Government Interference in Managing the General Environment - Essay Example

?PESTLE and Life Cycle Analysis Stakeholders are those individuals or group that can affect or get affected by the activities of an organization. Many books and articles define stakeholders as the “a person, group, or organization that has direct or indirect stake in an organization because it can affect or be affected by the organization's actions, objectives, and policies” (Business Dictionary.com). This definition can be considered to be rigid but it can be said that this definition is a bit vague because it does not describe the exact power of the organization upon its stakeholder or vice versa. There are many other methods that can be used to analyze the power of any particular stakeholder or any particular stakeholder group, one of these methods was suggested by Mendelow, known as the Stakeholder mapping. According to this method any individual stakeholder or any stakeholder group’s power can be ascertained and managed. Many books define stakeholders to be individuals or groups that have an interest in an organization; hence it may not be necessary for any individual or group to have an interest in any particular organization because interest is not the only ingredient to constitute regard someone as a stakeholder. This can be further explained by giving the example of the society at large which is a major stakeholder to the all factories which are emitting a large quantity of carbon dioxide, hence they only have an interest to the extent of the carbon dioxide emission and they might not have enough power to stop the factories from doing such an act (ACCA, 2007). The five groups of stakeholders that any business organization needs to consider for its growth perspective would be: Shareholders/Owners Employees Customers Government Society at large Majority of banks consider the employees to be the most important stakeholder within the banking organization. Banks consider their employees to be their vital stakeholder because of their decision making ability. The employees have the ability to take up decisions on any given matter hence these employees have the ability to drive the bank into a profitable or a loss making venture. This decision is really important for the survival and the long-term growth of the banks and hence it is because of this only reason that the employees have such a powerful decision in their hand, banks considers them to be the most important stakeholder (ACCA, 2007). “Systems thinking” is a process which tells that different things and activities within nature/organization are totally linked with each other. This theory defines that the activity of one individual or a group would affect the life or decision of other individuals or groups. Systems within an organization include the employees, the processes and the structure of that organization and it is because of these people, processes and structures that the organizations get affected either in a positive or a negative manner. The banks use the closed systems thinking approach in the entire movie. The best exception would have been to follow the open systems thinking approach where the banks would have been involved in focusing on external issues and threats as well, this way open systems thinking system would help the banks to survive for a long period of time by focusing on the external environment along with the internal one (Gharajedaghi, 1999). The governments should play an important part in stabilizing banks as these banks are the main institutions in any economy. These banks are heavily involved in stimulating an economy and hence they should always be helped in situations when these banks are falling apart. Government interference in managing the general environment would be really important and these banks can be funded by the governments to make them survive during difficult time periods. The film tells us the Government and the Law Enforcing authorities were really weak in putting up any system that would have led the bank to survive during such difficult times. The banks collapsed leading to further economic collapse of the society. This could have been ensured by proper regulations such as anti bankruptcy bills passed for banks by the legislators. The main reason for the collapse of the bank was the fact that it wanted to grow very fast and this fast growth led the owners and the employees to indulge in activities that led to the failure of the bank. Considering this point through the PESTLE theory would be: Political: The government’s lack of support for the bank led to its bankruptcy. Economic: The banks insistence of indulging into high return activities led to the bankruptcy and this further led the economy to suffer. Social: The owner’s rejection to fund the alternative energy source led to the collapse of the bank. This funding would have helped the bank to generate further funds and also help in improving their image. Technological; The inability of the owner’s to understand the importance of the alternative energy source and to fund in it. Legal; The absence of proper law and regulation to fund major banking institutions from failing. Ethical; The greed for more led to the collapse of the bank, this greed was not fruitful for everyone in the banking industry and hence it led to the fall of the bank (Docstoc.com; Kaplan Publishing, 2007) Whenever a bank collapses or fails, shareholder/owners and the investors are the major stakeholders which face the major hit. Investors are deprived of their funds that they have invested in and shareholders are deprived of their funds along with the right over the bank/business organization. The groups affected in the immediate environment include the government, legal authorities and the society at large. Facebook is a social network service provider and it considered to be a private organization in terms of its legal identity. Facebook was launched in 2004 by Mark Zuckerberg with the help of some of his friends and associates. The company faced many hiccups during the course of its operation and business. The owner, Mark Zuckerberg, was initially accused of using the idea of some other guys and it was pointed out that the facebook was actually an idea developed by those guys, namely the Winkevoss brothers and Divya Narendra. This was later taken to the court along with the other issues of the Co-owner i.e. Eduardo Saverin and all these issues were later resolved to unleash the beginning of the most reputable and popular social networking site around the globe. Facebook is owned 24% by Mark Zuckerberg, 10% by Digital Sky Technologies and Accel Partners, 6%, 5%, 4% and 3% owned by Dustin Muskovitz, Eduardo Saverin, Sean Parker and Peter Thiel respectively, there