Social Networking and Enterprise - Essay Example

Social Networking and Enterprise 1. Introduction The use of social media for the enhancement of organizational performance has been highly expanded the last years. In fact, since the appearance of social media and social networking, the terms of competition in the market have been changed. Businesses tend to focus on social media and social networking even if risks have not been eliminated. In banks and financial institutions the use of social media has an important implication: it can threaten the data stored in these organizations’ IT systems (Business Wire 2012). The case of Wells Fargo proves that social media can be successfully embraced in banks, even if changes are required so that the relevant framework to become more effective. The potential benefits of social media and social networking for Wells Fargo are explored in this case. It is proved that the organization is highly developed in terms of social media; still, the development of certain policies could allow the organization to improve its social presence, even in the long term. 2. Main Findings 2.1 Advantages and disadvantages of social networking presence for Wells Fargo 2.1.1 Social Networking and Social Media in business environment Social networking has become a quite popular practice in organizations worldwide. In order to understand the potential value of social networking for modern businesses it would be necessary to explain primarily its general context, as described in relevant literature. According to Daft (2009) the term ‘social networking’ reflects a framework that offers to its users the potentials of ‘peer-to-peer communication and sharing of information’ (Daft 2009, p.312). In other words, social networking represents an ‘online community the members of which can interact and share personal data, information and opinions’ (Daft 2009, p.312, Figure 1). Waddill and Marquardt (2011) note that social networking refers mostly to the ‘online clustering of individuals into groups’ (Waddill and Marquardt 2011, p.237). The terms under which these groups are developed are depended on the rules of each social networking site, as aligned with existing legislation in regard to online activities and communication. The organizations that employ social media and social networking in their daily activities are also known as social organizations (Bradley and McDonald 2011, p.18). These organizations are aware of the value of social networking and social media and are capable of using these frameworks not only for increasing their performance but also for establishing a long-lasting relationship with their stakeholders (Bradley and McDonald 2011, p.18). The level at which social networking is currently used in businesses worldwide is significant, but still there are prospects for further growth (Waddill and Marquardt 2011, p.237). In 2008 the business journal McKinsey Quarterly developed a survey in regard to ‘the use of second-generation web technologies, known as Web 2.0’ (Daft 2009, p.312). The survey showed that just a 28% of the organizations had incorporated social networking in their daily operations (Daft 2009, p.312). In regard to the other forms of advanced Internet technologies, such as blogs and wikis, the relevant percentages were significantly higher: 34% for blogs and 32% for wikis (Daft 2009, p.312). Moreover, it was revealed that two are the key reasons that can lead organizations to embrace advanced Internet technologies, such as social networking: ‘a) the need for improving cooperation within the organization and b) the need for promoting knowledge management’ (Daft 2009, p.312). Social media offers a series of advantages to modern businesses: a) it helps towards the increase of consumers’ engagement to a particular product/ service (Divol, Edelman and Sarrazin 2012); b) it helps leaders ‘to improve and develop their social presence’ (Divol, Edelman and Sarrazin 2012); and c) it helps leaders to create new brands (Divol, Edelman and Sarrazin 2012). Indeed, the sharing of information, as developed through social media and social networking, helps leaders to understand market trends and to proceed to the establishment of brands that will be welcomed by the public (Divol, Edelman and Sarrazin 2012). In any case, social media is a tool used by a high percentage of the population (Sherter 2010). In a relevant survey it was proved that in USA ‘more than 50% of the population uses social media for communication purposes’ (Sherter 2010). It should be noted that social media and social networking have also certain disadvantages. Because the use of social media and social networking sites in the workplace is difficult to be controlled by the employer, the development of strong conflicts between employers and employees because of social media has become a common phenomenon. For example, Noah Kravitz, a former employee of PhoneDog has been sued by the above firm because after leaving the company he directed all his Tweeter followers to his personal account (Gross 2012). The employer claimed that the value of these followers, about 17,000, could be estimated to $42,500 (Gross 2012). The firm asked Kravitz to give this amount to the organization (Gross 2012). Moreover, the contribution of social media in business growth is not standardized; most firms may be able to benefit from using social media. Still, there can be cases where the use of social media can harm organizational performance. The case of Kravitz, presented above, can be considered as such example. 2.1.2 Wells Fargo - Current social activities and their success Wells Fargo has managed to highly develop its presence in social media. In 2012 ‘the firm’s director of social media was replaced’ (O’Daniel 2012). The new director, Renee Brown, will be based in Charlotte (O’Daniel 2012); from there she will have the control of all firm’s activities in regard to social media. Brown has introduced a program for the development of the firm’s social presence. In this context, 40 brokers have been hired for working on Twitter (O’Daniel 2012). The range of social media that the organization currently uses is extremely high. According to a relevant report the firm currently employs the following types of social media: ‘Facebook, Twitter, Stagecoach Island virtual tour, public blogs and Youtube channels’ (Sherter 2010). In 2012, the firm has checked the potential use of other types of social media, such ‘Yammer, Socialcast and NewsGator’ (Carlson 2012). Within the organization, ‘Chatter, of Salesforce.com, is used by employees in order to communicate and to share information’ (Carlson 2012). In 2012, the performance of Wells Fargo in regard to social media has reached an extremely high level (Wilms 2012). In fact, the organization ranked first among other banks across USA in regard to its performance in social media (Business Wire 2012). Of course, failures in regard to the management of social media have not been avoided. In September 2012, Wells Fargo, as also other US banks faced severe Cyberattacks but its IT systems proved quite effective in protecting store data (Perlroth 2012). However, in February 2011, the firm’s ATMs across a large part of US crashed causing severe problems to the bank’s customers (Serres 2011). 