(Social) Entrepreneurship
University of Groningen Faculty of Economics and Business Master’s in Business Administration –
Small Business & Entrepreneurship Written by
Abstract
This thesis analyses how organizations use Social media networks (SMNs) to create social value. Attention is also given to the influence that social value has on creating economic value. Seven interviews in total were conducted on a single organization. Three different insights, called perspectives, were taken, namely from the entrepreneurs, the employee, and the users. The interviews were transcribed, coded and combined into a coding scheme, which are integrated in the results. There are a lot of factors that influence the creation of social value, such as social interaction and safety. The SMN plays an important role in some founded relationships. Two of the most striking relationships that finally result in social value are: first, the SMN leads to identifying, which is influenced through the power of ambassadors on the platform, second, the SMN leads to community building because of the amount of social interaction it provides.
Keywords: Social Media Network, Social Value, Economic Value, Entrepreneurship, Social Entrepreneurship
Table of contents
1. Introduction ... 5
2. Relevant literature ... 7
2.1 Social media networks ... 7
2.1.1. Online businesses ... 7
2.1.2. Defining social media networks ... 7
2.1.3. Individuals’ and firms’ motivations for using social media networks ... 8
2.2. Social value creation ... 9
2.2.1 (Social) entrepreneurship ... 9
2.2.2 Defining social value creation ... 9
2.3 Sub-research questions ... 11 3. Method ... 12 3.1 Research design ... 12 3.2 Research setting ... 12 3.3 Case selection ... 12 3.4 Data selection ... 13 3.5 Data analysis ... 13 3.6 Quality of research ... 14
5. The case: United Wardrobe ... 15
5. Results ... 16
5.1 Social value societal level ... 16
5.1.1 Summarizing the societal level ... 17
5.2 Social value community level ... 17
5.2.1 Identifying ... 17
5.2.2 Quality products ... 17
5.2.3 Safety ... 18
5.2.4 Ambassadors ... 19
5.2.5 Community building ... 19
5.2.6 Summarizing the community level ... 19
5.3 Social value; family/personal level ... 20
5.3.1 Fun ... 20
5.3.2 User-friendly platform ... 20
5.3.3 Social interaction ... 21
5.3.6 Other social personal/family factors ... 22
5.3.7 Summing up personal/family level ... 23
5.4 Economic value ... 23
5.4.1 Attached to the platform ... 23
5.4.2 Marketing ... 24
5.4.3 Sustainable organization ... 24
5.4.4 Selling outside the platform ... 24
5.4.5 Summing up economic value ... 25
6. Discussion and Conclusion ... 26
6.1 Research questions ... 26 6.2 Conclusion ... 29 6.3 Theoretical implications ... 30 6.4 Practical implications ... 30 6.5 Limitations ... 31 6.6 Future research ... 31 References ... 32 Appendices ... 36
Appendix I, Interview guide entrepreneurs ... 36
Appendix II, Interview guide users ... 38
1. Introduction
“When you give everyone a voice and give people power, the system usually ends up in a really good
place.” (Mark Zuckerberg, founder of Facebook)
Social media networks (SMNs) have had an important role in our lives over the past few years (BVDW, 2010). This can be proved by the millions of people who participate daily in thousands of social media networks, where interactions often generate new knowledge and learning for the participants (Faraj, Jarvenpaa, & Majchrzak, 2011; Rheingold, 2000; Tapscott & Williams, 2008). Another concept in this study is social value creation. The concept of social value creation has in the past years received more attention in the literature, however, it is an on-going topic to discuss in politics, businesses, society, science and economics. There is some information about the concepts for SMNs and social value in the literature on Information Systems (IS). However, the two concepts have not yet been researched together. Therefore, the research in this thesis contributes to this understudied area by revealing how an organization uses SMN to create social value, especially organizations that have a focus on high economic value and an interest in social orientation.
Social networks are today one of the most important dimensions of people’s social environment, so much so that they may have the power to enable or constrain living and working conditions (Johnson, Faraj, & Kudaravalli, 2010). Famous examples of social media tools/platforms are: Facebook, LinkedIn and Twitter. The key features of SMNs are fairly consistent, however the culture varies. Some SMNs support pre-existing social networks, while other SMNs want to connect strangers based on a shared interest, political view, or activity (Boyd & Ellison, 2007). The content of such websites depends predominantly on user-generated activities; these activities are often informal contributions (Scott & Orlikowski, 2014).
These online developments give opportunities for social entrepreneurs to exploit new business models. Social entrepreneurship combines profitability with social/environmental goals (Doherty, Haugh, & Lyon, 2014). Santos (2012, pp. 345-346) defined social entrepreneurship – suitable for this study because of its broad scope – as such, “social entrepreneurship is not specifically about creating market mechanisms or securing government subsidies or creating a social enterprise, it is about crafting effective and sustainable solutions using whatever combination of institutional means is deemed effective.”
The purpose of social value is interpreted in different ways in the literature. One interpretation is that social value deals with promoting community development, creating fairer policies or helping with other social problems (Austin, Stevenson, & Wei-Skillern, 2006; Sud, Van Sandt, & Baugous, 2009). Martin and Osberg (2007) give another interpretation: that the ultimate purpose of creating social value is to improve the wellbeing of disadvantaged individuals.
In sum, both concepts – SMNs and social value – have already been well researched. However, the role of SMNs within social value creation has not yet been studied. Therefore, this thesis fills the gap between the two concepts. Specifically, this research focuses on an entrepreneurial organization – United Wardrobe (UW) – that creates high economic value and is in some way socially oriented, which means that the organization fits with the definition of social entrepreneurship, supposing that the social value is highly important for these socially orientated organizations. Besides, the influence of social value on economic value is researched. This organization has an online platform with a SMN where users can sell their clothes. To fill the gap in the literature, the following research question is proposed:
How do organizations use Social Media Networks to enable the creation of social value?
