keep learning and building and moving forward."

Facebook showed a series of concept videos that highlighted its vision for metaverse,
such as sending a holographic image of yourself to a concert with a friend attending in
real life, sitting around virtual meeting tables with remote colleagues or playing
immersive games with friends. Facebook recently said it would hire 10,000 people in
Europe to build out the concept.

Zuckerberg also announced Messenger calling is coming to VR, plans to operate a virtual
marketplace where developers can sell virtual goods and a new home screen in Oculus
Quest to make chatting and games in the virtual world more social.

"Your devices won't be the focal point of your attention anymore," he said. "We're
starting to see a lot of these technologies coming together in the next five or 10 years. A

26 | P a g e
lot of this is going to be mainstream and a lot of us will be creating and inhabiting worlds
that are just as detailed and convincing as this one, on a daily basis."

A number of major companies have changed established brands over the years. Kentucky
Fried Chicken shortened its name to KFC, Japanese car brand Datsun became Nissan.
Some high-profile name changes have followed scandal or controversy. Philip Morris,
the maker of Marlboro, changed its name to Altria, for example, and ValuJet became
AirTran after one of its planes crashed in 1996.

Other name changes are intended to reflect the company's broader ambitions. Snapchat
rebranded as Snap in 2016 to reflect its foray into hardware and Google restructured the
company with a new name, Alphabet, and plans to grow a variety of business divisions.

Facebook's metamorphosis - will it


work?
By Chris Vallance
BBC News / Published 30 October 2021

The corporation formerly known as Facebook has a new name Meta.


There will still be a Facebook, and an Instagram and all the familiar platforms, as this is
simply a renaming of the parent company alone.
The new name also invites people to participate on its "next chapter" - a 3D journey into
the metaverse, which it sees as the future of the internet.
But some analysts wonder if the public will trust the firm enough to take part in Mark
Zuckerberg's new vision.
Does Meta matter?
The new name produced millions of online searches for the specific query Meta in the
UK and US combined, analysts say.
Popular questions included:
 What is Meta?
 What does Meta mean?

27 | P a g e
 What does Meta stand for?

Dive into the Oxford English Dictionary and various definitions of meta are available - as
a prefix it "denotes change, transformation, permutation, or substitution", or "beyond,
above, at a higher level".
The company says it favours "beyond", but it is also seeking a metamorphosis of sorts.
A chance perhaps too to welcome a new brand untainted by leaks and negative press,
though an analyst with Forrester noted "a name change doesn't suddenly erase the
systemic issues plaguing the company".
Officially though it's about the future.
"Our new company brand captures where our company is going and the future we want to
help build," Meta said.
That destination is the metaverse.
What on earth is the metaverse?
The company believes the metaverse will be the next evolution in the way we use the
internet.
"In this future, you will be able to teleport instantly as a hologram to be at the office
without a commute, at a concert with friends, or in your parents' living room to catch up."
chief executive Mr Zuckerberg wrote.
Media caption,Chris Cox, Meta's chief product officer explains the new name

Some of that may seem familiar to those who have spent the pandemic in video
conference calls, but the vision for the metaverse will remind others of earlier virtual
worlds, such as Second Life.
However, Meta stresses this is not a virtual world, but a new three-dimensional space to
be used and accessed in various ways, saying: "Augmented reality glasses to stay present
in the physical world, virtual reality to be fully immersed, and phones and computers to
jump in from existing platforms."
The company says it is: "A social, 3D virtual space where you can share immersive
experiences with other people, even when you can't be together in person - and do things
together you couldn't do in the physical world."

