Social Media: Transformation of the Business World

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Moreover, some companies such as Yahoo! and Microsoft Corporation created alumni groups on Facebook, which let past employees keep close watch on the latest news of their business. Such act can retain the employees’ loyalty and encourage rehiring. (Qualman, 2010) Studies shown that rehiring can reduce the recruitng cost to half, meanwhile, the productivity of the past employees is 40% higher than those new hires (Sertoglu and Berkowitch, 2002).

ii. Workplace communication

Social media can be regarded as a novel company magazine or newsletter, for example, an employees can keep track on his/her company’s latest news by following its Facebook page. It can also enhance the interaction between employees and encourage two-way communication in the workplace (Westwood, 2015), as employees are invited to give feedback on various company-wide issues. Effective workplace communication can improve employees’ productivity as well as their job satisfaction, which can lead to a decrease in absenteeism and turnover costs (Johns and Saks, 2011), for example, hiring and training costs to develop a new employee’s proficiency.

Social media also brings benefits to multinational companies. Morgan Stanley, a global financial services corporation with more than 55,000 employees in more than 43 countries (Morgan Stanley, 2015), uses enterprise social networking tools to facilitate both internal and external communication, with the aim to “transform the way to connect with its people, ideas and capital" (Leader-Chivée, Hamilton, and Cowan, 2008).

UNIQLO, a Japanese causal wear company which operates 1226 retail stores all over the world (UNIQLO, 2014), has also put forward an internal blog content management networking solution to connect a 700-store employees to corporate headquarters, including the connection with floor staff, through internal business mobile applications.(Leader-Chivée, Hamilton, and Cowan, 2008). Such solution can allow employees collaborate real-time information and process development more effectively across countries.

iii. Employee Training

Most modern organizations value their employees as the most competitive and expensive assets to drive business success, therefore, the importance of employee training and development programs have been highlighted. Researches shown that formalizing the programs through both formal and informal learning is the most effective way to nurture leaders and talents (Skule, 2004), and in particular, the majority of workplace learning take place in informal trainings (Chao,1997), which put emphasis more on the learning flexibility, for example, learning from peers’ experience sharing.

In recent years, many companies have adopted social media as an instrument of informal employee learning in the workplace, in the belief that social media can speed up the spread of information and the ability of expanding both business and individual networks. In a survey conducted by interviewing 125 United States companies in different industry sectors, more than 80% respondents stated that they perceive social media as an effective medium to provide valuable learning opportunities to employees (CARA Group, 2011), so as to strengthen their professional knowledge and skills of employees. Moreover, employees can gain insightful directions through gathering peers’ advice and experience sharing on online internal discussion forums, without the need of real-time interaction with others.

In short, companies can make use of social media as an informal learning platform for employees to share their knowledge and work experience, to raise questions and receive feedback among each other, which can lead to enhancement in workforce performance and organizational efficiency.

External Communication

Social media not only exerts influences on workplace communication, but also external communication. In general, a research entitled “The Impact of Social Media on External Communications in the Corporate Environment” stated that “90% of companies use social media for external communications, either in combination with internal use (51%) or for external use only (39%)"(Frost & Sullivan, 2014).

Advertising Campaign

In connection with external customers, companies make use of social media to gather and interpret customer opinions and immerse them into changes in business product management, for example, My Starbucks Idea owned by Starbucks.

Starbucks is a worldwide coffee company which emphasizes on customer experience and has been adopted My Starbucks Idea, an online user innovation community (OUIC) website, for getting ideas and feedback from its customers, in terms of products, experiences and involvement (Starbucks, n.d.). Through My Starbucks Idea, Starbucks has collected more than 100,000 posts about innovation from its customers until 2011 and 200 out of them were adopted into its business transformation, including product design, ordering process, and membership management, for example, offering power connections in stores.

According to the research, it shown that the idea of adopting OUIC not only can collect a great amount of innovative ideas and comments, but also can act as an effective tool to generate and introduce appealing and feasible ideas into the business, as well as uncover flaws in the business, which can increase companies’ competitiveness. (Dong and Wu, 2015). This can also can increase customer loyalty as customers feel valued and appreciated by witnessing their opinions are taken into account in the business change.

Social Media Analytic Tools

Application and Effectiveness

Social media has become a prevalent tool of business operations among companies, as to gather data like ratings and reviews can reveal the audience’s interests, networks and relationships; however, a vast amount of data has been generated across multiple use of social media channels. It comes with a key concern: how to wisely convert the data into meaningful and actionable insights? According to the survey conducted by Harvard Business Review Analytic Services (2010), it stated that “nearly two-thirds of the 2,100 participating companies are either currently using social media channels or have social media plans in the works”; however, more than 80% of these companies did not take advantage of diversified social media channels to formulate corresponding social media strategies and integrate them into current marketing plans. To formulate value-adding strategies, it is essential to extract