The study is relevant because it will give a better understanding of social value creation through SMNs and contribute greatly to the IS literature. Korsgaard and Anderson (2011) split social value into three levels: societal, community and personal/family. This study goes deeper into this theory by finding factors that influence social value in these different levels and also how these factors influence each other. In addition, the study looks to the influence that social value creation has on economic value creation, which is less researched. This is striking because organizations that have the purpose to create economic value realize more and more the added value of social orientation. The study has also practical relevance; as has been previously mentioned, SMNs give opportunities to entrepreneurs and organizations alike. This study focuses on an organization that creates high economic value and also has some social value creation. Therefore, the results are also useful for an organization that operates in the same field. These organizations can improve their SMNs by being aware of the factors that create social value, which in turn influences their economic value creation.
2. Relevant literature
The relevant review gives a clear understanding of the different concepts. First, the concept of SMNs is discussed. Second, the concept of social entrepreneurship is explained, which includes defining social value creation. The chapter ends with an acknowledgement of gaps in the literature, followed by this thesis’ sub-research questions.
2.1 Social media networks
This sub chapter defines e-businesses first, and then the concept of SMNs. Lastly, the motivation of using a SMN, as suggested by the literature, is given.
2.1.1. Online businesses
There were about 59,000 web-shops operating in the Netherlands in 2014 (Webwinkelvakdagen.nl), with a total turnover of almost €14 billion. The turnover of online businesses, called e-business, had a growth of 134% from 2008–2014. In contrast, the turnover of offline businesses declined by 7% (ABN Amro, 2014). Judging from the literature, online business can be roughly divided into two areas. The first is business-to-consumers (B2C) commerce. The second is consumer-to-consumer (C2C) e-commerce: transactions between two individuals. This second type of e-commerce can be found in chat rooms, forums, third-party listing sites and any other places where people can exchange with each other (Jones & Leonard, 2014). An important factor in C2C e-commerce is trust because the buyer has to rely on the seller’s cues to determine if the transaction is a good idea or not. The seller has the advantage of setting up safeguards, such as upfront payment. Therefore, the buyer of a transaction is at a bigger disadvantage than the seller (Jones & Leonard, 2014). Jones and Leonard (2014) found some factors that influence the trust of a buyer in a C2C e-commerce, namely website quality, third-party recognition, fear of seller opportunism and information asymmetry. For example, the seller has to display pictures of the product, so the buyer can ensure the quality and confirm if the description is consistent, in order to lower the fear of seller opportunism. It is striking that there is no literature on consumer-to-business-to-consumer (C2B2C). C2B2C means that the business is a third party, who receives part of the fee from the transaction. In other words, the buyer pays the organization, and the organization in turn pays the seller.
2.1.2. Defining social media networks
and Haenlein (2010) classified different types of based on high or low self-presentation/self-disclosure and high, medium or low social presence/media richness. The researchers split these types up into blogs, social networking sites, virtual social worlds, collaborative projects, content communities, and virtual game worlds. They classified social networking sites as high in self-presentation/self-disclosure and medium in social presence/media richness, and describe social networking sites as ‘‘applications that enable users to connect by creating personal information profiles, inviting friends and colleagues to have access to those profiles, and sending e-mails and instant messages between each other.’’ From a IS perspective, Boyd and Ellison (2007) describe social networking sites as having three characteristics: ‘‘a web-based service that allows individuals to (1) construct a public or semi-public profile within a bounded system, (2) a list of other users with whom individuals can share a connection, and (3) a viewable and searchable list of connections and those made by others within the system’’. Kane, Alavi, Labianca and Borgatti (2014) updated the term from ‘Social Networking Sites’ to ‘Social Media Networks’ because social media platforms mediate social networks; much of the activity may occur outside the platform but the platform itself continues to be positioned in the middle of the users it connects and mediate their relationships. The updated definition of social media networks has four essential features: ‘‘(1) they offer a unique user profile that is constructed by the user, by members of their network, and by the platform; (2) they provide access to digital content and protect it from various search mechanisms provided by the platform; (3) they articulate a list of other users with whom users share a relational connection; and (4) they enable users to view and search their connections and those created by others on the platform’’. This definition gives a clear overview about what a social media network is and fits best with recent developments in the Web 2.0; therefore this is the framework that is used in this thesis to evaluate if an online platform is a SMN.
2.1.3. Individuals’ and firms’ motivations for using social media networks
Firms use SMNs to support the creation of brand communities (Muniz & O’Guinn, 2001) or for market research that helps to reach their business goals (Kozinets, 2002). Each brand community has a unique purpose, however, all organizations have a common goal – namely to establish and develop long-term connections with their current and potential consumers (Zaglia, 2013).
2.2. Social value creation
This part begins with to explain the difference between entrepreneurship and social entrepreneurship, after which the concept of social value creation is illustrated.
2.2.1 (Social) entrepreneurship
In the literature, the single most widely used definition of entrepreneurship can be attributed to Covin and Miles (1999), who indicate that an entrepreneur is an innovator who addresses market needs with a new business model, technology, service and/or product.
The last decade the social part of entrepreneurship has become even more important (Dacin, Dacin, & Matear 2010). In the Introduction, the broad definition of social entrepreneurship according to Santos (2006) is given; this definition is similar to the definition of social entrepreneurship given by Austin, Stevenson and Wei-Skillern (2006, p. 2): “Social entrepreneurship is an innovative, social value creating activity that can occur within or across the nonprofit, business, or government sectors.”
These definitions are connected because both have a broad view of social entrepreneurship, with means that social entrepreneurship can exist in any organization. Austin et al. (2006) developed four dimensions to compare commercial business to social business. The first dimension is market failure – a significant problem for the commercial entrepreneur but a potential opportunity for a social entrepreneur because commercial market forces cannot always meet social needs. The second dimension is mission. The purpose of social entrepreneurship is to create social value for the public good, whereas commercial entrepreneurship aims to create profit and revenue. Commercial entrepreneurs can, however, also benefit society with new products/services and new jobs. The third dimension is resource mobilization. The social entrepreneur has more difficulty in getting capital from banks and therefore needs another approach to mobilize resources, which could be via crowdfunding or business angels. The fourth dimension is performance measurement: the social entrepreneur has more difficulty in measuring performance than the commercial entrepreneur, who can rely on measures like market share, quality and financial indicators. Therefore, the researchers conclude, the distinction between commercial and social entrepreneurship is not dichotomous, but rather a continuum that ranges from the purely social to the purely commercial.
