![]() Figure 1. Interest in “delete facebook” per Google Trends (Larson & Vieregger, 2019). However, as can be seen in Figure 1, a surge in the interest in deactivating FB accounts went back to the normal levels relatively fast, and most users stayed despite the scandal. As Larson and Vieregger (2019) state, the incident resulted in a movement #DeleteFacebook and endangered the platform’s reputation. The experience of FB indicates the platform users’ significant concern about their personal information misuse. In this regard, it is necessary to obtain data for analysis and consider the conclusions regarding the FB scandal made by other researchers. The results of this research can be useful for organizational change and development. FB is considered the subject of the case, and the connection between the company’s data violation and market value is investigated. Data CollectionĪ case study is the primary data collection method for this research. ![]() Hence, the unprecedented consequences suggest a direct relationship between the data violation and the corporation’s market value. A week after the scandal, FB’s shares decreased by about a quarter (Yu & Huarng, 2020). According to Yu and Huarng (2020), the company also experienced a drop in stock price that resulted in $50 billion of market capitalization within the first three days after the data breach revelation. FB not only faced lawsuits and a boycott campaign among its users. This data breach raised questions regarding FB users’ privacy and the firm’s ability to protect its customers’ identifiable information.Īs for the financial aspect, the FB case study allows for investigating the effect of data breaches on the organization’s value. Presidential elections in 2016 and the Vote Leave Brexit campaign (Rehman, 2019). The accounts’ personal information was collected and utilized for political purposes, namely, in the U.S. As Rehman (2019) reports, in 2018, a scandal occurred when Christopher Wylie, a former Director of Research at CA, revealed that the personal data of millions of Facebook users was used without their contest. This study aims to discuss the Facebook (FB) – Cambridge Analytica (CA) data breach as a case supporting the claim that ethics violations will reduce the firm value, all else equal.ģ22 specialists online The Background of Facebook – Cambridge Analytica Data Breachįirst, it is crucial to consider the background of the Facebook – Cambridge Analytica data breach case. This paper focuses on the case of the Facebook–Cambridge Analytica data breach, providing an in-depth understanding of the connection between ethics threats and companies’ reputation. Ethical issues in finance constitute a broad theme and subject to research for many scholars (Garonna & Spaolonzi, 2016 Sugimoto, 2018). In particular, the connection between data breaches and the company’s value can be observed. ![]() According to Nuseir and Ghandour (2019), the globalization and the digitalization of data have contributed to the complexity of ethical issues. The business field has always been exposed to ethical issues and challenges, but in the modern digital world, the type and scope of the problem have changed. Facebook’s Response to the Data Breach Scandal. ![]()
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