Social Media Capital Conceptualizing The Nature, Acquisition

ACCINF-0000100443; No of Pages 18
International Journal of Accounting Information Systems xxx (xxxx) xxx
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International Journal of Accounting Information

Systems
journal homepage: www.elsevier.com/locate/accinf
Social media capital: Conceptualizing the nature, acquisition,

and expenditure of social media-based organizational resources
Gregory D. Saxton a,⁎, Chao Guo b
a
Schulich School of Business, York University, Room S337L, Seymour Schulich Building, 4700 Keele St. West, Toronto, ON M3J 1P3, Canada
b
School of Social Policy & Practice, University of Pennsylvania, 3701 Locust Walk, Philadelphia, PA 19104-6214, United States of America
a r t i c l e i n f o
Article history: The near-universal organizational participation in social media is predicated on the belief there
Received 2 June 2018 are some tangible or intangible new resources to be had through tweeting, pinning, posting,
Received in revised form 22 October 2019 friending, and sharing. We argue the linchpin of any payoff from engagement in social media
Accepted 20 December 2019
is a special form of social capital we refer to as social media capital, and offer a conceptual
Available online xxxx
framework for understanding its nature, acquisition, and expenditure. This paper contributes
to existing literature by elaborating a new type of organizational resource and then synthesiz-
Keywords: ing and extending research on the processes through which organizations can translate social
Big data
media efforts into meaningful organizational outcomes. Understanding this causal chain is crit-
Data analytics
ical not only for measuring the return on investment from social media use but also for devel-
Resources
Social capital oping accounting information systems that are both adaptable to social resources and better
Social media able to exploit the data analytic and forecasting capabilities of real-time social media data.
Social networks © 2020 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-
NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
People and organizations engage in social media activities on Twitter, Facebook, and Instagram for a variety of altruistic as well as
self-interested reasons: for fun, connecting, learning and sharing, as well as for bragging, self-promotion, and the pursuit of profit. Re-
gardless of motive, participation in social media is predicated on the belief that doing so yields some meaningful benefit, ranging from
enhanced financial performance (Du and Jiang, 2014) and customer service (Schaupp and Bélanger, 2013) to improved stakeholder
relationships (Saxton and Waters, 2014), knowledge leadership (Eschenbrenner et al., 2015; Suddaby et al., 2015), and organizational
learning (Lenk et al., 2018). Yet there are also considerable reputational and productivity-related risks involved with social media use
(Brivot et al., 2017; Demek et al., 2018). Overall, as Scott and Orlikowski (2012, p.38) argue, social media can be “both a blessing and a
curse” for organizations.
Given the substantial potential benefits and costs, it is critical to understand precisely how and in what ways social media can
deliver organizational returns. As a step toward answering this question, in this paper we theorize around the key role of social
resources (Lin, 1999; IIRC, 2013) in understanding and delivering organizational outcomes. Drawing upon the notion that some
tangible or intangible resources can be accrued and/or mobilized through the use of social media (Castelló et al., 2016;
Debreceny, 2015; Du and Jiang, 2014; Fischer and Reuber, 2011; Parise et al., 2015), we argue social media has engendered a
new, novel, and valuable resource – social media capital – that is the linchpin of any meaningful benefit from engagement in social
media. Social media capital is defined as the stock of social media-based social resources an organization has generated via its so-
cial media efforts. In line with a network view (Burt, 1992; Debreceny et al., 2017; Lin, 1999; Worrell et al., 2013),1 these social
⁎ Corresponding author.
E-mail addresses: gsaxton@yorku.ca, (G.D. Saxton), chaoguo@upenn.edu. (C. Guo).
1
The network view focuses on the social network – the network of actors to which an organization is connected. Network scholars typically analyze social and orga-
nizational phenomena through social network analysis, which involves mapping and studying the social relationships among a set of actors (Freeman, 1979; Worrell
et al., 2013).
https://doi.org/10.1016/j.accinf.2019.100443
1467-0895/© 2020 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/
).
Please cite this article as: G.D. Saxton and C. Guo, Social media capital: Conceptualizing the nature, acquisition, and expenditure of
social media-based..., International Journal of Accounting Information Systems, https://doi.org/10.1016/j.accinf.2019.100443
2 G.D. Saxton, C. Guo / International Journal of Accounting Information Systems xxx (xxxx) xxx
resources are visible in characteristics of the network of connections the organization has fostered on social media – including the
size of the network, the strength of the ties made, the centrality of the organization's network position, and the norms and values
embedded in the network community.
What is so special about social media capital? Why are these social media-based social resources important to organizations?
The existing literature is helpful but falls short of answering these crucial questions. Notably, there is a dearth of research that can
help shed light on the conceptual and empirical nature of online social resources, not only in the accounting information systems
(AIS) literature but across the business and social science disciplines. Moreover, the research that does exist gives an unclear pic-
ture of causal ordering (Davis, 1985), with various studies positing social resources as input (IIRC, 2013), output (boyd and Ellison,
2007), means (Shen et al., 2014; Wasko and Faraj, 2005), and mediator (Beaudoin and Tao, 2007). At the same time, the gaps in
our collective knowledge go beyond the matter of causal ordering; just as important is the lack of research into the relevant causal
processes that could serve to inform us about exactly how organizations can move from the accumulation of social resources to
desired organizational outcomes such as, among others, increased revenue, improved customer satisfaction, or better social or op-
erational performance. Social media may be a key source of Big Data, and data may be “the new gold,” but we agree with Alles
and Gray (2016) that the era of Big Data (Vasarhelyi et al., 2015) does not mean, as Anderson (2008) argues, “the end of theory.”
Correlation is not enough; we need conceptual understanding in order to extract knowledge from the data and make valid ac-
counting decisions (Alles and Gray, 2016). Our paper is designed with this end in mind.
At the core of our conceptualization in this paper is that social media capital is a key mediator between social media presence
and organizational outcomes. As with other organizational assets, social media capital is a resource that can be acquired and
expended to achieve organizational outcomes. Yet in the social media context, this resource assumes a privileged place in the
value chain; we argue that, in order to reach any meaningful organizational outcome through social media activities, the organi-
zation must first acquire social media capital. Differently put, social media capital is the central and proximate resource acquired
through social media efforts. The reason for this mediating role lies in the primacy of the formalized social network in social
media platforms (Kane et al., 2014; Kaplan and Haenlein, 2010). Few activities – from making connections to reading, liking, shar-
ing, and commenting on messages – occur on social media without being mediated by a formal friend/follower relationship.
Moreover, the extremely tight relationship between the social network and organizational outcomes is distinct from what occurs
off-line. Off-line, a TV ad could reach millions without a firm having any substantial social capital or pre-existing social network;
at the very least, the size of the audience is divorced from the organization's own level of social capital. This would be highly im-
probable on social media: without a pre-existing network, a message would simply not reach a large enough number of followers
to be successful. In short, whereas offline the relationship between social capital and audience outcomes is weak and optional, on
social media it is predominant and required.
Moreover, as we propose in this paper, not only does social media capital have a unique mediating role in determining orga-
nizational outcomes, but it is a new company-generated intangible asset – a “strategic, value-enhancing resource” (Lev and Gu,
2016) that flows from daily social media efforts (Debreceny, 2015). As a new asset, social media capital possesses several distinc-
tive characteristics: it is directly observable in real time, is unequally distributed, is acquired through a specialized set of commu-
nicative activities, and requires specific conversion and expenditure processes. Its distinctive characteristics and key proximate
role in the value chain – combined with a general lack of understanding of how social media returns are generated – calls for
a shift in how AIS scholars conceptualize the accumulation and mobilization of online social assets. The goal of this paper is to
take up this call in presenting a conceptual framework that outlines the nature, acquisition, and expenditure of social media cap-
ital and discusses the implications for accounting and AIS research and practice. Specifically, our framework presents six propo-
sitions covering how social media capital is the proximate resource obtained via social media efforts (P1), is directly observable
(P2), is distributed according to a power law (P3), is acquired only via messages and connecting actions (P4), and can be lever-
aged to achieve strategic outcomes via capital conversion (P5) or direct expenditure (P6).
Our paper thus makes several contributions to the literature. First, it elaborates a new genre of organizational resource – so-
cial media capital – that is the key immediate resource engendered by participation in social media. Second, it identifies the
types of activities organizations can engage in to build this resource. Third, it offers a template for organizations to understand
and manage their social media-based resources, providing a more detailed map of the steps needed to maximize their social
media return on investment. Finally, it provides a more clear-cut framework for conceptualizing and understanding organiza-
tions' social media-based resource-acquisition efforts. In so doing, we elaborate one of the six key “capitals” (social and relation-
ship capital) in the Integrated Reporting framework (IIRC, 2013). Social media capital is a strategic resource, one that is,
moreover, visible in real-time sources of social media data (Debreceny et al., 2019). If accounting and AIS professionals are to
avoid the “managing out of the rearview window” (Alles and Gray, 2016) that comes with the reliance on backwards-looking
accounting measures, they need to incorporate these and other sources of Big Data (Alles and Gray, 2016; Vasarhelyi et al.,
2015) into their reporting, forecasting, data analytics, business intelligence, business health audit, and data mining work
(Amani and Fadlalla, 2017; Gray and Debreceny, 2014). To do so effectively, however, requires a conceptual understanding of