2.2.2 Defining social value creation
Schumpeter, 1934). This value creation is more important for the commercial entrepreneur. Second, there is social value creation, which is where social entrepreneurs are more interested. There is not much attention in the IS literature about social value creation, but in the entrepreneurship literature on entrepreneurship, the following definition is found in Felício, Gonçalves and Gonçalves (2013, p. 2140): “It refers to the necessary goods and services provided by organizations with social purposes such as promoting community development, advocating for more inclusive and fairer policies, or dealing with a variety of other social problems.”
Perrini (2006) emphasizes the fact that social expected value can enhance social conditions such as working conditions, access to technical progress, or integration and participation within the community. Furthermore, Chow and Si Shi (2015) conducted a research about customer satisfaction with brand pages in Social Networking Sites. When they say social value, they mean the perceived benefit of enhancing a customer’s social wellbeing and relationships. They divided social value into three variables: interaction, collaboration and social presence. Interaction is important in strengthening a user’s social identity with the brand page. Collaboration is about the exchange and support among followers. Social presence means creating a community in which customers feel a sense of human contact and warmth. The researchers suppose that when a firm meets these criteria, customer satisfaction will be higher. These findings, however, only support social presence – it enhances participants’ social wellbeing in the context of brand page, and makes them feel a sense of human warmth.
While it is easy to understand the importance of social value, it is more difficult to measure it. Korsgaard and Anderson (2011) developed a framework that divided social value into three different levels, thus making it easier to research. The first is societal: values could be for sustainability and instrumentality. The second is community: values can be for local or sustainable growth. The third is personal/family: values can be for development of the family as an institution or self-actualization. All of these levels can be in some way linked to one of the aforementioned theories – societal to the definition of Felício et al. (2013); community and personal/family to Perrini (2006) and Chow and Shi Shi (2015).
Figure 1. Economic and social value for an organization (Meyskens & Bird, 2015)
2.3 Sub-research questions
To help answer the central research question of this thesis, two sub-research questions are developed. The existing literature considers the two addressed concepts separately, however, the concept of ‘social value creation’ is explained very generally. Therefore, there is no literature about social value in the focus of this research, which is high economic value and some social orientation. To research this, it is first important to know which social values are created through the organization. In order to do that, the following question is proposed:
Which forms of social value creation does the organization support?
Furthermore, the role of SMNs in social value creation has not yet been researched. Therefore, the following sub-research question is proposed:
3. Method
In this chapter, the research methodology is discussed. First, the design of the research is presented. Second, the setting of the setting is explained. Third, the selection of case studies is discussed. Fourth, the procedure of data selecting is shown. Fifth, the analysis of data is explained. Finally, the quality of the research is addressed.
3.1 Research design
This case study attempts to fill the gap in the literature about social value creation and (especially) how SMNs are used by organizations to create these social values. For Eisenhardt (1989), the aim of research can be to generate theory, and this aim is applicable to this research. An embedded single case study – a case study with multiple perspectives of analysis – is carried out because it enables a more in-depth analysis. The main perspective is ‘the organization’; the second perspective is ‘the user’; the third and final perspective is ‘the employee’.
The theory building approach (Eisenhardt, 1989) has the following steps: getting started, selecting cases, crafting protocols, entering the field, analysing cases, shaping hypothesis, enfolding literature, and reaching closure.
3.2 Research setting
Four students from the Rijksuniversiteit, Groningen, supervised by Dr D. J. Langley, carried out the study. Every student was given the same research question – only the focuses of the other researchers were different. This research was focused on an organization with high economic value that also has some social orientation, with the assumption that these orientations lead to high social value creation. The interviews with entrepreneurs and the employee of the organization, UW, were conducted at their headquarters in Utrecht, the Netherlands. There were three interviews with the entrepreneurs and one with the employee. This was carried out from 20–29 April 2015. The interviews with two of the users were carried out in Groningen and one of the interviews was conducted through Facetime. The interviews took place from 14–21 May 2015. All users preferred to be interviewed anonymously. 3.3 Case selection
3.4 Data selection
The information from these cases is gathered through semi-structured interviews (primary data) because qualitative information is needed to build a new theory. The structure of the interview is based on the principles of Emans (2004). The interviewer followed the guidelines, however, there was some leeway given for the interviewer to react to the answers of the interviewee. The interview guidelines were prepared by the four student researchers and were checked by supervisor Dr D. J. Langley and interview specialist Dr M. A. G. Offenbeek, both from Rijksuniversiteit Groningen.
The interviews for the entrepreneurs and users can be found in appendices I and II. The total length of the interviews was around 45 minutes. All interviews were in Dutch, as all interviewees preferred this language. The interviews were recorded and during the interview notes were written. The quality of the recordings was good, which means that no information has been lost. All of these interviews were transcribed.
A second student researcher, Mathijs Hoek, attended the interviews for two entrepreneurs: Berden and Verheul. According to Eisenhardt (1989), this approach has two advantages: it enhances the creativity of the research and the convergence of the observations from both interviews and enhances confidence in the findings. The role of the fellow student present was to observe. After the interviews, both researchers shared the observations to see if there were any differences, which turned out not to be the case.
3.5 Data analysis
3.6 Quality of research
5. The case: United Wardrobe
The business idea for UW was developed by Berden, an entrepreneur. Berden talked about his idea with Verheul – another entrepreneur -, then his fellow student, at school in 2012, and so idea was born to create a community where people could buy and sell second-hand clothes. According to Verheul, “Berden came up with the idea of UW after he recognized that his sisters liked to buy second hand clothes but there was not a suitable platform for this.” They conducted research into how to start a community and it soon became clear that they would need a programmer. They contacted Dohman, an entrepreneur who had some programming skills and knew other people with IT knowledge. Together, the three of them founded UW.
