The Impact of Using Social Media in Business - Literature review Example

Name of the student Name of the institution Name of the tutor Date of submission The Impact of Using Social Media in Business Table of Contents Table of Contents 2 1.0.Introduction 3 2.0.Critical Evaluation of the Sources 4 2.1.Evaluation of the first article 4 2.1.1.Understanding social media and Web 2.0 4 2.2.Evaluation of the second article 6 2.2.1.The impact of social media on business capabilities 6 3.0.Literature Review 8 3.1.Methods 8 3.2.Results and Discussion 8 4.0.Conclusion 12 5.0.References 12 6.0.Appendix 1: Examples of social media used in different business activities 15 7.0.Appendix 2:The diversification of social media services by Nivea Company 16 8.0.Appendix 3: why consumers follow brands 17 List of Figure Figure 1: Figure 1: Research model on the impacts of social media on business process performance 11 1.0. Introduction Social media have been gaining popularity and are increasingly becoming essential for business. The social media such as Twitter has revolutionised business, including start-ups, small, medium-sized and large companies (Brocke2010). Regardless of their extensive use and impacts on business, little is known concerning the specific impact they contribute to business. The aim of this paper is to stretch beyond the listings of impacts of social media technologies on business. In such connectedness, there will be assessment and analysis of the extent social media has impacts on different kinds of business process performance. It has to be noted that impact of social media has been narrowed based on studies from scholars such as Bravo et al. (2012). Therefore the scope will be extended by assessing the business impact on management, corporate governance, strategic competitiveness and sales. Scholars such as Bughin (2011) have indicated that companies that use social media tend to outperform those that do not. However, the performance trend has to be succinct and specific with regard to different business operations. The research question in this paper is “the impact of social media on business.” Generally, the study seeks to better conceptualize the social media environment as well as impacts of commonly used social media tools. In order to answer the question, the paper will consider different case studies and how these companies have benefited or failed as a result of using social media. 2.0. Critical Evaluation of the Sources 2.1. Evaluation of the first article Chaudhary, K., Subramanian, K. S., Sinha, V., & Bhattacharya, S. 2012. The contemporary framework on social media analytics as an emerging tool for behavior informatics, HR analytics and business process. Management-Journal of Contemporary Management Issues, (2), 65-84. 2.1.1. Understanding social media and Web 2.0 In the conceptualization of social media and Web 2.0 Chaudhary et al. (2012) took a case study on International Business Machines (IBM) as a business organization dealing with manufacturing and distribution of computers. Their focus was to assess how social media analytics enables organizations to gain deeper insights not only into customers but also into employees’ sentiments. Additionally, a scholar such as Denyeret al. (2011) conceptualized Web 2.0 tools suggesting that the link social media has on business are by assessing social media with regard to demands of business and clients. On the other hand, Chaudhary et al. (2012) brought a different perspective of understanding social media and Web 2.0. In their argument they posit that social media are tools that business organizations use to innovatively analyse productions and employee centric data and behavioral patterns so as to facilitate business processes. This definition relates to what term Web 2.0 as it was developed in 2001 by O’Reilly (2005) while in a conference brainstorming how to help managers develop strategic methods to running business. In as much, it has to be noted that what O’Reilly (2005) describes lacked critical element on business; that is, businesses have to operate on specific trends, patterns and technological trends of customers. It is from this weakness that Chaudhary et al. (2012) related Web 2.0 and business patterns differently. They add that social media has Internet-oriented operations that are based on Web 2.0 technology. This on the other hand enables business to exchange and interact the information and content enabling the success of business. This position was earlier held by Bravo et al. (2012) who saw social media and business as as collection of social, economic and technological trends that collectively help next generation of the Internet transact business activities conveniently. However, Denyeret al. (2011) has shown that social media is different from Web 2.0. In showing the difference, they see social media as collection of group of internet-located applications that can help in building technological and ideological foundations of Web 2.0. From this definition, Denyeret al. (2011) definition means that social media allow the creation as well as exchange of user-generated content. This study has focused on different Web 2.0 tools that have been adopted in different organizations. The conclusion that can be made with regard to Chaudhary et al. (2012) understanding of social media and Web 2.0 is that the emerging form of media makes the exchange of information, sharing of pictures, audio, videos and messages among internet users easy and the need and relevance of Social Media has not been only felt for general internet users, but for business. These tools have been attached as appendix 1. 2.2. Evaluation of the second article Nath, A. K., Singh, R., & Iyer, L. 2009. Web 2.0: Capabilities, business value and strategic practice. AMCIS 2009 Proceedings, 451. 