how the new resources measured with such data fit in the value chain. This study seeks to add to such understanding while sug-
gesting ways AIS can be adaptable to social resources, to other company-generated intangible assets and, more broadly, to data
analytics and Big Data.
Our plan for the paper is as follows. First, in the following section we review the literature on social capital and social
media. We then turn to the framework that outlines our proposed social media capital-centered value chain. The framework
takes the reader through a series of six propositions covering the nature, acquisition, and expenditure of social media
G.D. Saxton, C. Guo / International Journal of Accounting Information Systems xxx (xxxx) xxx 3
capital. Lastly, in a final section we discuss the implications of the framework, including a presentation of AIS-focused future
research questions.
1. Prior research: social media and social capital
Social capital2 is arguably one of the most influential concepts in the social science and business literatures. As with other pop-
ular management concepts, the range of definitions is broad (Adler and Kwon, 2002). However, there is general agreement that
social capital fundamentally involves the resources that accrue from membership in a social network (Adler and Kwon, 2002;
Bourdieu, 1989; Coleman, 1988; Putnam, 2000). Our study adopts this view and defines social capital as “resources embedded
in a social structure” (Lin, 1999, p. 35) that organizations can access or leverage in the pursuit of instrumental goals.
With the opening of the World Wide Web in 1995, scholars began asking whether the new types of networks and communi-
ties that were forming online might also deliver new types of social resources (e.g., Lin, 1999). Such calls intensified in the wake
of the new, more interactive phase of the Internet that began with the launch of such sites as LinkedIn (2003), Facebook (2004),
YouTube (2005), Twitter (2006), and Pinterest (2010). Collectively known as social media, these sites are distinguished from first-
generation Internet technologies (such as websites) in terms of the substantially heightened opportunities for direct interactivity,
two-way exchange of information, network connectivity, and creation and exchange of user-generated content (boyd and Ellison,
2007; Debreceny, 2015; Kane et al., 2014).
The more interactive and network-dependent nature of social media compared to prior forms of new media suggests a greater
potential for the generation of social capital. In fact, a growing body of literature shows a link between social media use and
individual-level production of social resources (e.g., Ellison et al., 2007). Moreover, in a review of the inter-personal communica-
tion literature, Steinfield et al. (2012) found that users of online social network sites tend to connect with their existing offline
relations, rendering it important to view social networking site usage as part of an integrated set of communication practices
that blend online and offline activity.
While the existing literature offers important insights into understanding the link between social media and social capital, it
has a number of shortcomings. First of all, most research has focused on the effect of social media on the individual-level produc-
tion of social capital (Ellison et al., 2007; Stefanone et al., 2011), but has paid virtually no attention to the organizational-level
production of social capital via social media. The idea that online social networking could lead to concrete benefits for an organi-
zation is not farfetched. For instance, Fischer and Reuber (2011) suggested that entrepreneurial engagement on Twitter can pos-
itively affect entrepreneurs' cognitions and behaviors that result in new opportunities and thus increased chances of
entrepreneurial success. Castelló et al. (2016) argued the non-hierarchical use of social media is critical for the acquisition of or-
ganizational legitimacy. Goh et al. (2013) found participation in social media efforts yield more profitable customer relationships.
Eschenbrenner et al. (2015) found Big 4 accounting firms' social media use appeared to facilitate knowledge sharing, branding and
marketing, and socialization and onboarding. In the capital markets context, firms' social media use has been linked to greater
dissemination (Blankespoor et al., 2014), higher firm equity values (Du and Jiang, 2014; Luo et al., 2012), decreased reputational
damage (Cade, 2018; Lee et al., 2015), and more positive investor perceptions, judgments, and trust (Elliott et al., 2018; Kipp
et al., 2018; Trinkle et al., 2015). And Saxton and Wang (2014) found a relationship between nonprofits' use of Facebook and
the level of success in obtaining financial resources through crowdfunding. The evidence thus suggests participation in social
media facilitates the accumulation of intellectual and reputational and financial capital; it is therefore not unreasonable to expect
it to also help organizations generate social capital.
Moreover, most research on whether and how new media (including the Internet and social media) can promote or diminish
social capital has focused on the effect of new media on offline social capital. What seems to have been ignored is the possibility
that there is a distinction between online and offline social capital (Steinfield et al., 2012; Williams, 2006) and that new social
capital can be formed online. The distinction is important, as it indicates the existence of a new form of social capital, a new re-
source embedded in cyber-networks. This idea is bolstered by research on online communities that has found the flow of re-
sources in online settings to be different and more fluid than in offline settings (Faraj et al., 2011).
Meanwhile, there is little coherence in the definitions and methods of those who have attempted to study these new online
forms of social capital. In a review of social capital research, Kikuchi and Coleman (2012) merely note that “…online studies
on social capital thus far conceptualize and operationalize the term much differently…” than do offline studies. More generally,
Williams (2006) contends that, “Existing approaches to studying social capital online have been stymied by importing measure-
ments from older, functionally different media” (p. 610). This issue is likely compounded in the context of the newer social media,
which are presumed to be different from the earlier, more static and less interactive forms of new media. As a result, prior re-
search does not really tell us what social media-based social capital looks like. It also doesn't tell us whether and how it is differ-
ent from offline social capital, nor how to define and measure it.
Relatedly, there is a blurring of social and non-social resources in defining and measuring social capital, especially in the online
context. In a recent review, Kikuchi and Coleman (2012) note that scholars often (incorrectly, they argue) consider such cognitive
constructs as life satisfaction to be social capital. Some studies stretch the concept of social capital far beyond the realm of social
relationships. We thus concur with Kikuchi and Coleman (2012) that it is important to return to the roots of the concept before
theorizing further on the nature of online social capital. We should, in other words, focus on the social resources embedded in
2
In our network-based view the terms social resources, social assets, and social capital are equivalent; most of the existing literature uses the term “social capital” and
hence our review in this section focuses on this term.
online social structures (Lin, 1999). Other resources – such as cognitive, human, and financial – that flow from the social resources
should be considered distinct.
Lastly, and perhaps most critically, there is a dearth of analysis and theorizing on the antecedents and consequences of social
capital in the context of new media. The extant literature lacks theorizing on broader, “big picture” issues relating to the causal
mapping of online social capital. Just as Kwon and Adler (2014) found in their review of offline social capital, there are, notably,
considerable gaps in our understanding about the specific role(s) of online social capital in the value chain. Is it output or outcome
(boyd and Ellison, 2007; Ellison et al., 2007)? An input (IIRC, 2013)?3 A means to an end (Shen et al., 2014; Wasko and Faraj,
2005)? A side effect? Or a mediating factor (Beaudoin and Tao, 2007)? There has yet to be much theorizing around these key
issues of the causal ordering and mapping of online social capital; yet until such logic is made explicit, further empirical cause-
and-effect research will not bear much fruit (Davis, 1985).
At the same time, the lacunae in our collective understanding of causality go beyond the matter of causal ordering. Crucial
questions concerning relevant causal processes remain unanswered, particularly concerning how organizations can move from
the accumulation of social media-based social capital to their desired organizational outcomes. Overall, while there is a growing
body of research documenting blunt cause-and-effect relationships, there is little theorizing around key processes – of how social
capital is accumulated, converted, or expended to deliver other valuable resources or improved organizational performance. This
lacuna is particularly acute in the AIS and accounting literatures, which beyond recent individual-level social capital research
(Kelton and Pennington, 2019) and general interest in intangible assets, Big Data, and data mining (e.g., Alles and Gray, 2016;
Amani and Fadlalla, 2017), have been mostly silent on how to conceptualize, measure, and mobilize social resources. If AIS
scholars and practitioners are to extract actionable, valid knowledge claims and insights from Big Data sources such as social
media (Amani and Fadlalla, 2017), it is imperative to develop a conceptual, theory-based understanding of the relationships
among the data, the intangible assets, and organizational outcomes (Alles and Gray, 2016).
2. A conceptual framework of social media capital
Fig. 1 presents the conceptual framework that guides the discussion. The framework includes a series of six propositions that
collectively cover the nature of social media capital (P1, P2, P3) as well as the causal relationships that drive the acquisition (P4)
and expenditure (P5, P6) of social media capital to reach organizational outcomes.
In the following sections we cover the six propositions in order; throughout, we touch on the role of AIS in the measurement
and/or management of the relevant organizational efforts and data.
2.1. Nature of social media capital
As noted earlier, social media capital is the stock of social media-based social resources an organization has generated via its
day-to-day social media efforts. As with other resources, it can be acquired and expended in order to achieve organizational out-
comes. As a special form of social capital, social media capital has distinctive characteristics that set it apart from its offline coun-
terpart in important ways. Our chief purpose here is not to enumerate all the ways social media-based social capital is distinct
from offline social capital; instead, our focus is on developing those theoretical insights that are essential for understanding the
distinctive causal relationships involved in the strategic acquisition and expenditure of resources developed via organizational
participation in social media. In what follows, our first three propositions pertain to the nature of social media capital, particularly
its privileged place in the value chain, its direct observability, and its unequal distribution.
2.1.1. Privileged place in value chain