The website has been online since January 2014 and the IOS app was launched in November of that year. The firm had an average growth of 28% per month in 2014. Now, there are around 75,000 users of the site. The biggest demographic of these users are women between 18-24 years old. Nowadays, UW has eight part-time employees in addition to the three founding members. One of the employees, Slijkhuis, becomes an entrepreneur of UW at the end of 2015. The firm is located in Utrecht and in February 2015 the platform expanded to Belgium.
Users of the platform have to make a profile; with it, users can connect with other users. These connections are called ‘followers’ and the list is publicity visible. When a user wants to buy a garment, there is the possibility to chat, which everyone can see. Aside from the chat function, there is also the possibility to make a bid on a garment.
If a user wants to buy a garment, he or she pays UW, which in turns pays the seller. UW receives 10% of the transaction from the seller and a €1.99 transaction fee from the buyer. For Jones and Leonard (2014), the business model for UW is between B2C e-commerce and C2C e-commerce. Therefore, C2B2C e-commerce, as introduced in the preceding Chapter on the literature, is applicable to this organization.
5. Results
For the research question: How do organizations use Social Media Networks to enable the creation of social value? To be answered, a within-case analysis was conducted. As has already been mentioned in Chapter 3, the results on social values are divided into different levels, which show the economic value. Each part ends with a summary where the results connected to the literature, new factors are named and relationships are highlighted. These summaries are a good start in answering the given research questions.
The most important factors that influence this relationship are expressed, selected by how many times they can be identified in the interviews, how extensively they were discussed and the opinions of the researcher who conducted the interview. Most quotes are integrated into the text, some additional quotes per factor can be found in appendix III.
5.1 Social value societal level
The entrepreneurs and the employee of UW are aware that they are in some way socially responsible; this was, however, not their business founding principle. Berden expressed this as follows: “We, as a firm, do not really take active part in social responsibility, but we do feel that we should be socially responsible.”
Berden considered social responsibility from a user perspective and said, “I do not think people are so much aware about social responsibility when they buy something, of course a little.” In other words, Berden thinks that the users know they are doing something socially responsible, however, this is not the users’ main goal for buying a second-hand product. The users give different opinions about this: User 2 is aware of the fact that using the platform helps to make the world a better place. However, when she buys something at UW, she does not do so with the intention of being socially responsible. Another opinion about social responsibility comes from User 3: “It is one of the reasons for me to buy on UW.” Therefore, it can be said that some users really have a feeling of doing something to make the world a better place when they buy products on UW.
5.1.1 Summarizing the societal level
By comparing the results with the literature, it can be concluded that the results from this thesis have a connection with the definition of social value given by Felício et al. (2013). UW deals with societal problems first, because it does not produce its clothes in developing countries, where working conditions are often poor. Second, it does not contribute as much to environmental pollution because the clothes do not have to be shipped from developing countries to, for example, the Netherlands. Third, it helps to reduce the amount of clothes in the wardrobe that would otherwise go to waste.
The results from the different perspectives correspond well with each other. The organization and users are both aware that the platform contributes to social responsibility; therefore, it is a little strange that they did not include it in their business goals or communicate this issue to the outside world, considering it is clearly an important factor for some users. In conclusion, social value on a societal level is created despite it getting less attention from entrepreneurs.
5.2 Social value community level 5.2.1 Identifying
The first factor that helps to create social value on a community level is identifying with other users. According to Berden, “The seller is, of course, happy when he/she sells his stuff and doing that on a way that is nice, trendy and where he/she can identify with the network”. Bearing UW in mind, the largest number of users has a passion for clothes and comprises women between the ages of 18-24. Therefore, a large number of users can identify with each other. The process of identifying is important for this target group because they watch to their peers and imitate their behaviours.
User 2 gave the following reason for why she participates in the network: “They only offer clothes and the people are from my age group. Especially, girls that are in my network”. User 2 also said: “I usually buy clothes from the people I follow because they have something I like. They put more things on which I also like”. Therefore, the SMN contributes to identifying like minds, which in turn stimulates social value creation.
Berden also acknowledged the benefit in users identifying like minds: “if people can identify themselves with other people, they will be more willing to buy and sell clothes”. This also benefits the organization because if there are more transactions, then the organization will earn more.
5.2.2 Quality products
platform; Berden confirmed: “The fashion that is on the platform is also the appearance of the platform”. In other words, the community that offers the clothes also build the image of the platform.
User 2 also makes note of the quality of products: “it is easy because UW checks the products. So you will not easily find worthless products there”. Aside from the quality of products, users often mentioned the large, broad assortment of clothes on offer. User 2 said about the assortment: “They are things you do not see in cities because everyone can put clothes online themselves”. An example of the broad assortment comes form User 3: “There are not as many shops near [in the neighbourhood] that sell those ethical things, which I like”. Also, User 1 likes the assortment: “A little bit hipster. Something that is trendy”.
5.2.3 Safety
One factor that influences social value on a community level is ‘safety’. Safety means that the seller gets their money and that the buyer gets their product. Once the product is sold, UW strives to pay the seller within 21 days. This is a long time, however, but has to be so because there is a 14-day return policy in the Netherlands, which means that if the buyer is not satisfied with the bought product (e.g. it is damaged), the buyer is entitled to send the product back within 14 days. Slijkhuis said: “You [the user] have the advantage of some security because money is held until the product has arrived and whether or not the person has decided to send it back”. Dohman gets a lot critical feedback from the sellers about this. The interviewed users do not cite this as a problem. User 2 said about safety, “it is safe because when I buy something, it is certain that I get the clothes, otherwise I get my money back”. User 3 also commented, “Now, you know a little bit more from whom you buy”. By this, the user means that because of using SMN, people know each other a little first and therefore get a safer feeling of buying a garment from sellers.
