Social Media Risk Management in Dutch
Telecommunications Companies
An exploratory research of social media risk management in SMEs and large
companies in the Dutch telecommunications industry
Theun Scheringa
S2683555
t.r.scheringa@student.rug.nl
Supervisor: Dr. Sakshi Girdhar
19
thof January 2020
Word Count: 11622 (including tables, references and appendix)
MSc Business Administration: Management Accounting and Control
Faculty of Economics and Business
Abstract
Social media risks have been studied extensively in previous literature. However, research on how these risks are managed is lacking. The purpose of this research is to expand the literature on social media risk management. Four social media managers have been interviewed to study how risks are managed in telecom companies, who are responsible for these risks and how are they assessed. Furthermore, differences between SMEs and large companies are studied. This research discovered that companies in the telecom industry have established social media departments. Also, firms don’t actively enforce a social media policy as it diminishes the creative content of employees and creates a negative tension between employees.
Contents
Introduction ... 1
LITERATURE REVIEW ... 3
Risk management ...3
Corporate social media ...4
Social media risks ...5
Social media risk management ...5
Reputational risk controllability ...6
Methodology ... 9
Research design ...9
Data collection ... 10
Data analysis ... 11
Results ... 12
Social media use ... 12
Social media management ... 12
Social media risk management ... 14
Social media risk assessment ... 16
Discussion... 18
Conclusion ... 21
Theoretical implications ... 21
Managerial implications ... 22
Limitations and future research ... 22
References ... 24
Appendix ... 28
Appendix 1: Interview guide... 28
Appendix 2: Interviewee characteristics ... 29
1
Introduction
Social media is a rapidly growing and constantly changing phenomenon. Twitter, Facebook, Instagram and LinkedIn have grown exponentially over the last couple of years (Statista, 2019). People use it to (re)connect with people, upload pictures, find jobs, etc. (Brivot, Gendron and Guenin, 2017). Social media is not only important in our social life but also starts to make an appearance in our professional life (Kaplan and Haenlein, 2010). In the beginning, organizations used social media mainly for marketing purposes, but nowadays it is primarily focused on how a company wants to be seen by the outside world and how to interact with stakeholders (Brivot et al., 2017). Moreover, corporations use social media to seize opportunities and improve current business practices (Bjorkli and Woje, 2018; Rivera-Arrubla and Zorio-Grima, 2016; Turban, Bolloju and Liang, 2011). It is used to create transparency and stakeholder engagement (Rivera-Arrubla and Zorio-Grima, 2016), improve marketing activities, branding purposes, customer service activities and recruitment activities (Bjorkli and Woje, 2018). Also, firms use social media to collaborate within or outside organizational boundaries and to diffuse knowledge across departments (Turban et al., 2011).
As firms try to integrate social media into their corporate structure, new risks materialize (Arnaboldi, Azzone and Sidorova, 2017; Brivot et al., 2017; Culnan, McHugh and Zubillaga, 2010; Demek, Raschke, Janvrin and Dilla, 2018; Eschenbrenner, Nah and Telaprolu, 2015; Williams and Hausman, 2017). At the beginning of the social media revolution, related risks were seen as the equivalent to financial risks (Eschenbrenner et al., 2015). This view changed in recent years. Brivot el al. (2017) focus on corporate reputation risks that arise from social media usage inside companies, such as client confidentiality breaches, leaks of intellectual property and violation of the firm’s code of conduct (Culnan et al, 2010). Moreover, recent literature about social media risks classifies four different types of risk apart from reputational risk: technical, human, content and compliance (Williams et al., 2017). Culnan et al. (2010) wrote about risk management issues, such as security and privacy issues concerning Twitter. Although these risks are still relevant, social media risks have grown significantly larger to companies and consequently, research regarding changing risk management is necessary.
2 management strategy after a problem has occurred, while research shows that a proactive risk management approach is preferable (Demek et al. 2018). All these findings show that there is still a lot unclear about the way social media-related risks are controlled in organizations. Therefore, this paper tries to answer the following question:
How are social media risks managed in SMEs and large Dutch telecommunications companies? In order to provide a comprehensive answer to the research question, this research will answer the following sub-questions:
- Who manages social media risks inside an organization? - How are these risks identified, measured and assessed?