Our first proposition is that, unlike offline social capital, which is just one of many important resource types an organization
can acquire offline to achieve organizational outcomes, in the social media context, social media capital is always the central and
most immediate resource to be acquired. Differently put, in order to reach any meaningful organizational outcome through social
media activities, the organization must first acquire social media capital.
This privileging of social media capital in an organization's value chain is a point that has not been explicitly made in prior
literature, yet there is strong support for it. A key reason lies in the primacy of the formalized social network in social media; for-
malized social networks are in fact a defining feature of social media (Kane et al., 2014; Kaplan and Haenlein, 2010), one that dif-
ferentiates social media from prior forms of new media such as blogs and websites. Whereas a website can be viewed by anyone
with an Internet connection, few activities occur on social media without being mediated by a formal friend/follower relationship.
Messages are the key social media tool (de Vries et al., 2012; Saxton and Waters, 2014), and who reads these messages – whether
they be tweets or status updates or photos – is largely determined by the set of users who have formed a formal, typically binary
(on/off) friend or follower relationship with the message sender. On social media, the formalized social network is key, and it is
within this network-centric environment that organizations are seeking to build social media capital.
The privileging of the social network – and the extremely tight relationship between the social network and organizational
outcomes – is distinct from what occurs off-line. Off-line, a nonprofit organization could, for instance, hold a fundraising event
3
The International Integrated Reporting Council's Integrated Reporting framework (IIRC, 2013), for example, vaguely lists social and relationship capital as both an
“input” and an “outcome” of the value creation process.
Fig. 1. Conceptual framework: nature, acquisition, and expenditure of social media capital.
that would be attractive enough to raise funds in the absence of a large pre-existing network, and in many cases a lasting network
would get built as an off-shoot from the fundraising event. Similarly, offline, a company could reach an audience of millions
through newspaper, TV, or radio without having its own pre-existing social network; at the very least, the size of the audience
would be divorced from the organization's level of social capital. This would be highly improbable on social media: without a
pre-existing (even if extremely new) network, a message would simply not reach a large enough number of followers to be suc-
cessful. In short, on social media, the relationship between social resources and audience outcomes is paramount.
A growing body of empirical research backs our proposition that social network-based resources are a pre-requisite to success-
fully achieving organizational objectives on social media. An organization must have followers before any meaningful organiza-
tional engagement can take place (Saxton and Waters, 2014). Typically, the organization will first see a new user follow the
organization. Subsequently, the organization may begin to see the “digital footprints” of a budding organization-stakeholder rela-
tionship (Smith, 2012) as reflected in a defined set of publicly visible behavioral indicators: 1) the user will archive/favorite,
share/retweet, comment on, or upvote/downvote an organization's social media message, or 2) a user will mention the organiza-
tion in her own social media message. Recent research has shown a strong relationship between the number of followers and
these other, message-based outcomes indicators (Bakshy et al., 2011). Similarly, a growing body of marketing research has
found the strength of the social media-based brand community is related to subsequent value-creation practices such as brand
loyalty and trust (Laroche et al., 2013).
In short, we propose it is the network-based social assets – the social media capital – that comprise the key, proximate re-
source organizations are developing when they engage in social media-based activities. It is why, before influencing opinions, a
corporate social responsibility-focused Twitter account such as @EnviroSears or @Microsoft_Green needs to develop a sufficiently
large audience that will hear those claims. It is why a nonprofit organization that wants to employ social media to get donations,
find volunteers, or mobilize constituents needs to first have built a network of social media followers. Or why a firm that wants to
use social media to build a brand community, repair its image, spark a viral marketing campaign – and ultimately, boost sales,
corporate reputation, or market share – needs to have first developed an influential position in a relevant social media network.
In all of these cases, social media capital comes first. Our first proposition highlights this unique role of social media capital in the
value chain.
Proposition 1. Social media capital is the central and proximate resource that an organization must acquire on social media.
Whereas offline, social capital is just one of many important resources an organization may (but not must) acquire, on social
media – before any meaningful outcomes can be achieved – the organization must first acquire social media capital. This propo-
sition carries implications for the AIS practitioner in several ways. Notably, while AIS and accounting professionals are experts at
analyzing financial resources and outcomes, they have been slower to incorporate other forms of capital – such as social and re-
lationship capital – despite calls for their increased relevance by, among others, the International Integrated Reporting Council
(IIRC, 2013).4 Proposition 1 provides insights into this newer area of focus for AIS practitioners. Just as importantly, the proposi-
tion paints a picture of the place of social media capital in the social media-centered value chain. In effect, this and subsequent
propositions provide a model of the causal ordering (Davis, 1985) of the relevant concepts, which is critical to the success of
two of the central data analytics-focused tasks for accounting and AIS practitioners: inferring and predicting (Schneider et al.,
2015). Causal mapping is a key competency of “forward looking” AIS, for generating valid inferences and predictions requires a
clear model of the cause-and-effect ordering of the activities, resources, intangible assets, and other elements involved in a pro-
cess being analyzed. Proposition 1 helps provide this understanding for social media capital.
2.1.2. Direct observability

