MBA 525 Review Of Literature

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MBA 525 Review Of Literature

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MBA 525 Review Of Literature

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Course Code: MBA525
University: Saint Leo University

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Question:

Discuss about the impact of social media on corporate reputation.

Answer:

Introduction
Recent tremendous growth and developments in technology and the emergence of web 2.0 have revolutionized communication activities through the emergence of fast, new and more reliable methods of communication (DiMauro & Zawel, 2012). Technological advancements have given rise to social media growth and development as a force to reckon with in the communication process. Among the major social media communication platforms include Twitter, blogs, Youtube, Instagram, Facebook, official company websites, and Email. With these platforms, the level of interaction between corporate organizations, shareholders, and both the internal and external stakeholders have increased immensely. These parties have been able to share information in a real time manner, and therefore, there is a mutual interdependency of the actions between the actions and the behaviors of the stakeholders of an organization. This has also boosted marketing and corporate branding activities and this has come along with significant positive impacts to the reputation of corporates (Furman, 2010). Despite the presumed positive impacts, the use of social media, has come along with numerous side effects to the same corporate organizations that utilize them in their communication process. This is because of the loss of control of what is published online, which gives the opportunity for the publication of inaccurate and misleading information that can cause serious damages to the reputation of a corporate organization.
Problem statement
According to Luo and Lee (2011), corporate reputation refers to an organizations overall appeal to its major stakeholders in comparison to its competitors. It also refers to the judgment that a stakeholder has on a corporate organization based on the past experiences with the involved organization. The reputation may be considered strong and positive if the stakeholder’s appeal or experience is positive with the organization; conversely, the reputation can be negative if the appeal or experience is poor. The adoption of social media in communication mix of an organization has significant positive impact on the involved company’s reputation. This is because it enhances credibility of the organization as well as embeddedness among the various stakeholders and these play a major unction in enhancing the reputation of the company (Hanna, Rohm, & Crittenden, 2011). On the other hand, various research studies and reports have shown that the adoption of these platforms has negatively impacted the reputation of corporate organizations. This is because the incorporation of social media tools have brought about change in the behavior of consumers who now have the opportunity to take part in the generation of content in the communication process between them and the company (Safko, 2012). Corporate organizations have lost control of the type of content that is generate and published by the various stakeholders over their various social media platforms, and this has contributed to the emergence of publication that have portrayed organizations in the negative light, hence, damaging corporate reputation. In line with these aspects, this work is going to carry out a literature review on how the adoption of social media has impacted the reputation of corporate organizations in positive and negative manner.
Objectives

To examine the positive impact of social media on corporate reputation,
To examine the negative impacts of social media on corporate reputation,
To examine the different angle of threats to corporate reputation through social media,
To examine the different actors that cause threat to corporate reputation through social media.

