Executive Pay: The Curious Case of Carlos Ghosn’s Arrest
February 12, 2025
Introduction In the digital age, information technology plays an important role in the success of an organization. Technology provides edge in this globalized world. Companies are facing competition not only from local companies but from international companies as well. In such a scenario, it is important that company invest in technology which is aligned with […]
Brazil is the most expensive country to live in Latin America. The real problem is that Brazil has become more expensive than most countries in Europe and maybe it is expensive when compared to America as well. The real problem is that people in these developed countries make three times the income of an average […]
Six Sigma is a process oriented methodology designed to improve business performance by improving specific areas of strategic business processes. There are 2 different methodologies available for carrying out improvements in processes or operations. Improvements can be of two types: improving the existing process or designing a new process altogether. When we have an existing […]
In a computer spare parts supply chain, usually the network consists of the country depot that stocks all the parts required to support the field. The number of parts in such depots run very high depending upon the volume of sales and can range from 15000 SKUs to 35000 SKUs, depending upon the model and […]
During 1990, ERP market was dominated by few vendors namely SAP, BaaN, Oracle, People Soft and JD Edwards, who were also known as big five of ERP market. The market was, then, was growing at compound rate of approximately 35%. Fortune 500 companies were the major customers. Key focus of ERP vendors, during that period, […]
Facebook is one of the most important firms in the American economy. The tech giant is a major employer in the United States. Its actions have a profound economic impact across the globe. This is the reason behind the hefty valuation that Facebook commands. However, this valuation and the entire business model came under siege on March 19, 2018. Facebook was found to be engaged in a political scandal. As a result, the valuation of Facebook suddenly crashed. The company lost more than $36 billion in market capitalization in a single day. This negative sentiment also impacted the Dow Jones Industrial Average which was down by close to 7% in a single day.
In this article, we will have a closer look at the political scandal that Facebook has been involved in. We will also consider some of the economic impacts of this scandal.
Cambridge Analytica is a public relations firm based in the United Kingdom. This firm specializes in psychological profiling and even psychological warfare. This means that they collect data from social networking websites. This data is then used by Cambridge Analytica to draw psychological profiles of the respondents. Once these profiles are drawn the reaction of this audience to various messages are tested. Based on this testing, Cambridge Analytica enables political candidates to form a message which resonates with the population. The underlying belief behind these activities is that people do not vote based on rational thought. Instead, they vote based on emotions. If a company is somehow able to harvest data and understand the emotions, they reach a position wherein they can influence the outcome of the elections.
Facebook was involved in this scandal because the data collected by Cambridge Analytica, in this case, was collected on Facebook. Also, Facebook allowed them to harvest the data from the friends' list of the users who had agreed to take the quiz. This means that people who had not even directly given permission for their data to be used were also affected by the scandal. It is said that Cambridge Analytica used Facebook on a massive scale. They harvested as many as 50 million profiles from Facebook during the period. These profiles were used by the Trump campaign during their election campaign. Also, the involvement of former White House staff and white supremacist Steve Bannon with Cambridge Analytica is making Facebook’s role look even more suspicious.
This scandal is more related to Facebook than to Cambridge Analytica. The reason behind this is that Facebook had full knowledge of the fact that the third party i.e. Cambridge Analytica was developing a tool specifically to harvest the user’s information. It is also known that Facebook had full knowledge of the fact that the data of many users will be taken without their direct consent. However, they still allowed the political consulting firm to harvest data. This is being seen by many as a violation of the privacy policy.
To sum it up, Facebook is in the midst of a major crisis. The reputation of the firm has taken a major beating. Earlier, Facebook was involved in the net neutrality scandal. Now, Facebook is involved in the misuse of customer data. Any more scandals will have a negative impact on the already fragile financial statements of Facebook.
Your email address will not be published. Required fields are marked *