The difficulty in observing social capital has long posed a challenge to those wishing to measure it. This unobservability man-
ifests in two ways. First, offline, it is difficult for organizations or individuals to discern even their own level of social capital: you
could count your friends or the size of your Rolodex, but beyond that there are few if any reliable, direct measures of offline social
capital. Second, it is even more difficult, if not impossible, for an outsider to observe and measure your stock of social capital, as
your social network and the social resources embedded in the network are generally invisible to outsiders.
The literature has developed two general responses to addressing the observability dilemma. The first is the “outcomes” approach
(Williams, 2006), in which immediate outcomes of social capital are used as (indirect) measures of social capital. In a practical sense,
offline, often the best way to discover whether you have social capital is when you try to spend it. Because of this, many studies have
relied on indirect proxies of social capital that can best be considered immediate or intermediate outcomes of social capital (Williams,
2006). Offline, this might be dinner parties, voting, church attendance, membership in bowling leagues, philanthropic generosity, or
levels of generalized trust – the sorts of measures popularized by Putnam (2000). Similarly, online, the ability to garner job references
might be used as a measure of an individual's level of online social capital (Williams, 2006), while the extent of conversations in an
online community might be used as a proxy for the social capital an organization has accumulated (Saxton and Guo, 2014). The prob-
lem is, job references and conversations and dinner parties may be indirect indicators of higher social capital (Putnam, 2000) but they
certainly do not constitute social capital as we conceive it. Rather, they are the product of higher levels of social capital. In short, while
4
For a recent exception in the AIS literature, see Kelton and Pennington (2019), who look at the role of social capital in the CEO/individual-level effects of social media
use.
it is in some situations acceptable to use outcomes of social capital as proxies for social capital, it would be far better – whenever pos-
sible – to develop measures that do not confound social capital with its outcomes.
The second generic response to the observability issue is to rely on self-reported data using survey-based or interview
methods. Survey methods are perhaps the most common approach, especially in studies of offline social capital (Putnam,
2000). Surveys have also been employed in studies of online social capital. For instance, Williams (2006) compares online to
offline social capital with a series of outcomes-based survey items. Similarly, in a study of social capital in a legal association's
website-based electronic network/bulletin board, Wasko and Faraj (2005) utilized surveys to tap levels of commitment and rec-
iprocity. Interviews and surveys are also often an invaluable tool for measuring offline network connections in small-scale, ex-
treme, and/or intra-organizational contexts (Tsai and Ghoshal, 1998).
As valuable as they may be in the offline context, on social media neither the outcomes nor the survey-based perceptual ap-
proaches are ideal. To start, though surveys are excellent for tapping the richness of ties and perceptions of levels of social capital
in relatively static networks, their inherent limitations render them less effective in studying the larger, more dynamic, more var-
iable networks that form on social media. Survey methods are also not particularly well suited to capturing one's network ties or
network position on social media; while it is certainly possible to employ surveys to capture dyadic ties and hence build network
measures, such approaches are costly and difficult for anything but small networks or intra-organizational networks with a higher
likelihood of compliance.
The outcomes approach, in turn, is less desirable in the social media context due to the greater observability of the phenomenon.
There is no need to resort to indirect “outcomes” measures when levels of social resources are themselves directly perceivable. In ef-
fect, because the data on social media platforms are generally publicly visible and openly accessible (Debreceny et al., 2017), social
media make it easier than ever to observe, acquire, and measure network data. For this very reason, we argue social media capital
is a directly and publicly observable resource, one that amounts to a key, company-generated, value-enhancing intangible asset
(Lev and Gu, 2016). Given that tracking such company-generated intangible assets is one of the core tasks of what is becoming
known as accounting analytics, AIS and accounting analytics scholars and practitioners need to know how to measure it.
Yet where precisely should AIS and accounting analytics practitioners be looking for evidence of this resource? Because social
resources on social media are inherently network-based resources, the focus should be on examining characteristics of the orga-
nizations' social media networks. This in turn necessitates a heavy reliance on conceptual and methodological tools from the
field of social network analysis (see Worrell et al., 2013). In line with this network-based view, we argue there are several salient,
measurable dimensions of social media capital. First, social media capital is visible in certain key network characteristics such as
network size, or the number of ties the organization has (Ahuja et al., 2003; Kikuchi and Coleman, 2012), as well as network po-
sition (Burt, 1992; Debreceny et al., 2017; Freeman, 1979). The former can be observed by accessing various social media appli-
cation programming interfaces, where the number of followers, the number of friends, or the number of people engaging with or
talking about the organization, etc., all becomes directly observable “behavioral traces” that tap the size of the network, however
defined.5 The latter becomes discernable through the application of social network analysis tools to the matrix of dyadic connec-
tions of all those comprising that network.
Second, because the “digital footprints” of the organization-stakeholder relationship are public and visible, we can observe dy-
adic tie strength in the length, intensity, and/or number of interactions (Granovetter, 1973; Worrell et al., 2013) as well as in
multiplexity (Wu et al., 2010), or the number of different types of interactions (e.g., friend/follower relationship, @USER mentions,
direct messages, retweets). At the network level, in turn, social network analysis tools (Wasserman and Faust, 1994) can be
employed to examine the density or, conversely, the sparseness of an organization's community of ties, which can be considered
the aggregate manifestation of strong/weak ties (Worrell et al., 2013).
Third, social media are effectively public, transparent communication systems, which offer the possibilities to observe cognitive
facets of social capital such as the strength of a network's norms and values (Coleman, 1988; Kikuchi and Coleman, 2012; Putnam,
2000) or the presence of shared codes, narratives, and systems of meaning (Nahapiet and Ghoshal, 1998). For instance, norms of
reciprocity are indicated by reciprocal favoriting/archiving, retweeting, and friending behaviors, while Big Data analytic techniques
such as machine learning can be used to capture core cognitive features – such as commitment, identity, solidarity, expectations
and obligations, and trust – that are reflected in the language used in social media messages (Go et al., 2009).
Encapsulating the above arguments, we propose the following:
Proposition 2. Social media capital is directly observable.
That social media capital is directly observable does not mean that the related accounting analytics task – measuring social media
capital – is straightforward or easy for the AIS practitioner. As noted above, social media capital is multi-dimensional – covering net-
work size, network position, tie strength, and network norms and values. Data on all of these dimensions need to be tracked, collected,
sorted, wrangled, transformed, and combined to generate meaningful, decision-relevant organizational scores. This task is compli-
cated by the unstructured nature of the data, by the need to access various application programming interfaces, by the multiple
and non-standardized formats in which the data are made available, and by the volume and speed of the data flowing into the system.
Our “observability” proposition hence carries considerable implications for the infer, predict and assure tasks (Schneider et al., 2015)
of the accounting and AIS professional. Core design alternatives for these tasks, including methods, models, constructs, and
5
Social media typically afford the possibility of capturing ties – and thus constructing network analyses – along a number of distinct dimensions, ranging from formal
friend/follower ties to ties based on message-based connections such as sharing, user mentions, liking, archiving, and commenting and even ties based on belonging to a
distinct “conversation” as indicated by participation in the same hashtag community (Bruns and Burgess, 2011).
Fig. 2. Histogram, number of Twitter followers of 135 North American Mining Firms, April 2015. Note: Dashed vertical line shows mean value of 8,429 followers;
the solid curved line is the kernel density line, or line that reflects the non-parametric probability density function.
instantiations (Schneider et al., 2015) are all influenced; for instance, in terms of instantiations, should the analytics team use R or
Python or Power BI or Tableau, or what combination of these tools, to analyze data that may be stored in Hadoop, SQL, or MongoDB?
Methods are likewise diverse, requiring not only the social network analysis (Worrell et al., 2013) tools mentioned above but also text
processing and sentiment analysis, etc., along with a range of other data analytics techniques (Richins et al., 2017). Moreover, the
need to be “forward-looking” (see Alles and Gray, 2016) necessitates processing the huge volume of data in near real-time, which re-
sults in massively increased task frequency, complexity and potential for information overload (Schneider et al., 2015) unless ad-
vanced machine learning, deep learning, and artificial intelligence processes are put in place (Richins et al., 2017; Sutton et al.,
2016). Last but not least, with the need to gather and analyze data from stakeholders interacting with the company on social
media, privacy and ethics are also relevant concerns (see Schneider et al., 2015).
2.1.3. Unequal distribution

