WEEK 7 CASE STUDY

 

 Importance of cultures, Did Facebook overpay for WhatsApp? and Problems bringing new investors.

Ferdinand Taslim (TP072735)

Culture is a very important aspect to consider as an entrepreneur. As an entrepreneur, negotiation skills are crucial because we will be faced with many people along our venture, including businessmen, investor, and many others. Negotiators from diverse cultures may have conflicting expectations, leading to misunderstandings in their reasoning (Jiang, 2013). Generally, people's negotiation behaviors are strategic and may be influenced by culture. Culture shapes the gradual evolution of social norms, and specific strategies may become institutionalized to enhance social interaction within a particular culture. Understanding their cultures and researching before meeting them is one of the many tactics utilized by entrepreneurs to ensure a good communication flow. The core of business negotiation lies in the expression of human relationships. Therefore, habits, linguistic skills, and psychological needs must be aligned with specific cultural contexts (Tang & Lv, 2009, as cited in Jiang, 2013). A good negotiator must relate and position themselves beneficially when faced with people from different cultures. That is why studies for intercultural awareness is very important and is one of the compulsory subjects in many schools.

Jovan Richaldy Chandra (TP071536)

For me, culture is an important thing because it's like the special flavor that makes each group of people feel unique. It consists of things such as language, traditions, music, food, and art that bring people together, help them understand each other, and make them exchange ideas. Also, culture helps us to connect with our roots, express ourselves, and learn from each other's experiences. 

Personally, I would say yes because WhatsApp is one of the biggest companies that have ever been built by humans and had so much potential. Like they could make another apps using WhatsApp name such as another social media, or whatever it is. Some people think it was too much because WhatsApp didn't make as much money as Facebook paid for it. But others think it was a good investment because WhatsApp had a lot of users and potential to grow even more.

Investor is one thing that every company should pay attention to. Long-term investors have the flexibility to explore various investments and strategies (Warren, 2016). One problem is that new investors might want to have a say in how the company is run, which could lead to disagreements or conflicts with existing owners or management. Moreover, if new investors have different goals or expectations than the current owners, it could cause issues in decision-making and planning for the company's future. Also, bringing in new investors might mean giving up some control or ownership of the company, which existing owners may not want to do.

Rafael John (TP072612)

Culture plays a significant role in international business decisions, such as trade and foreign direct investment (FDI). The search results indicate that the cultural dimensions established by the GLOBE study, including factors like power distance, uncertainty avoidance, and collectivism, can have a substantial impact on a country's attractiveness for trade and investment.

Specifically, the search results suggest that cultural differences between the source and destination countries are important considerations. Managers and policymakers need to thoroughly analyze the cultural factors of a country before making international business decisions, as failure to do so can elevate the risks.

Regarding Facebook's acquisition of WhatsApp, the search results do not provide a definitive answer on whether Facebook overpaid. However, the results do indicate that cultural factors, such as the rise of social media influencers and trust/privacy concerns, are shaping the social media landscape and may have influenced Facebook's strategic decisions.

As for problems in bringing in new investors, the search results highlight the importance of cultural value orientation. Differences in cultural factors like individualism, uncertainty avoidance, and long-term orientation can affect individual investors' stock trading behavior and participation in the market (Chatterjee, 2020). Understanding these cultural influences is crucial for attracting and retaining diverse investors.

In summary, culture is a critical consideration in international business, mergers and acquisitions, and investor participation, as it can significantly impact the success and dynamics of these activities. Thoroughly analyzing cultural factors is essential for making informed decisions in these domains.

Marcello Irawan (TP072752)

In this world, there are many people. Where they have differences in culture, race and so on. Culture is a collective programming of mind which distinguished the member of one group with another (Spencer and Franklin, 2012). With culture, culture shapes the way people think, act and interact with each other. In other words, there are various ways of using language, ways of solving a problem and so on. 