2.1.3 Time-plan and the resources required to embrace one of the Social channels As noted earlier, Wells Fargo has already embraced social media and social networking as tools of communication and sharing of information. However, it has been also proved that the performance of the firm in the particular sector is not as high as expected. The failures that have appeared in the firm’s social networking tools, as these failures were analyzed earlier, have negatively influenced the overall image of the firm as a social organization. From this point of view, a plan would be introduced in the organization so that the effectiveness of the firm’s social networking schemes is improved. In terms of time, the above plan should be divided into two parts: a) in the first phase of the plan, that would last 6 months, the firm’s existing social networking and social media tools would be reviewed and tested as of their efficiency; no update of software would take place, unless absolutely necessary. Rather emphasis should be given on the elimination of failures related to existing infrastructure and technology. In this way, the risk of severe failures, such as the recent problem with the firm’s ATMs, as presented earlier, would be eliminated; b) a second phase of the plan would be necessary; in the second phase the replacement of parts of infrastructure and the update of software would be decided in the context of the report that would be produced after the end of the first phase. The second phase, would last no more than 6 months. For the realization of the plan, certain resources would be required: a) appropriately skilled individuals should be hired; b) advanced technology would be also necessary, but just in the second phase of the plan, c) funds should exist for covering the needs for additional personnel, the improvements of IT systems/ Internet technology and the arrangement of training programs for helping all employees to become more familiar with social networking and social media. 2.2 Method of data collection and credibility of the source The data used in this study have been collected using the following methodology: research has been developed through online search engines using the terms involved in this paper, such as ‘social networking’, ‘social media’ and ‘Wells-Fargo’. Then, from the list produced the resources that can be characterized as more credible have been chosen. At this phase of the research two different criteria have been employed: a) Only academic studies (books, journals) and articles/ reports published by credible news organizations have been considered as appropriate for this study and b) recent studies, from those retrieved using the previous criterion, have been preferred so that the current status of the relationship between businesses and social networking/ social media is effectively explored. 3. Analysis and Conclusions 3.1 Effective solutions for building a social presence for Wells Fargo Wells Fargo has already a significant presence in social media and social networking. Still, the profile of the firm as a social organization could be further improved. There are certain tactics that could help towards the achievement of the above target: a) the increase of social media employed in organization’s activities. The social media currently used by the organization are mentioned in section 2.1.2 and cannot be regarded as adequate, even if the firm’s performance in the specific sector is significant, as analyzed earlier. It should be noted that not all social media tested by the organization are currently used, as explained in section 2.1.2; b) the increase of incentives towards employees for supporting the relevant plans; the provision of bonus or of other benefits could probably persuade employees to participate more actively in the relevant plans; c) social events could be arranged for helping the firm’s customers to become more familiar with the organization and its needs in terms of social media; d) the provision of support to educational sites could help towards the increase of the firm’s social presence, either in the short or the long term. It is implied that in the above events students would be able to be informed on the potential benefits of social media and its use in daily financial transactions; e) the development of a team that will work on the update of the firm’s account in social media. According to a recent report, one of the most common reasons that don’t allow banks to be benefited from social media is the ‘lack of appropriate following’ (MarketScope 2012); f) quite commonly, social media features that have been introduced in banks’ websites cannot operate appropriately due to the necessity of extreme safety measures, so that personal data of customers’ are protected; improvements in the firm’s IT systems (Figure 2) would help to eliminate the particular problem. 3.2 Conclusions According to the issues discussed above, Wells Fargo is a quite successful bank in the field of social media. In practice, the organization’s growth has highly related to the use of social media both for communication purposes and for financial transactions. Still, problems have not been avoided. The research developed in regard to this subject proved that Wells Fargo has created a complex social media network that it is difficult to be controlled as of its performance. The introduction of the measures suggested above could help the firm to secure its social presence in the long term. In any case, it is required that the involvement of the firm in social media and social networking activities are carefully monitored as of their potential effects. The periodical review of the firm’s performance in regard to the management of social media would further help the organization to identify early any potential failures and minimize the risk of major damages. References Bradley, A. and McDonald, M., 2011. The Social Organization: How to Use Social Media to Tap the Collective Genius of Your Customers and Employees. Watertown: Harvard Business Press. Business Wire, 2012. Wells Fargo Again Named Best Internet Bank in U.S. August 9, 2012. Available at http://www.businesswire.com/news/home/20120809005282/en/Wells-Fargo-Named-Internet-Bank-U.S. [Last accessed at 29 November 2012] Carlson, C., 2012. Wells Fargo increases sales with enterprise social media. FierceCIO. November 21, 2012. Available at http://www.fiercecio.com/story/wells-fargo-increases-sales-enterprise-social-media/2012-11-21 [Last accessed at 29 November 2012] Daft, R., 2009. Organization Theory and Design. 10th ed. Belmont: Cengage Learning. Deloitte, 2012. As the Importance of Social Business Grows, So Does the Need for C-suite Support. CFO Journal. October 18, 2012. 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Available at http://www.americanbanker.com/issues/177_184/regions-wells-experiment-with-social-media-atm-mashups-1052916-1.html [Last accessed at 29 November 2012] Appendices Figure 1 – Words and graphs in communication, as used in social media (PriceWaterHouseCoopers, http://www.pwc.com/us/en/technology-forecast/2012/issue1/features/feature-mining-social-media-intelligence.jhtml) Figure 2 – Importance of Social Software in meeting challenges (Deloitte 2012) Read More