Methodology
To achieve the objectives of this literature review, the researcher is going to rely on the use of secondary sources to collect relevant information. In this regard, the researcher is going to study and examine the already published books and peer-reviewed journals that discuss the use of social media by organization and this impacts the reputation of the involved corporate organizations. The research is going to make use a systematic study by gathering of information and data from quantitative, qualitative, as well as systematic review studies. To acquire the relevant type of data, the researcher will search databases of online libraries such as the PRO Quest, EBSCO Host, and J Store libraries. These are reliable libraries and therefore, there use will ensure that the researcher makes use of accurate and reliable information in the study of the topic involved. The researcher is also going to utilize Google Scholar to locate and gather information from books that discuss the use of social media in corporate organization communication, marketing, and branding. To ensure that the information used is relevant, the researcher will limit the search and rely on up to date sources, for example, recent sources that were published in the last five years. The researcher will take into consideration some of the important elements, for example, such as the, major purpose of collection of information, authors’ credential, as well as the target audience in order to ensure that use of sources that are high-quality.
Data analysis and interpretation
To determine the literature that makes most contribution to the topic under study, the researcher use qualitative methods to analyze the data that has been collected. In this regard, the information from the secondary sources will be analyzed through qualitative methods in order to determine the extent through which the use of social media positively or negatively impact the image of corporate organization.
Literature review
Positive impacts of social media on corporate reputation
Embeddedness
According to a research study that was carried out by Hettler (2010), communication messages through social media enables an organization to evoke higher feelings of embendeddness among their stakeholders as compared to information that is communicated through other traditional methods. Despite not having membership to organizations, many individuals carefully choose organizations to identify with, and this process has been promoted by the emergence of social media communication platforms that has enabled customers and organizations to share and exchange information (Barwise& Meehan, 2010). This has led to the establishment of an intricate, strong and trustworthy relationships between these the internal and external stakeholders of a corporate organization, hence, positive effects on the reputation of the involved organization. The feeling of embeddedness normally take place through forums that are sponsored by the company involved. For example, today companies have actively engaged in the creation of online forums over the various social media platforms to exchange and share information with their stakeholders. These include facebook pages where external stakeholders like or subscribe to enable them receive information from the company.
This forum has enabled organization to exchange information with their stakeholders in a manner that improves the image and reputation of the company before the eyes of the public (Hassan & Ibrahim, 2012). Individuals who engage with companies acquire the feeling of embeddedness. This creates a good relationship between the organization and the stakeholders, and therefore, the various stakeholders can go ahead to engage in word of mouth interactions by talking positively about the corporate organizations, and this contributes positively to the reputation of an organization. The ability of consumers to feel embedded plays a crucial role in building corporate reputation because of what is referred to as brand communities, which are developed over the social media platforms. Therefore, the more consumers engage in interactions over the social media platforms, they become closer and closer with the organization, and the feeling of closeness enhances the reputation of the corporate organization among the clients (Michaelidou, Siamagka, & Christodoulides, 2011). Several research studies support this finding, for example, getting consumers engaged over the social media enhances corporate resonance that results in a strong psychological bond between clients and an organization, hence, enhances corporate reputation.
Credibility
In another research study concerning the effects of the use of social media on the reputation of a corporate organization, it was established that the interactive characteristic of the social media communication platforms establishes and improves the credibility of the messages communicated by the organizations, and hence, it positively impacts the reputation of the involved corporate organization (Weber, 2010). According to Berthon, Pitt, Plangger, and Shapiro, 2012), marketing and branding messages that are communicated to the target audience over the various social media platforms are highly credible as compared to the messages that are communicated via other channels. This is because the information that is presented over the social media contains elements of user-generated content. A research study by Jones, Temperley and Lima also reveals a clear relationship between exchanging knowledge among consumers and the motive of engaging in a word of mouth information exchange regarding a particular organization (2010). The use of social media enables both the internal and external stakeholders to criticize the information that is presented to them, and therefore, the company will always work towards providing accurate and reliable information, hence, more credibility that leads to the improvement of the reputation of a corporate organization (Chang & Zhu, 2011). This is as opposed to the publication of information over tradition print and electronic media where the content is totally controlled by the management of the organization, which gives the organization an opportunity to provide misleading content. In a recent study that involved the use of high and low interactive versions of organizational websites, it was established that websites that are more interactive had a positive influence on the on the attitudes and perceptions of clients by creating a positive impression that won the trust and loyalty of those who engaged in the interaction process. This goes a long way to create a positive effects on the reputation of the corporate organization that is involved. In this regard, it is clearly evident that the adoption and the implementation of social media communication platforms has enhanced the reputation of corporate organizations.