Another meaning of safety is the privacy of the users. This means that UW does not sell data from its users to other firms, and also that some of their personal data is not public. The entrepreneurs cited this as especially important. Dohman says this about the issue: “We cannot give a 100% guarantee but from people’s perceptions, it is very safe. It is all about how you go about doing this”. However, the users do not mention this. A possible explanation is that users are not aware of this level of privacy, or consider it as expected.
5.2.4 Ambassadors
The next factor that stimulates the creation of social value is ‘ambassadors’; this factor has a direct relation with SMN. In this instance, ambassadors are users of the platform that have a nice profile and sell a lot.
These ambassadors are listed on the homepage of the website. According to Berden, “Nice profiles that have a nice offer available to users, are really the ambassadors of our brand”. Entrepreneurs mention that ambassadors are important in two ways: to strengthen the brand – as Berden states – and to set an example for other users. Dohman phrased it as follows: “We show our top sellers on the main page and they are mostly the nicest users. We try to make these sellers stand out to show other people, ‘this is the purpose of UW’ ”. User 3 confirms this notion of setting an example, saying: “I also watch the top sellers to see what they have on offer. They must have nice clothes because otherwise would not be the best sellers”. However, in the eyes of User 3, the quality of the clothes between the top sellers and other users are more or less even.
To show that ambassadors are a direct result of SMN, Verheul can be quoted: “It is nice to build a network because when you have 500 followers, most of whom have an equal number of followers, then you can sell your products a lot more quickly”.
5.2.5 Community building
A factor that helps to create social value on a community level is ‘community building’. Community building is highly important for the organization, as Dohman states: “From the outset, we wanted a website that is nice to visit; where there is a community and where users can shop a friends would on the high-street, all through the conveniency of the Internet”. Dohman also said, that “Especially among women you see that they like to shop together not just to buy products but also to talk”. This idea of shopping together and talking is a result gained by using SMN through making profiles and user interaction. User 1 confirms this, saying: “At a given moment you recognize people where you often buy or sell something. It is kind of a marketplace”.
5.2.6 Summarizing the community level
which can be linked to community building. This is because social presence resembles the real life action of shopping together, which gives a sense of human contact and therefore improves the human well-being.
The factors ‘identifying’ and ‘quality of the products’ are not named in the literature neither can they be linked to a theory. Not naming ‘identifying’ in the literature is notable because according to this case this is an important factor for participating in the network.
Next, ‘identifying’ has relationships with a lot of other factors. The first is through the big assortment of, for example, vintage clothes, whereby users can identify with other users who have the same fashion style. The second is the ambassadors stimulate the identifying process; the user imitates the behaviour of the ambassador. The third is where identifying benefit the community building, which in turn helps to achieve a safer platform.
Furthermore, SMN influences all factors – except the ‘quality of clothes’ – positively. These factors in turn create social value on a community level. What is noteworthy is that the views from the different perspectives largely correspond. Only the factor of ‘safety’ has some difference in perspectives. UW’s entrepreneurs and the employee pay a lot of attention to this; however, users cited this as being less important. Possible reasons are that it is an expectation for users that a platform is safe or that they are not aware of privacy issues.
5.3 Social value; family/personal level 5.3.1 Fun
One of the most important factors that contribute to creating social value on an individual level is ‘fun’. In this case, fun means that it is a pleasurable experience to come to the website. According to Berden, the main reason as to why users come is to have fun. In-line with that, Verheul also says: “For the buyers we have a place where they can buy durable clothes in a fun and inexpensive way”. User 2 confirms this, saying: “It is just fun”.
User 2 says the following about using the website: “You have the feeling you are joining a place where it is nice to buy and sell stuff”. This confirms the views of UW’s employee, Slijkhuis, “It is very valuable for a number of people who want to buy second-hand clothes in a fun way”.
SMN helps contribute to the ‘fun’ factor through, for example, chatting, following, and profile creation.
5.3.2 User-friendly platform
interviewed users, the part: “nice to go to”, has been successful. For example, User 3 said: “I made an account on UW because it looks nice”, while User 2 said: “It is easy to use and it is also fun”.
Slijkhuis realized user-friendliness as being important: “Better design, pleasant usability. It is easy to place a message beside the product to ask questions about it”. From the last part of this quote, it can be concluded that SMN plays a role in the user-friendliness of the platform. However, this is not only positive, as User 1 criticized that when he browses through things under the selection criteria of ‘men’, he gets clothes both for men and women. This is a fault of the platform what influences the user-friendliness negatively.
5.3.3 Social interaction
The next factor that has been mentioned a great deal by entrepreneurs and the employee is social interaction, by which they mean the frequencies of interaction and different manners in interacting, rather than the quality of the interaction. According to Verheul, the organization consciously opted for a social twist on their platform: “By social twist we mean it is not only dry buying and selling but that it is fun, where you can directly ask questions and get answers quickly”.
Social interaction is a direct result from SMN because it exists when users talk with each other, which is a function of a SMN. Verheul discussed the extra value of SMN: “The social media network we created is extra nice because of, for example, push notifications, that follow each other and see what other people do”. Slijkhuis also recognizes the extra value, and sketched a possible situation without SMN: “It would be some Marktplaats.nl, something like a webshop. But I think we would really go down; it would not be used so intensively as now”.
Besides the entrepreneurs and the employee, users also mention social interaction. User 3 said: “I think that people seek a lot of contact with each other by chatting. I think when you have the same idea – a connection – it is more than only selling clothes”. Similarly, User 1 also mentioned: “I think the target group, women, attach a lot of value to the social media aspect. It works fast and the chat fits with the age demographic, making it quick to ask a question and quick to get an answer”. Both quotes refer to the role of SMN, which makes the social interaction easy, fun and able to tell a story.
5.3.4 Cheaper clothes
Another important factor that stimulates creating social value is ‘cheaper clothes’. The clothes on UW are often cheaper because they are second hand.
Verheul describes their target group: “they are mostly young, trendy students with a chronic cash shortage and too many clothes in their wardrobe”. Therefore, the young women are interested in cheap clothes. Berden mentioned the attractiveness of mentioning ‘cheaper clothes’ for their users: “Basically, it is easy to get users because when you say to a girl of 16 that there is a marketplace where you can buy beautiful clothes for a nice price, it will work”.
