Snap Inc. makers of the popular “snapchat” mobile app, is one of the fastest growing, new wave of social media companies globally. Since Snap inc’s media platform went live, they have experienced an exponential increase in revenue. The popularity and successes of these social media firm, shows more clearly the changing trend in the world of businesses and thus, exposing the need for traditional managers to continuously create more conducive environment for innovation and creativity for their businesses to thrive.
Assignment Questions
Using your knowledge of effective management and organisational practices, learnt on the module and reliable information from own wider reading on the company “Snap Inc.”, carefully address the given 3 tasks:
Solution
Introduction
The Snapchat is one of the applications which have revolutionised the way people use to communicate. Its innovative features, aesthetics, and options have made an impact on the other social platforms as well. This report discusses the current organisational structure of the company and points out the specifics and reasons that are becoming a barrier to its success. In addition to that, the corporate culture of the company is also discussed. A modern management approach is recommended to the company, and its benefits and disadvantages are assessed. Lastly, the objectives of the company are identified, and SWOT analysis is conducted.
TASK 1
A-Background of Snap Inc.
Snap Inc. was founded by Evan Spiegel and Bobby Murphy on 16th of September, 2011. It is based in Venice, California and Los Angeles. It is a social media and technology company with four products; Snapchat, Bitmoji, Zenly, and Spectacles. Originally the company was named as Snapchat Inc., but later on, it was renamed to Snap Inc. to represent all of its products. In the year 2017, the company generated revenues of around 825 million US dollars. Snapchat generates the highest revenues. Spectacles are the smart glasses designed by the team that is dedicated to recording short videos and also includes a feature of synchronisation with the person’s account (Snap Inc, 2017).
B-Organisational Structure of Snap Inc.
The organisational structure of Snapchat is centred on its owner and founder Evan Spiegel. The company is proficient when it comes to the development of new products and generation of innovative ideas because of its unique organisational structure (Mullins, 2016) that can term as “hub-and-spoke” (Muller, 2011). It has to face some challenges as well. Evan Spiegel is the CEO of Snap Inc. has all the power of decision making.
The term “hub-and-spoke” can be explained as that sometimes the company is more proficient than its peers, and that can be proved by the prophetic breakthroughs that it has made in its lifetime. While, on the other hand, this model results in many complaints that usually go unaddressed for a long time. This organisational structure and approach can put Snapchat at a disadvantage sooner or later against its biggest competitor Facebook. Facebook is not only duplicating its products, but it also successfully generated profits from it. The organisational structure of Snap Inc. depends upon its CEO and his decisions. Even the project managers are not provided with full authority and decision-making power (Vandeveer & Menefee, 2010).
Moreover, the office of the company is not like any normal office, rather it is some different houses at the beach. The CEO travels from one house to another in a Range Rover. But the company realises that this structure can be a problem for the company as different departments are not connected with each other (The Economic Times, 2017).
The company currently has only one subsidiary that is Looksery and has 27 executives. Apart from this, the company has seven independent directors as well.
The bellow Organisational Structure of Snap Inc-16072017 has been taken form (The Official Board, 2018).
TASK 2
A-Modern Management Approach
System Management Approach of Snap Inc.
The organisation is treated as a system and its departments as a sub-unit. All these departments together make up the whole system. All the departments are influenced by other departments and on the system as a whole too.
Now, as the system theory suggests, there are two types of systems. A system that is affected by its external environment is an open system, and a system that is not affected by its external environment is a closed system. Organisations are usually treated as open systems as they are directly affected by their environment (Drafke & Murtaugh, 2009).
Open System Management
Open system management theory refers to the idea that organisations are deeply affected by what takes place in their environment. The term environment here refers to the social, political, economic, and legal and all the external factors (Johnson et al., 2014) that can have an impact on the operations of the organisation. The same environment also serves the purpose of providing the company with the key resources. Snap Inc. can have challenges and benefits from implementing an open system approach towards its management (Vandeveer & Menefee, 2010).
Advantages
- It promotes structured arrangement of the units and the current structure of the company is all over the place.
- The open system defines the responsibilities of the individuals beforehand and lays down the plan of action, so the risk involved decreases.
Disadvantages
- It can be said that the system contradicts with its corporate culture and its operations as well.
- The interdependence between the environment and the company is not defined in this approach.
B-Organisational Culture of Snap, Inc:
As per their framework, the cultural web represents the ignored assumptions of the organisation which significantly shows their culture (Beshay & Sixsmith, 2007). The three elements considered in understanding the organisation structure of Snap Inc. are;
- Stories: The former employees of snap Inc have disclosed that the organisational structure of the company revolves around the role of CEO. No one is given any authority or power whatsoever (Newton & Statt, 2018).
- Symbols: The logo and company name were changed to Snap Inc. after the acquisition of spectacles showing the intent of expansion in the company’s product portfolio (Business Insider, 2016).
- Structure: The corporate organisation structure, on papers, is well defined; it has 1 subsidiary, 12 executives and 9 BODs.