2.2.1. The impact of social media on business capabilities This article has exclusively taken a case study on General Motors (GM) in the conceptualization of the impact of social media on business capabilities. They authors specifically cited a case where the company uses blogs extensively for internal communication on issues affecting sustainable chain supply management and how to develop proper performance indicators. This bidirectional and transparent to all users internal communication helps the management to create a suitable policy by accumulating all the stakeholders’ opinion on the blog transparently and then to disseminate the policy. The first impact is communication and collaboration. According to their case study on Axe Body Spray, social media have the ability to promote communication and collaboration within and among its customers. This in turn has fostered what they termed as ‘rapid internationalization of its products as well as globalization of their operations’ (p. 271). Four indicators that the company associated with communication and collaboration shows have been; first is the ability to coordinate relevant discussion in the firm. Secondly, the ability to reach as many customers as needed but within the shortest possible time. Thirdly, the ability to synchronise tasks and projects for the benefit of the company and lastly the company benefits from social media through customized audit communication streams. On the different note, Nath et al. (2010) have further indicated that social media helps in rapid application development.Taking a case study on Flickr and Twitter, Vodafone managed to enhance application development through the integration of third-party services (Nath et al. 2010). This has been effective because the company combined existing applications and technologies into their businesses. According to their chief executive officer, Nath et al. (2010) report that Flickr and Twitter have been used in engaging customers, experts, suppliers and other company suppliers alike in the process of product development. This is a clear case where social media is being used as a channel that supports community building, customer collaboration and sharing ideas and market trends that propel the performance of a company.In a different study, Myers (2007) has shown that this is what SouthWest Airlines (SWA) has done and even went ahead to consolidate customers and fans for the better performance of its operation in light of competition it was facing. Still on SWA, the Company actively engaged fans on Facebook through posting different items and argumentative debates just to gather opinions on what customers expect from them. However, this is what Nath et al. (2010) term as ‘discrete approach to marketing and feasibility study on what people expect’ (p. 192). American University of Sharjahrecently integrated a number of social media tools into the learning process and in turn, the institution has succeeded in the modification and development of applications faster (Nath et al. 2010). Secondly, American University of Sharjah through adoption of Facebook has hastened the improvement on the requirements modeling. 3.0. Literature Review 3.1. Methods Based on studies from Denyeret al. (2011) social media is defined as an approach for second generation of Web development and design that helps in the process of communication. On methodology, the study has considered multinational companies operating from Australia, United States of America and England to assess how their engagement in social media has impacted on their business. However, the study will focus its attention on specific areas where there are target groups and such groups have been identified as firms that have used social media in their operations. These locales have been identified as regions where relevant data will be gathered or the entry to which the data on the topiccan be generated. In totality, Businesses have different responsibilities to undertake and such must be conceptualised through its laid platform, structure, financial reports and annual reports and their adoption of social media. Similarly, evidence based researches have shown that the first step in understanding management of a company is to integrate its undertaking in social media with how sustainable the business intends to operate with regard to the environment, competitors and specific objectives. 3.2. Results and Discussion Researches on the impacts of social media on business have been rife (Bell and Loane2010; Bughin2011). Bell and Loane (2010) report that due to competition; companies now adopt contingency theory where they try to identify the situational variables through social media. These variables in turn have been used to predict the most effective and appropriate outcome for a given circumstance. The central concept is that through social media organizations are able to bring change and the role of managers in implementing and envisioning the transformation of its performance. However, a different view has been given regarding the impacts of firms’ adoption of social media for business activities. For instance, Birkinshaw and Crainer (2010) argued that the relationship between different organizations’ mission and transformation theory was not conceptualized by using platforms such as Twitter and Facebook. This viewed can reflect a case where companies engage in opening of WiFi network hotspots. Despite these arguments and debates on whether social media has had positive benefit for business related activities, some companies use platforms such as Bing and Flickr to improve the way people work and live campaign (Bardoel 2014). A different view that can help in the assessment of how social media have impacted on business activities is not to compare how successful companies have performed but a need to conceptualise the fact that there is a need for critical evaluation of its business model including a breakdown and examination of its key business segments. The figure below has been adopted to show how the company has managed to integrate social media with a view of attaining business process performance. According to a review by Eisenfeld and Fluss (2009) on different companies in United States of America, social media has been used by these companies to promote their products as well as services. The figure as attached in appendix 2 is an extract from the research by Eisenfeld and Fluss (2009) on Nivea Company. Generally, companies can decide to use social media on a given products as well diversification of social media services and these options as seen in appendix 2 have been chosen based on two