So, to answer these questions, a study is conducted to examine how different companies are taking care of their social media risks. The reputational risk control framework by Brivot et al. (2017) is used in order to provide this paper with a clear structure regarding social media management. This framework identifies four different approaches to controlling social media risks. In this framework, four frames are divided by whether reputational risks can be controlled and whether firms have a fear of losing control. As social media is such a rapidly evolving phenomenon, it is interesting to study how these four frames have stood the test of time over the past couple of years.
3 Several companies inside the telecom industry are examined. The telecom industry is an appropriate industry to study social media risks, as these companies have high social visibility and are constantly interacting with their customers on social media. The market is characterized by their high ‘’churn’’ rate: the rate at which customers switch to another telecom company (Dahiya and Bhatia, 2015). Consequently, the companies in this industry are vulnerable to lousy customer engagement and a negative brand image (Smith, 2016). Additionally, social media is also an interesting subject to study in the Netherlands. Their social media penetration rate is 19% higher than the global average (Statista, 2019). Likewise, the Netherlands ranks among the European countries with the highest social media integration in organizations with an integration rate of 66% (Eurostat, 2017). WhatsApp (11.5 million users) and Facebook (10.8 million users) were the largest social media platforms in the Netherlands in 2018, while Instagram (4.1 million users) gains the most users (Van der Veer, Boekee, Hoekstra and Peters, 2018).
The following section will provide background information about standard risk management in organizations, corporate social media use, social media risk management and the four reputational control frames of Brivot et al. (2017). These will be studied in-depth to create an understanding of previous social media control literature. The third section and fourth section will explain the used methodology and the results. The fifth section will interpret the results and how they fit in the existing literature. The sixth section will conclude this research.
L
ITERATURE REVIEW
Risk management
It is important to clarify the term ‘’risk’’. A broad definition of risk for companies is the likelihood that the expected outcomes are not the actual outcomes (Hampton, 2009). Risk management can be described as part of good governance in public and private sectors and a key part of modern management control (Huber and Scheytt, 2013). It aids the long-term stability and toughness of a firm. Previous literature distinguishes between external (environmental and systematic risks) and internal (financial and non-financial risks) risks (Stein and Wiedemann, 2016).
4 enterprise risk management (Soin and Collier, 2013; Zaleha Abdul Rasid, Ruhana Isa and Khairuzzaman Wan Ismail, 2014). In the past, risk management was managed by a ‘silo’ approach in which some risks were treated separately. Nowadays, a company uses a more holistic approach to risk and risk management: enterprise risk management (ERM, Zaleha Abdul Rasid et al., 2014).
Corporate social media
Several authors have tried to define social media (Kaplan and Haenlein, 2010; Lundmark, Oh and Verhaal, 2016). Kaplan and Haenlein (2010) introduced a widely used definition for social media: ‘’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’’. Web 2.0 was used as a platform where all the created content could be modified by all other users. Social media exploited this feature to become the social two-way communication form it is now. Lundmark et al. (2016) define it as: ‘’social media, as a unique form of communication, integrates multiple sources of legitimacy, and as a result, presents a unique and important context through which to study the topic. Indeed, social media are a means for the dissemination of both internally and externally generated information pertaining to firms, industries, and society in general.’’ Both papers stress the importance of two-way communication and user-generated content.
5 Consequently, previous literature notices a distinction in social media adoption between SMEs and larger organizations (Verheyden and Goeman, 2013; Wamba and Carter, 2016). Most existing research on business use of social media is related to large organizations and does not specifically address SMEs (Bulearca and Bulearca, 2010; Chua et al., 2009; Derham et al., 2011; Stockdale et al., 2012). Verheyden and Goeman (2013) found that larger companies are more likely to integrate social media platforms and would use these platforms more intensively than SMEs. The most important factors for these differences were lack of knowledge, skills, intangible and tangible resources. Therefore, SMEs struggle to use social media platforms strategically (Beier and Wagner, 2016; Verheyden and Goeman, 2013; Wamba and Carter, 2016).
