Harvard Case - Strange Bedfellows: eBay, craigslist and Profit versus Public Service
"Strange Bedfellows: eBay, craigslist and Profit versus Public Service" Harvard business case study is written by Sonia J. Toson. It deals with the challenges in the field of Business Ethics. The case study is 23 page(s) long and it was first published on : Jun 1, 2016
At Fern Fort University, we recommend that eBay adopt a multi-pronged strategy to address the ethical and societal challenges posed by Craigslist's rise. This strategy should prioritize building a strong ethical foundation through clear corporate values, robust regulatory compliance, and transparent communication. Simultaneously, eBay should leverage its resources to innovate and offer competitive services while promoting social responsibility through initiatives like community engagement, fair trade practices, and environmental sustainability. This approach will help eBay maintain its market leadership while addressing the growing concerns regarding ethical business practices and social impact.
2. Background
eBay, a global online marketplace, faced a significant challenge from Craigslist, a local classifieds website. Craigslist's simplicity, low fees, and focus on local communities attracted users and advertisers, threatening eBay's market share. This case study explores the ethical dilemmas faced by eBay as it navigated the tension between maximizing profits and fulfilling its social responsibilities.
The main protagonists are:
- eBay: A global online marketplace with a strong focus on profit maximization.
- Craigslist: A local classifieds website emphasizing community and ethical practices.
- Donnacha O'Brien: eBay's CEO, grappling with the ethical implications of competing with Craigslist.
- Meg Whitman: eBay's former CEO, who faced criticism for her aggressive business practices.
3. Analysis of the Case Study
This case study can be analyzed through the lens of Stakeholder Theory, which emphasizes the importance of considering the interests of all stakeholders, including customers, employees, investors, and the broader community. eBay's actions were primarily driven by shareholder value, while Craigslist prioritized its users and local communities.
Ethical Considerations:
- Business Ethics: eBay's aggressive tactics, such as targeting Craigslist users with spam, raised ethical concerns about fair competition and consumer privacy.
- Corporate Social Responsibility: Craigslist's focus on community and ethical practices highlighted the growing importance of social responsibility in business.
- Leadership: eBay's leadership faced the challenge of balancing profit maximization with ethical considerations.
Strategic Considerations:
- Disruptive Innovation: Craigslist's emergence as a disruptive force challenged eBay's established business model.
- Competitive Advantage: eBay needed to find new ways to differentiate itself and compete effectively against Craigslist.
- Corporate Strategy: eBay needed to develop a strategy that addressed both its financial goals and its social responsibilities.
4. Recommendations
eBay should implement the following recommendations to address the challenges posed by Craigslist and maintain its market leadership:
1. Ethical Foundation:
- Develop a comprehensive Code of Conduct: This code should clearly define eBay's values, ethical principles, and expectations for employee behavior.
- Strengthen Regulatory Compliance: Implement robust systems to ensure compliance with all relevant laws and regulations, including data privacy and consumer protection.
- Promote Transparency: Be transparent about business practices, including fees, advertising policies, and data usage.
- Establish a Whistleblower Program: Encourage ethical behavior by providing a safe and confidential channel for employees to report concerns.
2. Competitive Innovation:
- Invest in Local Communities: Develop features and services that cater to local communities, mirroring Craigslist's strengths.
- Enhance User Experience: Simplify the platform, improve customer service, and offer personalized recommendations.
- Leverage Data Analytics: Utilize data to understand user needs and preferences, enabling targeted marketing and personalized services.
3. Social Responsibility:
- Community Engagement: Partner with local organizations and charities to support community initiatives.
- Fair Trade Practices: Promote fair trade practices for sellers and buyers, ensuring ethical sourcing and responsible pricing.
- Environmental Sustainability: Implement green business practices, reduce carbon footprint, and promote sustainable consumption.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: eBay's core competencies in online marketplaces and technology can be leveraged to develop innovative solutions that address the challenges posed by Craigslist.
- External Customers and Internal Clients: The recommendations prioritize the needs of both external customers (buyers and sellers) and internal clients (employees).
- Competitors: The recommendations acknowledge the competitive threat posed by Craigslist and aim to differentiate eBay through innovation and social responsibility.
- Attractiveness: These recommendations are expected to enhance eBay's long-term profitability by attracting and retaining customers, improving employee morale, and enhancing brand reputation.
6. Conclusion
By embracing ethical business practices, innovative solutions, and social responsibility, eBay can navigate the challenges posed by Craigslist and maintain its market leadership. This approach will not only secure its financial success but also contribute to a more ethical and sustainable business environment.
7. Discussion
Alternatives not selected:
- Aggressive price competition: This could lead to a price war that erodes profitability for both companies.
- Legal action against Craigslist: This could be costly and time-consuming, and may not be effective in the long run.
Risks and key assumptions:
- Implementation challenges: Implementing the recommendations effectively requires significant resources and commitment from eBay's leadership.
- Changing consumer preferences: The recommendations assume that consumers value ethical business practices and social responsibility.
8. Next Steps
- Develop a detailed implementation plan: This plan should outline specific actions, timelines, and resource allocation for each recommendation.
- Communicate the strategy to stakeholders: Transparency and open communication are essential for building trust and support for the new strategy.
- Monitor progress and adapt as needed: Regularly assess the effectiveness of the recommendations and make adjustments as needed.
By taking these steps, eBay can position itself as a leader in the online marketplace industry while embracing ethical business practices and social responsibility.
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Case Description
This case provides a fascinating true story that will engage students and provide them with a real life example of corporate law and governance in the context of a socially responsible company. Specifically, the case addresses minority shareholder rights, fiduciary duties of directors and controlling shareholders, ethical decision-making in the business context. The case useful for an advanced business law course and is positioned to discuss social entrepreneurship and options for directors and officers of social enterprises who want to focus on social and service missions without risking a breach of their fiduciary duties. The instructor's manual provides theoretical frameworks in the areas of corporate social responsibility, business ethics and principles of corporate law to guide the discussion of the case. The manual also provides additional multimedia teaching aids and updated information regarding expanded choices of entity currently available for social enterprises.
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