Social Media impact on organization’s structure and behavior

I wrote this research paper for Human Resources class in my Digital Media MBA program. It explores the impact of social media on organizations. It is written in academic format (APA style with references at the end).  While it is long and dry, I believe it sheds some light on the confusion facing today’s organizations in response to social networking.

Abstract

This paper will discuss the impact of social media on today’s organizations. It will start by understanding the changes in organizations from the industrial age to the digital age. Then it will explore companies reactions to the rapid changes in technology and the popularity of social media tools. While many organizations often think that social media influences communication and relationships outside of the enterprise firewall,  recent data and studies have shown that organizations are affected by social media in all aspects of their structure and culture. Examples of social media impact on various types of organization’s will be presented. Finally problems and possible solutions  to integrating social media in today’s organizations will be discussed.

Social Media impact on organizations

Organizations have mostly been structured based on their customers’ needs, the legal and political constraints of their country, and the economic and technological changes impacting their environment. When social media was first introduced, organizations often thought of it as means to connect with the customers and market their product. They did not however expect the tremendous impact that it would have on their own internal structure.

In a modern day organization’s behavior, employees and suppliers have as much impact on the organization structure as customers and competitors have had in the past. This was not always the case. Classic organization theory has evolved in the early 20th century to merge scientific management theory developed by Fredrick Taylor (1917), bureaucratic theory by Max Weber (1947) and administrative theory by Mooney and Reiley (1931). The main focus was on the organization goals and the methods for management to maintain equilibrium through control and manipulation of the workers and their environment. While it was initially successful at improving production in the industrial age, its shortcomings were apparent in explaining people’s motivation and behavior to work only as function of economic reward.

Then in the mid 1960s, contingency theory was developed to address the failure of classic organization that was becoming more apparent in volatile industries. Contingency theorists view conflict as unavoidable, but manageable. According to Chandler (1962) who studied four large United States corporations, organizations would act in a rational, sequential, and linear manner to adapt to changes in the environment. Effectiveness was a function of management’s ability to adapt to environmental changes.

It wasn’t until the recent studies by Kast and Rosenzweig (1972) and W.R.Scott (1981), that used systems theory as means to explain that all the components of an organization are interrelated, and that changing one variable might impact many others. Organizations are viewed as open systems, continually interacting with their environment and in dynamic state of temporary equilibrium as they adapt to environmental changes.

While studies may have shown that successful organizations are in constant state of flux in response to their environment, many companies are still looking at social media technologies as way to market their product and learn about their competitors. They consider them separate from the company’s culture and structure, existing outside the company’s firewall. This is understandable for social media technologies started in 2000 as means to connect family and friends or individuals to virtual coaches. Organizations on the other hand were removed from such interaction. It wasn’t until the launch of Twitter in 2006, that companies started to consider using social media technologies to engage their customers (Online Schools, 2010).

Social media technologies have drastically reduced the cost of content creation, distribution and discovery methods. Organizations and individuals are able to create an online presence easily and economically. This presence could produce a large following depending on the interest in the content created and information shared. An online community is the dream of every business in the social media arena given its relatively low cost and instantaneous customer access.

In 2008, Facebook, YouTube, LinkedIn, blogs, Wiki and Twitter, to name few social media platforms, have become popular tools with corporate marketing teams to spread the word about the products and services. The traditional word of mouth marketing has become “word of mouse”, a digital marketing term used to describe promoting products or services virally through the web. Companies realized that social media is a powerful medium that is changing the way the world communicates. Its power stems from crowd-sourced communities that allow the instant sharing of information between people with related interests. However many organizations are often shocked by the impact of online communities on their internal organization structure.

The change stemmed from the speed at which information travel in the social media arena. In most cases, the information environment outside the organization is changing far more rapidly than the information environment internally. Customers, partners, prospects, and employees can find, access, and share information in a way that corporate infrastructure, security, culture, and policies inhibit. Organizations are having a hard time keeping up with – never mind responding to or taking advantage of – these new environments.

The path of information regarding the organization is no longer just the role of the marketing department. Employees are online talking to customers, colleagues, and suppliers who have become friends through various social networks. They are sharing their experiences, impressions and expectations regarding their jobs, the organization and management. The speed at which the information travels is beyond the control of the organization. Every employee, customer and supplier has become a reflection on how the organization functions and operates. The power has shifted from what the company wants to relay to the public, to what employees, customers and suppliers say about the company—for better or worse.

This transfer of power has affected organizations tremendously on all levels. Early adapters of social media have accepted the power shift and harnessed the influence of social media to their advantage. Southwest Airlines is a great example of an organization that empowers its employees and respond to customers’ complaints and comments through social media. In 2010, a Southwest airline pilot requested an overweight passenger to de-embark the plane due to the company’s “one seat” policy. Little did he know that the passenger was a famous writer, actor and director with millions of followers. Mr. Kevin Smith, the passenger, took to social media to express his anger. It was within 8 hours that SWA responded to him and every one of his followers comment regarding the incident, apologizing and explaining their policies. What SWA demonstrated is an organization that engages with its customers and doesn’t shy away during conflict in fear of tarnishing its reputation. Instead it takes pride in its transparent policies and admits to its mistakes, earning respect from customers and employees (Silverstein, 2010).

