Case Study: Twitter/X

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Twitter/X is an online social media and networking platform. People using Twitter/X can send and respond in 280-character-long messages (initially 140 characters), referred to as "tweets".

Based in San Francisco by 2019 Twitter/X reportedly had almost 350 million monthly active users, although it should be noted that the majority of “tweets” are sent by a minority of people (the Pareto effect), and there are claims that up to 20% of the accounts are what are referred to as “fake” accounts.

On October 27, 2022, after a six-month legal case where he initially tried to cancel the purchase agreement, Elon Musk purchased Twitter/X for US$44 billion. Almost immediately Musk fired its CEO, Parag Agrawal as well as a number of other senior executives, including the Chief Financial Officer (CFO) and General Counsel (GC). Musk then stepped into the position of CEO, dissolving Twitter/X’s Board of Directors.

At this point Musk developed what he referred to as the “war room”, a small group of insiders that would assist Musk in his plans for Twitter/X. The members of the war room were largely investors in the Twitter/X takeover bid as well as previous associates of Musk, typically with limited experience in social media and the roles they were tasked to undertake. The group was to consider how to overhaul the app and monetize it more effectively, as well as to consider ways to achieve cost savings – largely through reducing the size of Twitter/X’s workforce. Within a week Musk took Twitter/X private, with shares ceasing trading and the company delisted from the New York Stock Exchange shortly afterwards.

This is when the real fun started! At this stage Musk implemented a very authoritarian approach to people management. In a widely publicised move he laid off 3700 employees from Twitter/X – a figure which represented about half the organisations workforce. Of note was the total lack of consultation with staff, with most realising they had been dismissed only when they could no longer log into their computers. Further he imposed restrictions on staff work patterns, requiring employees to work only within the office and not at home, and cancelling employee lunch breaks.

However, this then progressed further. Musk directed the remaining staff to extend their working hours in order to meet the deadlines Musk had directed for his intended changes to Twitter/X, including monetizing the platform more effectively through strategies such as paid verification (“blue ticks”). However, the reality of such strategies was criticised as impractical and open to exploitation. The speed and rapidity of the changes Musk was implementing caused widespread chaos and turmoil within the company as remaining staff tried to both keep up with the changing playing field from Musk’s directives, as well as keep the platform running and operation.

By mid-November 2022 Musk sent an email to all staff, and demanded that they commit to "extremely hardcore" work in order to realize Musk's vision of "Twitter/X 2.0", or to resign from the company. The email further stated that “only exceptional performance will constitute a passing grade”. The deadline for response was only just over 24 hours. As a consequence, close to 1000 of the remaining staff chose resignation.

There is no question that Musk’s behaviours since taking over as CEO of Twitter/X have harmed the company. Beyond the treatment of staff, as well as the consequent impacts on Twitter/X’s operations from the rapid state of change, Musk’s decisions to support “free speech”, and reinstate a number of previously banned accounts (including Trump’s and Alex Jones’), resulted in a wave of antisemitic trolling and other forms of hate speech. Ironically, he also suspended anti-right wing accounts and removed Twitter/X’s previous policy of prohibiting Covid-19 misinformation.

These changes impacted on a range of companies who reduced or limited their ad spending on Twitter/X, which further impacted on the bottom line of the company,and furthered the imperative to monetize the platform. For example, large companies including Pfizer and Audi reduced their ad spend. Likewise the decision to be the advocate for “free speech” impacted on other potential income sources. One of the most critical is Twitter/X’s access to the digital storefronts of Apple and Google. More recently, Musk’s comments that advertisers who were leaving X (Twitter) could “go f**k yourself” would not have been seen in a generally positive light by potential advertisers on the platform (Source: https://www.cnbc.com/2023/11/29/elon-musk-to-advertisers-who-are-trying-to-blackmail- him-go-f--------------- yourself.html), as would his alleged recent direct support of antisemitic

comments on the platform. Indeed Disney has recently suspended advertising on the platform for these reasons. Major companies further withdrawing their advertising support may led to future bankruptcy as a real concern. Declining user numbers will continue that process.

Professor of Human Resource Studies at Cornell University Rebecca Kehoe notes that Musk’s actions present a clear indication of how not to treat employees.

"With predictions of a looming recession, we are likely to see more companies facing difficult workforce decisions in the coming months. The recent chain of events at Twitter/X is a case study for other companies in how not to treat employees in a company’s difficult times. It’s not surprising to see a mass exodus of employees who have seen their colleagues and leaders abruptly laid off and who have been given an ultimatum where the alternative to leaving requires committing themselves to gruelling working conditions in service of a CEO who has signalled no regard for their wellbeing or worth”.

"Building employee commitment to a company’s values requires trust, mutual investment, and time. Elon Musk has offered Twitter/X ’s employees none of these, and the employee response is clear."

(SOURCE:https://news.cornell.edu/media-relations/tip-sheets/musks-Twitter-case-study- how-not-treat-employees)

Indeed Musk’s treatment of employees is not new. He has dismissed staff on a whim at multiple previous companies (including Tesla and Space X) and has overseen large scale layoffs at Telsa. His actions at Twitter/X also may have breached U.S state and federal labour laws, with many staff not being provided their minimum severance payments. Further there is some evidence that the staff that were fired represented a notably disproportionate number of people from diversity groups (i.e., not white, middle-aged, Anglo-Celtic men).

Furthermore the reduction in staff numbers, and diversity, has resulted in a decline in the quality of the platform, most notably the lack of innovation and features that may actually get users to want to use the platform. Twitter/X can no longer rely on hashtags and tweets/retweets. These features are present elsewhere. Twitter Spaces, which still is not 100% functional was the last innovation – ironically in 2021, a year before Musk took over. The lack of staff, and diverse staff, suggest that this stagnation will not change any time soon – with Twitter/X at serious risk of simply becoming obsolescent.

To summarise, all of the changes to and issues faced by Twitter/X over the past 18 months since Musk’s takeover have come at a notable cost to the business. For example, traffic is well down, with November 2023 figures showing 5.9 billion visits compared to 6.8 billion in November 2022, a 13.8 % decline. Likewise active monthly users were down 6.5% across 2023, with some estimates of Android active monthly users showing a 16% year-on-year decline (Source: https://www.similaweb.com/website/Twitter/com/).

It is clear that Musk’s approach to management and leadership is on the surface antithetical to the notion of leading and managing as inspiring and motivating people. His approach seems more akin to viewing staff as merely parts of a machine, tools to achieve ends. It will be interesting to see how this plays out over the next 12-24 months.

QUESTIONS

  1. Explain how Musk’s alleged decisions to downsize the workforce of Twitter/X, particularly focussing on removing minorities and women in preference to keeping Anglo-Celtic males may impact on the You may consider this in relation to both organisational culture, as well as the issue of diversity itself.
  2. Explain whether Musk’s behaviour since he has taken over Twitter/X has been ethical, using any ONE of the ethical perspectives covered in the course as your frame to examine it.
  3. Type “What is Organisational What are its core dimensions?” into ChatGPT. Paste it into your assignment at the start of Q3. Now I want you to critique that answer based on the theory and literature we have covered in the course. Where is ChatGPT’s definition strong, and where is it limited?

Solution

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