The attractiveness ‘cheaper clothes’ has according to the entrepreneur is confirmed by two of the users. User 2 said: “I can wear very nice clothes without paying the full price”, while User 3 says: “You can have cheap new clothes. It is second-hand but I do not care about that”.
The SMN makes it possible to chat and make a bid on a garment, which results in a negotiation. Therefore, the price of the garment can decrease.
5.3.5 Browsing
According to Boyd and Ellison (2007), browsing means to develop new contacts. When entrepreneurs talk about browsing, they mean scrolling through different products. Therefore, the interpretation of browsing differs a bit.
Berden says, “I think that users really like going through the clothes”. Dohman discusses the influence that browsing can have on transactions: “A bit scrolling what you can do everywhere. You are bored, you go scrolling and maybe you buy nothing the first time, but maybe the third or fourth time you do”. The previous quote mentioned ‘boredom’ as reason to browse, while other reasons given by the entrepreneurs have to do with curiosity and relaxation.
All interviewed users used the app/website to go through (or, ‘browse’) the clothes. Even User 1, who had not at the time of interview either bought or sold anything, used the platform to browse. According to User 2: “I like to see what other people wear”. User 3 used the app to browse because it is easy to open the app and go through the clothes.
5.3.6 Other social personal/family factors
5.3.7 Summing up personal/family level
Boyd and Ellison (2007) state that ‘searching’ and ‘browsing’ motivations are about participating, which coincides with the results from the interviewed entrepreneurs. In short, searching means finding information; this can be linked to both ‘story telling’ and ‘social interaction’. The meaning of browsing has already been discussed. Results also show commonalities with research undertaken into motivations for using Facebook (Johnston, Chen and Hauman, 2013) – using the platform where it is fun and nice and meet new people with whom they can identify. ‘Social interaction’ can also be linked to the social interaction dimension of Chow and Si Shi (2015).
Factors that are not mentioned in the literature, however, and yet can be added are ‘user-friendliness’ and ‘warm feeling’. Especially, ‘user-‘user-friendliness’ can be added because it applies to a lot of platforms. The factors ‘cheaper clothes’ and ‘too much clothes’ are case specific, and therefore less suitable. Most insights into the different factors of the different perspectives correspond. The factor ‘user-friendly’ gets a lot of attention from UW’s entrepreneurs and employee; this is logical because they want to improve the platform on a daily basis. According to them, user-friendliness is one of the strong points of the platform, however, User 1 was critical about this issue. Aside from this, one entrepreneur only names ‘story telling’. It is striking that the users do not consider it at all.
SMN has a high influence on social interaction, which in turn influences other factors. First, social interaction has an interplay with user-friendliness of the platform, because through for example the possibility for asking questions, the user-friendliness gets higher however if the user-friendliness is high, it is easier to interact with others. Second, there is an interplay relationship with social interaction and the fun of using the platform because the possibility of asking and following makes it fun and when it is fun there is more social interaction on the platform. Third, through social interaction it is more attractive to browse on the platform, it makes for example users curious. Fourth, through social interaction there is a possibility to negotiate about the price of clothes, which results in cheaper clothes.
Furthermore, the user-friendliness of the platform and the possibility to browse stimulates, besides social interaction, the fun factor on the platform. Therefore, it is important to have a platform that is easy to use.
5.4 Economic value
As has already been said, the focus of UW is to create economic value. The factors that contribute to creating a high economic value are given in this section.
5.4.1 Attached to the platform
stay longer on the site and are more active”. The hope of the entrepreneurs is that returning visitors will lead to more transactions, which is reasserted by employee Slijkhuis: “You want that the user comes back and places another order. So you have a social commitment to react to messages that are sent to you or sent by someone who is following you”. As can be clearly seen, the SMN plays an important role in attaching users to the platform by creating a kind of social commitment.
User 3 mentioned that she uses the app for going to the platform, and that she uses it every day. She does not particularly come back for the SMN, but rather she returns to the platform because it is a small step to open up the app. However, she likes the social aspects. Therefore, it can be said that it is not only the SMN that attaches users to the platform; it is a combination that includes the SMN and the app.
5.4.2 Marketing
Another factor that influences the relationship between economic value and SMNs is marketing, as Dohman confirms: “We use our own information for our own marketing”. Marketing is important for UW to get new users. To get new users, Verheul said, “We mostly do Facebook marketing; we buy clicks. That way, we get people to our website”. This is logical because the majority of UW users are active users of Facebook.
5.4.3 Sustainable organization
UW wants to create a sustainable organization by using a SMN on their platform. Berden says, “By ‘sustainable’ I do not mean so much that the clothes get a second life but more that we, as an organization, have a long life”. Slijkhuis added the social aspect to this: “The choice is a little bit made from a commercial perspective because we want to bind the user of the platform to the concept”. Furthermore, Berden discussed how to build a sustainable organization: ‘‘The number of transactions and users are our key parameters to build a sustainable organization’’. In other words, UW wants to create a sustainable organization by a lot of new users and existing users that return to the platform, who both do transactions.
To give the organization a long life, they are constantly busy with improvements and new developments, for example, launching the Android app, or expanding into new markets like Belgium and France.
5.4.4 Selling outside the platform
lower the price. That is, of course, very annoying”. This is frustrating for the organization, but it is very difficult to protect the firm from this development. This is a recent issue for the organization; at the time the entrepreneurs work hard for a solution to retain the users on the platform. Meanwhile, the entrepreneurs are very close to the social interaction that happens on the platform and made some program codes that, for example, enable users to give their e-mail to fellow users of the platform.
User 2 also acknowledges the problem, as according to her, “selling outside UW is a big disadvantage. I saw it a few times in the messages. I’m disappointed to see that happening”. It is striking that User 2 is disappointed about this. She is grateful that the online platform gives an opportunity to sell her clothes in a nice way, and is aware that the organization needs money to develop the platform further. Also, User 3 has some experience with the problem of selling outside the platform; she said that people asked for her Facebook so they can close the deal through that medium. She has not respond to their request.
