Question

Case study 1 – Total marks = 10

Facebook has around 2.38 billion active users across the world, which makes LinkedIn's user base of 630 million seem small in comparison. Plus, both audiences are made up of a diverse array of people, but LinkedIn tends to have a more professional clientele, or those with a deep interest in business. Perhaps what's most fascinating, though, isn't how many users each platform has, but how much time these users spend on each respective site. On Facebook, people spend around 35 minutes a day scrolling through their feeds and engaging with their friends, whereas LinkedIn users spend just 17 minutes a month using the site.

In the Gulf area, constant Facebook usage has resulted in decreasing productivity in various firms as the office staff were using this social networking site excessively and spending too much time on it.

The Associated Chambers of Commerce and Industry in all Gulf states stated that employees use LinkedIn and Facebook to ‘chat, among other activities. With employees spending one hour on average on websites such as Facebook, it leads to a decrease in productivity by 10%. Further, approximately half of the office employees use Facebook during their work time and 60% of the employees did not think using such websites during office hours was problematic or wrong. Moreover, in March 2003, the Dubai Council in the UAE observed that the staff were spending 400 hours on average on Facebook on a monthly basis and thus issued a ban on the staff to stop them from using Facebook on the office computers.

Questions: [ Student has to write answer at least 125 words for each sub-question]

i. Analyse the impact of such practices mentioned in the case on the micro-economics.

ii. Analyse the possible consequences for businesses in Gulf countries of allowing access to Facebook and other social networking sites on the full utilization of resources. ( 3 Marks)

iii. Do you think access should be denied? What is the impact on explicit costs? Explain in detail. ( 4 marks)

Answer 1

i) In the mirco economics market:- Users wasting time to use social networking during office ours would lead employees as under performer and less productive which in result tends to decrease total output for the employer and as a result both would be worstoff in this situation. Also it can lead to see different changed beviour of employees if they are not allowed to what they want to use.

ii) Full Utilization of resources makes a business profitable and it's one of the best tool to make a business profitable, if employers allow using social networking sites during office our then obviously productivity and concertation will fall down for employees which lead to low production and as a result business will affect from this and they may fail to make profits.

iii) If a particular company is denied for the access than it may cause to the extra cost initially as the deny may turn to attrition but once it will become the culture than denying would to good enough to make the employees productive and to run the business.