Social media risks
The emergence of social media does not only entail positive effects. In 2012, respondents of a research by Deloitte ranked social media as fourth biggest risk source for the upcoming years. The danger with social media is not the creation of new types of risks, but its ability to reach a large amount of people online that are all able to give their opinion on your product or company (Scott and Jacka, 2011). Demek et al. (2018) classifies four different risks: IT security, information leakage, employee productivity and reputational risks. The increased communication through information technology (IT) could result in information leakage, while it becomes more susceptible to viruses and malware. Furthermore, social media weakens the public and private boundaries inside organizations (McDonald and Thompson, 2016). Boundary management is needed to prevent internal problems inside a company due to the ‘’collision of their social worlds within the relatively new world of social media’’, which could result in negative employee productivity (Ollier-Malaterre, Rothbard and Berg, 2013). The magnitude of social media allows almost everybody to give their opinion on certain issues and organizations. Organizational managers fear that they will lose control of the conversation surrounding their company on social media (Brivot et al., 2017). Reputational risk increases when the reputation created online with (false) ideas does not match the reality shared by the company itself (Aula, 2010).
Social media risk management
Firms should make full use of the potential benefits of social media and avoid their negative impacts. Aral et al. (2013) state: ‘[to make use of social media potential] thus requires organizational conditions that
reflect the transformational potential of active contributions by customers, the potentially wide-ranging effects of negative customer articulations, and their interdepartmental perspective’. However, social media
6 management strategies (Culp et al., 2015). Firms first started to use social media without being aware of the possible risks (Demek et al., 2018; Larcker, Larcker and Tayan, 2012). When these risks are acknowledged, most companies react to social media and implement social media tools without a risk management process (Demek et al., 2018), while research on this topic suggest that firms should use a proactive approach (Haynes, 2016; Larcker et al., 2012; Scott and Jacka, 2011). In most cases, firms focus on the technical aspect of social media and disregard the strategic and structural aspects of organizational management, as they don’t use the collected data from social media for their risk management program (Geyer and Krumay, 2015; Larcker et al., 2012).
To manage the risks of social media, organizations implement social media policies (Andreesen and Slemp, 2011; Demek et al., 2018; Scott and Jacka, 2011). In the beginning of the social media era, social media websites were banned completely at the work floor. However, these measures turned out to be too radical and policies were introduced to guide online behavior of employees on social media instead (Dreher, 2014; Patel and Jasani, 2010). Most of these policies were introduced to create awareness that content on social media is seen by an incredible amount of people, instead of only other employees and that content on social media stays online indefinitely (Vaast and Kaganer, 2013). Several researchers (Demek et al., 2018; Dreher, 2014) suggest that proficient training is needed to prepare employees for the risks and benefits that social media introduce.
Furthermore, it is unclear which departments monitor social media use and its risks. Grant Thornton (2013) researched the risk and rewards of social media. Their respondents noted that the primary department tasked with social media risk management was marketing/public management, followed by IT and nobody currently monitors it, while other companies appointed five other departments to control social media. Arnaboldi et al. (2017) acknowledge the impact of the marketing and communication departments on social media monitoring activities. Moreover, they note that accountants could be condemned to carrying out routine work, as other departments manage social media monitoring in the future. In contrast to this statement, others notice that accountants try to position themselves as stable factors when firms are afraid of losing control of their corporate reputation due to social media influences (Brivot et al., 2017).
Reputational risk controllability
7 reputational risk created by social media. Reputational risk has been identified as the most important risk in the telecom industry (Culp et al., 2015) and thus this framework will provide the basis for this research. The first perspective is the ‘’beyond control’’ frame. This perspective states that reputational risks should not or cannot be controlled, but should also not be feared. Content on social media is made by the public and the facts matter just as much as opinions. Therefore, managerial actions to impose control over social media content is deemed old-fashioned as its content won’t be steered in a certain direction. Furthermore, social media creates ‘proximity’ between managers and subordinates. A vertical hierarchy does not work anymore due to the free flowing nature of social media and everybody can express their points of view. Last of all, public organizations should engage in conversation around their brand, but they are discouraged to steer this discussion in a certain direction, as it cannot be controlled.
