As the author of ‘Zuckerberg’s rocket, ready for lift-off’ predicts, Facebook’s IPO could potentially establish the share price between $34-$38. With the company’s current revenue of $3.7 billion, the process of initial public offering could raise another $12 billion, increasing Facebook’s valuation to over $100 billion.

With such high potential brand value, Facebook’s reach will further extend. The growing customer base is essentially what enables the company to generate profit. With advertising being the number one source of revenue for the company and a growing customer base, it is essential that Facebook adapts its marketing to the fast-paced environment.

‘[Facebook] also intends to explore a host of other areas, from payments to “social commerce”’ suggests the article, indicating that Facebook is planning on expanding their current business model and going to offer a greater diversity of products.

Will the IPO cause the Facebook advertising costs (for other companies) to increase? Would an increase in advertising costs result in a lower demand or would it make Facebook even more profitable? In contrast, if the share prices go down after the IPO – how will that impact the Facebook advertising opportunities (reminder: Facebook generates 2/3rd of their profits from advertising)?

Author unknown, ‘Zuckerberg’s rocket, ready for lift-off’, 25/09/2012, http://www.economist.com/node/21554532

The above article from March, 2011, discusses the appropriateness of American Apparels’ work culture. While the company’s CEO, Dov Charney promotes sexual freedom in the workplace, believing that ‘it’s a First Amendment right to pursue one’s affection for another human being’, many of the employees disagree. As Charney argues, his philosophy of sexual creativity is closely associated with stimulating creative energy. However the line between energy stimulation and sexual harassment seems to be too thin for many workers. As a consequence an ex-employee field a suit against the company, requesting a compensation of $250 million. In late 2011, another suit was filed, once again for sexual harassment.

 
The ethical issue of potential sexual harassment, arises from a stakeholder conflict and the work culture of the company. As the CEO uses ‘sexy marketing’ to promote brands unique USP (noticeable and provocative clothes), he enforces all employees to adapt a specific mindset. As a result, the stores are often perceived as appealing and attractive by the customers, yet not all employees are comfortable with the sexual freedom promoted by the brand at the workplace.

The ethical issue of sexual harassment at the workplace has stimulated a debate, as the CEO believes that retaining it is the key to an increase in sales, while the board of directors is becoming increasingly worried about the potential legal consequences. Whether or not American Apparel’s sexual freedom is beneficial or potentially threatening is to be determined.

O’Brien, Gael, 3/15/2011, ‘American Apparel and the Ethics of a Sexually Charged Workplace’. http://business-ethics.com/2011/03/15/0852-american-apparel-and-the-ethics-of-a-sexually-charged-workplace/