In addition to its privileged place in the value chain (Proposition 1) and direct observability (Proposition 2), the nature of so-
cial media capital is also distinct from offline social resources in terms of its distribution among a population of organizational
users. Specifically, we expect social media capital to be accumulated according to a power law distribution instead of a normal
distribution. The power law distribution (e.g., Shirky, 2003), also called the Pareto distribution, has the general shape y = 1/x.
Because of how frequently it occurs in new media consumption – the number of visitors received by websites, online book
sales, etc. – Anderson (2006) has referred to the power law as “the shape of our age.”6 Power laws tend to arise under conditions
of variety in content, inequality (some content is better than others), and where network effects are present, which suppress the
bad and promote the good (Anderson, 2006).
Conditions of content variety and content inequality are present equally on websites and newer social media, yet the network
effects condition holds even more strongly in the network-based social media environment. This a priori reasoning alone would
seem to provide sufficient basis for the above proposition. Yet there is also burgeoning empirical evidence to support it
(e.g., Fieseler and Fleck, 2013; Debreceny et al., 2017). Our own recent empirical work backs it; for instance, the histogram
shown in Fig. 2 of the number of Twitter followers of 135 publicly traded North American mining firms roughly conforms to a
power law distribution.
In contrast to the normal distribution, in a power law distribution a large number of organizations will have low levels of social
media capital, while a few organizations will generate very high levels of social media capital. In fact, as can be seen in Fig. 2, the
mean value of 8,429 followers (dashed vertical line) conveys little information in such distributions. 116 of the 135 organizations
have fewer than the mean value; these 116 “low social media capital” organizations have an average of 1,495 followers. By con-
trast, the 19 “high social media capital” organizations (those with values higher than the mean) have an average of 50,758 fol-
lowers. While the follower count is but one measure of social media capital – capturing just a single dimension of social media
capital, size – the contrast between the low- and high-social media capital organizations is stark.
6
In academia we see a similar shape in the citation patterns for academic papers (Redner, 1998).
One of underlying reasons for this lies in the fact that social media are communication networks (Monge and Contractor,
2003), where organizations send and receive bits of communication. The communication is generally sent and received in the
form of discrete visual or textual messages (tweets, status updates, etc.), which means the accumulation of social media capital
is effectively mediated by users' consumption of each discrete message that is sent. We can thus also meaningfully examine the
micro-foundations of how social media capital is accumulated by examining message-level audience reactions. For instance,
looking at the number of retweets (number of times the message was shared) in 27,680 tweets sent in 2013 by the 41 corporate
social responsibility-related Twitter accounts of Fortune 200 companies, there is evidence that the power law drives the consump-
tion of media even more strongly at the micro or message level than it does at the aggregate organizational level. Specifically,
12,802 of the 27,680 tweets (46.25%) received zero retweets, while 5,885 received a single retweet (making 67.51% that receive
≤1 retweet). These messages are the “losers” in terms of social media consumption. Relatively few (8.5% of tweets) received N5
retweets and only 3.6% received N10. Only 188 tweets received N50 retweets. Of these “winners,” the most heavily retweeted
message received 3,719 retweets; after this the number of retweets received drops considerably, with the second most-heavily
retweeted message receiving 2,979 retweets. The third most-heavily retweeted message received 1,899 retweets and the fourth
1,756 retweets. In brief, there is a steep drop-off in how many times a message is consumed and forwarded by audience members
that is non-normal and is instead indicative of a power law distribution.
In effect, whereas such things as height, age, number of years employed, commute time, or standardized test scores tend to be
normally distributed, a large number of relevant social media phenomena are not. Instead, they roughly conform to the power law
distribution. To validly perform their infer and predict tasks (Schneider et al., 2015), data analytics and AIS professionals need to
understand the implications of the non-normal distribution of intangible assets such as social media capital. How does the power
law distribution affect the acquisition of social media capital? Above all, such distributions are noted by the small number of “win-
ners” and the large number of “losers.” The idea of “mean value” makes little sense in a non-normally distributed, “rich get richer”
context. Moreover, in an environment characterized by power law distributions it is difficult to predict or forecast performance.
The degree to which a fundraising or marketing campaign is successful is contingent on the “X factor” that is the network effect;
no one could have foreseen, for instance, the #IceBucketChallenge reaching such a vast audience; that level of success is equivalent
to the organization winning the network lottery.
Based on the above arguments, we offer the following proposition:
Proposition 3. The distribution of social media capital follows a power law.
2.2. Acquisition of social media capital: messages and connections
How social media capital is acquired on social media is also distinct from offline settings. Whereas offline social capital
(Putnam, 2000) may be built from a hugely diverse set of social practices – ranging from golf outings to dinner parties, invest-
ment clubs, church attendance, and postcards – social media capital can only emerge from two specific sets of actions available
on social media platforms: sending messages and formal or informal connecting behaviors. The term communication network
(Monge and Contractor, 2003) thus fits social media platforms perfectly: they are, fundamentally, dynamic networks, with actors
dynamically connecting with and dis-connecting from other actors; and what flows through these networks is communication, in
the form of the stream of messages that are sent. It is these two actions that comprise the heart of what is afforded by social
media and separate them from earlier, more static forms of new media. Below we discuss how each of the two actions enables
organizations to acquire resources through their social media-based efforts.
2.2.1. Messages
A key feature of social media is its dynamic updating and messaging capabilities. The videos on YouTube, photos on
Instagram, pins on Pinterest, messages on LinkedIn, tweets on Twitter, and status updates on Facebook can all be thought of
as discrete “dynamic updates” or, more succinctly, “messages” the organization is sending to its public audience – and it is
these messages that comprise the chief communicative activity on social media (de Vries et al., 2012; Saxton and Waters,
2014). They represent the continual, dynamic steps an organization takes to engage with the public and hence acquire, main-
tain, and mobilize resources.
How exactly do social media messages lead to social media capital? Simply put, social resources are built through repeated
social interactions, and messages are the vehicle that drives those interactions on social media (Kane et al., 2014). With most so-
cial media platforms featuring a user mention function within messages (e.g., @USERNAME in Twitter) as well as direct messaging
and/or reply features, targeted and rich connections with other users is possible, prevalent, and visible.7 Each organizational mes-
sage thus sets up a potential interaction between the organization and its intended audience members.
Two recent accounting and AIS studies provide insights into the micro-level mechanisms through which social media mes-
sages lead to the development of social resources. First, relying on social identity theory, Elliott et al. (2018) find that CEOs'
tweeting efforts help create perceptions of a “social bond” between investors and the CEO that boosts levels of investor trust.
Kelton and Pennington (2019), in turn, making an explicit social capital argument, argue that the connections and interactions
7
With the social media of social media-based interactions, the accounting analytics practitioner can thus measure engagement efforts via a publicly visible “message-
based” conceptualization of interactivity and engagement (Sundar et al., 2003), one where measurement of engagement relies not on survey data but on the “behavioral
traces” of organization-audience interactions such as likes, comments, and shares.
fostered by CEO tweeting lead to greater social capital in the form of shared goals and trust. These findings dovetail with research
from the fields of communication and marketing that interactivity, dialogue, and two-way communication are at the heart of
relationship-building (Huang and Zhang, 2013; Hoffman and Fodor, 2010; Kent and Taylor, 1998).
This is not to say that one-way communication is unimportant. To the contrary, messages fundamentally convey information,
and in order to build a fan base (and increase its network size, a core dimension of social media capital) an organization needs to
regularly send messages that offer information and/or knowledge that is seen as useful by current and potential followers (Guo
and Saxton, 2014; Suddaby et al., 2015). This continuous supply of strategically crafted informational messages is a fundamental
reason why people want to follow an organization.
Ideally, an organization will develop a strategic informational role whose implementation is manifested in the messages it
sends. The nascent literature documents a number of different strategic roles. For instance, public relations scholars have long fo-
cused on reporting and public information as one of the key strategies for relationship-building (Huang and Zhang, 2013), and
social media messages appear to constitute a valuable, dynamic reporting tool (Saxton and Waters, 2014). Other roles identified
include that of analyst (Saxton, 2012), content curator (Church et al., 2013), connecter, and expert (Rheingold, 2012). For in-
stance, a generic strategy for a Big 4 accounting firm (Suddaby et al., 2015), or a budding blogger-entrepreneur, is to identify a
niche and develop a following as an “expert” in that niche role. The expertise role, in successful cases, will lead to a larger network
of followers and a better network position (i.e., greater social media capital) within a strategically targeted community. The ex-
pertise is imparted via the messages, and the following cultivated through the expertise role can then be leveraged through ad-
vertising, consulting, book sales, and the like. The point is, the way to get access to resource-rich contacts is through adding value
– through curating, ideas, analysis, opinions, etc. In brief, beyond interacting and dialoguing with specific users and sharing
community-building stories with followers, the content strategy of a firm's messages constitutes a key component of its strategy
to connect with new followers and build a follower base. AIS practitioners need to ensure these efforts are tightly linked to busi-
ness strategy (Schneider et al., 2015) by verifying that the acquired social resources are built off the “ideal” audience network
envisioned during the social media-centered strategic planning process.
2.2.2. Connections
Another key feature of social media sites is what may be referred to as “connecting actions.” As with messages, they are not
static features of the medium, but rather dynamic actions the organization undertakes on a continual basis to foster network ties.
These connecting behaviors are relationship-building because they are discrete actions that make or solidify a connection to an-
other user. They are, in effect, a means of establishing a new tie or, if to a user with whom the organization already has a con-
nection, of boosting tie strength (Worrell et al., 2013). Each new connection effectively adds to the size of the network, while
repeated interactions can bolster tie strength, foster stronger community norms and values, and ultimately help improve the
organization's network position.
There are two types of connecting tools: network-based and message-based. The first type are what would typically come to mind
when thinking of social media: the organization's friending and following behavior. An organization's decision to follow another user
reflects the decision to make a formal connection to that user (Westerman et al., 2012). On all major social media sites this connection
is binary – either you are “connected” or you are not. Such formal tie-forming actions are important for a key reason: They show the
organization's interest in engaging with other users. Moreover, following users that follow an organization lends the impression the
organization is interested in what its followers are talking about, even if it never actually reads this information (Lovejoy et al., 2012).
Organizations that actively create mutual ties with followers are thus sending a signal of their interest in creating an online commu-
nity. They are also the mechanism by which the organization gains access to new information (Parise et al., 2015). Yet there is tremen-
dous variation in how organizations use the formal connecting tool. For instance, recently the 135 Twitter accounts of publicly traded
North American mining firms followed on average 319 other Twitter users, with a range from 0 to 15,673 users followed.
The other type of connecting behaviors is made through the messages the organizations send on social media. The majority of
social media platforms afford a number of message-based connecting tools: replying and commenting, liking, sharing, user men-
tions, hyperlinks, and hashtags (Saxton and Waters, 2014). Whenever an organization retweets or shares another user's message,
replies to or comments on that message, likes or favorites a message, or includes in one of its messages a hyperlink to or a user
mention of another user, it is forming a message tie to that other actor (Guo and Saxton, 2018).8 Reciprocal use of these ties can
foster greater reciprocity and social bondedness and thus further develop tie strength (Elliott et al., 2018; Gilbert and Karahalios,
2009; Kelton and Pennington, 2019; Worrell et al., 2013). The use of hashtags can similarly help connect the organization to the
other members of the “ad hoc publics” (Bruns and Burgess, 2011) that form around the hashtag. Each of these connecting tools
can either bolster the organization's ties to its current follower base or develop ties with new users, all while exposing the
organization's followers to new people or ideas or information or events.
In sum, it is not enough to merely be “on” social media. Having a static profile page on Twitter or LinkedIn, for instance, will
build inconsequential levels of social media capital. Social media capital is instead built through the organization's day-to-day
messaging and connecting efforts.
Proposition 4. Social media capital can only be acquired through sending messages and making connections.
8
The “behavioral traces” of interaction are publicly visible and remain so after the interaction ceases. A targeted audience member can, in effect, see all of an orga-
nization's discrete communicative efforts to interact with her.
For AIS and analytics practitioners, the messaging and connecting actions are integral components of the social media capital-
centered value chain. The accounting analytics professionals won't be able to perform their prediction and inference tasks
(Schneider et al., 2015) unless they have a clear understanding of the relevant value chain. Moreover, to ensure they are collecting
the correct data, and to then extract value from the data, the entire effort (as with other analytics-focused AIS projects, see
Schneider et al., 2015) needs to be tightly linked to business strategy. The AIS and analytics personnel thus not only need to
know the “big picture” strategy for the firm's social media efforts, but they should have a seat at the table at all key decision-
making points, including the initial setting of strategy, decisions regarding what data to gather and analyze, and evaluation of
the firm's social media efforts and engagement. There also needs to be tight integration with those delivering the organization's
social media content as well as analytics professionals who may be working in other functional areas such as marketing.
2.3. Expending social media capital: direct and indirect effects on organizational outcomes
Social media capital may be a value-producing intangible asset, but it is a means to an end. In our model (Fig. 1), we propose
two chief processes through which social media capital produces value. In the first process, social media capital has an indirect
impact on outcomes in that it is converted first into other capitals, or other tangible or intangible resources the organization
can expend to reach desired outcomes. In the second process, social media capital is expended in the direct pursuit of organiza-
tional outcomes, or ends relating to organizational-level financial and non-financial performance. Our two final propositions cover
these two processes.
2.3.1. Conversion of social media capital into other forms of capital