The ‘’subveillance’’ frame is the next perspective. Subveillance, in contrast to surveillance, is about taking actions under the radar and can be associated with foresight and business intelligence. Data mining is also included in the subveillance perspective. This frame expects that the potential benefits of data mining outshines the reputational risks caused by social media usage. Potential customers leave a digital footprint, which can be used to predict and anticipate reputational risks. It will change the job description of controllers, as risks are not defined a priori, but posteriori due to the outcomes of data mining. Moreover, data provided by social media creates a lot of chances for public companies. The extensive additional data gives a clear insight into the wishes and demands of their target groups, making it easier to target their campaigns towards these groups.
Thirdly, the ‘’de-territorialization’’ frame states that companies should stay away from social media. As the social media environment is still largely unknown, it is better to keep away as it will hurt the company more than it will gain. Comparable to the statements in the ‘’beyond control’’ perspective, supporters of the ‘’de-territorialization’’ frame believe that companies don’t have the ability to stand out and control the chaos created by social media.
9
Methodology
Research design
The purpose of this study is to enrich the social media literature by investigating how social media risks are managed and which departments/functions are in charge of these risks. Current social media literature is quite vague concerning these issues and there are several different departments that could play a role, while other papers mention that accountants should monitor these risks (Brivot et al., 2017; Demek et al. 2018). In order to create some clarity around this issue, exploratory qualitative research is needed (Yin, 2017).
Moreover, this research tries to create a better understanding about how firms integrate social media into their corporation and how risks are identified, measured and assessed. Furthermore, different roles regarding social media management will be identified. A multiple-case study is used to investigate these issues. The results from a multiple-case study are more compelling and can be regarded as more robust than single-case studies (Yin, 2017). The multiple-case study in this paper focuses on the replication logic and at a different pattern of theoretical replication created by SMEs compared to large firms in the same industry: telecommunications industry.
The Dutch telecommunications industry was chosen after it met several prerequisites stated by the researcher. All companies in this industry have a strong social media presence in the Netherlands. There is a limited amount of companies in this industry with three large players and several smaller firms (Florijn, 2019). Furthermore, poor social media management (or lack of management) should lead to a sharp decline in customers, which makes it necessary for companies to have some form of social media management. Last of all, a distinction between SMEs and large firms is expected. In this research, size has been the deciding factor between large and small companies. SMEs are categorized by the European Union as less than 250 employees (Eurostat, 2019). However, the telecom industry in the Netherlands is divided into three large players and several smaller firms. Therefore, in this research, companies with 500 or fewer employees are seen as SMEs and firms with more than 10.000 employees are seen as large.
10 customers that switch to a different provider). Business loss of ‘’churn’’ is unavoidable but should be kept to a minimum (Dahiya and Bhatia, 2015). Gaining new customers in this industry is 5 to 10 times more expensive than retaining existing customers (Kayaalp, 2017). Therefore, companies in this industry battle for market share, need to continuously interact with customers and should be able to deal with customer complaints 24 hours a day (Sengupta, 2017).
Data collection
As previous research was divided about which actors were responsible for social media risks inside organizations, multiple employees within the same company were asked who were responsible for social media and its risks. It became evident that social media managers dealt with most of the issues involving social media in the Dutch telecommunications industry, instead of accountants and risk managers. Additional information on the interviewees can be found in appendix 2. The data were collected using semi-structured interviews. The use of semi-semi-structured interviews provides the interview with a clear structure, but the interviewer maintains the opportunity to ask probing questions (Horton, Macve and Struyven, 2004). Furthermore, the interview protocol was kept flexible, so it could be altered due to answers given by interviewees (Gioia, Corley and Hamilton, 2012). This happened after the first two interviews. The results showed that social media managers had no contact with their colleagues in the risk management department and couldn’t answer the risk management questions. However, as the companies let the social media department fix their issues with social media, the risk management questions became irrelevant.
