As Facebook Incorporated approaches its high profile initial public offering on Friday, a large number of San Franciscans are expecting to become cash multi-millionaires in a matter of minutes. This brings about several issues that could arise in the transition to a publicly traded corporation, especially for a company like Facebook.
One key issue that arises when that amount of money is put on the table is motivation. When you first start out and are working for a cause, your motivation to succeed is extremely high. The drive of those who worked for Facebook at its beginning was incredible. They stopped at nothing to get what they wanted. Now they have it and are about to be rich. What is that outside factor going to do to affect the motivation of Facebook employees?
This is how non-profits function. Non- profits gain support form outside sources by way of donations and grants, which then go to fund projects. Employees get paid very little but their work ethic is extremely high because they find passion in what they do. Money takes away from the enthusiasm and excitement that drives people to work for a cause.
Facebook thus far has run on insider trades and funding. Now that shareholders will have their hands in the company, that initial drive to produce great work will start to diminish. The motivation of the company to achieve maximum potential will now grow dim in the light of millions of dollars. The only motivation or employees after the IPO will in turn be to acquire more money for either the company itself or to return to shareholders in dividends.
Obviously, this situation is all hypothetical because Facebook’s IPO has not occurred yet, but due to past occurrences with the same idea, motivation might end up being Facebook’s next big issue.