Social Media Exploration and Exploitation by Small and Medium Enterprises for Business Continuity

Introduction

Small and Medium Enterprises (SMEs) form the backbone of an economy. In the state of Florida, SMEs account for 98.9% of businesses and employ more than 40% of the workforce¹. Threats to business continuity during disasters, such as the COVID-19 pandemic or hurricanes, including inventory losses, loss of customers, decline in sales, and operational delays, present significant economic danger. Business continuity plans typically include pre-disaster measures, response during a disaster, and post-disaster strategies. Pre- and post-disaster measures include using savings, soft loans, applying for subsidies or grants, or filing insurance. However, during a disaster, a firm is faced with maintaining continuity in business functions. The role of information systems (IS) and technologies (IT) has been increasingly important for business continuity planning (Cerullo and Cerullo, 2004). Amongst the technologies that can aid with business continuity, social media platforms play an increasing role (Fuchs, 2017; Anderson 2020).

Uses of social media extend beyond simply connecting people (Belo et al., 2013). SMEs use social media platforms for business functions such as market research, customer acquisition, marketing, and customer support (Culnan et al., 2010). The past decade has seen a rise in social media use for business, including for SMEs (Smith and Vardiabasis, 2010). While technologies such as social media platforms can be viewed as tools that can change, their use in business functions represents core IT capabilities; i.e., what firms uniquely do with the IT platforms. IT capabilities describe the bundle of key IT assets, including IT skills, technologies, and the alignment between IT and business strategy (Henderson and Venkatraman, 1999). IT capabilities can be vital in business continuity, as has been seen in recent natural disasters (Akram et al., 2018).

From a strategic management perspective, IT capabilities are a form of dynamic capabilities, which have evolved from the resource-based view of a firm. Dynamic capabilities, formed through processes of organizational learning, are seen to drive competitive advantage (Kane and Alavi, 2007; Bhatt and Grover, 2005) rather than the possession of resources or assets such as IT. Two key organizational learning processes, exploration and exploitation (March, 1991), have been studied extensively in strategic management, and adapted in the context of IT capabilities. Research clearly distinguishes between exploration or the adoption of IT tools, and post-adoptive exploitation, where users “extend the feature sets of IT applications introduced to enable organizational work systems” (p. 531, Jasperson et al., 2005).

Most users expend minimal effort and use a small proportion of the functionality of which an IT tool is capable of to try and get their work done. When faced with constraints or challenges, they may look for other tools or resort to manual processes. Tools with low switching costs, such as free social media platforms, make it easy for users to explore them. However, the long-term strategic benefits of technologies often come from exploitation (March, 1991). While there has been substantial research concerning the adoption of social media by SMEs, there is little empiric investigation into the extent to which the adoption is exploration or exploitation. This distinction is important because although organic social media may be free, there are direct and indirect costs associated with managing social media channels that require investment from the organizations. As seen in our sample, these investments occur in the form of personal time, human resources, and monetary expenses – all valuable resources for SMEs, but can have strategic implications for business continuity.