Executive Pay: The Curious Case of Carlos Ghosn’s Arrest
February 12, 2025
DMADV is a six sigma methodology. It is used to design new processes or products where none exist and get it right in the first time. This is a part of the DFSS “Design For Six Sigma” concepts which place focus on creating processes right the first time. The focus of DMADV is on quantifying […]
Business Process Improvement programs have become the major tools for Organizations to keep working on their internal operations to enhance the operational efficiencies, to implement new processes in line with business requirement and to eliminate redundancies and wastage. When the Organizations used to be managed and run based on hierarchy and centralized decision making, the […]
“Kaizen” refers to a Japanese word which means “improvement” or “change for the better”. Kaizen is defined as a continuous effort by each and every employee (from the CEO to field staff) to ensure improvement of all processes and systems of a particular organization. Work for a Japanese company and you would soon realize how […]
Intellectual Property Rights (IPR) safeguard the creations of the mind, offering legal protection to inventors, artists, and businesses for their innovations, designs, and works. When individuals and businesses know their work is protected, they are more likely to invest time, resources, and energy into research, development, and innovation. This cycle of protection and creation benefits […]
What Do Recent Events Indicate About How India Inc. Has a Diversity Problem? It is a well known fact that Indian Corporates often pay lip service to Diversity and Inclusivity and most D&I initiatives often exist on paper with little to show in terms of actual achievements. Apart from culturally shaped attitudes towards women and […]
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 *