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1 LECTURE 6. SOCIAL MEDIA AND NETWORKING IN GLOBAL BUSINESS An earlier version of this lecture was presented at the 20 th Annual International Conference.

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Presentation on theme: "1 LECTURE 6. SOCIAL MEDIA AND NETWORKING IN GLOBAL BUSINESS An earlier version of this lecture was presented at the 20 th Annual International Conference."— Presentation transcript:

1 1 LECTURE 6. SOCIAL MEDIA AND NETWORKING IN GLOBAL BUSINESS An earlier version of this lecture was presented at the 20 th Annual International Conference on Industry, Engineering, and Management Systems, Cocoa Beach, FL, March 23 – 26, Copyright © 2014 Karol Pelc

2 2 INITIAL QUESTIONS: 1.What are advantages of Web 2.0 technology and tools? 2. Why and how may social media influence transnational business communication? Examples. 3. Discuss personal experience of adopting innovations in social networking (software, standards, tools).

3 “….The social media is a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content. “ Kaplan, A. M., and Haenlein, M. (2010), Users of the world unite! Business Horizons, 53, DEFINITIONS 3 Web 2.0 site allows users to interact and collaborate with each other in a dialogue as creators of user-generated content in a virtual community, in contrast to websites of Web 1.0 where users are limited to the passive viewing of content that was created for them. Terminology: social media (SM), social networks, social network sites (SNS), social technologies, social software Examples: Facebook, Twitter, LinkedIn, Orkut, Qzone, MySpace, YouTube, Wikipedia etc

4 Classification of social media (according to Kaplan and Haenlein 2010) Adopted from: Kaplan, A. M., Haenlein, M.,Users of the world unite! The challenges and opportunities of Social Media, Business Horizons, 2010, 53,

5 55 COLLABORATIVE PROJECTS -Wikipedia -Gutenberg -Zooniverse BLOGS -Personal -Institutional -Educational -Opinions and comments VIRTUAL SOCIAL WORLDS - Second Life VIRTUAL GAME WORLDS - World of Warcraft CONTENT COMMUNITIES -YouTube --Wikis SOCIAL NETWORKING SITES - Facebook - LinkedIn -Twitter - Weibo CONTENT COMMUNITIES - YouTube - Wikis - Instagram WEB 2.0 INNOVATION COMPLEXITY - SELECTED ELEMENTS

6 6 Initial and the most common application areas of SM in business Marketing and e-commerce management advertising and product/service information market research customer reviews and discussions product/service evaluation customer satisfaction testing customer knowledge contribution Human resource management recruiting evaluation suggestion systems Public relations company reputation personnel opinions customer knowledge contribution

7 7

8 Business process support by selected “social media/ technologies” From: McKinsey survey of about 3100 executives, published in January [% of companies using at least one social technology] ProcessSocial networking BlogsVideo sharing Wikis Scanning external environment Finding new ideas Managing projects Developing strategic plan Allocating resources10544 Matching employees to tasks Assessing employee performance 7433 Determining compensation

9 9 Conclusions on business process support: Companies use social media/technologies most often to scan the external environment and seek out new ideas. Companies that use social media/technologies least often do so to assess employee performance and determine compensation. Companies use most often two social media/technologies: - social networking - blogs

10 10 Benefits due to social media/technology adoption in business Based on McKinsey survey of about 2,000 companies, published in Top three measurable benefits in selected areas: Internal purposes Increasing speed to access knowledge Reducing communication costs Increasing speed to access internal experts Customer purposes Increasing effectiveness of marketing Increasing customer satisfaction Reducing marketing costs Partners, suppliers, and external expert purposes Increasing speed to access knowledge Reducing communication costs Increasing speed to access external experts

11 INNOVATION DYNAMICS Conventional dimensions: 1.Functional performance of technology; P(t) e.g. Moore’s law (transistor count; density of microelectronics). Refer to Lecture 3 for details on Moore’s law Diffusion rate, adoption/penetration rate; a(t) multiple models e.g. Coleman model, Dodd model, Mahajan-Schoeman model a(t) = number of adopters; Penetration rate of population: a(t)/total population [%]

12 NEW ADDITIONAL DIMENSION If innovation adoption is not just an event (e.g. purchase of a new product) but it is rather a process, then additional dimension is needed to reflect that process. Adoption of innovation in social networking is a learning process with several phases of gradual improvement of interactivity. 12

13 NEW DIMENSION: INTERACTIVITY LEVEL Interactivity : “…the degree to which a communication technology can create a mediated environment in which participants can communicate both synchronously and asynchronously, and participate in reciprocal message exchanges.” (Kiousis, S., 2002) Interactivity level (in social networking): The number reflecting complexity and intensity of interactive operation mode of actors involved in social networking Interactivity level corresponds to innovation adoption phase (i.e. ‘depth’ of adoption) in social networking. 13 KiousisKiousis, S. (2002). “Interactivity: a concept explication,” New Media & Society, September, 4,3,

