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FACEBOOK

GM 588 Managing Quality/

Week 7 Leading, Building, and Sustaining Performance Excellence

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Keller Graduate School of Management

April 14, 2011Introduction

Facebook is the largest worldwide social network, as of January 2011 it has over 600

million users, founded by a Harvard undergraduate named Mark Zuckerberg, in February of

2004, (CrunchBunch). It began by connecting Harvard students and then surrounding colleges,

but later opened its service to the general public. Microsoft powers the site's Web search and

provides its search ads. Members post photos and information about themselves, share videos

and connect with one another through online profiles. It provides messaging services to its users

and mobile applications to Java-powered feature phones. Following are interesting facts:

Type of industry: Internet Information Providers

Product or service: Technology

Size of company: 2,000 +

Facebook’s headquarters is located in Palo Alto, California, with sales offices through

Europe and Asia. Its international headquarters is located in Dublin, Ireland and sales office in

Hong Kong, Hamburg, Hyderabad, London, Madrid, Milan, Paris, Singapore, Selangor,

Stockholm, Sydney, and Toronto, (CrunchBunch).

The Mission:

“Facebook mission is to give people the power to share and make the world more open and connected." (Facebook.com)

Considering that Facebook is a relatively new organization, it is still leading, building

and sustaining performance excellence as it keeps ahead of its hefty competitors such as Google

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Inc., MySpace Inc., and Twitter Inc. tomention a few. Last year in November 2010, Facebook

surpassed Google in “pageviews” and it accounted for 1 in every 4 pageviews in the US

(brandchannel.com 2010). Plus as, based on its estimated value of $41 billion, it is the third

largest web brand in the US behind Goolgewith$192.9 billion and Amazon at $74.4 billion, also

it is important to note that eBay lags in fourth place behind Facebook with 39.3 billion

(brandchannel.com 2010). By comparison in 2007, Facebook was said to have been valued at

$15 billionranking 5thmost valuable US Internet company (Arrington, M. 2007).

Facebook’s growth is a testament to their high quality management and leadership in the

industry.With Comments like this one from Forrester’s analyst Augie Ray says Facebook "has in

fairly short order—just a couple of years—gone from being a very niche site to one where the

majority of Americans spend a great deal of their online time."(brandchannel.com 2010) show

the magnitude of what Facebook has achieved in such a short time.

In the process of growing, Facebook has kept their mission right on target. Facebook has

not blinked at the huge monetary offers it has consistently received since its inception, starting in

2004 when they were offered $10 million to as much as Yahoo’s offer in 2006 of $1 billion and

Viacom’s for $750 million. Plus other multiple attempts from Google and Microsoft to acquire

them.(brandchannel.com 2010).Facebook has accepted millions of dollars form investors in

order to keep with their Mission of “giving people the power to share and make the world more

open and connected”.

Identified Problems and use of Quality Management (North America)

Global competition has forced many organizations to satisfy the ever-growing demands

of the customers. It’s a well-known fact that no business can exist without customers. Facebook

needed to retain existing customers while targeting non-customers as well. They formed strategic

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priorities and examined their business practices to evaluate how to meet the challenges in facing

competition in domestic and international markets. It uses a management system that is a

customer focused organization that involves all employees in continual improvement of all

aspects of the organization. The structured system for meeting and exceeding customer needs

and expectations created company-wide participation in the planning and implementation of

breakthrough and continuous improvement processes. It integrates Facebook’s business plan and

has had a positively influence on customer satisfaction and market share growth.

A new survey from the Pew Internet & American Life Project finds that some 65 percent

of U.S. Internet users have opened up their wallets and paid for online content, whether that is

music, videos, software, games, or other items (Duncan, 2010). Most online buyers spend on the

order of $10 per month the equivalent of just a few cups of coffee (Duncan, 2010). Buckle down

because the digital spending habit is here to stay. The industry is taking jobs from local

communities adding to the unemployment numbers.