28 | P a g e
Azeem Azhar, author of Exponential, says: "It's not going to be something that will be
contained in a VR headset that sits in the corner of the living room. It will be a set of
things that will show up across our different applications and across our devices, as those
devices get better and better."
Will it work?
Writing in The Times, technology analyst Benedict Evans characterised Facebook's
motivation this way: "If there is something after smartphones, Facebook wants to be
landlord, not a tenant."
But is the metaverse the right real estate?
Mr Azhar says the "crunch point" is answering the question for the general consumer:
"What is the thing that we will actually need to do with this?"
He says at the moment: "We're still looking for that absolute killer application of these
virtual reality and augmented reality technologies."
And if it does succeed, rather than replacing existing tech, the metaverse will sit
alongside it. "It may be 20-odd years since text messaging became popular and people
still send text messages, even though there are so many other richer ways we can
communicate with each other."
Great, when will it happen?
Meta already owns virtual reality headset maker Oculus.
And the firm launched experimental versions of two metaverse projects last year -
Horizon World, which lets friends meet virtually, and Horizon Workrooms, which
enables virtual work meetings.
At the Facebook Connect event where Mr Zuckerberg spoke about the metaverse he also
teased a new high-end headset dubbed Project Cambria.
But the metaverse is a work in progress, and the company says fully realising the idea
will take another 10 to 15 years.
Meta will spend billions of dollars to bring it to life. The company recently announced it
is hiring 10,000 people in the European Union to work on the project.
Mr Zuckerberg also said the metaverse would be the work of more than one company,
and that "open standards and interoperability" will need to be part of it.

29 | P a g e
How safe and private is the metaverse?
After all the leaks, and accusations levelled at Facebook of late, will people trust the
world that Mr Zuckerberg built to keep them safe, and their data private?
The Guardian suggested that advertisers might target ads based on "your body language,
your physiological responses, knowing who you are interacting with and how".
Mike Proulx, research director at research company Forrester, said: "Without trust,
Meta's metaverse plans are already at risk."
Mr Zuckerberg and Meta colleague Nick Clegg, Britain's former deputy prime minister,
have sought to address concerns.
Mr Clegg noted there were years to get regulation and technology right, while Mr
Zuckerberg said: "Privacy and safety need to be built into the metaverse from day one."
Media caption,Frances Haugen, former Facebook employee

Whistleblower Frances Haugen told the BBC that "over and over again, we see Facebook
prioritising expansion and growth". She felt the resources could be better used on
improving the safety of Facebook.
Facebook responded that it has no commercial or moral incentive to do anything other
than give the maximum number of people as much of a positive experience as possible.

Key quotes from the Facebook Papers

By Tara Subramaniam, CNN Business


Updated 1314 GMT (2114 HKT) October 30, 2021

30 | P a g e
(CNN Business)One week ago, a consortium of 17 news outlets, including CNN, began
publishing a damning series of stories -- collectively called "The Facebook Papers" --
based on thousands of pages of internal company documents.

These documents are disclosures made to the Securities and Exchange Commission and
provided to Congress in redacted form by Facebook whistleblower Frances Haugen's
legal counsel. The redacted versions were obtained by the consortium.

The documents, and the stories based on them, raised concerns about the potential real-
world harms from Facebook's various platforms. They also offer insight into the inner
workings of the company, including its approach to misinformation and hate speech
moderation, both in the US and internationally, as well as employee reactions to concerns
about company decisions.

The Wall Street Journal previously published a series of stories based on internal
Facebook documents leaked by Haugen, which raised concerns about the impact
of Instagram on teen girls, among other issues. (The consortium's work is based on many
of the same documents.)

Facebook has repeatedly tried to discredit Haugen and said reports on the documents
mischaracterize its actions. "At the heart of these stories is a premise which is false," a
Facebook spokesperson previously said in a statement to CNN. "Yes, we're a business
and we make profit, but the idea that we do so at the expense of people's safety or
wellbeing misunderstands where our own commercial interests lie."

Here are some key quotes from the documents provided so far.

Vaccine misinformation
In February 2021, a year into the pandemic, a Facebook research report was shared
internally and noted a concern: "Our internal systems are not yet identifying, demoting
and/or removing anti-vaccine comments often enough."

31 | P a g e
Another report a month later stated: "The aggregate risk from [vaccine hesitancy] in
comments may be higher than that from posts, and yet we have under-invested in
preventing hesitancy in comments compared to our investment in content."

A Facebook spokesperson said the company has made improvement on the issues raised
in the internal memos.

Human trafficking
According to one internal report from January 2020 entitled "Domestic Servitude and
Labor Trafficking in the Middle East," a Facebook investigation found the following:
"Our platform enables all three stages of the human exploitation lifecycle (recruitment,
facilitation, exploitation) via complex real-world networks. ... The traffickers, recruiters
and facilitators from these 'agencies' used FB [Facebook] profiles, IG [Instagram]
profiles, Pages, Messenger and WhatsApp."