After an organization first acquires social media capital, it is often able to exploit this resource to develop alternative forms of
capital. Here the notion of “conversion” of resources comes into play. Social media capital can, in line with Bourdieu (1989) and
others, be converted into other types of capital, be it symbolic capital, cultural capital, or financial or human or intellectual or rep-
utational capital.9 When a start-up leverages its social media networks to raise money on a crowdfunding site such as Kickstarter,
it is looking to convert social media capital into financial capital. When a marketing organization asks for votes for a Shorty Award
(for best social media content producers) it is seeking to convert social media capital into cultural capital, while a business-to-
consumer company that asks those in its social network to rate a product on Amazon or a service on Facebook or AngiesList
or TripAdvisor (Jeacle and Carter, 2011) it is seeking to leverage acquired social media capital in order to increase reputational
capital. When Facebook builds a social network that it then uses to acquire customer data, it is effectively converting social
media capital into intellectual capital. When another company uses its social media networks as a knowledge-gathering or “listen-
ing” tool to learn about trends in consumer desires, it is building a different form of intellectual capital. Yet another company
might seek to build a social network intended to provide political capital that could serve as a cushion against negative regulatory
actions. Similarly, when a nonprofit organization asks followers to donate money, forward an educational tweet, or supply infor-
mation it is seeking to leverage its social resources into financial, human, and cognitive capital, respectively.
This idea has support in a broad range of disciplinary research. For instance, Fischer and Reuber (2011) argue that network
contacts developed through entrepreneurs' Twitter engagement can increase cognitive capital. Saxton and Wang (2014) found
a relationship between the size of nonprofit organizations' Facebook fan network and the financial resources obtained through
crowdfunding efforts. González-Bailón et al. (2011) found network position to be related to the spread of information, while
Parise et al. (2015) found network-level tie strength increased employees' likelihood of developing good ideas; in other words,
social media capital fosters intellectual capital. Relatedly, there is a body of health communication research testing for the rela-
tionship between online social capital and health outcomes (Beaudoin and Tao, 2007; Stefanone et al., 2011). Proposition 5 re-
flects this process:
Proposition 5. Social media capital can be converted into other types of capital.
A key feature of Proposition 5 is that it serves to separate the social resources (social media capital) from other immediate
outcomes that some prior research has considered to be either conceptually or operationally part of social capital. Operationally,
this has been seen in the “outcomes” approach to measuring social capital (Williams, 2006) whereby, for instance, the ability to
persuade network contacts to give a loan, supply job references, or help fight injustices is taken as an indirect measure of social
capital. While such approaches are useful in offline settings, they are less desirable on social media given the greater observability
of social capital. Conceptually, this is seen in otherwise valuable research where concepts such as cognitive capital are considered
dimensions of social capital rather than immediate outcomes. Instead, and in line with other social capital research (Kikuchi and
Coleman, 2012; Lin, 1999), we posit social media capital as comprising the social resources; other resources flowing directly from
those social resources are conceptually distinct. Our arguments are thus in accord with Fischer and Reuber (2011) in considering
cognitive capital, for instance, to be one step removed from social media capital. Cognitive capital and social capital are distinct:
increased knowledge can be acquired as a result of social capital, but the increase in knowledge itself is not social capital.
9
Our broad view of “capitals” conforms with the Integrated Reporting framework, which posits six capitals (financial, manufactured, intellectual, human, social and
relationship, and natural capital), or “…stocks of value that are increased, decreased or transformed through the activities and outputs of the organization” (IIRC, 2013,
p. 11).
Our model depicted in Fig. 1 also shows a causal path leading from the converted capitals to organizational outcomes. The
causal process is straightforward: after the organization has converted social media capital into an intangible asset or financial,
intellectual, human, cultural or symbolic capital (see Proposition 5), it can then leverage that asset to help meet some pre-
determined organizational outcome.10 In the following section we deal with the outcomes in more detail, focusing on the direct
link between social media capital and outcomes.
2.3.2. Direct expenditure of social media capital