Gaining credibility is a vital element of the reputation of a corporate organization because it improves the attitudes and perception of the clients towards the advertisements and marketing messages of a corporate organization (Barrutia, Charterina, & Gilsanz, 2009). The ability of an organization to establish itself as credible before the eyes of the public enables the organization to build and enhance its reputation in the eyes of the public, and this brings about a positive influence towards the purchasing intention of consumers. Credible advertisement messages have a positive influence on how a particular brand or a product of a given organization is perceived by the potential clients. This is also because the consumers judge a product based on the credibility that is associated with the source of information that is being consumed. If the consumers identify with the source of the information to be trustworthy, they will have a favorable perception towards the product and this enhances the credibility of the involved corporate organization. On the other hand, when the source of the information is deemed as not trustworthy by the clients, the clients will form a negative attitude towards the product and the involved company, and this leads to the damage of the involved company’s reputation. This conclusion is similar to the findings of another research study that was carried out by Schultz, Utz, and Göritz, (2011), who established that there is a two-way relationship between brands and credibility. According to this study, credibility which enhances corporate reputation contributes towards an increase in a positive attitude towards the message communicated. Similarly, the credibility of a message positively impacts the clients’ attitudes towards the company and its brand, hence, improved corporate reputation. The second relationship is a clear indicator that the social media has an influence on the reputation of a corporate organization.
In another research study, it was established that the rise of the social media communication platforms as communication tools have to a great extent helped in building the reputation of corporate organizations (Grainger, 2010). This is because the employees have taken advantage of the possibilities brought by social media tools to champion for their organizations. There are websites where the employees engage in discussions regarding the progress and the achievement of their companies, the projects that are underway and those that are beneficial to the community. These discussion are very instrumental in promoting the reputation of the corporate organization before the external stakeholders, and goes to a great extent in shaping the perceptions and attitudes of the public, and hence, building the reputation of the involved organization. According to Karahasan (2012), these types of discussion forums are deemed to be trustworthy because the communications come from internal stakeholders of the involved organizations.  
Negative impacts of social media on corporate reputation
Despite the positive impacts of social media on corporate reputation as discussed above, there are numerous negative impacts that the use of these platforms in the communication process have brought to the reputation of organizations (Knight, 2011). The negative impacts that the social media brings to the reputation of corporates has been given attention by many researchers, however, little attention has been given to the various angles or actors that contribute to the negative impacts on corporate reputation. In this regard, this section is going to examine the negative impacts of the use of social media on the reputation of corporate organizations based on three angles, namely, the customers, employee and corporate angles.
Customer’s perspective
Various research studies have illustrated that the incorporation of the tools of social media by the customers significantly contribute towards damaging the reputation of corporates. The emergence of social media has introduced the concept of consumer generated content, and this has made corporate organizations to lose control of the content that is published, and this has resulted as a major threat to the reputation of organizations in various ways (Mangold & Faulds, 2009). Through the use of social media, the clients have been greatly enlightened, and hence, they are able to confront corporates organizations over their social media platforms, for example, the customers are now able to expose corporate organizations for their unethical practices in the business industry (AL-Tarawneh, 2012).
According to Aula (2010), the consumers have the ability to damage the reputation of a corporate organization through the incorporation of social media as they are able to mess with a company’s product through modifications to portray the product in manner that it was not intended for. This normally happens when a customer buys a product or receives a service from a given company but does not experience the desired quality. The lack of satisfaction and the presence of social media abilities motivates the consumer to publish information that may damage the reputation of the involved corporate organization. The emergence of such critical publications have painted organizations in negatively light in the eyes of the public, and this has contributed to the damage of the brand and image of organizations.
In another similar study, it was established that consumers use anti-branding sites to damage the reputations of corporate organizations. (Kietzmann, Hermkens, McCarthy, Silvestre, Bruno, 2011) examined some of the ways that customer use of social media has emerged to be a threat to the reputation of the corporate and found out that there are numerous anti-branding sites where they engage in publishing information of dissatisfaction regarding particular organizations, a practice that has emerged as a major threat because it damages the reputation of a company (Qualman, 2011). Over these communities, consumers publish irrational and emotional information that promotes the development of negative perception and attitudes towards an organization. The social media communication platforms have facilitated this because the consumers can engage in anti-branding campaigns very fast and in a very cost effective manner.
Employee’s perspective
