Internal Factors that Influenced Facebook to Adopt the WhatApp Acquisition - Case Study Example

Name Institution Tutor Date Change as It Applies in Organizations Introduction Change is an inevitable occurrence in the lifecycle of any organization. In most cases, the dynamic nature of the business environment influences many organizations today to adopt to change. Understanding organizational change and how to manage the change is therefore a critical concept in improving the performance of the organization. Normally, the concept of change within the organization is linked to organization wide changes as opposed to smaller changes that take place in the organization such as modifying the development program or recruiting a new employee. The major examples of change in the organization include: a transformation in the mission and vision statement, re-engineering activities, downsizing and mergers (Mattiske, p3). The media industry essentially the social media industry is one of the leading communication platforms today. Companies in the industry have also been forced to adopt several changes in their operations. This paper seeks to examine the concept of organizational change at Facebook.Inc. The scope of the analysis will be on one of the recent change initiatives at Facebook which is; the 2014 acquisition of WhatsApp. Internal Factors that influenced Facebook to adopt the WhatApp Acquisition Facebook has over the years had a reputation of grabbing acquisitions. However, no deal undertaken by the company generated heated debates such as the 2014 acquisition of WhatsApp. This was basically the biggest purchase with the deal costing a total of $16 billion (Teresa, p1). A number of internal reasons influenced the move by Facebook to adopt this particular change. The internal need to improve performance in order to dominate the global communication industry can be sited as one of the reason why Facebook made the initiative to acquire WhatApp Company (Teresa, p1). Facebook has been the leading social media communication company with the largest user base. However, with the emergence of new actors in the market such as: Instagram, SnapChat and also other existing companies such as Twitter, the dominance of the company in the market declined. Various studies have been conducted in order to examine the impact of organizational change on the performance of organizations. A study conducted by Beck et al (p1) highlights that a likely factor that influences organizational change is the need to improve internal performance. Through the use of data on startup firms in Germany, the study investigated the impact of organizational change on performance. The findings of the study disclosed that cumulative organizational change results to the refinement of the organization. According to Beck et al (p10) the dynamic nature of the business environments can affect the performance of many firms as a result constant adaption of change and effective management of the change is very essential. It can be stated that the findings presented by Beck et al (p10) are very factual and also applicable in the context of Facebook. The performance of Facebook Company as a social network site has actually been gradually declining. Many users were initially very excited about the emergence of Facebook. However today, the excitement has actually declined. Although many users still have their accounts, nevertheless, the level of activity has declined. Many people have turned to other platforms such as Instagram and SnapChat. It can be argued that the move by Facebook to acquire WhatsApp was therefore a vital step of improving the performance of the company. The perspective by Beck et al (p10) that the dynamic external environments has an effect on performance, hence the need to constantly implement change is therefore a true fact when the case of Facebook is critically analyzed. On the other hand, the move by Facebook to acquire WhatsApp can be described as just an expansion initiative that is not related to a decline on the performance of the company. As argued by the Social world’s theory, change can take place due to negotiation between several social worlds. The theory proposes the significance of who is applying the change indicators and for what purpose. The steps that are taken should aim at enhancing the quality work at the same time meeting quality standards. Integrating the WhatApp platform in the company’s portfolio definitely implies that the company did conduct a negotiation with stakeholders in the social environment for instance the clients. By conducting a market research on what would improve user’s preference, the company discovered that the applications that exist in WhatsApp would definitely enhance the quality of services offered by Facebook. As a result, the company opted to engage other operators in order to address the decline in performance. In my opinion, every organizations needs to improve its performance at one point. As a result, the initiative by Facebook to acquire the WhatApp Company was instigated by the need to provide better and advanced services to the user. I must confess that the prominence of Facebook has declined. I have a Facebook account but I do not use it as much as I used to. The WhatApp application is much appealing when compared to the use of Facebook. I therefore believe that Facebook’s acquisition of WhatsApp is definitely an effective change initiative to improve performance. The second reason for Facebook’s acquisition of WhatsApp was the need to meet various key organizational objectives. Tereza (p1) highlights that the need for growth essentially user growth was a formidable objective why Facebook made the move to acquire WhatsApp Company. Since inception, the company had the objective to advance its user growth. Facebook therefore constantly made moves to adopt mergers and acquisitions. Acquiring WhatApp was the most useful approach of advancing growth in the number of users based on the fact that WhatsApp had a faster progression in the number of users. In terms of the number of users, WhatsApp was rated as one of the fastest growing firms. This is because the company managed to attract a total 419 million users within a span of four years. On the other hand, Facebook only attracted 145 million users within four years of operation. It is projected