Transformation of Business through Social Media

Transformation of Business through Social Media

R. Venkatesh (VIT Business School Chennai, India) and Sudarsan Jayasingh (VIT Business School Chennai, India)
Copyright: © 2017 |Pages: 17
DOI: 10.4018/978-1-5225-0846-5.ch001
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Abstract

Social media are widely used in regular operations of many companies, including start-ups, small, medium and large organizations. The Social media are fundamentally changing the way we communicate, consume, collaborate and create. It creates one of the most transformative impacts on business. The most significant consequence of social media has been the shift of power from the institution to the individual. These shifts in the consumer-brand relationship have thrown up new challenges and opportunities for business organization. Social media have transformed the ways businesses from marketing and operations to finance and human resource management. Increasingly, social media are also transforming the way businesses relate to workers, allowing them to build flexible relationships with remote talent, to crowdsource new ideas, or to engage in micro outsourcing. Social media are increasingly being used in organizations to improve relationships among employees and nurture collaboration and the sharing culture. The purpose of this research is to explore the major changes which have taken place in organization because of social media.
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Introduction

Social media are widely used in regular operations of many companies, including start-ups, small, medium and large organizations (Bell& Loane, 2010). The business environment in tandem with the technological developments has undergone an amazing transformation. Social media is a phenomenon that has transformed the interaction and communication of individuals throughout the world. It have transformed consumers, societies, and corporations with wide spread access to information, better social networking and enhanced communication abilities (Kucuk & Krishnamurthy, 2007). Social media is ‘‘a group of internet based applications that builds on the ideological and technological foundations of Web 2.0, and it allows the creation and exchange of user-generated content’’ (Kaplan & Haenlein, 2010, p.61). Social networks are defined to be websites which link millions of users from all over the world with same interests, views and hobbies. Blogs, YouTube, MySpace, Facebook are examples of social media that are popular among all level of consumers (Sin, Nor & Agaga, 2012).

Worldwide, the social network user base is expected to increase from 1.47 billion in 2012 to 2.55 billion in 2017 (eMarketer, 2014). Social media usage in India as number of internet users in India reached 302 million users by December 2014 (EY, 2015). India is a key market for social media giants active as social media users in India grew to around 106 million and India is among the top three countries in terms of number of people using Facebook (100m+ users), whereas Twitter is seeing an increased user base of over 33 million (EY, 2015). The increased mobile web penetration is also seen as a key contributor to increased growth in active social media usage — 84% Facebook’s 100 million users in India access it from their mobile devices. 81% of the brands surveyed considered Facebook to be the most important platform, while almost 48% of surveyed brands think that Twitter is the second-most important platform to be on, closely followed by YouTube (43% surveyed brands considered it to be the third–most important channel). Businesses are also establishing their own YouTube channels while actively producing, curating and distributing video content for promotional material and showcasing new developments for the brand. Meanwhile, Vine, the latest entrant in social media platforms, concentrates on short six second video snippets that can be shared using Facebook or Twitter.

The popularity of social media sites has also spread to companies and firms as part of their strategies. Research studies shows that 93% of Fortune 500 companies have accounts on social media sites (Barnes, Lescault & Holmes, 2015). 21 percent of Fortune 500 corporations had corporate blogs, 78% use twitter, 74% has Facebook, 84% has joined Glassdoor, 93% use LinkedIn and 13% use Instagram. More than 70 percent of organizations operating around the world are now active on social media (KPMG, 2011). Companies across variety of industries such as automobile, travel and tourism, banking and financial services, retailers, airlines fashion and education and many more using social media to tap opportunities in the market. The use it to build brands, promotions, product development, customer service, employee engagement and recruitments etc. In many organizations, the number of social media-specific roles is limited. Simply Measured survey of over 350 social media marketers found that 65% of teams have between 1 to 3 people dedicated specifically to social media (Simple Measured, 2015).

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