Our final proposition relates to the organization's ultimate strategic outcomes. Unlike the capitals, which are simply means to an
end – acquired by the organization for the value they will help produce – the outcomes are the ends themselves. They comprise the
end of the value chain. We take a broad view and consider outcomes to cover not only traditional accounting-based measures of fi-
nancial performance, operational performance and overall performance (Hult et al., 2008); but also non-financial outcomes such as
management quality, service quality, and social and environmental outcomes (Kihn, 2010). The range of potential outcomes is thus
broad. A Fortune 500 company might wish to leverage its social media capital to boost sales and profits. An environmental nonprofit
might seek instead to build social media capital in order to educate the public or to have a mobilization-ready audience for future lob-
bying and advocacy-related actions. A local government, in turn, might seek to mobilize community support for disaster-relief efforts.
A decentralized group like Anonymous might mobilize its network of loosely affiliated members to hack a Fortune 500 company's
website in a dedicated denial-of-service attack or to engage in cyberattacks against the terrorist group ISIS (McKay, 2015). An indi-
vidual entrepreneur might aim for consulting contracts or book sales or Google Ad revenue, while a business-to-consumer company
might seek increased sales or service quality or social performance, and so on. Proposition 6 involves the direct translation of social
media capital into a desired (financial or non-financial) organizational outcome:
Proposition 6. Social media capital can be directly expended to achieve organizational outcomes.
The idea of directly translating social media capital into a desired (financial or non-financial) organizational outcome is
reflected in a slogan of the firm Constant Contact, which seeks to help companies “turn fans into customers.” When an organiza-
tion turns “fans into customers,” it is effectively turning social media capital into financial outcomes.11 Social media capitalists can
build their social resources through clearly demarcated campaigns or through day-to-day connecting and community-building
work. Either way, the result is the same: once social media capital is earned it can be spent. There are numerous popular reports
and anecdotal evidence of small businesses leveraging social media capital in this manner. For instance, Cisnero (2014) writes
about Herschel Supply Company using social media capital chiefly to boost customer satisfaction, with DAVIDsTEA and Serengetee
employing it to enhance brand sentiment and build a vibrant brand community.
To date there is no academic research on the relationship between social media-based capital and strategic organizational
outcomes.12 Instead, existing research has been on establishing the general link between social media use and outcomes in
such areas as financial performance (Du and Jiang, 2014), customer service outcomes (Schaupp and Bélanger, 2013), stake-
holder relationship quality (Saxton and Waters, 2014), knowledge leadership (Eschenbrenner et al., 2015; Suddaby et al.,
2015), and organizational learning (Lenk et al., 2018). The collective issue with this literature is that there is no specified mech-
anism for how social media engenders organizational value. We address this issue by introducing social media capital as the
central and proximate resource an organization acquires on social media and by specifying the distinct processes through
which value is generated from social media capital (P5 and P6). Our propositions P5 and P6 are important for mobilizing the ef-
forts of the AIS and accounting analytics teams to track and evaluate not merely the stock and flow of social media capital but,
more importantly, its relationship to changes in traditional accounting performance indicators. This predictive analytics (Alles
and Gray, 2016) task is at the heart of accounting analytics, yet is useless without a conceptual understanding. In order to accu-
rately forecast future financial or non-financial performance based on current levels of company-generated intangibles such as
social media capital, the organization needs to have an intangibles-centered business model – a causal model that provides un-
derstanding of where the intangible asset fits in the value chain.13 It is for this very reason that our model depicts two pathways
for reaching organizational outcomes.
10
Given that the effect of social media capital is indirect here, it is beyond the scope of the current paper. Instead, for the logic of how financial, human, or intellectual
resources are related to strategic outcomes, one can turn to the considerable existing bodies of research, including the resource mobilization (McCarthy and Zald, 1977),
resource dependence (Pfeffer and Salancik, 1978), and resource-based view (Wernerfelt, 1984) literatures. A key point is that the ultimate goal does not have to be on-
line, and that the financial or human or other resources that are generated as a result of participating in social media are no different than those created through offline
activities.
11
Financial performance is thus both a “capital” and an outcome depending on where it sits in the value chain. When money is raised through, for instance,
crowdfunding, it should be treated as an asset; when the money comes at the end of the value chain through sales, it should be treated as an outcome.
12
At the individual level, however, a recent study by Kelton and Pennington (2019) shows that CEO tweeting boosts social capital, which in turn results in more pos-
itive investor judgments and CEO compensation recommendations.
13
We use the term “business model” similarly to the IIRC (2013, p. 15) in its bIRN framework: “An organization's business model is its system of transforming inputs,
through its business activities, into outputs and outcomes that aims to fulfill the organization's strategic purposes and create value over the short, medium and long
term.”
3. Discussion and future research directions
In this paper we have argued the immediate resource acquired by organizations via social media use is what we refer to as
social media capital. More specifically, social media capital is an important resource – the proximate resource obtained via social
media efforts (P1). Social media capital is also observable (P2), unequally distributed (P3), is built only via messages and
connecting actions (P4), and can be leveraged to achieve strategic outcomes via capital conversion (P5) or direct expenditure
(P6).14
We now identify a number of important areas for future research, organized under three broad categories relating to the na-
ture, acquisition, and expenditure of social media capital.
3.1. The nature of social media capital
The AIS literature has not devoted much effort to social resources. Accordingly, there exists a great deal of opportunity in
building understanding of the nature of these resources. To start, more work is needed to further distinguish social media capital
from its offline counterpart. Earlier in this paper, we used offline social capital as a reference point against which social media
capital can be defined; however, we did not tease out all the details of the distinction between the two as doing so would be be-
yond the scope of the current paper. Future research should make a devoted effort to provide a systematic comparison between
social media capital and offline social capital, and to carefully consider the implications of this distinction for AIS research and
practice.
Second, a primary need lies in research on the measurement of this intangible asset. The measurement and tracking of intangible
assets is a core element of the nascent field of accounting analytics. Given that such intangibles are not captured in traditional AIS and
require specialized skill sets, such as applying machine learning algorithms to unstructured data (Richins et al., 2017), the AIS field
would benefit from intensive research into the use of social network analysis, data mining, and machine learning tools to measure,
track, and compare the various dimensions of social media capital and to create composite, organizational-level social media capital
scores. Not only would this facilitate cross-temporal and cross-sectional comparisons and the calculation of return on investment, but
such insights are indispensable for companies' predictive analytics (Alles and Gray, 2016) efforts.
Moreover, we should reiterate that social media capital is multi-dimensional. This means that, just because an organization is
high on one dimension (such as network size) does not mean it will be high on the others (such as network position or tie
strength). A holistic view of social media capital thus needs to be taken, and this presents measurement and interpretability chal-
lenges for the AIS professionals involved. It is here that something we have only indirectly discussed thus far – namely, the quality
of the acquired network-based social resources – should be addressed. In brief, it is necessary to assess both the quantity and the
quality of the acquired social resources. While network size captures the “quantity” of social media capital, we argue the strength,
centrality, and norms and values dimensions each captures a certain aspect of the “quality” of the acquired social media capital.
Social media capital will thus be of the highest quality when values on all three of these dimensions are high – namely, when the
organization has a more central network position, has greater tie strength with its connections, and has developed a network with
stronger network values and norms of reciprocity and trust. Moreover, the information extracted on the stock and flow of social
media capital needs to be tightly linked with broader business strategy. Specifically, building on some of our other arguments,
quality is likely also influenced by the extent to which social media capital is present for the right type of network or, in other
words, when the acquired social resources are built off the “ideal” audience network envisioned during the social media-
centered strategic planning process. Future research should dig further into what precisely “quality” social networks look like
in this context, for it is only in having quality social media capital that the organization will be able to adequately leverage its
online social resources (i.e., expend its social media capital) to deliver the intended instrumental goals set during the strategic
planning process.
Research opportunities also exist flowing from our Proposition 2 concerning observability. Social media-based intangible assets
are transparent in that they are observable and measurable by both internal and external actors. In the past, those external to a
firm—customers, suppliers, competitors, creditors, regulators, and investors—could only make educated guesses about the firm's
type and level of social capital; now, they can see and measure not only the firm's stock and flow of social media capital but
also its implicit social resource-acquisition strategy. It would therefore be fascinating to explore how this transparency affects
management accounting and strategic decision-making. Relevant questions that could be examined include the following:
• How can AIS be developed to measure competitors' implicit social resource-building strategies?
• How will the measurement of publicly visible intangibles such as social media capital be incorporated into financial statement
analysis efforts?
• What are the implications for reporting standards for resources that are directly observable?
We have also proposed (Proposition 3) that social media capital is accumulated not according to the normal distribution but
according to the power law distribution (Anderson, 2006). At an abstract level, we know that not all organizations are born equal
on social media: some organizations will generate a large stock of social media capital, while most will not. What we do not
know, however, is what kinds of messages, campaigns, and organizations are more likely to become “winners.” This provides a
14
Social media capital is thus distinct in many aspects from offline social capital, which is merely a proximate resource, is difficult to observe, is generally normally
distributed, acquirable via myriad ways and venues, and is convertible and/or expendable through a wide variety of actions.
considerable opportunity for future research, particularly that which can help explain the difference between “winners” and
“losers.” At the practical level, in turn, AIS and accounting analytics practitioners need to understand and appreciate the power
law if they wish to correctly model and forecast the organizational outcomes flowing from non-normally distributed intangible
assets. The ramifications of power law-distributed outcomes on AIS need to be better understood.
3.2. Acquisition of social media capital: building social resources via messaging & connecting activities
A bountiful research agenda exists in studying the tactics as well as processes by which different messaging and connecting
behaviors foster social media capital, ranging from the optimal timing and frequency and volume of new messages and connec-
tions to the effects of different message-based emotions and sentiment and appeal types to the inclusion of “entities” such as
photos, videos, hashtags, and hyperlinks (de Vries et al., 2012; Saxton and Waters, 2014). While our fourth proposition focuses
on the organization's messaging and connecting actions, research could also build on findings from other disciplines that add au-
dience characteristics as moderators of the efficacy of organizational messaging and connecting activity (Lipsman et al., 2012).15
Beyond such tactical, micro-level research, we also need explanations that aggregate messaging and connecting behaviors to
the organizational level and examine organizational strategies for accumulating social media capital. The organization's
resource-acquisition plan needs to be strategic. To build quality social media capital, in other words, an organization needs to
work backwards from intended outcomes to the type of audience network it needs to build, to the type of messages and connec-
tions it needs to have in order to cultivate that audience.16 In emphasizing organizations' use of social media to fulfill organiza-
tional purposes, our framework applies an overtly instrumental perspective to social media use. Accordingly, other
instrumentalist theories common in, for instance, the corporate social responsibility disclosure literature, such as the
legitimacy-seeking perspective (Castelló et al., 2016) or impression management (Neu et al., 1998), could be leveraged as a
lens for explaining the link between organizational messaging and connecting actions and the development of social media cap-
ital. Similarly, given our emphasis on the building of social relationships, public relations' relationship-building paradigm, which
focuses on communicative relationships to stakeholders (Kent and Taylor, 1998; Saxton and Waters, 2014; Smith, 2012), could
yield meaningful theoretical insights. Building on the above theories, future research into the acquisition of social media capital
could examine such questions as the following:
• What is the relationship between legitimacy-seeking behaviors and social media capital-seeking behaviors? Do “legitimacy-
seeking” messaging and connecting activities lead to greater levels of social media capital?
• Which types of messages tend to attract specific types of stakeholders? What drives attention to messages, campaigns, and
organizations?
• Which types of stakeholder targets produce the biggest gains in social resources?
• Which strategic “roles” (expert, curator, analyst, connector, reporter, etc.) best foster social media capital?
We also recognize the relationship between an organization's social media activities and social media capital is likely an iter-
ative process, with messaging and connecting actions leading to the acquisition of social media capital in specific networks, which
in turn influences the nature of continued messaging and connecting efforts, etc. In effect, due to the decentralized nature of social
media, firms have to be flexible and adjust their messaging and connecting tactics based on what develops “on the ground.” While
we present a more parsimonious uni-directional model of this process, future research could further elaborate such iterative
processes.
3.3. From social media capital to outcomes: conversion and expenditure processes
We have argued AIS practitioners and scholars alike cannot untangle the value-producing benefits of social media until the key
proximate and intermediary roles of social media capital are recognized and better understood. To do this well, as with any other
asset, organizations need to have a causal chain-focused “business model” (see IIRC, 2013) to help guide their efforts at acquiring,
managing, mobilizing, and expending that asset. Accordingly, one of our primary aims has been to provide a framework that more
precisely describes how social media-based resources are built and then leveraged. In Propositions 5 and 6 we posited two dis-
crete processes – capital conversion and direct expenditure – by which social media capital is mobilized to deliver strategic out-
comes. Yet these processes are not fully understood. Relevant future research questions that elaborate these two processes could
thus include the following:
• Which types of capital are most easily obtained via the “conversion” process?
• Which organizational outcomes are most and least amenable to delivery via social media capital?
• What factors moderate the “convertability” of social media capital?
• What is the relationship between social media capital and other company-generated intangible assets? Are there synergies with
brand loyalty or political capital or reputation or legitimacy?
15
Along the same lines, a recent AIS study (Lei et al., 2018) finds that both the number of Twitter followers a firm has and the Twitter activity of those followers in-
fluence the firms' level of voluntary nonfinancial disclosure.
16
No firm will seek to build a network for all purposes; a network cultivated to reduce or identify fraud will be distinct from one developed to build reputation, garner
consumer insights, or boost sales.
Existing theories can be used to flesh out such questions and complement our framework. For instance, certain capitals lend
themselves readily to a specific existing theory, such as reputational capital and the legitimacy-seeking and impression manage-
ment perspectives (Castelló et al., 2016; Neu et al., 1998). Similarly, given the centrality of resources in our framework, the
resource-based view (Wernerfelt, 1984) along with resource mobilization (McCarthy and Zald, 1977) and resource dependence
(Pfeffer and Salancik, 1978) theories could be used to explore the interplay among the capitals or to supply the logic of how fi-
nancial, human, or intellectual resources are converted to strategic outcomes.
Looking at future research from a different angle, we see possibilities across multiple AIS and accounting sub-fields. To start, in
financial accounting, we see a wide range of predictive analytics (Alles and Gray, 2016) and data mining (Amani and Fadlalla,
2017) questions, such as the following, that examine the relationship between social media capital and future values on key ac-
counting performance indicators:
• Is social media capital best suited to developing financial or non-financial outcomes?