that approximately I million users become members of WhatApp each day. This number increases each day. The acquisition of WhatsApp can therefore be seen as a useful approach of enhancing the user growth of Facebook (Tereza, p1). Another objective that influenced the acquisition was the need for the company to advance its mobile connectivity initiatives. Over the years, Facebook was in the process of developing its personal apps for mobile communication. The initiatives however failed. (Tereza, p1). Facebook also had the objective of increasing the level of engagement with the users. WhatsApp has been a renowned platform which provides high engagement rates. Mark Zuckerberg, Facebook’s CEO acknowledges that WhatApp is an app that is extensively used which offers a high level of engagement that is even greater than Facebook. The acquisition was therefore relevant in promoting the level of engagement with the users. Mattiske (p1) highlights that change should not be undertaken for the sake of change, but it should be done with a robust strategy to attain identified organizational objectives. As disclosed by Tereza, (2014, p1) Facebook initiated change through the acquisition due to the need of attaining various organizational objectives. For instance one of the objectives of the company has been to improve mobile connectivity. This is supported by the fact that the company launched its platform online and developed an app where people download and access the website through their phones and connect with other users. What is evident is that the application was not very effective due the fact that Facebook did not provide a platform that fully engaged the users. Sending a message on WhatApp is much easier for users than on Facebook. It is therefore much easier for users to engage on the WhatsApp platform. Consequently, the acquisition of Facebook was a useful approach that would meet the objective of increasing the level of user engagement. Therefore, it can be argues that the move by Facebook to implemented change through acquisition can be ranked as viable due to the need to meet organizational objectives. Berk et al (p10) contend with the view that organizational change has to have an objective as proposed by Mattiske (p1). According to Berk et al (p10) change is in most cases influenced by the dynamic organizational perspective which argues that the dynamic nature of the business environment greatly instigates change in many organizations. The opinion by Berk et al (p10) can be perceived as bias based on the fact that organization can have the objective of implementing change. In my opinion, I believe that implementation change within the organization does not necessarily have to be linked to meeting certain objectives. Some times change is instigated by factors that are beyond the control of the organization. External Factors that influenced Facebook to adopt the WhatsApp Acquisition A leading external factor that instigated Facebook’s acquisition was the emergence of the young audience phenomena. Many articles in the recent years have argued that Facebook is apparently turning out to be old. Many users have now replaced Facebook with new application such as Instagram, SnapChat and WhatsApp subject to the preference of the user. WhatsApp is definitely an appealing means of communication for even young people. This aspect greatly challenged the usefulness of Facebook. The move by Facebook was therefore aimed at capturing the young audience (Tereza, 2014, p1). Competition from external forces is another critical factor that influenced the decision by Facebook to acquire WhatApp. As noted earlier, Facebook has the desire to be a dominant play within the social media communication industry. When compared to other companies, Facebook has attempted more mergers and acquisitions as opposed to other firms in the industry. The increase in the level of competition has been a constant challenge for the company’s position. In order to deal with competitors such as Instagram, SnapChat and Twitter the acquisition was relevant (Tereza, 2014, p1). The external factors stated by (Tereza, 2014, p1), provide an insight to the fact that the external forces can definitely drive an organizations towards adopting change. The big question that arises however is Facebook’s organizational capacity for change. Heckmann et al (2015) conducted a study to examine organizational capacity for change. The study examined why some organizations are more capable to change as opposed to other organizations. The study further examined whether organizations that are more successful at changing are more successful in their change projects. The study involved an analysis of 134 companies in Germany. The findings of the study disclosed that perceived past change experiences are positively linked with an organizations change capacity. The study also concluded that organizational capacity for change is linked to the performance of its change projects. The case of Facebook definitely reflects the issue of organizational capacity for change. Facebook has actually undertaken various change initiatives in the recent years which depict the company’s capacity for change. Since 2005 Facebook has been involved in various acquisitions and mergers which have actually been very successful. Some of the successful acquisitions include the 2012 of Instagram, Quickfire in 2015 and the find in 2015 just to name but a few. Based on the existing successful projects it can be stated that Facebook does have the organizational capacity for change. In my opinion, I think that the findings of the study by Heckmann et al (2015) are very relevant in explaining the organizational capacity for change that exists at Facebook Company. Indeed, Facebook has the capability for change based on the fact that the company has had previous success in acquisitions projects. However, the success of previous projects does not automatically imply that the WhatsApp acquisition will automatically work. Factors that challenge the change process. One of the factors that affects the change process is the issue of employee resistant to the change. Adam (2014) a former employee of Facebook disclosed his perspective concerning the WhatsApp acquisition. According to Adam (2014) the move by Facebook was basically a step that indicates just how much