In the recent decades, employees have emerged to be the most valuable stakeholder in an organization. This is because the quality of products or the quality of services delivered to the consumers is dependent on the employees, therefore, the most successful firm across the globe are those that prioritize the needs of their employees. In this regard, the employees play a significant function in the building or damaging of the reputation of a corporate organization. According to Miles and Mangold (2014), the employees have a major effects on the image of the company because they are the prime interaction interface between the employer and the suppliers, customers and other key external stakeholders, and therefore, their behavior can have a huge negative or positive impact on the reputation of a particular firm. There are two major ways through which the employees can negatively impact the reputation of corporate organizations, for example, through the expression of their dissent in private over the social media platforms or when they engage in the management of the social media communication platforms of a corporate organization (Savage, 2012).
The emergence of social media communication platforms allows employees to express themselves and voice their opinions (Miles & Muuka, 2011). This has consequently given the employees the power to make their voices heard across the globe over these platforms. The intention with which the employee expresses him or herself can negatively or positively impact the reputation of a company. In the event that an employee make use of these platforms to communicate the issues that are affecting a corporate organization will come as a major blow to the company, hence, damaging the reputation of the company.
The employees’ power to express their grievances and dissenting opinions privately over the social media spreads very fast to external stakeholders and the members of the public as well, and this goes to a major extent in negatively impacting the reputation of the organization (Kietzmann, Hermkens, McCarthy, & Silvestre, 2011). According to Miles and Mangold (2014), this impact is very serious and is a major threat to the company due to the lack of the organization’s management to control the employees publications, which goes unfiltered to external audience on a large scale and a real time manner. The expression of grievances and dissenting opinions by employees on their employers damages the reputation of the company and as a result, the current consumers and other potential clients to loose trust and loyalty on an organization (Miles & Muuka, 2011). The unlimited access of social media publications is exacerbated further by the fact that a negative publication that is published by one employee has the ability to attract the attention of global external audience, which will as a result cause a huge damage to the reputation of the corporate organization (Smith, 2009).
The adoption of the social media as an organizational communication tool has led to the emergence of websites that gives employees the opportunity to engage in work related discussion forums, for example, EmplyeeDrt.com and AboutMyJob.com, whereby they are able to discuss some of the issues affecting them at work and finding solutions to them. Despite the positive intention of these websites, the employees have taken advantage of these websites to publish information that has emerged to be major threats to organizations that they are representing (Miles & Muuka, 2011). This is because they use these social media website to expose their companies and workplace policies and processes that are not in compliance with legal requirements. The users of these social media communication platforms share the information with many people across the globe and this has emerged to be a major threat to the reputation of the organization. According to a research study that was carried out by Leskovec, Huttenlocher and Kleinberg (2010), the grievances and dissent of employees has a huge ability to damage the reputation of a corporate organization because it exposes the weaknesses of the organization.
Corporate’s perspective
The emergence of social media as communication tool has also put the corporate organizations themselves on the spot for inappropriately using them to the damage of their reputation. The social media presents numerous opportunities to corporate organizations if used well; however, the failure to strategically use these platforms have remained a constant threat to the reputation of the same organizations. According to Kaplan and Haenlein (2010), by engaging in the use of social media platforms for communication, the corporate organizations are exposing themselves to reputational damages. The emergence of social media has enabled for easy and quick attribution of crises that are taking place back to the corporate organizations. One of the major factors that cause reputational damage from the side of the corporate organization is the lack of presence of an organization in all the social media platforms. When an organization is not present in the social media platforms, it lacks the capacity to effectively monitor the complaints and the grievances of their employees over these platforms, and this is a huge potential threat to their reputation. Corporate organization also make a mistake of handling the different media separately while the social media should be integrated together for effective communication process.
Corporate organizations use social media platforms to respond to negative publicity; however, studies have revealed that a majority of the communication departments of corporate organizations utilize poorly planned strategies that end up damaging their reputations (DiStaso, McCorkindale, & Wright, 2011). This is further supported by another research study which established that the manner in which an organization responds to crises that are affecting them over the social media platforms has a huge influence on the company’s reputation. In this particular research study, the research concluded that the effective management of crises over the social media platforms significantly reduce any reputational damage to the company.
Conversely, the mismanagement of crises over the social media platforms can significantly cause a major damage to the reputation of the company. Corporate normally makes the mistake of ignoring the complaints that are made by their employees or clients over the social media, and this goes to a great extent into causing a damage in corporate reputation. Research has also revealed that it is the mistake of the corporate organization to use different strategies for responding to these complaints, the strategies that do not effectively curb the damage that is caused by social media communication platforms (Shullich, 2011)). For example, the strategy of forced compliance causes a damage to the reputation of a corporate organization because it forces employees to conform to policies that imposed, less favorable and less flexible.