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Another problem for Facebook is security risks increase as users become more and more

enthusiastic to try out new features: shopping, new games, add-ons, and of course, the Facebook

fan pages. Of the most dreaded Facebook security problems is that there is plenty of room for

users to enter their information. Most of the users go on to enter all their details including their

photos, real names, addresses, and even phone numbers. This makes it easy for bad guys to target

these users for identity theft. Another facet of protecting your identity comes from potential

employers, spouses, and business prospects can read these posts and get a strong opinion about

you. You would not like to lose a business contract just because you posted a stupid message or

comment. You can easily create friend groups in a way to restrict access of who sees what. This

way you can allow your nearest friends to see everything you post while restricting access to

people in other groups.

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The highest probabilities among Facebook security problems are phishing attacks and

downloading malware. If you are befriending a stranger, you are at a greater Facebook security

risk as you might be inviting someone who wants to siphon off all the info s/he needs to hack

your computer or to steal your identity or something even more dangerous. Always remember

that it is easy for anyone to create a fake profile on any social network and Facebook is no

exemption. A cute lady can actually be one of your enemies who may lead you into dialogs that

ruin your online and offline reputation. Before accepting or sending a friend request, check out

the profile of the person. If you find anything suspicious, it is better to stay off the person.

An additional interesting feature of Facebook is that it allows user to create custom

games and add-ons. These are an easy way to send in malware to your computer or mobile

phones. When you allow a third party application to gain access to your profile, it may not only

misuse the information (yours and of those in your friends too) but also download any kind of

malware into your computer. In simple language, using third party applications such as games,

ads, or any add-on can increase Facebook security risks.

Facebook has over 500 Million users giving them the control of several different markets

(Yasmine, 2011). The notoriety has decreased the amount of feedback answers to issues

provided by its customers. Facebook introduce a new feature or functionality, Facebook users

want to contact Facebook support for the feedback. Urge to contact Facebook support is more

when a new feature is not liked by users at large. Facebook is a big concern and contacting them

directly is not easy. Most easy way to contact Facebook is by using contact forms for specific

Facebook features.

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Facebook is set up as a business. It has its customers’ interests to serve so that it can be a

profitable company and return its investors’ money and provide a return for its financial

stakeholders. The problem is that Facebook users are not the customer. They are the product that

is sold to the actual customers who (I suspect) are advertisers. Thus, Facebook’s values aren’t

necessarily aligned with their users, which mean, almost inevitably, privacy is not Facebook’s

key concern.

So if with Facebook, the users are the product, what are they actually selling? The social

graphs its users create, along with the logged minutiae of their lives, could just be the product

that Facebook is, and will continue, to sell to advertisers. Your privacy is Facebook’s product.

Your social graph has value to advertisers.

Opportunities in International Perspective

CEO Mark Zuckerberg gave an interesting story of seven radical militants’ in Lebanon.

Their perspective about Western world has changed by the impact of “social networks’ and

internet’s global bridge…

Javier Olivian, international manager at Facebook, states 500 million of Facebook users’

60% are from outside of United States and Canada. Facebook is in 89 languages. Internet, social

network and globalization are common terms, but Facebook gained loyalty, trust and brand

image by providing lingual prerogatives to its members all over the world.

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An additional opportunity that Facebook gets from international expansion is attracting

advertisers, audiences, new markets, acquirers and investors. According to Research Company

Pingdom Facebook generated user adoption. Members increased 153% and growth was

astronomical in Europe, Asia and Middle East. Respectively Turkey, Britain and South Africa

recorded the highest membership numbers in one year.

In this sense Facebook needs to improve technology driven international strategy.