Interviews were conducted face-to-face, with one skype-call exception. The interview guide is provided in Appendix 1. The interviews were held during a period of a month and the duration of the interviews was on average 45 minutes, with exception of the interview conducted by Skype. If the interviewees agreed, interviews were recorded, so the researcher could make observations during the interview and focus completely on the probing questions. The interviews were held in Dutch, as the interviewees preferred this over the English language and took away the language barrier between interviewer and interviewee. After the interviews were transcribed, the interviewees were given the opportunity to receive a transcript of the interview. All the interviewees declined this proposal.
11 media usage of companies in the telecom industry. The previously stated methods (interviews, previous literature and the social media page analyzes) are used for data triangulation. Data triangulation is used in order to ensure the methodological validity and reliability of the results (Leung, 2015).
Data analysis
12
Results
Social media use
The telecom industry is characterized by its high ‘’churn’’ rates. Customers are likely to switch to a different provider when they are not pleased with their current provider. Therefore, companies in the telecom sector use social media mainly to increase brand awareness and to build a customer relationship. An increase in brand awareness does have a positive effect on potential customers and can result in additional customers (Hoyer and Brown, 1990). Furthermore, building a strong customer relationship by fast response times and reassuring answers on social media withhold current customers to switch to different providers.
The companies use various social media platforms to connect with their customers. Facebook and Twitter are used as a service channel to answer customer complaints or general questions. LinkedIn and Instagram are used as a marketing channel to broadcast special offers and regular deals formatted as pictures or videos. Moreover, there is a distinction between different social media platforms regarding customer engagement. Posts on Facebook are used to reach ‘’older’’ customers, while Instagram posts are focused on a ‘’younger’’ target group. Besides, large companies have integrated an enterprise social network: a social media platform, which is only accessible for employees. This platform is used to posts certain relevant articles and to promote communication between different departments inside the organization. However, the interviewees mentioned that this platform was not used to form solutions against certain social media risks, but primarily to inform employees. SMEs do not have an enterprise social network.
Social media management
13 part of their activities are social media related. These findings show that firms in the Dutch telecom industry have a similar system for managing social media.
Another interesting finding was that none of the interviewees applied for the function they currently occupy. All interviewees gradually worked towards the managing function they currently hold. Only one of the interviewees answered that their current job had some connection with her previous education as she studied communication. The other employees started as webcare employees, most of them as a part-time job next to their studies. These jobs brought the employee in direct contact with customers (e.g. customer support desk). Knowledge about customers and being familiar with customer complaints are helpful in working in a social media position. When a companies’ view regarding social media shifts, job descriptions change too. The quote below is a good example of such a case.
‘’As a completely online company, social media has definitely changed our job. Our company grew along with the popularity of Facebook and Twitter. It started out as a tool to answer customer questions. However, this changed to a tool to increase the brand awareness of the company.’’ - Campaign and content manager, Firm A.
During the interviews, differences between SMEs and large companies started to show. In SMEs, employees grow into a new job or they perform their new tasks along with their old tasks. First, new jobs are created when managers feel that they lack adequate oversight of certain practices. Employees that show upper management that they are up to the task will get these jobs as shown in the quote down below.
‘’I was able to secure this new job through a presentation on social media in which I depicted some strategies which could improve our social media presence’’ - Social media marketing manager, Firm B.
On the contrary, large companies seem to have established certain social media positions before they find a suitable employee. As the quote down below shows, large companies look at other companies’ actions. If other companies implement a new department, this company should follow their lead as they are afraid to fall behind. SMEs don’t have these kinds of resources and adopt these practices only when needed or when management perceives it as valuable.
‘’I was asked to create order in the chaos. There was a system, but it was not clear how it should be used.
14
Social media risk management
There are several differences in managing risks between large firms and SMEs. In SMEs, social media departments have to justify their decision in small meetings with their team and members of the marketing department. Once a week, such meetings are held, in which the posts for that week are discussed and in which the risks are assessed. If this team is in doubt about the potential controversy a post could produce, another manager or the president of the company needs to make the decision. However, this occurs very sporadically. Generally, social media departments in SMEs can respond quickly to current events, in contrast to large firms. In large firms, as mentioned in the social media management paragraph, there are several departments involved in social media risks. First, the webcare team monitors social media posts. When a post gets too technical or difficult and the webcare employee has no idea how to respond to it without causing harm to the reputation of the company, it will be sent on to the social media department, media relations or another department for which the question could be relevant. Furthermore, community management focuses on the engaging posts of the company. They also send their questions through to us when they get to complicated. Most of these departments are situated in different cities, which could take some time until there has been a response or solution to the problem.
