Social Media
LaChina McClain
Professor Smallwood
LEG 100
May 4, 2013

Facebook is a very popular social media site where users can share their ideas and feelings about events in an open atmosphere. These ideas are known as “statuses”. Additionally, the site is used to share pictures, videos, and other points of individual interest with the rest of the world or just a selected few. This is totally up to your personnel preferences. A growing trend is using Facebook as a social media marketing arena. There are several home-based and populated sites that are dedicated to the sale of items or services. It is through this newly established media power, that many entrepreneurial individuals have been able to establish themselves a social media marketing giants, and have gained much attention and income from being able to do so. This new ability is just a start of the technological marketing revolutions. Last year, 73 percent of Fortune 500 companies were active on Twitter, while more than 80 percent of executives believed social media engagement led to increased sales (Savitz, 2012). Social media has gained so much notoriety that “the average return on social (media) engagement was calculated to be between 3-5% (Walker, 2012). The most engaged businesses are reporting a calculated 7.7% business impact specifically from social (media) engagement, which is four times the performance of the lowest performers who only achieved a 1.9% estimated return” (Walker, 2012). This is why the social media market is a haven for future marketing success, and Facebook is a prime marketing component in that success. For Facebook to achieve and maintain the business dominance it has achieved in the virtual arena, it has adopted the core legal knowledge that is a necessity for the business to be managed properly. The four components of legal astuteness are: a set of value laden attitudes about the importance of the law to the firm’s success, a proactive approach to legal issues and regulation, the ability to exercise informed judgment when managing the legal aspects of business, and context-specific knowledge of the law and the appropriate use of legal tools (Bagley, 2013). By utilized these four components Facebook ensure that the company maintains its proper legal balance between social media provider and social media marketing provider. This is accomplished through the establishment of corporate compliance directorates, and the inherent sponsor. Additionally, Facebook works to ensure that all legal issues are resolved as fairly, justly and timely as possible. Facebook’s ability to mediate any of these matters contributes to the company’s capability to manage the operations as a whole. Finally, Facebook has a working understanding of the context in which the services that are provided, so that in the likelihood of a legal issue, it is able to ease or divert the legal actions to the knowing product manufacturer or seller. All of these characteristics work to defend Facebook in the event of legal conflicts. The company legal compliance directorate ensures that all products advertised are in legal standing and does not support the sale of substandard products, such as pirated or copyright conflicted merchandise. Facebook also works to deal with any action as swiftly and impartially as possible. This helps to contribute to the company understanding the needs of the customer, as well as the need for self-preservation. This brings us to the third and fourth aspects. With their ability to work as a mediator and have a working knowledge of any legal issues this ensures that all grievances are being addressed and no other action will occur, or be left unresolved.
If there is ever a situation that requires any type of mediation, Facebook works with the marketing directorates to provide some form of alternate dispute resolution. Alternate dispute resolution procedures can help the company maintain a relationship with the opposing party, reduce legal expenses, dispose of issues relatively quickly, and allow for flexible business-oriented solutions (Bagley, 2013). There are three types of ADR: negotiation, mediation and arbitration. Negotiations are the give and take people engage in when coming to terms with each other (Bagley, 2013). It can be directed directly by the concerned parties or can take place during the mediation process. In negotiation, the concerned parties meet to resolve a dispute. Mediation is defined as “a form of dispute resolution whereby the parties agree to try to reach a solution themselves with the assistance of a neutral third party who helps them find a mutually satisfactory solution (Bagley, 2013). Mediation uses a trained, impartial third party to help reach consensus on substantive issues at disagreement among conflicting parties in public involvement. A mediator can be from within or outside an agency but must be neutral and perceived as such by all parties. Arbitration is defined as the resolution of a dispute by a neutral third party (Bagley, 2013). In arbitration, the parties turn over decision-making authority to the arbitrator who acts like a judge. Whether it is binding or non-binding, the outcome of the arbitration is the arbitrator’s decision. Of these three methods of ADR, the most commonly utilized and generally accepted method would be the negotiation. In this format, the two parties would work together to reach an agreement and Facebook would not have to intervene, due to the sale being between the provider and the client that purchased the items. This method would work to benefit all parties, as it can be the quickest and easiest way to solve problems that could arise from the sale of items utilizing a social media forum. From a governmental standpoint, social media can cause some issues because there are fewer laws that govern electronic purchases. In order to standardize and regulate the traffic of material that is sold through social marketing, the federal government uses the Federal Trade Commission to regulate the transactions that occur, to ensure that the purchases are properly coordinated, and that the products are of legal standing. The mission of the FTC is to prevent business practices that are anticompetitive or deceptive or unfair to consumer, to enhance informed consumer choice and public understanding of the competitive process, and to accomplish this without unduly burdening legitimate business activity (About the Federal Trade Commission, 2012). While the current governance is managed and mandated by the legislative branch of the government, all three branches play a part in the operation of an online business through a social media format. The three branches of government are: the judicial branch, the executive branch and the legislative branch. Although the government works well with each other using the checks and balances system, I believe all three would work hand in hand on regulating consumer transactions. The reason I say this is because the power that each individual branch has needs to be exercised. The legislative branch makes the law, the executive branch executes those laws and the judicial branch interprets them. These three branches would all have an impact on regulating consumer transactions via social media but the judicial branch would effectuate significantly. The judicial branch is established on the Constitution and investigates whether actions are within the rights given by the Constitution, on both other levels of government. This falls into the realms of social media and all it entails (i.e., free speech, etc.) this is why I feel the judicial branch would have the most significant impact out of the three government branches. It is very important to understand the relationship that is established and maintained by the service provider and the person receiving the service. The type of relationship that exists between social media providers and businesses are quite different. Most networking sites generally have terms and conditions for utilizing the site and the content you will be displaying. This is typically the case with all websites. That is why it is important to read the fine print. As a business, you are responsible for what you post or advertise on a social networking site and the site is responsible in making sure the content is not breaking the law. They expect for all content to be personable, respectful and constructive. The goal of using social media networking websites is to place your business right in your target midst of people who are likely to become customers. Social media is a small market niche currently that is seemingly under tapped. However, future marketing success will be dictated by how well a company transitions from traditional sales environments to one of a virtual baseline. Essentially, the earlier that a company understands the social media impact, the better the future business should entail. As long as social media marketing is properly facilitated and implemented, the sky is definitely the limit.

References

About the Federal Trade Commission. (2012, January 5). Retrieved from Federal Trade Commission: http://www.ftc.gov/ftc/about.shtm
Bagley, C. (2013). Managers and the Legal Environment. Mason: Cengage Learning.
Savitz, E. (2012, December 11). 5 Ways Social Media Will Change The Way You Work in 2013. Retrieved from Forbes: http://www.forbes.com/sites/ciocentral/2012/12/11/5-ways-social-media-will-change-the-way-you-work-in-2013/
Walker, P. (2012, March 28). Socially Engaged Companies see 4X Greater Business Imoact. Retrieved from POV: http://www.pulsepointgroup.com/2012/03/socially-engaged-companies-see-4x-greater-business-impact/