A Facebook spokesperson told CNN: "We prohibit human exploitation in no uncertain


terms." The spokesperson said it has "been combatting human trafficking on our platform
for many years."

The algorithm's impact


An internal research note from April 2019 pointed out that multiple European political
parties claimed Facebook's 2018 decision to refocus its News Feed algorithm on a new
metric, referred to as "meaningful social interactions," had "changed the nature of
politics. For the worse."

Facebook told CNN the introduction of the metric wasn't a "sea change" in how the
company ranked users' activity on the social network as it previously considered likes,
comments, and shares as part of its ranking.

Gaps in international coverage


In June 2020, a Facebook employee posted a report to an internal group with about 1,500
members noting an ongoing audit into the effectiveness of its signals to detect

32 | P a g e
misinformation and hate speech in at-risk countries. According to the report, the audit
"found significant gaps in our coverage (especially in Myanmar & Ethiopia), showcasing
that our current signals may be inadequate."

In a public statement addressing reports concerning the leaked research, Facebook said,
"We have an industry-leading process for reviewing and prioritizing countries with the
highest risk of offline harm and violence, every six months. When we respond to a crisis,
we deploy country-specific support as needed."

Internal reactions to January 6th insurrection


Commenting on a post about the Capitol insurrection written by Mike Schroepfer,
Facebook's chief technology officer, one staffer wrote: "Leadership overrides research
based policy decisions to better serve people like the groups inciting violence today.
Rank and file workers have done their part to identify changes to improve our platforms
but have been actively held back."

Another staffer, referencing years of controversial and questionable decision-making by


Facebook leadership around political speech concluded, "history will not judge us
kindly."

In response to the documents, Facebook told CNN, "the responsibility for the violence
that occurred on January 6 lies with those who attacked our Capitol and those who
encouraged them." The company also stressed the steps it took before and after the
insurrection to crack down on content related to the "Stop the Steal" movement.

33 | P a g e
Questions
HRM Comprehensive Exam Question:

“Facebook intends to continue its focus on recruiting the best builders from both the US
and around the world."

1. Question: Discuss how the Facebook Company can manage its workforce
diversity and then explain how this recruitment process would affect its
employees’ productivity and creativity.

Strategic Management Comprehensive Exam Question:

Facebook has been in the news consistently, however, more than ever during the month
of October 2021; too many controversies: court laws, fines to be paid, human resource
restructure, mega marketing and reposition plans, social and political questionable ethics.

2. Questions: Please analyze strategically Facebook new chapter "next


chapter" “a 3D journey into the metaverse”
3. Question: After all these news controversies if you are Facebook CEO
what would have been your strategic decision? In this question we expect
from the candidate to perform a full strategic management process to
supported strategy decision and justification.

Marketing Comprehensive Exam Question:

4) Question: Illustrate the BCG matrix in the Marketing Strategy and


competitive advantage Facebook have while also explaining the competition
Facebook has from Twitter, Linkedin, and Snapcht.

5) Question: "When a brand name falls out of favor with the public and its
customers or if the firm wants to reorient the brand with the future, it is always a
good move to change the brand name," Discuss the rebranding strategy of
Facebook?

34 | P a g e
Financial Comprehensive Exam Question:

6) Question: The following is a table (1) that summarizes some selected financial ratios
of Facebook Company for the four recent years from 2018 till 2020:
Table (1) Facebook Selected Financial Ratios
Selected Financial Ratios 2020 2019 2018

Current ratio 5.05 4.39 7.19

Gross Margin 80.58 81.93 83.24

Operating Margin 38.00 33.92 44.61

Pre-Tax Profit Margin 38.00 35.09 44.61

Net Profit Margin 33.90 26.14 39.59

Total Assets Turnover 0.53 0.53 0.57

Receivable Turnover 7.58 7.42 7.53

Days Sales in Receivables 48.12 49.14 49.59

ROE – Return on Equity 22.71 18.29 26.28

ROA – Return On Assets 18.29 13.85 22.71

ROI – Return On Investment 22.71 18.29 26.28

Operating Cash Flow Per Share 0.79 2.60 1.82

Given some selected financial ratios of Facebook Company, Analyze different


dimensions of the company’s financial health along with the recommendations about its
major strengths and weaknesses. [Don’t limit your analysis to only a description of what
has increased or what has decreased without providing the meaning/analysis of that].

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