Assignment 1: Social Media Medina 1

Prof:
LEG 100: Business Law 1
July 25, 2013

Medina 2 A few years ago I jumped on the social media bandwagon after being introduced to it by my father. I was always a little skeptical about social media because of all negative that I had heard about it. Now, I love it because there is a lot of positive about social media as far as I am concerned. Social media is an asset to marketing, and it is fun for personal use as well. I am fan of Facebook so I will discuss how it can direct consumers to a better source of purchasing. A Legally Astute Marketing Manager According to our text a legally astute manger has four components; a set of value-laden attitudes about the importance of law to the firm’s success; a proactive approach to regulation and legal issues; the ability to exercise informed judgment when managing the legal aspects of business; the appropriate use of legal tools and context specific knowledge of the law (Bagley, 2013, p. 11). The legally astute social media marketing manager has to take those components a step further. The legally astute social media marketing manager must embrace social media and its networking power to drive sustainable change in the business world. In his book, We First: How Brands & Consumers Use Social Media To Build A Better World, Simon Mainwaring shows how brands can leverage social media to build consumer goodwill, loyalty, and profit. One of the components of the legally astute manager stresses the importance of values. The We First value of accountability is what builds trust between institutions and the public and between brands and their consumers. Building trust helps the marketing manager take a proactive approach to regulation and legal issues. Trust is declining daily in today’s economy rapidly. According to the Edelman Trust Barometer, trust in American companies fell to an all-time low of 36 percent in 2009, but it rose to an unimpressive 54 percent in 2010. Companies must understand that they Medina 3 cannot by trust, but it must be earned and renewed. They can be easily exposed these days through social media if they fail to live up their promises. Goodwill is another component of accountability. Trust makes people want to buy from your company, and goodwill makes them want to recommend your company to others. The last element of accountability is transparency. Transparency means that individuals and companies must operate with honesty, credibility, and congruency between their words and deed. Transparency helps the manager stay focused on the law and the use of legal tools. It works against backroom deals, hidden agendas, false pretenses, and unethical conduct. All of these values of accountability help the legally astute social media marketing manager mitigate the risks involved in doing business in cyberspace (Mainwaring, 2011, pp. 82-83). Alternative Dispute Resolution Negotiation, mediation, and arbitration are methods of alternative dispute resolution procedures that can help companies maintain keep a relationship with an opposing party. Negotiation happens when the two opposing parties engage in give-and take to come to an agreement. Negotiation can be seen along different dimensions. It can be concerned for future or desired relationships or it can be seen to address past events that have caused disagreements. Mediation happens when parties agree to a solution with the help of a neutral third party. It is a cheaper alternative to a lawsuit, it costs less, and resolutions are speedy. Arbitration is the resolution of a dispute by an arbitrator, the neutral third party. It is the most formal alternative dispute resolution, and it is more like a trial. I think that mediation is most effective for resolving issues that arise with consumer who make purchases from businesses that provide links to social media. One reason why I chose mediation is because it is a flexible process, and it allows for Medina 4 different procedures, rules and structures. Mediation is an appropriate option when parties have a desire to settle their dispute, and they want to preserve their relationship. I think that Facebook would want to continue to grow as it is by the millions so mediation would a beneficial ADR for the company to use. The company’s need for privacy would also be a reason for it to use mediation to resolve any genuine disputes that may come about (Bagley, 2013, p. 67-71). Social Media Across State Lines State governments have general powers, also known as police power. These powers include the powers to protect the health, safety, welfare, and morals of state residents. The Eleventh Amendment immunizes states from lawsuits brought by individuals from another state or nation. There is a Supremacy Clause that makes federal laws supreme over state laws. The federal government should allow the states to have more control over how transactions that occur across state lines are handled. Managers can pursue change through political action committees and direct lobbying (Bagley, 2013, p.92). Three Branches of Government There is a separation of powers within the federal government. The judicial branch, (the courts), the executive branch (the President and cabinet departments), and the legislative branch (the Congress) all make up the federal government. The Constitution provides the judiciary its power through Article I and Article III. Congress has the authority to establish federal courts through Article I and Article III provides the basis for federal courts judicial power. The President’s executive power is defined in Article II. The President has the power to grant reprieves and pardons for offenses against the United States, and he has extensive power over foreign affairs. He can also appoint Justices of the U.S. Medina 5
Supreme Court with the advice and consent of the Senate. He also has the power to approve or disapprove acts of Congress. The Legislative Branch consists of the House of Representatives and the Senate. They have the power to regulate commerce with foreign nations and among other states, spend to provide for the common defense and general welfare, coin money, establish post offices, levy and collect taxes, issue patents and copyrights, declare war, and raise and support armies. Congress can also make laws as necessary (Bagley, 2013, pp89-91). In m any ways, peaceful change is the ultimate benefit that social media can offer. Social media can reach millions of people with enough leverage to create change without any violence. Consumers do not have to beat down the doors of an irresponsible company. They can use Facebook to gain its cooperation. It is so important to look at the positive role that technology can play and to see how its uses will be increasingly oriented toward meaningful ends. The tools of social media are allowing consumers to shop more consciously. Dozens of websites help weed out wasteful or poorly made products. It is easier to get information about companies that are exposed for having unhealthy, unsustainable, or unethical practices (Mainwaring, 2011, pp. 159-160). Campaigns on Facebook work well because its viral communications tools enable large numbers to become aware of an issue and join together quickly. Facebook has been called digital democracy. Jared Cohen, a former student of Condoleeza Rice said, “Facebook is one of the most organic tools for democracy promotion the world has ever seen.” As Facebook began to grow globally, it was also being discussed in the White House Situation Room, where President Bush and his National Security Council staff gathered during crises. Because President Obama Medina 6 mastered digital tools in 2008, it was called the “Facebook election” (Kirkpatrick, 2010.p.290). Even though the President is known for his use of social media, mainly Facebook, I think that the legislative branch can effectuate the most significant impact on regulating consumer transactions via social media outlets. One of the powers that it has is to regulate commerce with the foreign nations and the states. Because consumer transactions are an element of commerce, I would say that this branch would have the greatest impact. The legislative branch also has another important power that could benefit social media, and that is its ability to make laws as necessary (Bagley, 2013, p.91). Agency Relationships
Agency is considered an important legal relationship in today’s business world. Corporations could not function without the law of agency. Facebook introduced engagement ads as a form of advertisement. In its first year engagement ads generated close to a hundred million dollars of revenue. Facebook charges at least $5 per thousand views for those ads. Facebook gives advertisers more targeting options than most websites. Facebook is an awesome marketing tool for many businesses. For a well-known company like McDonald’s the number of mentions on the site is in the millions. Facebook is an agent for many businesses as well. Mazda asked its fans on Facebook to help it design a car for 2018. They received contributions from all over the world. Some consumer-oriented companies now put less emphasis on their website and more on their Facebook page. The relationship between people and companies will continue to evolve rapidly on Facebook and yield some startling developments. It is the perfect platform for building customer loyalty (Kirkpatrick, 2010, pp. 263-265)

Medina 2 Works Cited
Bagley, C. (2013). Managers And The Legal Environment. Mason, OH: Cengage Learning.
Kirkpatrick, D. (2010). The Facebook Effect: The Inside Story of the Company That Is
Connecting the World. New York, NY: Simon & Schuster.
Mainwaring, S. (2011). We First: How Brands & Consumers Use Social Media To Build A
Better World. New York, NY: St. Martin’s Press LLC.