5.4.5 Summing up economic value
UW wants to create economic value through focussing on a few factors that influence value creation. The first is ‘attachment to the platform’, which is realized through SMN and app. Aside from this, a few factors of social value creation also contribute to the process. This is discussed in next chapter. The second is ‘marketing’ – Kozinets (2002) mentioned that SMNs generate information for marketing research, which is in line with the marketing factor in this chapter. The third is ‘creating a sustainable organization’, which is a result of transactions. More transactions lead to more revenue, which in turn hopefully leads to a more sustainable organization. Fourth, ‘selling outside the platform’ is a negative factor that exists through SMN because users closely interact with each other on the platform and are thus able to exchange any personal information they wish.
6. Discussion and Conclusion
First, the research questions are answered, which leads to propositions. Next, the conclusion is presented. Then the theoretical implications and practical implications are given. Last, limitations of the research and suggestions for future research are given.
6.1 Research questions
In the results section, the relationship between social value and SMN is analysed on different levels and from different perspectives. Now the different parts have to be combined in order to answer the sub-research questions.
Which forms of social value creation does the organization support?
UW supports three levels of social value creation, namely: societal, community and personal/family. The factors that influence these creations of social value are already presented in the results section. This section pays attention to the relationship between factors on different levels and the influence of some social value factors on economic value creation. (As an aside, relationships that are highly influenced through SMN are given in following research question).
Some community factors influence social value on societal level. The first relation between community factors and social value is the big assortment of clothes, which increases the choice available, hopefully leading to more transactions and therefore a higher social responsibility and better environment. Another relation is that people can identify with other users with whom they feel they have something in common, increasing awareness of social responsibility. It is striking that there is no strong relationship found between personal/individual factors and societal factors.
Furthermore, relationships are found between some factors of social value on community level and personal/family level. First, ‘ambassadors’ stimulates the factor ‘browsing’ because users like to go through the clothes of other users, especially users who have a high reputation. Second, ‘fun’ stimulates ‘community building’ because users like the concept of going shopping ‘together’. Therefore, users have fun, which results in a stronger community.
How does the organization implement SMNs in order to result in this social value creation?
The results already show the role of SMN on individual factors that create social value. In the previous question, some relationships between the factors on different levels are presented, however the role of SMN has not yet been discussed in the relationships between factors on different levels. This question covers two central relationships; the next question expands upon the most striking relationships.
A central factor of creating social value is ‘social interaction’, which is a result of using SMN. This because users make a profile and have access to digital content, which gives users the possibility to socially interact with each other. As has already been said in the summary, social interaction influences some factors on a personal/family level: cheaper clothes, user-friendliness, fun, and browsing. However, social interaction also influences factors on other levels. First, on a community level, it affects the safety because the identity of people is known, which improves the trustworthiness of sellers for prospective buyers. Second, through social interaction, users can identify like minds more quickly and easily. Third, through social interaction, potential buyers can ask questions about the quality, making it difficult for sellers to fool buyers, which results in the likelihood of receiving higher quality products. Fourth, social interaction helps to build a community because if the users interact, they get the feeling of ‘shopping together’. The final, negative, result of social interaction is that users can easily sell their products to buyers outside the platform.
SMN also plays an important role in attaching users to the platform. Through the SMN, users have to make a profile on the platform when they join the network, which binds them to the platform. This relationship is mediated by some factors, one has been named in the last section of the previous question, namely ‘social responsibility’. Other factors that mediate this relation are; first, ‘identifying’ plays a role because through the SMN the user identifies easier with other users that love fashion and are therefore more attached to the platform. Second, ‘social interaction’ exists through the SMN, so people can easily talk with each other whereby they build a kind of relation with peers, which results in more attached users to the platform. Last, the SMN gives users the feeling that they belong to a community, in other words where users can shop together. This also leads to a stronger attachment to the platform. The organization wants to attach users to the platform because the purpose is that users return to the platform and do more transactions.
How do organizations use Social Media Networks to enable the creation of social value?
In the previous question, some relationships have already been discussed. However, these relationships are, in the eyes of the researcher, not the most striking. The two most novel relationships are now presented, and each of these relationships leads to a proposition.
starting point of this relationship. As said, ambassadors are important for the brand’s image and for setting an example to other users. Ambassadors are highly important for the target group: girls between the ages of 16-24. A characteristic of this group is that they pay a great deal of attention to their peers, imitating behaviours and/or styles. Ambassadors mediate the factor ‘identifying’; the more influence and power the ambassadors have, the better and easier users can identify with others. This can be negative, for example ‘Project X’ in Haren in 2012. This happened because a girl from Haren organized a private party, wherefore she invited friends on Facebook. However, she made the mistake to make the invite public. Therefore, everyone could see the event. Some prominent people convoked others – people that were not invited – to come to the party, which resulted in a lot of social interaction among young people on Facebook. Young people had to go there; otherwise they were not ‘cool’. So in turn, many young people came to Haren. This escalated and resulted in fights between police and young people. However, ambassadors have a positive influence on the identifying process for UW, which results in imitation user behaviour. This relationship results in social value for individual users and for the community. This striking relationship leads to Proposition 1 (shown below).
Another striking relationship, the purpose of the factor ‘community building’ is to bring the interactions made while shopping in the high street, onto the web, where users can get the feeling of ‘shopping together’. Most people from the target group are familiar with online buying, which means that this process does not have to be expanded on further through the organization. Therefore, the organization goes a step further to bring shopping on the high street figuratively to the Internet. This is a result of using SMN because through profiles, users can see with whom they are shopping. This relationship is mediated through the factor ‘social interaction’. If there is more interaction on the platform, such as chatting and following, users get more of an idea of shopping together. Also, this factor of social interaction is influenced through SMN. Finally, this relationship leads to social value for both individual users as well as the community. This novel relationship leads to Proposition 2. Note: It should be kept in mind that the propositions lead to social value creation.