critically aspects; the niche of the company and areas where its competitors does not appear strong. According to the research the choice to adopt social media in promoting its productshas not only given buyers, consumers and suppliers an option but has helped in changing the structure of the company. Another research conducted by Lee et al. (2008) on the same company tended to support earlier findings by Eisenfeld and Fluss (2009). In their support they added that by engaging social media there will be two critical impacts; first, rival companies will not sustain the competition especially on value chain that will directly be impacted by e-commerce via its possible influence. Secondly, the company will be able to perform various business activities and processes such as sales and customer support. Just like Swabey (2009) also proposed, the company will certainly use its newly introduced electronic platform to provide consumers from different countries with access to a wider inventory of newer products than the currently traditional ones. This will be easy for consumers to complete order entry, post-sales assistance and give ordering from suppliers. However, a different view on the impacts of social media o Nivea’s business activities was given by O'Reilly (2005). He argues that this company has huge market for a given product therefore social media have failed in differentiating their products according to the market place. Figure 1: Figure 1: Research model on the impacts of social media on business process performance Source: Bardoel (2014) Theoretically, Bardoel (2014) argues that some companies have used social media to analyse the external environment and how this can be accompanied by its goals. This is turn has been helpful indetermining competitive advantage, a method which dictates the external factors that are more important than internal ones. Bardoel (2014) further argues that companies use the figure as attached in appendix 3 in assessing the kinds of brands to introduce to market. Based on the appendix three, the reason why consumers like produced brands is to keep up with activities. Based on this information, Baigh (2014) adds that the companies have been successful on sustainability, ecological imprint and socially engaged work practices. The ‘three ‘Ps’, profit, people and planet, are at the centre of the vision and goals of companies such as Optus due to responses from customer. 4.0. Conclusion This study has discussed different issues of social media and their impacts on social media. One of findings of the study is that social media has been playing integral role in modern advertisement therefore its influence on business has been on the rise. Based in appendix 3 as it has been used by different business organisation discussed thus far, consumers are willing to trust information posted on social media therefore this will continue to promote ways in which businesses run their activities. From cases studies of companies, social media may not necessarily benefit businesses but in totality, businesses have the ability to experience positive impacts with their current or prospective clients or customers. However, there is need for these companies to pay attention especially when comes to threats disadvantages of using social medial. This case has found that such attentions are needed especially when businesses introduce new products or services in the market. 5.0. References Baigh H. 2014. Seven Strategies for Simplifying Your Organization. Harvard Business Review. Retrieved from http://blogs.hbr.org/2013/05/seven-strategies-for-simplifyi/ Bardoel A. 2014.Tool or Time Thief?Technology and the Work-Life Balance. Working paper WP005/02, University of Wolverhampton. Bell J Loane S 2010. "New Wave" Global Firms: Web 2.0 and SME Internationalisation. J of Marketing Management, 26(3-4), 213-229. Birkinshaw J, Crainer S 2010. Using Web 2.0 to create management 2.0. Business Strat Rev, 21-23. Bravo, R., Matute, J., &Pina, J. M. 2012. Corporate social responsibility as a vehicle to reveal the corporate identity: a study focused on the websites of Spanish financial entities. Journal of Business Ethics, 107(2), 129-146. Brocke JV, Rosemann M 2010. Handbook on business process management : Strategic alignment, governance, People and Culture: Springer. Bughin J (2011). How Web2.0 pays off: the growth dividend enjoyed by networked enterprises. McKinsey Quarterly. Chaudhary K. Subramanian K. S., Sinha, V., & Bhattacharya, S. 2012. The contemporary framework on social media analytics as an emerging tool for behavior informatics, HR analytics and business process. Management-Journal of Contemporary Management Issues, (2), 65-84. Eisenfeld B Fluss D 2009. Contact centres in the Web 2.0 world. CRM Magazine, 13(2), 48-49. Kietzmann JH, Hermkens K, McCarthy IP, Silvestre BS 2011. Social media? Get serious! Understanding the functional building blocks of social media. Business Horizons, 54 (3), 241-251. Lee SH, DeWester D, Park SR 2008. Web2 opportunities for small businesses. Service Business, 2 (4) 335-345 Liu CH, Liu HZ 2009. Increasing competitiveness of a firm and supply chain with Web 2.0 initiatives. Int J of Electronics Business Management, 7(4), 248-255. Myers MD 2007. Qualitative Research in Information Systems. IS-World: www.qual.auckland.ac.nz Nath AK, Singh R, Iyer L, Ganesh J 2010. Web 2.0.: Capabilities, Business Value, and Strategic Practice Journal of Information Science and Technology, 7(1), 23-39. ResearchMoz K 2013. Australia - Telco company profiles - Telstra, Optus and Vodafone. Retrieved from http://www.researchmoz.us/australia-telco-company-profiles-telstra-optus-and-vodafone-report.html O'Reilly T 2005. What is Web 2.0? Design patterns and business modes for the next generation software (downloaded April 2012 from http://www.oreillynet.com/lpt/a/6228). Swabey P. 2009. The Social Process: Web 2.0 and business process management, (downloaded April 2012, www.information-age.com/channels/comms-and-networking/features/1053092) 6.0. Appendix 1: Examples of social media used in different business activities 7.0. Appendix 2:The diversification of social media services by Nivea Company 8.0. Appendix 3: why consumers follow brands Read More