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Founded in 2004, Yelp is a multinational corporation based in San Francisco, California that focuses on providing information on local businesses to its customers by developing, hosting as well as marketing Yelp.com and a Yelp mobile app. Being a watchdog group, Yelp publishes crowd-sourced reviews concerning local businesses regardless of whether the businesses owner is aware or not.
Operating an online guide provides valuable insight to clients on businesses that offer quality products and services and attracts a wider market as individuals can access listings using mobile phones. Critics argue that Yelp is an extortion group that in most cases provides fake reviews and that the corporation’s only interest is marketing for a price. This paper will give a comprehensive case analysis of the situation.
The mission of Yelp is to connect people with local businesses. The stakeholders within the organization are Jeremy Stoppelman, Max Levchin while those outside the organisation are Bessemer Ventures who invested $5 million, DAG ventures who invested $15 million and Elevation Partners who invested $100 million in the corporation. The formal decision making process is a consensus between the CEO Jeremy Stoppelman, the management and a board of directors.
According to Orsburn (2012), the process begins with deliberating on issue that leads to an acceptable resolution from the consent of board of directors, the CEO and the management to finalizing a decision. A simple majority rule determines the informal decisions in the organisation on matters that are of less significance. The process of service delivery occurs online as clients and new visitors review a variety of businesses to suit particular interests.
The relationship between Yelp and local businesses is complicated as business owners are in constant conflicts with the corporation because of the reviews. To conceptualise the core problems pertaining to Yelp, it is vital to get all the relevant details that are against the multinational corporation. To begin with, the management made revenues part of the profit-oriented motive that drives the corporation (Weinberg, 2009).
The evidence to that fact is the ruling given by the federal appeals court stating that Yelp can legally manipulate any review on a business for advertising revenue. Business owners claim that the failure to pay for advertising causes Yelp to withdraw the positive reviews about a given business. Yelp has a very effective filter on the internet yet the cooperation still suffers from the problem of fake reviews. Consequently, business owners terms the reviews as unfair claiming that Yelp manipulates the reviews.
In the theoretical framework, a company should interact with clients in a manner that creates dynamic relationships in the interest of both the client and the corporation. No bias exists in the case of Yelp because the multinational corporation acts like an economic mafia. Mathews illustrated that countless arguments exist against the services provided by the corporation with very little interest to the clients (2012).
Theoretical principles state that the management should be aggressive in meeting the needs of the local businesses. This would create an environment free from any form of conflict of interest. Among the measures to implement would to engage stakeholders and local business owners in developing strategies that would harness better business interactions. Such strategies would enable local businesses to unleash the full potential.
Major decisions to focus on would pertain to the means through which Yelp can improve on filtering the reviews. Such a strategic move would create a fairly competitive environment for local businesses because of fair reviews and rating. This is important as it would increase the transparency and authenticity by the corporation that would in turn restore the trust of business owners and other clients (Orsburn, 2012). Another strategic issue of concern would be the social responsibility of the corporation.
To achieve this, stakeholder engagement would be necessary in setting objectives to enforce the mission of connecting clients with businesses. In addition to corporate governance, Yelp would requires to be more reliable in addressing client related issues to ensure that such issues do not get out of hand. The risk factors are few because only the revenues would decline for some time.
Alternative solutions to the situation include matching the advertising cost to the size of the business. This means that businesses that are large in operations would pay a higher price for advertising compared to small businesses. On theoretical grounds, this solution is feasible as it enhances uniformity of local businesses. The strength of this measure is that small businesses will get an equal opportunity to expand just like the large businesses (Mathews, 2012).
Consequently, the customer demand for Yelp services would increase. For validity purposes, the law should be strict by requiring Yelp to pay a fine if any of the reviews are false. Not only would the measure enable the corporation to achieve short and long-term objectives but it would also eradicate any weaknesses within the organizational levels. Ultimately, crowd sourcing would prove to be the most novel way of suiting the needs of the society.
It is therefore essential for a corporation to create a conducive environment that serves the interests of the management, stakeholders and clients. As illustrated, Yelp has had complicated relationships with local businesses who are the clients of the multinational corporation. Weinberg declared that to move forward, Yelp would require formulating strategies involving the stakeholders and local business owners to enhance friendly and beneficial interactions (2009).
The best solution in this case would be to get rid of the current system that does not identify fake reviews due to the inability to filter reviews appropriately. Coupled with establishing an anti-corruption unit, implementing a more aggressive screening system within the corporation would ensure that reviews are legitimate. The best way to address client related issues would be to structure the customer care department in a convenient manner that resolves any queries.
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The first course of action to undertake in implementing the solution would be to provide the necessary resources and a comprehensive layout of the new roles under the resolved departments. The stated information would enable the information and technology department to install a new system to cater for the needs of the clients. A new customer care system would guarantee efficiency in the client related operations. The sales department would validate any reviews regarding local businesses before posting the reviews online.
Another recommendation would involve the management and the board of directors formulating a new department that would tackle cases where corruption makes negative reviews to become positive. The above efforts in the modern society will notable create peaceful relations between the corporation and business owners geared towards greater success.
Mathews, J. N. (2012). Social media marketing for business owners. Bloomington, IN: Booktango Publishers.
Orsburn, E. M. (2012). The social media business equation: Using online connections to grow your bottom line. Australia: Course Technology Publishers.
Weinberg, T. (2009). The new community rules: Marketing on the social web. Sebastopol, CA: O’Reilly Publishers.