• Is social media capital better at predicting financial performance, operational performance, or overall effectiveness (Hult et al.,
2008)?
• Which accounting indicators (e.g., sales, inventory turnover, earnings) does social media capital more accurately forecast?
• How do investors use social media capital and other publicly visible intangibles in their decision making?
Similarly, given that social media capital is a value-producing asset that should be tracked by the AIS, there are applications
and research questions in managerial accounting, including the following:
• Can social media capital be used to predict cash flow or to forecast inventory demand?
• How do all of the company's intangible assets and “capitals” interact?
• What special data, tools, and approaches are needed to optimize the asset management of social media capital and other
company-generated intangibles?
Furthermore, there are a range of applications and research questions in assurance and compliance. Eschenbrenner et al.
(2015) posit social media use might enhance auditor recruitment, selection, and retention; building on this idea, a Big 4 firm
might, for instance, foster a social network for the sole purpose of identifying and attracting outstanding audit or AIS profes-
sionals. There is also evidence social media can be used for relationship-building, such as building public trust in the firm and
the audit process and fostering relationships with potential clients (Eschenbrenner et al., 2015; Suddaby et al., 2015). Building
on these and other ideas, such as those found in Amani and Fadlalla's (2017) list of data mining applications, relevant research
questions might include the following:
• Can social media capital lead to improved employee recruitment, selection, and retention outcomes?
• Do rapid decreases in social media capital forecast diminishing business health, or help predict a firm's going concern status?
• Can social media capital networks be leveraged to predict fraud lawsuit or assess fraud risk?
• Can social media capital help improve audit team collaboration, problem-solving, and creativity?
With company-generated intangibles becoming generally more important (Lev and Gu, 2016), the aim is that answers to the
above questions could prove useful for understanding other forms of intangible assets, other types of Big Data, and other areas of
data analytics research.
Finally, so far in this article we have held the maintained assumption that social media capital is – like financial capital or
human capital – expended upon use (i.e., it is expendable) and is always good to have (i.e., it is value-producing). Yet until further
research is done we won't fully know. For instance, with regards to expendability, it is possible that social media capital is not
ultimately decreased with use and that, while the stock of social media capital might immediately decrease as the organization's
social network is leveraged, in the long run, the stock of social media capital might return to the same level or even increase in
those instances where the organization has actually strengthened the relationship with its supporters through the activation of
the network. Similarly, we have assumed that social media capital is always value-producing. While under most circumstances
social media capital would be a desirable asset that brings value to the organization, it is important to recognize the possible
downsides or risks to social media-based social resources. First, with large stocks of social media capital, an organization is subject
to greater risks of reputation loss (Brivot et al., 2017) or legitimacy crisis if something goes wrong (e.g., the posting of a problem-
atic social media message that instantly spreads across the network). Second, social media capital could potentially bring value to
a focal organization while at the same time have negative consequences for the larger community in which the organization is
situated.
4. Conclusions
A primary intellectual contribution of our paper is in arguing that the immediate resource acquired by organizations via social
media use is best characterized by the term social media capital. It is in many ways distinct from offline social capital; as we have
shown in our propositions, social media-based social capital has its own determinants, forms and characteristics, conversion pro-
cesses, and outcomes and consequences. One of our driving concerns is to get accounting scholars and practitioners alike to re-
imagine how they conceptualize, measure, and report the accumulation and mobilization of social media-based resources. It is
only by being clear about the nature of these resources that organizational leaders can achieve meaningful organizational out-
comes and thus attain a worthwhile return on their social media investment.
AIS scholars and practitioners can and should be playing a key role in this process. They – along with data scientists and data
analytics practitioners more generally – first need to be able to converse and coordinate with the managers developing market
strategies as well as the marketing professionals devising the communication campaigns that dovetail with those strategies.
More importantly, AIS practitioners need to develop systems that integrate core elements of the conceptual model, particularly
1) the “inputs” (messages and connections) to the creation of social media capital, 2) the measurement of the resultant social as-
sets (i.e., social media capital), and 3) the metrics that reflect how well the organization is leveraging and expending and
converting social media capital to acquire financial, human, intellectual, or cultural assets. Doing so well, it should be emphasized,
requires Big Data and data analytic skills; that is, an understanding of the role of social resources, of how to develop and leverage
those resources online, and of how to measure and analyze and report them. This presents a challenge to traditional accountants
focused on backward-looking financial measures rather than measures of the strategic and value-enhancing resources held by the
organization (Alles and Gray, 2016; Lev and Gu, 2016).
In conclusion, as some business luminaries have argued, data may be “the new gold,” but the key is not to get the data but to
extract knowledge from that data (Alles and Gray, 2016). With apologies to Anderson (2008), to do this well requires far more
than simple correlational understanding. Instead, a conceptual, theory-based understanding of the phenomenon is critical if ac-
countants, auditors, and AIS practitioners are to be able to extract actionable, valid knowledge claims and insights from Big
Data sources such as social media. AIS practitioners should, in other words, strive to be at the forefront of the analysis of such
data. If AIS scholars and practitioners are armed with conceptual knowledge and the requisite technical skills to extract informa-
tion and knowledge from Big Data, they could, in line with Richins et al. (2017), take the lead as knowledge creators within the
firm. This paper has set out to help advance this goal by laying out a conceptual map for one key strategic organizational resource.
Acknowledgments
The authors would like to the editors, the anonymous reviewers, and participants at the annual meeting of Association for Re-
search on Nonprofit Organizations and Voluntary Action for their helpful comments. The paper also benefited from comments
given at the Research Seminar series at the University at Buffalo, SUNY. Roy Suddaby, Eileen Fischer, Michael Stefanone, Matthew
Grizzard, Marya Doerfel, Charlotte Ren, Daniel Neely, Kenton Anderson, and Wayne Xu also provided invaluable insights.
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Social Media Capital Conceptualizing The Nature, Acquisition

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ACCINF-0000100443; No of Pages 18

International Journal of Accounting Information Systems xxx (xxxx) xxx

Contents lists available at ScienceDirect

International Journal of Accounting Information

Social media capital: Conceptualizing the nature, acquisition,

1. Prior research: social media and social capital

2. A conceptual framework of social media capital

2.1. Nature of social media capital

2.1.1. Privileged place in value chain

2.1.2. Direct observability

Proposition 2. Social media capital is directly observable.

2.1.3. Unequal distribution

Proposition 3. The distribution of social media capital follows a power law.

2.2. Acquisition of social media capital: messages and connections

2.3.1. Conversion of social media capital into other forms of capital

2.3.2. Direct expenditure of social media capital

3. Discussion and future research directions

3.1. The nature of social media capital

• Is social media capital best suited to developing ﬁnancial or non-ﬁnancial outcomes?

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