All respondents indicated that the largest social media risks in companies in the Telecom industry involve reputational risks. This is in line with previous research (Brivot et al., 2017; Demek et al., 2018; Di Gangi et al., 2018; Scott and Jacka, 2011). There are several ways in which the company’s reputation could get damaged. Existing reputational risks get magnified due to social media, which was also stated by Scott and Jacka (2010). Also, it is more difficult to fix wrong or mismatched posts than twenty years ago. In the past, it was possible mistakes were made in certain campaigns. These campaigns could get retracted and, in some time, the public had forgotten about the incident. Today, social media has accelerated the effect that was started on the internet. When something is out there, it is almost impossible to delete it. There is always someone who makes a screenshot or saves it on his computer. Moreover, a minor reputational risk for large firms is ‘’internet trolls’’.
We also have some problems with ‘’internet trolls’’. These are people that write very bad things on social media (something political or racist). On their social media page, it is stated that they work for this company. 9 out of 10 times, this person does not really work for our company. – Team leader Tech desk, Firm C.
15 language in it that they have to be removed. Nowadays, people are constantly online and companies need to be aware that posts or wrong company statements can’t be removed. Therefore, it hurts the reputation of the company if a complaint or negative comment gets removed. This is in line with the ‘’beyond control’’ frame of Brivot et al. (2017). The last reputational risk mentioned by the interviewees is about mismanagement between company culture and the types of items that are posted on its social media accounts. When the company has targeted older people, their social media account shouldn’t focus on posting funny items. They should provide guidance and clear answers, which is in line with previous research (Aula, 2010). Moreover, posts are not supposed to look sloppy or hastily created and there shouldn’t be any confidential information in online answers. Consequently, it is important for social media teams that nothing sparks negative sentiment in this high ‘’churn’’ environment.
The social media manager consumer market mentioned that a large company that just adopted social media needed a social media policy. The policy was adopted at the beginning of the social media period and taught the employees how to use social media and that everything they posted as an employee had a direct effect on the company. However, when this policy was implemented, it did hurt the ambiance of the company and the social media department obtained a bad reputation among the employees. Furthermore, one of the interviewees mentioned that employees felt restricted by the policies. Employees started to approach the social media department with creative social media ideas after the social media department stopped by actively enforcing social media policies. Instead of trying to correct employees, they now try to collaborate with employees to generate the best content and improve the work climate.
‘’However, when we applied these rules, other employees started to see us as the ‘’social media police’’.’’ – Social media manager consumer market, Firm C.
16 media department told the employee that this behavior was unnecessary and shouldn’t be posted on a public account. Employees know that everything they post on social media will reflect back to their company. Large companies also don’t have explicit rules, but the interviewees mentioned that it is common sense to avoid posting about religion, sex or politics. At the beginning of social media, it was needed to implement rules to make employees aware of the risks of social media usage. Currently, social media awareness has matured and the need for a strict policy has died out. Another reason was given by one of the respondents. She noted that social media grows so rapidly that most of the policies would become outdated fairly quickly if they would be implemented.
‘’There is no specific policy for how to use social media internally. People know they shouldn’t post confidential information on their social media pages. It is kind of an unwritten rule.’’ – Campaign and content manager, Firm A.
Furthermore, previous research noted that risk management, accountants and controllers played or should play some role regarding social media risks (Arnaboldi et al, 2017; Demek et al. 2018). Nevertheless, all interviewees mentioned that risk management departments were not included in social media meetings or other activities regarding social media. Managers in SMEs mentioned that risk managers Interviewees could not provide a clear answer to why they were not included. Also, several risk managers were contacted earlier in the interview process. They responded that they had nothing to do with social media, but they all considered it very interesting and mentioned that it could be a thing in the upcoming years.
Social media risk assessment
17
‘’The risks while using social media are recognized by ‘’internal radars’’ of employees’’ - Team leader
tech.desk, Firm C.