are other small ownerships within the private company as well (Kirkpatrick, 2010). There are chances that Facebook might go public in 2013 and offering an IPO (BusinessInsider.com, 2010). Life Cycle analysis helps in understanding the life of any particular product or service within a particular industry. The life cycle analysis helps in understanding the proper time for launching a product and the right time to pull off the project or to bring extension to an existing product/service. This life cycle analysis can be used to analyze Facebook’s rise but it may be difficult to analyze the threats and opportunities that may arise for Facebook in the near future. The threats and the opportunities can be analyzed through the use of the SWOT analysis whilst the rise can be monitored through the Life Cycle analysis, although this life cycle analysis can be used to monitor the performance of Facebook by looking at its revenue and ascertaining the maturity time for the social networking site and after such analysis, a proper action can be planned. The only issue of using Life Cycle analysis with Facebook would be that life cycle analysis tends to be less effective with product/services that need to change with respect to quick technological changes. There are few issues within the Facebook business model that have been pointed by some business commentators. The major issue within Facebook’s business model is that the company does not produce internal funds and it relies upon its advertisers to give them the major amount of the money. This makes the company to be dependent upon the advertisers. These advertisements are only given to any particular website based upon the heavy traffic of people on that website, on the other hand these advertisements are considered to be really annoying by the users and hence if excessive advertisements are used, it may de motivate customers to use the website. The best way would be to use fewer advertisements and block all pop-ups to make the user happy. Facebook’s success can be analysed using PESTLE; Political: Facebook did not face any political issues to operate globally when it was initially started but later on many countries blocked its usage because of the website’s association with anti-Islamic issues. Economical: Mark Zuckerberg had to face initial financial problems but these were resolved by Eduardo Saverin and later by other financial investors. Social: Facebook became a huge success when it was initially launched within Harvard as this site really helped in communicating between friends and other associates. Technological: Facebook was technologically advance as compared to all its competitors because of its innovative services offered. Legal: The Company faced many legal issues such as ownership rights and other forgery issues during its operation. Ethical: Many people believe that Mark Zuckerberg’s behavior with his friend was unethical and that the information that he hacked to bring up Facemash was also extracted in an unethical manner. The ethical issues identified in the film related to cheating and mistrust between the Mark Zuckerberg, his friend and owner Eduardo Saverin, the Winklevoss brothers and Divya Narendra. Besides these issues the film also focused on the privacy issues of the students whose photographs and other information was hacked by Mark Zuckerberg to start up his website Facemash. These issues make Facebook to be viewed as unethically formed by the owner of the company. Facebook is hugely involved in gathering its revenue through advertising. Facebook generated its revenue from the advertising companies whose advertisements are displayed to all the 600 million users of the website. These revenues are used to cover up all the costs for the company and generate profit for the company eventually. Employee’s salaries are one of the major costs for the company. Microsoft was Facebook’s major partner which helped the company to gather banner advertising. Facebook is a huge organization with many different stakeholders but the major stakeholders for the company would be: Advertising Companies: The advertising companies would be the major stakeholder as these companies help the company to generate large amount of revenue The Customers/Users: The users of the social networking site are also one of the major stakeholders of the company. This is because of the fact that the users have many other options available to use besides the Facebook and these users give priority to Facebook over all its other competitors. The main competitors for Facebook would be the MySpace and Twitter. This is because of their popularity and similarity of service like Facebook. To distinguish Facebook in an industry would be difficult but it can be considered to be a part of the online interactive media industry. The substitute products that consumers can use besides Facebook are all the social networking sites available for use on the Internet. These sites include the likes of Twitter, MySpace, Orkut, Hi5, LinkedIn and many more. All these sites are used by different users based upon their individual preferences but many consider facebook to be best because of the fact that it has 600 million active users. Facebook can be regarded itself as a substitute product because of the fact that there were many other social networking sites which were operating before Facebook came into existence. The only thing that differentiates it a bit is because of its better technology and user-friendliness as compared to its other competitors. Bibliography ASSOCIATION OF CHARTERED CERTIFIED ACCOUNTANTS (GREAT BRITAIN). (2007). ACCA study text: Paper P3 business analysis. London, BPP Learning Media. BusinessInsider.com, 6 Reasons Groupon's Rejection Of Google Is Great For The Universe, December 2010 http://www.businessinsider.com/google-groupon-dealTop of Form Bottom of Form Top of Form Bottom of Form Top of Form GHARAJEDAGHI, J. (1999). Systems thinking managing chaos and complexity : a platform for designing business architecture. Boston, Mass, Butterworth-Heinemann. KAPLAN PUBLISHING. (2007). ACCA: for exams 2007 and 2008. Wokingham, Kaplan Publishing. Bottom of Form Top of Form KIRKPATRICK, D. (2010). The facebook effect: the inside story of the company that is connecting the world. Pymble, N.S.W., Simon and Schuster Australia. Bottom of Form IMDb.com, Plot Summary, The Social Network, 2010 http://www.imdb.com/title/tt1285016/plotsummary IMDb.com, Plot Summary, Wall Street: Money Never Sleeps, 2010 http://www.imdb.com/title/tt1027718/plotsummary Reasons for Bank Failure, Docstoc.com http://www.docstoc.com/docs/946652/Reasons-for-Bank-Failure Stakeholder, Definition, Business Dictionary.com http://www.businessdictionary.com/definition/stakeholder.html Read More