Facebook did not care about the employees who held the company’s back for years as they supported it through its growth. Adam (2014) discloses that the management of Facebook did not even consult the employees concerning the acquisition. This makes the employees feel that they are not empowered. Although the existing employees may be excited about the new team on board, which is the WhatsApp team, what is evident is that there are so many messy emotional situations that arise when a new team arrives to the organization. Adam (2014) further discloses that employees such as the Engineers will undoubtedly experience tough times based on the fact that they raised complaints concerning the existence of a loose connection between the business values and the technical accomplishments. Based on the revelations presented by Adams a former employee of the company, it can be argued that resistant to change is one of the key challenges that is bound to affect the project. As agued by the organizational development theory, when implementing change it is significant to put into consideration the human factor. The theory asserts the importance of organizational changes to be linked to an agreement between the objectives of the individuals and those of the organization. The concept of team work is therefore very much relevant when it comes to implementing change. (Kimberling, 2002). In the context of Facebook’s move to acquire WhatsApp, the views of the employees were actually not integrated when coming up with the idea and even making the deal. This definitely implies that the management of the organization did not care to blend the goals of the employees with those of the business as proposed by the organizational development theory. Such a situation definitely generates resistance to change. Communicating the change before implementation is the best option for the management (Kamarudin, et al, p 496). In my opinion, I think that the process of integrating the operations of two separate firms is merged with high uncertainties and pressures. My opinion is that Facebook should adopt Kotter’s 8-step model in order to effectively implement the change. For instance; the first step in this model involves coming up with the urgency for change. In order for change take place in organization, the entire organization has to be familiar with the need for change (Daft, 2009). Based on the revelations presented by Adam (2014) the Facebook management did not inform its workforce of the need for the new acquisition. I believe that although the entire acquisition deal was closed in the previous year, the project has faced the problem of resistance to change. It is therefore essential for the company to be actively involved in managing change. Another challenge that affecting the change process involves the issue of user satisfaction. WhatApp had a substantial amount of users due to the low percentage of spending or free spending that existed when using the app. After the acquisition by Facebook it can be stated that there was a rise in user spending. Many clients were not happy by the move to increase the spending fees. This situation has affected the change process (Young, 2014, p1). An additional challenge facing the change is the inability to meet some of the key objectives of the company through the acquired app. Facebook Company greatly values advertising. However, the founders of WhatApp did not have the intention of conducting advertising using the app. The implication this is that Facebook faces the challenge of meeting the objective advertising (Rawlinson, 2014, p1). Mendonça, and Wallace (2001) argue that resilience is a significant element when change is to take place in the organization. Indeed it can be stated that Facebook has showed resilience in its WhatsApp acquisition initiative. Stanleigh (2007) argues that organizations should move from crisis control to strategic change management. Despite the challenges of the inability to meet some of its objective and also the dissatisfaction by the users, the company has continued to venture in its change initiatives. It can be argued that Facebook has been strategic in managing change. In my opinion, I think that Facebook is a good example of an organization that values change. There is however need for the company to implement effective change management practices. Conclusion From the discussion above it can be stated that change is an unavoidable concept in organizations. In addition, the process of implementing change is sometimes difficult as note by the case of Facebook. It is however essential for organizations to adopt effective change management approaches. Works Cited Adam, D’Angelo. ‘’How do employees at Facebook feel about the acquisition of WhatsApp’’? 2014. Retrieved on 12th September 2015, From http://www.quora.com/How-do-employees-at-Facebook-feel-about-the-acquisition-of-WhatsApp Beck, Nikolaus, Brüderl, Josef and Michael Woywode. The Causes and Consequences of Organizational Change: How to Deal with Unobserved Heterogeneity. Advanced Study . 2002. Daft, Richard. Organization Theory and Design. Cengage Learning. 2009. Heckmann, Nadine, Steger, Dowling, Michael. Organizational capacity for change, change experience, and change project performance. Journal of Business Research/. 5(2015). Kimberling, E. Organizational Change Management: Theory and Practice. 2002. Mattiske, Catherine. Managing Organizational Change. AudioInk. 2012. Mendonça, David and Wallace, William. Factors underlying organizational resilience: The case of electric power restoration in New York City after 11 September 2001. Journal of Reliability Engineering & System Safety, 141, p 83-91. 2015. Kamarudin, Fauzi, Starr, Karen, Kalthom and Aida Nasirah Abdullah. Communicating Change in Organizational Restructuring: A Grounded Theory Case Study. Journal of Social and Behavioral Sciences. 155, (6 ), p496-501, 2014. Rawlinson, Kevin. Facebook's WhatsApp purchase challenged. BBC News . 2014 Stanleigh, Michael. From crisis to control: The strategic change management process, Business Improvements Architects. 2007. Tereza. ‘’5 Reasons Why Facebook Acquired WhatsApp’’. Retrieved on 12th September From http://wersm.com/5-reasons-why-facebook-acquired-whatsapp/. Young Terrence .What challenges does Facebook's proposed acquisition of WhatsApp face. 2014. Read More