“Rather than launch local-language versions of Facebook for new markets, complete with a

local Facebook bureau, Facebook opted to provide translation tools [BusinessWeek.com,

5/14/08] that let users take the existing site and personalize it in their own tongue. The tools,

which users can tweak to create more accurate translations, helped Facebook roll out in new

countries faster than many rivals, giving it an early presence in local markets that grew

exponentially as users encouraged friends to join the site. "It was a very scalable process," says

comScore senior analyst Andrew Lipsman. "They have gotten these things up and going quickly

and the audiences are up." (Holahan, 2008)

Another international opportunity for Facebook could be adding a new feature to

Facebook applications and creation of an “employment” network. LinkedIn shows incredible

results in global business terms. People find jobs, recommend facilities, people, jobs, companies,

opportunities, data; people enlarge their vision about employment and companies by LinkedIn’s

global network. Since many companies realized in global competition they have to cooperate

with social networks and number one is Facebook. Companies look for new targets markets;

even do their market segmentation by Facebook. Especially textile, media, technology, restaurant

and entertainment industry created and attracted audiences by the benefits of social network.

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Social networks become major communication channel between business and end customers.

Internet and Facebook are on top for marketers to reimburse their integrated marketing

communications. When there is very intense traffic of business’ global popularity competition,

an international social-employment network facility of Facebook could create benefits for

customers and businesses.

“Nearly 28% of college students plan to seek employment using LinkedIn, up from 5%

last year, according to a survey out today from employee recognition provider I Love Rewards

and career-services network Experience. Slightly more than 7% plan to use Facebook, up from

5%.” (USA Today, 2011). Especially new grads look comments and updates of companies’

Facebook pages and career services recommend job seekers an intense relationship with social

networks such as Facebook. In this environment and with these trend parameters Facebook could

gain opportunities with employment related facilities, as LinkedIn does.

Recommendations and Solutions

Face book overall customer service is terrible because it fails to help members

resourcefully when it comes to accessing their account. The issue was users were not able to

access their accounts for several days. Facebook did not report that it was “down for

maintenance” The representative stated that it was an issue with the data base. He gave the users

a 24 hour time period to fix the problem, it took longer than expected. This type of performance

is detrimental for the business because users can easily decide to leave Facebook for good.

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Mainly, some user’s accounts were deleted and their contact was lost as well. The best method

would b to create features people can use to save contact and profile information in case of an

error occurring. Even though, the Face book is free it is essential to treat people like a paying

customer. Consequently, without the users Facebook will not be successful.

This company has not succeeded in obtaining best practices when an individual account

is hack. In this situation the software was not the issue, it actually what temporary suspended.

Paul was told by friends that his Facebook setup was change. The bad part about the situation

was the user not being able to see exactly what was occurring with the account because he was

locked out the account. Facebook solution to this sort of problem is to give the user a Facebook

test. This is not really accurate because the user must identify a photo of friend they wither

accepted or asked to be friend wit. The issue Paul has was not remembering exactly who was a

friend. Facebook is a website where you meet a lot of individuals for the first time; therefore, it

would not be a good idea to use this method to allow users to get back within their account. For

the simple fact an individual would probably have a difficult time choosing the right name of the

photo display randomly. It would be hard to figure out if the individual is not one of the user

close friends. Another method Facebook uses is security questions; the only problem is Paul did

not remember the answer. A good recommendation would be to allow the Facebook to obtain

customer support. Paul stated in the article there was not live customer support in Facebook. He

eventually solves the test in got back within the account. His complaints were they had slow

responses to his email, however, did apologize for the situation. The best thing to do to sustain

Facebook is to treat the users like paying customer, because this will continue their usage.

Remember MySpace was once the major website people network on the most in the pass. Do not

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allow something better with better service to take Facebook position as one the most popular

website.

Facebook has failed to implement strategies to protect children from cyber bullying.

Facebook has fail at incorporating a button for individuals to click upon to report any cyber

bulling. A good recommendation for Facebook to establish is the same button Bebo’s website

incorporated within their website (Facebook f a i l s , 2009 ). This allows the individual to

receive access to child protection officers in order to help the individual with their situation. An

individual from Child Exploitation and Online Protection Centre name Jim Gamble was appall

that the Facebook did not feel an extreme need to incorporate the button on the website.