Even though Facebook paid a lot for WhatsApp, there are quite strong reasons. Facebook has thought carefully and optimistically. Where WhatsApp is an application that we often use in everyday life throughout the world, to send messages, make calls, and so on. This makes WhatsApp a long-term investment site owned by Facebook. This can return the capital from buying WhatsApp in a short time. In this case, it also helps Facebook expand its product and service ecosystem.

In getting new investors, there are problems that arise. The first is the incompatibility of the vision and mission of investors and companies. This problem occurs very often because there are differences in the principles or ways of working of different parties which can result in the cancellation of an investment. Second, adjustment, where the company certainly expects new people to have the same character or habits as before. This is so that changes do not occur, and it is still with the same rules. However, there are times when you get investors who have different methods from previous investors, so new requirements have to be made which have to be thought through carefully so as not to burden one party or both.

Stanislaus Raymond Soecoko (TP077043)

In February 2014, Facebook acquired the messaging platform WhatsApp for a hefty $19 billion. This purchase was significant considering WhatsApp's limited revenue generation and predominantly international popularity, especially compared to its presence within the United States. $19 billion is not a small amount of money especially when the purchase was made in 2014. In my opinion, buying WhatsApp in 2014 was a good decision. WhatsApp is one of the most popular messaging apps ever made. Its popularity only grew bigger and bigger since 2014. As of 2014, WhatsApp boasts over 600 million users in countries from Europe to India, Latin American to Africa (Shih 2014). There are many benefits on buying WhatsApp pretty early on. If Facebook try to buy WhatsApp 2 years later for example, the transaction price might ascend. WhatsApp's focus on messaging aligned with Facebook's goal of connecting people globally. Integrating WhatsApp into Facebook's ecosystem could strengthen its overall offerings and competitive position in the messaging market. Buy buying WhatsApp, Facebook also automatically get rid of one their biggest competitors.

Daniel Kurniadi Khodyat (TP073665)

Investor is one of the most important parts of growing a venture as an entrepreneur. Investor sentiment indicates how far an asset value deviates from its economic fundamentals (Zhou, 2018). However, bringing in new investor is not always beneficial. Between the ideals of an entrepreneur and the increasing demand of investors might create a new problem. This illustrates the complexities of entrepreneurship, including the tension between artistic freedom and financial growth, as well as the importance of communication and alignment between founders and investors in navigating such challenges. As the vision of the venture and the vision of the investors may not align, and this may hinder artistic freedom for many venture starters. The relationship between investors and their investment is unique, Investor is needed tremendously for financial success, but not all investors might be compatible with the core belief of the startup. It is the best to choose an investor that shares the same conviction and way of thinking as the company envision for the future.

References:

Jiang, Y. (2013). Business negotiation culture in China a game theoretic approach. International Business Research, 6(3), 109.

Warren, G. (2016). What Does It Mean to Be a Long-Term Investor?. Brandes Institute Research Paper, (2016-04).

Nieborg, D. B., & Helmond, A. (2018). The political economy of Facebook’s platformization in the mobile ecosystem: Facebook Messenger as a platform instance. Media, Culture & Society, 41(2), 196–218. https://doi.org/10.1177/0163443718818384

MacDermott, R., & Mornah, D. (2015). The Role of Culture in Foreign Direct Investment and Trade: Expectations from the GLOBE Dimensions of Culture. Open Journal of Business and Management, 03(01), 63–74. https://doi.org/10.4236/ojbm.2015.31007

Chatterjee, D. (2020). Cultural Value Orientation and Stock Trading Behavior: A Study of Individual Investors from India. Social Science Research Network. https://doi.org/10.2139/ssrn.3683298 Spencer-        

Oatey, H., & Franklin, P. (2012). What is culture. A compilation of quotations. GlobalPAD Core Concepts, 1(22), 1-21.

Shih, G. (2014). WhatsApp’s struggle to keep things simple, Australian Financial Review, 23 February. 

Zhou, G. (2018). Measuring investor sentiment. Annual Review of Financial Economics, 10, 239-259.