Transparency is one of the main consequences of engaging in social media. Organizations can no longer decide what information to share or not to share with the public; in most cases this information has already found its way out through the employees, the customers or the suppliers. The advantage of going viral and the speed at which information travel in social media, are also the reasons many companies can no longer be “two faced”. Successes and failures are reported within the brand’s community and broadcasted virally within days if not hours. The good news is that organizations are forced to address their problems with a plan of correction, otherwise they will risk losing their customers and reputation in their industry.

As leaders and managers are learning the impact of social media on their organization, so are employees learning the impact it has on their jobs. In 2009, 8% of employees were fired because of inappropriate comments they placed on social media platforms (Mashable, 2009). Employees are still learning that they are an integral part of the organization and what they say or do outside of their work; still reflect on their organization as the case of Octavia Nasr, CNN reporter expressing her sadness for death of a man, whom she respected but was considered a part of a terrorist organization by her company (Greenwald, 2010).

The social media impact is not only seen in the corporate world, but also in the political arena. It is thanks in part to social media that a junior US Senator from Illinois has become the 44th president of the United States in 2008. Mr. Barak Obama’s support came from everywhere and mostly the unexpected places of social media that his rivals didn’t even consider tapping into (Qualman, 2009). On the other side of the planet and in 2011, Hosni Mubarak, The Egyptian President of 30 years, was ousted after 18 days of public demonstrations that started as an organized event on Facebook. While Egyptians used social media to call for a political regime change, Iceland used it to attract thousands of people globally and increase its tourism. Its approach was quite unique. In the campaign “Iceland Wants to Be Your Friend”, Iceland speaks to its followers in the first person, engaging them in a remarkable way. Today tourism in Iceland is the fastest growing industry and the second-highest earner in the country after exporting (Iceland Tourist Board, 2011).

It is due to these examples that organizations can no longer opt out of engaging in social media. Not only is the opportunity lost too great, but the competition is engaging the customer every chance they get. Some organizations might decide to delegate social media engagement to their marketing department as they block all social sites internally. This is a flawed decision because employees are still able to access them via their mobile devices.  Every employee has become the face of the organization and reflects its values. Also having a centralized authority system where management gets to control the engagement and the responses on the social platforms is very unrealistic arrangement due to the speed at which information travels.

It is without a doubt an adjustment for organizations and employees to understand how to navigate through social media. Many are struggling to understand the boundaries between personal and company’s social media tools. One of the main issues is the ownership of the content on the web. When an employees post on the company social sites, it could be considered company owned content. However it is not clear when employees post on their personal sites information pertaining to the company. The line blurs in terms of liability and ownership. Similarly when the company’s representative builds a following on the company’s site, it is not clear who has the ownership of such community, after all social media is about building and enhancing relationships.

Today’s technology and business environment are forcing organizations to restructure their processes and behavior. Social commerce is the new platform for doing business. Leadership and management need to embrace the change in order to succeed. New policies are needed to guide employees and management on social media best practices. Collaboration between departments is a must to harness the power of social media and to take advantage of the customer engagement. The best investment an organization could do is training the managers and the employees to respond in a timely manner to customer’s questions and inquiries. It is the only way to harness the power of social commerce and uncover opportunities to help the organization prosper in the digital era.

References

Chandler, A. D., Jr. 1962. Strategy and Structure. Cambridge, MA: M.I.T. Press.

Iceland Tourist Board. 2011. Travel and Tourism in Iceland
Retrieved from http://www.icelandexport.is/english/industry_sectors_in_iceland/travel_and_tourism_in_iceland/

Kast, F. E., and Rosenzweig, J. E. 1972. “General systems theory: Applications for organizations and management.” Academy of Management Journal. 15(4): 451.

Qualman, E. 2009. Socialnomics Page 68. New Jersey: John Wiley & Sons.

Mooney, J. D., and Reiley, A. C. 1931. Onward Industry. New York: Harper & Row.
Online Schools. 2010. Retrieved from http://www.onlineschools.org/blog/history-of-social-networking

Ostrow, A. August 10, 2009. .FACEBOOK FIRED: 8% of US Companies Have Sacked Social Media Miscreants. Mashable. Retrieved from http://mashable.com/2009/08/10/social-media-misuse

Salon. July 8, 2010. Octavia Nasr’s firing and what The Liberal Media allows
Retrieved from http://www.salon.com/news/opinion/glenn_greenwald/2010/07/08/media/index.html

Scott, W. R. 1981. Organizations: Rational, Natural, and Open Systems. Englewood Cliffs, NJ: Prentice-Hall.

Silverstein, C. February 15, 2010. Kevin Smith and Southwest Airlines: Social media case study
Retrieved from http://www.marketinghipster.com/2010/02/15/kevin-smith-and-southwest-airlines-a-social-media-case-study

Taylor, F. W. 1917. The Principles of Scientific Management. New York: Harper

Weber, M. 1947. The Theory of Social and Economic Organizations. Henderson, A. M., and Parsons, T. (trans.) New York: Oxford University Press.

{ 4 comments… read them below or add one }

omikunle December 29, 2012 at 2:31 pm

Great job

Montgomery Beyer September 8, 2013 at 12:24 am

I think this is an amazing article. I have already referenced this in the class I facilitate for a large online university. I can only hope that the assertions you make here in this paper have actual validity as I move towards promoting my social media campaign against one of the largest financial corporations in the world.

Thank you.

Lucas Lundale March 1, 2017 at 5:21 pm

If I wanted to cite this page as an APA reference for a paper I am writing, where would I find the information to do so? Thanks in advance! Lucas

Rasha Proctor March 6, 2017 at 2:44 pm

Sure Lucas! Good luck!

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