Nevertheless, controversial posts could be risky but are also used to generate more online traffic for the brand as shown by the quote below. These posts contained jokes or puns that could be taken the wrong way. A joke about a festival with a slight insinuation to drug use. Most of the young customers could enjoy such a post and tell friends about it because it is so risky that it barely happens. However, some younger customers and most of the elderly customers will not appreciate such a joke and in the worst case will move to a different provider. These outcomes are all taken into consideration when deciding if such a thing must be posted. These posts are not made solely by the social media department, and they need permission from their supervisors to post. However, this strategy was only mentioned by SMEs. Most of the large companies have a reliable brand image and such a post can hurt a lot more than it can gain.
‘’It happens that a post that is expected to spark some negative reactions, is posted, because the team thinks the positive effect (more views) of the post will exceed the negative reactions.’’ - Campaign and content manager, Firm A.
Next to managing risks that exert from using social media, social media is used to diminish and avoid other risks faced by large firms. In the webcare department, social media is used as a communication and detection channel. An example of this function is shown in the next quote. Social media can detect certain problems 5 to 10 minutes than call centers. These little differences can have large consequences in this fast-paced environment and can vastly increase customer appreciation if it leads to shorter response times of the company (Champoux, Durgee and McGlynn, 2012). Social media posts are scanned by a computer program and when certain words are used multiple times, the company can react immediately. It takes several different calls to notice a pattern in call centers and even more minutes to reach the conclusion that there is a problem somewhere. Social media has vastly improved this process in large companies. However, these practices were not identified by the interviewees of SMEs.
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Discussion
Research on social media risk management has grown in recent years, but additional research is needed to understand how these risks can be controlled in companies. This section will discuss the results of this research compared to previous literature. The first finding in the results is that all firms in this research had established separate social media departments. In SMEs, a distinction is made between the webcare department and the advertising department. In large companies, a community management team and a corporate communication team are added to the previously mentioned departments. These findings are in contrast to previous literature (Arnaboldi et al., 2017; Brivot et al., 2017) that argue that controllers or marketing and communication departments focus on social media-related issues. Brivot et al. (2017) mention in their ‘’re-territorialization’’ frame that social media has grown too big for just marketing and communication departments and that these issues should be managed by risk management. This research shows that risk management is not included in risk assessment and management tasks in the telecom industry. The risks in this industry are almost exclusively reputational-based and can be solved or prevented by experienced employees. Managers in these social media departments agree that they don’t have contact with risk managers, but also can’t explain why this contact lacks. This result is interesting as it shows that firms have integrated social media departments in the telecom industry, which shows that firms in the telecom industry are not including hybridization of their departments, as mentioned by Arnaboldi et al. (2017).
19 media policies are needed to create structure in social media activities, which result in less social media risks. This study expands the body of literature, as it shows that integrating a strict social media policy is not a guarantee for social media success and a reduction of social media-related risks. Rather, the effect of an integrated policy should be measured in companies to assure the effectiveness of the policy.
This research shows that firms are deliberately posting risky content to generate more online traffic for their brand. SMEs are more risk-taking than larger firms during this process. Furthermore, this research contributes to previous research (Aula, 2010; Demek et al., 2018) by identifying a new risk in the form of ‘’verified’’ customers. Customers like these, with numerous amount of followers, are identified by social media scanners of large firms. These customers receive additional attention when answering their questions. Moreover, large firms use social media scanners to recognize potential problems and reduce reaction times of breakdowns instead of using them to discover customer preferences. This finding adds to the ‘’subveillance’’ frame of Brivot et al. (2017). They mention that social media data should be used to gather information about customer preferences, but as shown before, also as a detection instrument.
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Conclusion
This research analyzed social media risk management in the Dutch telecom industry to answer the following research question: How are social media risks managed in SMEs and large firms in the telecom industry? This study adds to the social media risk literature by studying the different approaches of SMEs and large firms. Furthermore, it tests the framework of Brivot et al. (2017) in an industry with high social media activity.
