Analyzing Social Media for Corporate Reputation Management: How Firms Can Improve Business Agility

Analyzing Social Media for Corporate Reputation Management: How Firms Can Improve Business Agility

Christoph Seebach (Department of Business Administration, Goethe University Frankfurt, Frankfurt, Germany), Roman Beck (Department of Business Administration, Goethe University Frankfurt, Frankfurt, Germany) and Olga Denisova (Department of Business Administration, Goethe University Frankfurt, Frankfurt, Germany)
Copyright: © 2013 |Pages: 17
DOI: 10.4018/ijbir.2013070104
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Abstract

The business agility concept reflects an organization’s need to develop sensing capabilities for being able to respond to changes in the business environment. Therefore, intelligent information systems are needed to support decision makers with accurate and timely information. Since corporate reputation is among the most valuable assets, organizations need efficient measuring techniques to manage it. Recently, due to the advent of social media new reputational challenges have emerged for firms, since such technologies significantly increase the risk for being associated with negative issues. Therefore, organizations should utilize there IT-systems for actively sensing social media content as a basis for a quick response to reputational threats. Accordingly, the authors provide an empirical example on how firms might improve reputation management through sensing social media. Specifically, the authors analyze a dataset of 271,207 messages about an American Bank collected on Twitter. For their empirical investigation, the applied automated sentiment analysis and manual content analysis.
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1. Introduction

Today’s organizations are increasingly faced with unpredictable up- and downturns of demand, changing regulatory requirements, strong competition, and rapid technological advancements. In reports issued by PriceWaterhouseCoopers (2012, 2006) the last decade is described as years of rapid change characterized by high uncertainty and volatility, recounting a series of events such as, the popping of the dot-com bubble, the September 11 terrorist attacks, the Iraq War or the significant rise of emerging market economies (Sull, 2009). In 2008 the development peaked with the fall of Lehman Brothers and the ensuing global economic crisis which lead to the recent economic turbulences in Europe. As a result, companies worldwide have been battling to survive, to sustain and to grow against the increasing economic challenges of the market.

Under such conditions, enterprises must be able to detect and react to environmental changes, such as those mentioned above, in a rapid and effective manner to operate economically and to stay competitive (Overby et al., 2006). In the literature, an organization’s capacity to achieve this is captured by the concept of business agility (Goldman et al., 1995). In short, the concept suggests firms to actively sense their business environment for being able to quickly respond to opportunities and threats and to achieve superior performance (Day, 1994; Sambamurthy et al., 2003). Within the last couple of years the question of how information technology (IT) might help in shaping a firm’s agility has gained more attention, specifically with respect to sensing environmental changes (e.g., Sambamurthy et al., 2003; Tallon & Pinsonneault, 2011). The reason for this is that the sources which might be sensed have become increasingly digitized due to new technological developments, thereby providing new opportunities for firms to gain valuable insights about markets, customers or competitors (Roberts & Grover, 2012; Sambamurthy et al., 2003). In this regard, social media technologies such as blogs, microblogs or social networking tools seem to be a promising data source for improving an organization’s sensing capabilities (Larson & Watson, 2011; Roberts & Grover, 2012). According to a recent published study (InSites, 2010) the number of world’s public social media users has almost reached 1 billion; the public microblogging platform Twitter alone accounts for more than 100 million active users who post up to 250 million messages per day (Parr, 2011). Thus, switching from physical to online communication, people now leave their personal thoughts, opinions and needs on almost anything on the web (Jones et al., 2009). From a sensing perspective, organizations might extract valuable information from these data, such as customer’s buying intentions for products or perceptions of the market regarding certain issues (Larson & Watson, 2011). Hence, user generated content on social media websites might be a valuable source for enhancing an organization’s knowledge about the market and for detecting changes and new developments in the external business environment.

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