Do the financial and the environmental policies complicate the decision making in Facebook Company?
Do the financial and the environmental policies complicate the decision making in Facebook Company
In the current business environment, there are numerous strategic problems that face the businesses across the world. Most companies experiences many problems when investing in certain environments due to financial and environmental issues that are complex to solve. The environmental and financial policies are complicating the decision making for almost all the companies in the current digital investments. It is true that things seemed to have settled down in the past years, but the current business analysis elaborates that there are still numerous problems that still exist today. Dealing with the new uncommon regulatory environment is continuously becoming a new norm in the digital market and most companies like Facebook are struggling to find new ways of dealing with it. The threats of the increasing costs as a result of the changes of tax rates in different markets usually puts the Facebook company in a financial strains, a situation which they have to comply to in order to enhance their operation in the global market. The paper discusses the financial and environmental policies that complicate the decision making within the Facebook Company. how financial and the environmental policies
One of the biggest financial risks facing Facebook Company is the revenue stream. The composition of the Facebook Company is the same as the old-line publishing company. The third party advertising on Facebook amounted to 85% of the 3.7 billion sales made last year, a figure that represented a drop from 98% experienced in the year 2010 (Treadaway & Smith, 2012, p. 176). Placing most of the resources in the ad basket subject Facebook’s financial strategic plans to the vagaries of the advertising market; this complicates the financial decisions for the management. Changes in pricing, microeconomic conditions, falling user management, and the scenarios where users opt for viewing ads could lead to the hindrance of the financial stability as well as the decision making procedures in different market segments. Consequently, Facebook also experiences the increase use of the mobile applications as an alternative of desktop version Facebook; the mobile application does not currently generate meaningful revenue when compared to the desktop version of Facebook; this may hinder the financial projections and planning anticipated by the company. As a result, the continuous generation of the financial plans may complicate the decision making especially during this time when the company is experiencing huge expansions of its operations to different economies and markets. Diversity of the customer’s interest is another factor that causes the financial danger to the Facebook Company. For instance, the Zynga, which is a social gaming company represent close to 12% of the total Facebook’s revenue that amounted to over 445 million US dollars last year (Treadaway & Smith, 2012, p. 176). The incorporation of different shareholders with immense contribution to the business cost makes the financial management difficult and sometimes complicates the operational processes. The investment expectation for the future revenue and the growth of income from Facebook is another financial risk. The Facebook growth is characterized by the expansion to different market niches, a situation that is making the financial plans more complicated in different economies. The Facebook’s net income hit one billion US dollars in the year 2011, an increase by two-thirds from the year 2010. The total expenses and costs doubled in the year 2016 (Treadaway & Smith, 2012, p. 176). Just like the fast growing start-up businesses, the Facebook company needs to scale up the revenues in order to keep in pace with the user growth. The financial department should keep up with the revenue challenges in order to keep a lid on costs without losing the growth opportunities. how financial and the environmental policies
The Facebook anticipates the rates of revenue and user growth to decrease over time. They will unavoidably slow as they attempt to achieve the increasing market penetration rates, as the revenue increases to the higher levels. The Facebook’s bulging costs in 2011 was contributed largely by 606 million dollars in property and the purchases of the equipment, a situation that brought a lot of complexities in the financial planning. In 2018, Facebook Company has a plan of spending another 500 million dollars on the data related costs (Treadaway & Smith, 2012, p. 176). The expenses of sales and marketing of the Facebook products is another operational area that experiences financial planning complications. With the increasing demands of the Facebook products, a lot of purchases are being made and this requires elaborate planning in terms of financial organization. The advancement in the marketing of the Facebook products complicates the revenue collection and analysis. The financial department should therefore adopt the continuous financial management systems to help in curbing the losses that might be experienced as a result of improper management. In the year 2011, the sales and marketing increased to over 240 million US dollars or 132%. The company also recorded 46% increase in the sales and marketing expenses (Robertson, 2012, p.75). The above increase in profits is attributed to the advancement in the financial management systems.
The ever increasing environmental policies in different market segments usually complicate the decision making within the Facebook Company. Different economies have diverse demands from different companies. There are countries and different networks that require special demands from the investors. Despite the rising operation of the Facebook Company, its carbon emissions are still below the internet rival Google. The Facebook’s yearly emissions were 285,000 tons of carbon IV oxide in the year 2011 when compared to the Google’s 1.5 million tons in the year 2010. The large majority of carbon emission, close to 72% usually comes from the Facebook’s data center in the United States (DAFT, 2011, p.69). The yearly footprint for each user that is active on facebook is 269 grams. The Facebook Company also details the energy sources that power its companies and the communication centers. The majority of the carbon emission from the Facebook’s centers comes from coal power, an alternative source of energy that normally powers the operational centers. The rest of energy frequently comes from the renewable sources. The above environmental policies often complicate the decision making within the Facebook management. In the United States and in other countries, the environmental policies are essential and must be followed by every company. The Facebook Company therefore needs a specialized department and budget to help in providing special attention towards ensuring environmental sustainability. Facebook has committed to revolutionize its sources of energy by adopting the renewable sources of energy to power their data centers. The environmental policies complicate the decision making procedures as the adoption of the alternative sources of energy come at a costs that must be incorporated in the budgets. Because the environmental policies keep on changing with the emergence of diverse policies, the Facebook’s planning department usually finds it complex in managing and adopting the continuous creeping policies. how financial and the environmental policies
The Facebook Company is usually on alert to adopt the green energy and in the year 2011, the management announced the introduction of the green data center in Sweden by taking advantage of the cold climate to cool the servers, one of the most energy intensive data stores. Ensuring environment safety is an expensive procedure that requires special attention and a specialized department that monitors the changes in the environmental policies; this forces that Facebook Company to go beyond the digital operation, a complex situation that requires more revenues and manpower. As the digital marketing moved from the local machines to the clouds, the impacts of hosting so much data has been under scrutiny by different environmental organizations as well as the green campaigners. In 2017, Apple Company disclosed its energy use for the data centers in the Northern Carolina that powers the iCloud services.
The environmental policies come with complex procedures that ought to be adopted and incorporated by the Facebook Company. In most cases, these policies should be followed to the latter in order to safeguard the operational activities that generate high revenues. Therefore, investing in the mitigation processes requires complex decision making that should relate to the governmental requirements. The manufacturers for the computer products for data storage are required to observe the environmental safety; the Facebook Company therefore needs to take close attention during the procurement in order to ensure safety measures; this increases the complexity of the operation processes undertaken by the company’s management in ensuring safety of the environments in which they operate.
DAFT, R. L. (2011). Understanding management. Mason, OH, South-Western Cengage Learning.
Robertson, C.B., 2012. The Facebook Disruption: How Social Media May Transform Civil Litigation and Facilitate Access to Justice. Ark. L. Rev., 65, p.75.
TREADAWAY, C., & SMITH, M. (2012). Facebook marketing: an hour a day. Hoboken, N.J., Wiley.
Use the following coupon code :