ARE SOCIAL MEDIA PLATFORMS ECONOMICALLY RELEVANT TO A BUSINESS ORGANIZATION?

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a microblog on Twitter or an advertisement on 02 . discussion forums and blogs. SMPs can be differentiated on the basis of the two YouTube allows for significant control of information by its creator. Social Media Platforms (SMPs) such as Facebook or discussion forums are a dominant presence in many people’s personal lives. By comparison. Facebook is the largest social media platform. or is new information. These platforms are available on public sites such as Facebook and private sites such as Jive and Yammer. The question is – are they relevant to business organizations? Should they play a role in our professional lives? Can businesses make use of them to generate value? With the available profusion of platforms. For example. the content may not be altered by anyone else. it has become imperative that organizations ferret out this information tucked away in the cracks and crevices of social media. In a networked and connected world. A collaborative platform takes the SMP to a different level. Control and Collaboration Social media refers to the information and communication technology platforms designed for real-time social interaction. With close to 600 Million active users. which are the useful ones? Our view is that a SMP can be economically valuable to business organizations and enable them to do business better only if it generates information that either improves the reliability of existing information. a wiki enables new information to be entered and old information to be altered without control. such as wikis. Once disseminated.Navigating Social Media In our increasingly connected world. social media is playing a pivotal role. An event-planning platform is an example of a platform that enables a high level of collaboration among its participants. from merely enabling the sharing of information among participants to shaping content through collaboration following characteristics: The extent of control that may be exercised over the information flow.

For example. This type of information governance is termed ‘pooled-governance’ and a good example is Wikipedia. generate further new information. Adding contributors and editors into the pool of information providers and governors also increases the reliability of information. then the reliability of information can be high. then the control and collaboration in several ways. somewhat in the way that performing the same experiment many times is likely to yield an If the level of information control is high. A second way to improve reliability is by excluding those who provide unreliable information. the quality of information improves. thus increasing the pool of contributors and keeping information controls low. An example is eBay where unreliable buyers and sellers are down-ranked and ultimately excluded. An example is a strongly-tied strategic planning group who use a wiki to develop their strategic plan. they are unlikely to misrepresent the reliability of information shared. The first is when such platforms are accessible by many participants. Each participant is expected to add new information by virtue of the weak tie. in turn. some of which adds new information to the existing pool of information. By pooling the information of many contributors. Creating a collaborative platform of users with weak ties is a second way to generate new information. Collaboration for processing the information is expected to. An example is use of a private wiki for problem solving by large project teams. Newness here is driven by making it easy to create a LinkedIn profile.Relating Control and Collaboration to Newness and Reliability How are levels of information control and collaboration related to the newness and reliability of information and hence to the potential value to businesses? average close to the true mean. The newness of information is also related to the level of information Consider first the reliability of information. 04 . Note that this happens despite low control of information. Here the intent is to collaborate to create outcomes. Another way is when the participants in the platform share strong ties. Given their ties. reliability of information can be high. This can be improved by both increasing the level of information control and by greater collaboration. Each participant provides her own ideas. As an example: LinkedIn offers a platform that enables recruiters to discover potential employees by using recommendations and searching job tags. the information in a CEO’s blog to the staff is very reliable because it is tightly controlled. If the level of information control is high. This makes the resulting information more reliable.

Twitter and Linked-In in that order.Reality To understand the business potential of Social Media. Pre-authored content. An external SMP (ESMP) is. Other business functions. the most valuable platforms are the wiki and pre-authored content. employees. whose value arose from its reliability and the ability to receive feedback (new information) in a non-collaborative form. They are valuable to the corporation because they offer authoritative information. content. project management and problem solving. such as understanding competition. intended to be more widely accessible. although firms. project management. Recruitment was also found to benefit from external social media. blogs/pre-authored content (including multimedia content such as advertising) and wikis. 2. where the platform enabled the generation of new information with relative high levels of reliability. supply-chain management and building strategic alliances did not benefit from external social media. This would thereby enable companies to do business better. because external social media was accepted as a way of building awareness about the firm’s goods and services. Other outward facing business functions. strategic planning. such as in-house recruitment. Wipro in collaboration with Stanford University undertook a research study. Pre-authored content carriers. and sales of goods. registered vendors. The wiki is used primarily for project team Pre-authored building. videos) and it is used primarily for building awareness and promoting the firm’s products and services. the survey showed that two types of SMPs were valuable: 1. though this may be a result of the current state of technology. particularly in-company blogs. even though they are the least collaborative of all the platforms we have studied. on average. External social media is more widely used for business than internal social media. We believe that organizations will continue to embrace Social Media more tightly as technology around it matures and creates new touch points that brings them closer to end-customers. For internal social media. project ideation. This was the case for both ISMPs and ESMPs. supply-chain management and project ideation did not benefit from internal social media. We found that firms use internal and external social media platforms. Both internal and external social media platforms were viewed as positive contributions to a firm’s business. likely to use ESMPs than ISMPs. The most valuable platform is the pre-authored content platform (blogs. ISMPs for collaboration among participants with prior weak or strong ties. in some cases. The potentially useful business outcomes from social media that were surveyed included hiring and professional development. What’s truly valuable? In summary. with the most popular sites being Facebook. was important as it directly impacted employee awareness. Our survey indicated that the social media platforms most used for both internal and external business functions are forums. strategic planning. business development and marketing. particularly in-company blogs. think that there is potential for the use of internal social media in these areas. An internal SMP (ISMP) is accessible only by the firm’s employees and. vendors and suppliers thereby creating a stronger networked and connected world leading to better collaboration and sharing of information. of course. Data collected from 20 firms in Silicon Valley as part of the research supports this point of view. product development and developing intellectual property. though firms are also more 05 . was important as it directly impacted employee awareness. This seems to indicate that SMPs are of limited use for a business.

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