TASK 3
Strategic Management Objectives of Snap Inc.
The identified objectives of the company are listed below.
- Fostering creativity
New insights would give rise to new ideas for the development of new innovative products. It is crucial to the continued success of technology-based companies as they come and go in days. Constant innovation for being relevant is needed.
- Moving forward with technology
Technology is increasing at a very fast rate and with advancement in technology comes some different opportunities for the company to foster creativity and make the most out of these ideas and technology combined. For constant innovation and idea generation; the first objective of the company, depending on technological advancement is imperative (Robbins & Judge, 2014).
SWOT Analysis of Snap Inc.
| Strengths | Weaknesses |
| · The company has a very strong portfolio.
· The workforce of Snap Inc. is very efficient and highly skilled. Snap Inc. itself provides training to its employees. · The free cash flow of the company is also strong that gives it the opportunity to invest further. · The distribution network is also very strong and helps Snap Inc. to reach out to its market easily. · Its suppliers are reliable thus the risk of bottleneck minimises. · The company is very innovative and has made breakthroughs in its lifetime. · The company has a clean and successful record regarding mergers and acquisitions. |
· Recently the company has lost market share because of its inability to compete with the new entrants.
· Financial planning is not being done efficiently. · The Snapchat is spending a lot of money on the training of its employees. · There are gaps in the products that the company is offering. · The company did not get huge success in other products. · Its organisational structure favours only its core product, i.e. Snapchat. But it is becoming a barrier to the success of other products. |
| Opportunities | Threats |
| · Because of the decrease in the inflation rate, the company can offer credit at lower interest rates.
· New market trends give the opportunity for new products · An increase in the customer’s spending gives Snap Inc. a chance to regain its market share. · Analysing big data available online, the company can target new customers, analysing the trends and preferences · A new policy regarding the tax holds an opportunity as well. · Advancement in technology is the major objective of the company and it can be used to increase its customer base. |
· As Snap Inc. is functioning in some countries, it is exposed to the risk of fluctuations in the exchange market
· Increase in local distributors poses a threat to the company. · Laws are related to liability and debt and different in different countries. The company is exposed to this risk as well if any changes occur in the liability policy of any country. · The continuous change in the behaviour of the customers is a threat too. · The company does not offer its customers with continuous innovative products (Sarsby, 2016). |
Conclusion
In the end, it can be concluded that founded in the year 2011, the company Snap Inc. has made breakthroughs in the social media industry. The Snapchat is one of its famous products and generates the highest revenues for it. The company has to face some issues because of its corporate structure and culture. And its structure and culture also do not support growth in any of the other product lines apart from Snapchat. The goal of the company is innovation and creativity and to offer its customers with such innovative products that promote advancement in the technology as well.
References
Beshay, M. & Sixsmith, A., 2007. Organisational Culture in IT Projects: A Case Study Analysis. In 18th Australasian Conference on Information Systems., 2007.
Business Insider, 2016. Snapchat changes name to Snap Inc., debuts ‘Spectacles’. [Online] Available at: http://www.businessinsider.com/ap-snapchat-changes-name-to-snap-inc-debuts-spectacles-2016-9 [Accessed 13 March 2018].
Drafke, M. & Murtaugh, J., 2009. The Human Side of Organizations. 10th ed. London: FT Prentice Hall.
Johnson, G. et al., 2014. Exploring Strategy: Text and Cases. 10th ed. Harlow: Pearson.
Muller, H., 2011. On Top of the Cloud: How CIOs Leverage New Technologies to Drive Change and Build Value Across the Enterprise. John Wiley & Sons.
Mullins, L.J., 2016. Management and Organisational Behaviour. 11th ed. Harlow: Pearson.
Newton, C. & Statt, N., 2018. The Snapping Point. [Online] Available at: https://www.theverge.com/2018/1/5/16854242/snap-evan-spiegel-redesign-cheetah-corporate-structure [Accessed 13 March 2018].
Robbins, S.P. & Judge, T.A., 2014. Essentials of Organizational Behaviour. 12th ed. London: FT Prentic Hall.
Sarsby, A., 2016. SWOT Analysis. Lulu.com.
Snap Inc, 2017. Snap Inc Form S-1. [Online] Available at: http://online.wsj.com/public/resources/documents/SnapS1-02022017.pdf [Accessed 13 March 2018].
The Economic Times, 2017. Snapchat’s IPO Reveals “Unique” Company Culture, Houses As Office, Future Plans. [Online] Available at: https://www.econotimes.com/Snapchats-IPO-Reveals-Unique-Company-Culture-Houses-As-Office-Future-Plans-523186 [Accessed 12 March 2018].
The Official Board, 2018. Snap Inc. [Online] Available at: https://www.theofficialboard.com/org-chart/snap-inc [Accessed 12 March 2018].
Vandeveer, R. & Menefee, M., 2010. Human Behavior in Organizations. 4th ed. London: FT Prentice Hall.
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