Recommendations would be for Facebook to consider the duty of care every organization should

uphold. Many young people especially are using this site. It practical is a simple solution because

it is a button that is small and does not take up much space. It has been said by Facebook’s

spokesman that the number one priority is for individuals to be safe firstly. Facebook has

instilled a robust reporting system; this system actually supports 300 million individuals who use

the website (Facebook f a i l s , 2009 ).

Conclusion

As we conclude our report, we can all agree that Facebook is the product of a Harvard

prodigy: Mark Zuckerberg. His idea of linking Harvard University students and staff expanded

to a world wide Internet social network, beyond his wildest dreams. This concept has

transformed the way we communicate, live, and share personal information, today. Facebook is

a relatively young organization and who knows how far they will go. What we do know is that

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they are toppling the charts with popularity, exponential growth, and have the potential ability to

sustain itself for many more years to come. Let’s recap on some of Facebook’s statistical facts:

Competitors:

o MySpaceo Twittero Beboo Friendstero LinkedIno Taggedo Hi5o Piczoo Open Social

Estimated value:

o Google: $192.9 Billion

o Facebook: $75 Billion as of March 14, 2011, SecondMarket

o Amazon: $74.4 Billion

o eBay: $39.3 Billion

Employees: 2,000 +

Members: over 500 Million, 65% overseas

Facebook is leading, building, and sustaining performance excellence by managing its

customer volume, range, and management systems in customer focus that involves all employees

in continual improvement mode. This organization has seventy-five members in different

capacities to support Mark Zuckerberg, CEO from Board of Directors, VP of Advertising and

Global Operations, CTO. COO, CFO, Hacker, Engineers, VP Product, VP Human Resources,

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Recruiting, to Director of Public Policy, just to mention a few. Zuckerberg is well equipped with

a team that is super- charged with success, talent and opportunities in the national and global

arenas, (CrunchBase).

Since its inception in February 2004, Facebook has built its popularity largely through the

desire of people wanting to share personal information with family and friends within seconds.

Of course there are issues that Facebook has to face such as security breaches, privacy concerns

and public safety. They will definitely have to work with Homeland Security to safeguard users,

but this will be a continuous dilemma as hackers become wiser and sneakier in performing their

devious acts. The large volume of customers also multiplies the number of trouble shooting

Facebook faces with login issues, inability to access accounts, and what will they do with

customers’ information. Facebook will have to continue evaluating its services as it continues to

expand globally, install updates, implement changes, and satisfy customers’ demands.

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References

ACSI (July 2010). Quality Digest. Com ASCI Study: Customer Rate Social Media and Online

Portals.http://www.qualitydigest.com/inside/quality-insider-news/acsi-google-s-score-

dips-sharply facebook-myspace-bottom.html

Arrington, M. (October 25, 2007). TechChrunch.com. Perspective: Facebook is Now 5th Most

Valuable U.S. Internet Company. Retrieved from:

http://techcrunch.com/2007/10/25/perspective-facebook-is-now-5th-most-valuable-us-

internet-company/

Crunchbase, Facebook Company Profile retrieved March 7, 2011

http://www.crunchbase.com/company/facebook

Digital Trends (2010) Geoff Duncan, Survey: Nearly two-thirds of U.S. Internet users

have bought content. Retrieved from:http://www.digitaltrends.com/mobile/survey-nearly-

two-thirds-of-u-s-internet-users-have-bought-content/

Holahan, C. (2008). Facebook: No.1 Globally. Business week, p4-4.

Leonard, K. (2010). Businesses woo customers through Facebook, Twitter. Pittsburgh Tribune

Review (PA).

Shayon, S (Nov 23, 2010). Brnadchsnnle.com: What’s Shaking in FacebookVille: Coca-Cola,

FIFA, Tesco and more. Retrieved from:

http://www.brandchannel.com/home/post/2010/11/23/Facebook- Watch-112310.aspx

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TNW (2011) Fatema Yasmine. Facebook’s Known Issues Page: Helps with Facebook problems

FIFA, Tesco and more. Retrieved from:

http://www.brandchannel.com/home/post/2010/11/23/Facebook-Watch-112310.aspx