The findings elaborate on previous research by showing that firms in the telecom industry have integrated social media departments, consisting of webcare and brand departments in SMEs, while corporate communications and media relations are added in large firms. Previous literature expected accountants and controllers to have a more active role in dealing with social media risks, but this does not occur in the telecom industry. Secondly, in all three firms, risk assessment is done using rational thinking. Social media has matured so much that almost all employees can deduce if a post or response is acceptable or not. Still, regarding posts on their social media platforms, SMEs are more risk-seeking and take more risks with their posts to gain more customers, while larger firms are more risk-averse. Moreover, the findings show that firms in the Dutch telecom industry have stopped implementing and actively enforcing social media policies, which is contradictory to previous literature (Demek et al., 2018; Di Gangi et al., 2018; Haynes, 2016; Scott and Jacka, 2011). Social media use matured over the past couple of years and it is not necessary anymore to lecture employees on how to use this form of communication. Also, the results show that removing or not actively enforcing social media policies improved the work floor environment and promote creative ideas regarding social media. Last of all, this research adds to the body of literature by studying the differences between SMEs and large firms. SMEs saw social media as an opportunity when they integrated it into their company structure. Large firms, on the other hand, noticed that competitors were using social media, so they implemented it too. This difference in mindset does not lead to a very different approach to social media. Large firms have more human resources, which is not necessarily an advantage in a social media environment. SMEs can react faster to current events due to their more agile company structure. However, additional technical resources are an advantage when used to decrease response times.
Theoretical implications
22 followers on their social media pages as a risk. Third, it reveals that social media policies are not actively enforced anymore in the Dutch telecom industry, which is in contrast with previous literature (Dreher, 2014; Patel and Jasani, 2010). Furthermore, it tests the framework by Brivot et al. (2017) in an industry with high social media activity. It shows that three of their four frameworks do not apply to this industry as firms acknowledge that reputational risks should be controlled, but are not afraid to lose control. Furthermore, it adds to the ‘’subveillance’’ frame that social media data is not only used to gather information about customers but also to detect problems in their system or products.
Managerial implications
This study has some interesting findings for managers. First, managers should not underestimate the effect social media policies have on their employees. Policies are used to guide online behavior on social media, but if these policies are enforced actively, effects could become negative. Employees shouldn’t feel restricted by the policies and firms should be aware that it could damage the working atmosphere. Next, managers could diminish social media risks in large companies by hiring employees that could develop an ‘’internal radar’’ if the company has enough resources. Otherwise, in SMEs, social media departments should be kept small and manageable to assess all the activities of the employees. Last of all, managers should implement social media scanners to diminish the risks. If these are too costly, additional attention should be paid to customers with a lot of followers, as they present additional reputational risks.
Limitations and future research
24
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Appendix
Appendix 1: Interview guide
On behalf of the University of Groningen, a study is started into the role of social media in the risk management processes of Telecom companies. The goal of this research is to determine what influence social media has and how it is managed inside certain companies. Furthermore, different points of view are considered in this study to provide a complete overview of social media altercations in the company. The aim of this study is to get a better understanding of social media in a corporate environment. The results of this study will be confidential. Moreover, these results will only be used for this research. The interview will be transcribed and coded to guarantee its validity. Therefore, the interview needs to be recorded, do you object to this?
General questions:
1. What is your function at the company?
2. How many years have you worked for the company? 3. Has your function changed over the years?
4. Has social media changed your job? If yes, how? Social media:
5. What kind of social media channels does your company use? 6. How does this organization use social media? (internal/external)
7. Why does this organization use social media? (does it help achieve goals?) 8. If applicable: When did this organization integrate social media into the company
structure? Social media management:
9. What social media risks are present in your organization? (Information leakage, employee productivity, reputational or IT security risk)
10. Who/ which departments manage social media (risks)?
a. If not applicable, why doesn’t the company focuses on social media risks? 11. How does the organization determine which departments are responsible for social
29 What kind of social media policy is integrated in the organization?
12. How is social media risks connected with traditional risk management inside this organization?
Social media risks assessment:
13. How does the organization identify social media risk? 14. How is social media risk measured?
15. How is social media risks assessed? Social media risks communication
16. How are these social media risks communicated throughout the organization? 17. What communication channels are used? Why are these used?