14 Interactivity mode/Innovation adoption phaseInteractivity tasks surveyed (Forrester Research) 1Initial learning -Learning about existence of social media No tasks 2Field exploration -Random observations of user created contents -Acquaintance with some features and communication potential of social media Passive tasks Reading social media presentations: blogs, forums, customer reviews/ratings Watching videos on YouTube 3Focused observation -Observation of social networking sites; testing own capability to use them -Learning how to use social networking effectively Visiting social networking sites (Facebook, Twitter. LinkedIn) Maintaining profile on a social networking site 4Selection and classification -Classifying different forms of social media -Limited use of social media for communication Applying tags for classification of webpages, photos etc Online voting for websites 5Evaluation -Experimenting with interactive communication through selected media -Contributing to contents created by other users Comments on blogs of other authors Rating products/services Editing wiki texts 6Design and implementation -Interactive networking and communication with other users of social media -Creating own contents and publishing in broad range of social media Webpage design and publication Blog design and publication Photo/video/text creation and publication Music creation and publication Six phases of innovation adoption in social networking

15 15 INTER ACTIVITY LEVEL INTERACTIVITY MODE AND INNOVATION ADOPTION PHASE 6Design and implementation - Interactive networking and communication with other users of social media - Creating own contents and publishing in a broad range of social media 5Evaluation - Experimenting with interactive communication through selected media - Contributing to contents created by other users 4Selection and classification - Limited use of social media for communication - Classifying different forms of social media 3Focused observation - Observation of social networking sites and testing own capability to use them - Learning how to use social networking effectively 2Field exploration - Random observations of different user created contents - Getting acquainted with some features and communication potential of social media 1Initial learning - Learning about existence of social media RANK ORDER COUNTRY/CONTINENTFACEBOOK PENETRATION RATE % OF POPULATION (2014) 1.United Arab Emirates /Western Asia Monaco/Europe Gibraltar/Europe Iceland/ Europe Brunei/Southeast Asia Singapore/Southeast Asia Falkland Islands /South America 61.3 HIGHEST FACEBOOK PENETRATION (2014) - ABOVE 60% LEVEL Data sources: https://www.facebook.com/ads/create/,https://www.facebook.com/ads/create/ https://www.cia.gov/library/publications/the-world-factbook/rankorder/2119rank.html,https://www.cia.gov/library/publications/the-world-factbook/rankorder/2119rank.html 15

16 16 COUNTRY/ CONTINENTFACEBOOK PENETRATION RATE % OF POPULATION (2014) U. S. /North America59.96 Norway /Europe59.05 Denmark/Europe57.55 UK. /Europe56.78 Canada/North America55.55 France/Europe42.49 Germany/Europe34.52 S. Korea/Asia26.55 Japan/Asia17.30 FACEBOOK PENETRATION IN SELECTED DEVELOPED COUNTRIES (2014) 16 Data sources: https://www.facebook.com/ads/create/,https://www.facebook.com/ads/create/ https://www.cia.gov/library/publications/the-world-factbook/rankorder/2119rank.html

17 17 From the lowest end (Bottom 10) COUNTRY/CONTINENTFACEBOOK PENETRATION RATE % OF POPULATION (2014) 1.Tajikistan/Asia Niger/Africa Uzbekistan/Asia Burkina Faso/Africa Somalia/Africa Madagascar/Africa Malawi/Africa Afghanistan/Asia Guinea/Africa Mali/Africa3.00 LOWEST FACEBOOK PENETRATION (2014) - LESS THAN (OR EQUAL ) 3% 17 Data sources: https://www.facebook.com/ads/create/,https://www.facebook.com/ads/create/ https://www.cia.gov/library/publications/the-world-factbook/rankorder/2119rank.html,https://www.cia.gov/library/publications/the-world-factbook/rankorder/2119rank.html

18 18 U. S. Year % U. K. Year % Germany Year % JapanS. Korea INTER ACTIVITY LEVEL % % % % % % % % % % % % % % % 1 Initial acquaint Exploration Focused observ Classification Evaluation Design INTERACTIVITY CHANGES BY % OF ON-LINE CONSUMERS, *) *) Data compiled from the Forrester Research surveys published by Li and Bernoff (2008) and (2011); and from Forrester Research Report, “What's The Social Technographics Profile Of Your Customers?” (2014). Note: % numbers do not add to 100% in columns because several users/consumers declare simultaneous interactivity at different levels 18

19 SUMMARY 1.Definition, terminology and classification of social media (SM) 2.WEB 2.0 as a complex innovation. 3. Application areas of SM in business and benefits due to the SM application in business 4. Innovation adoption is a learning process. 5. Six phases are proposed for analysis of innovation dynamics in social networking 6. Innovation adoption in social networking can be better measured if an additional dimension i.e. interactivity level is analyzed 7. Penetration rate of population (e.g. by Facebook), differs substantially among countries 8. Changes of interactivity level differ among countries e.g. in case of Germany vs South Korea between 2007 and


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