Conclusion
In conclusion, Technological advancements have given rise of social media as a force to reckon within the process of communication. The adoption of social media in communication mix of an organization has significant positive impact on the involved company’s reputation. On the other hand, various research studies and reports have shown that the adoption of social media has negatively impacted the reputation of corporate organizations. The social media has contributed to the establishment of an intricate, strong and trustworthy relationships between these the internal and external stakeholders of a corporate organization, hence, positive impact on the reputation of the involved organization. Clear relationship between exchanging knowledge among consumers and the motive of engaging in a word of mouth information exchange regarding a particular organization. There are numerous negative impacts that the use of these platforms in the communication process have brought to the reputation of organizations. The consumers have the ability to damage the reputation of a corporate organization through the use of social media as they are able to mess with a company’s product through modifications to portray the product in manner that it was not intended for. There are two major ways through which the employees can negatively impact the reputation of corporate organizations, for example, through the expression of their dissent in private over the social media platforms or when they engage in the management of the social media communication platforms of a corporate organization. Finally, the social media presents numerous opportunities to corporate organizations if used well; however, the failure to strategically use these platforms have remained a constant threat to the reputation of the same organizations.
References
AL-Tarawneh, K. A. (2012). Measuring E-service Quality from Customer’s Perspective: An Empirical Study on Banking Services. International Research Journal of Finance and  Economics, 91(1), 123-137.
Aula, P. (2010). Risk of social media. Strategy & Leadership, 38 (6), 43-49.
Barrutia, J. M., Charterina, J. & Gilsanz, A. (2009). E-service Quality: A Multichannel and Pure Service Perspective. The Service Industries Journal, 29(12), 1707-1721.
Barwise, P. & Meehan, S. (2010). New social media possibilities. Harvard Business Review, 88(12), 80-84.
Berthon, P. R., Pitt, L. F., Plangger, K. & Shapiro, D. (2012). Marketing meets Web 2.0, social media, and creative consumers: Implications for international marketing strategy. Business Horizons 55(3), 261-271.
Chang, T. S. & Zhu, W. (2011). Enhancing Corporate Reputation for Market Expansion in China: Customer Orientation and the Mediating Effect of Product and Service Quality. Journal of Strategic Marketing, 19(2), 153-170.
DiMauro, V. & Zawel, A. (2012). Social Media for Strategy – Focused Organizations. Harvard Business Publishing, 14(2), 1-4.
DiStaso, M. W., McCorkindale, T. & Wright, D. K. (2011). How public relations executives perceive and measure the impact of social media in their organizations. Public Relations Review 37(3), 325-328.
Furman, D. M. (2010). The Development of Corporate Image: A Historiographic Approach to a Marketing Concept, 13, 63-75.
Grainger. J. (2010). Social Media and The Fortune 500: How the Fortune 500 Uses Perceives and Measures Social Media as a Marketing Tool. Master Thesis, School of Journalism and Mass Communication, University of North Carolina at Chapel Hill.
Hanna, R., Rohm, A. & Crittenden, V. L. (2011). We’re All Connected: The Power of the Social Media Ecosystem. Business Horizons, 54(3), 265-273.
Hassan, A. & Ibrahim, E. (2012). Corporate environmental information disclosure: factors influencing companies’ success in attaining environmental awards. Corporate Social Responsibility and Environmental Management 19(1), 32-46.
Hettler, U. (2010). Social media marketing: Marketing mit Blogs, sozialen Netzwerken und weiteren Anwendungen des Web 2.0. Oldenbourg Verlag.
Jones, B., Temperley, J. & Lima, A. (2010). Corporate reputation in the era of Web 2.0: the case of Primark. Journal of Marketing Management 25(9/10), 927-939.
Kaplan, A. M. & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business Horizons 53(1), 59-68.
Karahasan, F. (2012). Ta?lar Yerinden Oynarken Dijital Pazarlamanin Kurallari. Do?an Publishing.
Kietzmann, J. H., Hermkens, K., McCarthy, I. P. & Silvestre, B. S. (2011). Social media? Get serious! Understanding the functional building blocks of social media. Business Horizons 54(3), 241–251.
Kietzmann, J. H., Hermkens, K., McCarthy, I. P., & Silvestre, B. S. (2011). Building blocks for social media. Business Horizons, 54(3), 241-251.
Knight, W. (2011). Social Media 4 Business. Retrieved from, www.warrenknight.co.uk
Leskovec, J., Huttenlocher, D., & Kleinberg, J. (2010). Predicting positive and negative links in online social networks. Proceedings of the 19th international conference on World Wide Web; 26- 30 April 2010. Raleigh, NC. New York: ACM New York.
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Mangold, W. G. & Faulds, D. J. (2009). Social Media: The New Hybrid Element of the Promotion Mix. Business Horizons, 52, 357-365.
Michaelidou, N., Siamagka, N. T. & Christodoulides, G. (2011). Usage, barriers and measurement of social media marketing: An exploratory investigation of small and medium B2B brands. Industrial Marketing Management, 40(7), 1153-1159.
Miles, S. J. & Mangold, W. G. (2014). Employee voice: Untapped resource or social media time bomb? Business Horizons, 57(3), 401-411.
Miles, S. J. & Muuka, G. N. (2011). Employee Choice of Voice: A New Workplace Dynamic. The Journal of Applied Business Research, 27(4), 91-103.
Qualman, E. (2011). Socialnomics. Upper Saddle River, NJ: John Wiley and Sons, Inc.
Safko, L. (2012). Social Media Bible. Upper Saddle River, NJ: John Wiley and Sons, Inc.
Savage, J. (2012). Creating Brand Evangelists in the 21st Century: Using Brand Engagement through Social Media to Develop Brand Loyalty in Teens. Master Thesis, Faculty of the USC Graduate School University of Southern California.
Schultz, F., Utz, S. & Göritz, A. (2011). Is the medium the message? Perceptions of and reactions to crisis communication via twitter, blogs and traditional media. Public Relations Review, 37(1), 20-27.
Shullich, R. (2011). Risk Assessment of Social Media. International Journal of Electronic Commerce, 2(2), 103-126.
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