Proposition #1: SMN leads to identifying because of the ambassador factor
Proposition #2: SMN leads to community building because of the social interaction factor
models are developed, shown in figure 2 and 3, to make these propositions more visible. The results may be different for the creation of the factors ‘identifying’ and ‘community building’ on another age and gender. This will lead to different interpretations of SMNs.
Figure 2, Model of Proposition #1
Figure 3, Model of Propositions #2 6.2 Conclusion
This study researched the relationship between SMN and social value creation. This was conducted by a single-case study on UW. To prevent repetition from earlier chapters, detailed information is not included in this section.
The quote from Mark Zuckerberg, CEO of Facebook, in the Introduction: “When you give everyone a voice and give people power, the system usually ends up in a really good place”, is applicable to UW. The organization has created the platform, however, the users have the power and voice to socially interact and either to make the platform successful or to let it fail.
6.3 Theoretical implications
This study contributes to the scarce IS literature by improving the understanding of how SMNs influence social value creation in firms. This is especially so with regards to IS literature, where there is little information on social value creation. The social value factors are split on a different level, based on a study from Korsgaard and Anderson (2011), who used societal, community, and family/personal perspectives. In addition, economic value is added to the study because of the focus of this research.
The literature already gives some factors that play an important role in the relationship between SMN and social value creation. Boyd and Ellison (2007) talk about searching and browsing. In this case, browsing comes back but the entrepreneurs and users changed its definition a little. Motivations to participate in Facebook put forward by Johnston, Chen, and Hauman (2013) are also found in this research, such as perceiving it to be cool, fun, and identifiable. Chow and Si Shi’s (2015) study developed the dimension of social interaction, which is also an important factor in this thesis. Perrini (2006) says that social value enhances social conditions to participate in the community. In this research, this can be linked to ambassadors and safety. The definition from Felício et al. (2013) can be linked to social value on societal level, where the factor of social responsibility plays a role. Therefore, these factors named by the literature can be confirmed in this thesis.
The focus of this research is interesting, to understand what creates high social- and high economic value. This is because, partly through this focus, there exist factors that have not yet been named in the literature, such as ‘quality of the products’, ‘cheaper clothes’, ‘community building’, and ‘user-friendliness’. Besides all these listed factors, there also exists a relationship between factors. These relationships are not named in the literature at all. The relationships are already discussed in the summaries and sub-research questions.
6.4 Practical implications
Recommendations for application to firms that have the same focus as UW, a high economic value and a high social value, can be made.
Second, SMN has to be implemented so that the user-friendliness is high. When the platform is user-friendly, the organization creates a good condition for users, resulting in a high fun factor, easier browsing, easier identifying, and better community building.
Third, the results show that some awareness of social responsibility helps the organization. The users are in some way aware about this and for some it is a reason to use the platform. This can be done, for example, by donating a percentage of the selling fee to charity.
6.5 Limitations
The results of the research have to be interpreted by knowing the limitations. First, the generalization of outcomes is influenced by sample size. There were seven interviews conducted in total: three from the entrepreneurial, one from the employee and three from the user perspective. That is not a great deal, especially from the user perspective. To compensate for the sample size, interviews were deeply analysed and interviews from different perspectives were taken.
Second, some questions in the interviews were considered too vague by the entrepreneurs and users. However, four student researchers, the supervisor and one specialized professor, checked the questions. Questions about social value were in particular considered vague, probably because the term ‘social value’ is not yet common outside academia. Therefore, not all interviewees gave clear answers to these questions.
6.6 Future research
A suggestion for future research is to do a within-case analysis with the studies made by the other student researchers. They have the same sub-research questions and used the same interview guide.
Another suggestion is to repeat the study in the same setting, to see if the same results are visible. It is important that the organization of the case has the same focus as UW, which is high economic and social value.
Furthermore, it is interesting to test the propositions that are presented in this research. The setting to do has already been given.
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Appendices Appendix I, Interview guide entrepreneurs
Fijn dat u een interview met mij wilt doen. Ik zal dit interview gebruiken voor mijn master onderzoek, Unitedwardrobe.nl krijgt voor een publicatie ook een draft van het rapport. Vindt u het goed als ik het gesprek opneem? Ik verwacht dat het ongeveer 45 minuten gaat duren, we beginnen met wat inleidende vragen over uw functie en Unitedwardrobe.nl in het algemeen. Met het onderzoek probeer ik een zo goed mogelijk beeld te schetsen van de sociale waarden die worden gecreëerd door middel van social media netwerken.
Interviewer notes: 15 minuten voor vraag 1 t/m 9, 45 min voor 10 t/m15, door gebruik van Luisteren samenvatten doorvragen sturing geven aan vraag 10 t/m 15. Let op wanneer er in “je” of “men” gesproken wordt, zoek naar ik vind en ik zie.
Vragen:
1. Wat zijn uw functie en taken in de organisatie? a. Wat is uw achtergrond?
2. Kunt u ons wat meer vertellen over uw organisatie? a. Wat is de service die jullie leveren?
b. Welke markt of niche dienen jullie? c. Wat is jullie business model?
d. Hoe zou je je positie in de markt omschrijven? e. Hoe groot is jullie onderneming?
f. Welke partners heeft jullie organisaties?
3. Wat was het oorspronkelijke idee voor de organisatie? Hoe is het idee ontstaan? 4. Met welke missie is Unitedwardrobe.nl gestart?
a. Met welke service zijn jullie gestart? Hoe werd er onderscheid gemaakt van de concurrenten?
b. Op welke markt richten jullie je en hoe?
c. Met welk doel, visie of richting is Unitedwardrobe begonnen? 5. Volgt Unitedwardrobe nog dezelfde missie?
a. Hebben jullie de initiele doelen gehaald, als niet waarom? 6. Hoe is jullie organisatie entrepreneurial?
a. In hoeverre is Unitedwardrobe innovatief? 7. Is jullie service veranderd sinds het begin? Hoe?
