How to Use Social Media Effectively in Multinational Corporations

1.

Introduction

This essay discusses about how social media can be used by multinational
corporations to enhance their knowledge sharing and build strong social
capital. In this century, social media has manifested and become an integral
part of most people in the world. More crucially and importantly, multinational
corporations recognize this and are using it as a key tool to cultivate and
improve their abilities to share and gain knowledge. Through their utilization of
social media, these corporations then used this newly learnt knowledge to
solve their problems effectively.
In addition, social networking has also caused a fundamental and
transformational shift in how humans connect, share knowledge and
disseminate information. Because of their huge reliance on technology,
humans are inevitably running the risk of miscommunication and loss of vital
information.
2.

Social Media and Knowledge Management

However, so long as there is a proper management system of the knowledge

sharing process via social media, these corporations will be able to produce
quality products and provide excellent services to their customers. Amicable
working relationship between these corporations and their working partners,
suppliers and retailers would also be established successfully.
Today, due to globalization of companies, social media has evolved into a
powerful business tool. This is important and cannot be ignored by both
individuals and multinational corporations. The use of social media is closely
relevant to a higher level of learning and this relationship is even deeper when
companies realize that a strong organizational culture helps to stimulate
dialogue and inquiry within their employees (van Puijenbroek, 2014). In a
survey that had more than 2,000 companies participating, a huge percentile of
79 indicated that they are either planning or already using social media but
admit that

they were

actually unclear

about the

advantages and

disadvantages of using it in their corporations (Harvard Business Review,

2010). This shows that most multinational corporations are actually unable to
effectively and efficiently use social media as an important tool of
communication.
In order for these corporations to use social media as an effective
communication tool, they need to come up with a proper management
system. The first step to obtaining this system would be to understand how
knowledge sharing can be improved.
3.

Improve Knowledge Sharing

The modern culture of knowledge sharing can be cultivated with transparent

communication and the sharing of knowledge within corporations (Cook and
Pachler, 2012). This in turn generates more revenues and boosts economic
growth for the corporation.
Social networking is all about building professional networks of colleagues
and personal networks of acquaintances. These networks then help to provide
convenient information for one another via the web. Relationships are also
forged and strengthened by meeting others through online communication.
Professionally, employers and employees would then know who and where to
go for the information that they require. In addition, employees would also get
to know one another better and share mutual interests through these social
networks, therefore improving their working relationships and fostering better
understanding, all these achieved through knowledge sharing. Once
corporations acknowledge the benefits of knowledge sharing, it would serve
as a driving force to nurture the culture of using social media and create
communication networks of knowledge sharing within these corporations.
However, knowledge sharing may not only be restricted to just within the
organization. It can also reach out to these corporations working partners, for
example, their suppliers and retailers. A good example would be the case of
Japan automobile manufacturer, Toyota. By sharing its knowledge with its
suppliers on how to avert economic crisis, Toyota and its suppliers were able

to remain competitive and sustainable (Toyota Singapore, 2015).

Next, social learning theory is termed as a cognitive thinking process that
takes place in a social context. It is the view that people learn by observing
others. These factors include cognitive, behavioral and environmental
(Jashapara, 2011). When social learning is active and prominent, knowledge
is created and gained. Since social media is dependent on a high level of
social interactions, it has naturally evolved to become a useful tool to
encourage sharing and the creation of knowledge.
When social media is present, teams are formed. This is to facilitate the ease
of learning from all parties related to these corporations. A team is formed
when a group of people gathers together and strives towards a collective
purpose (Kozlowski and Bell, 2012). The team members are highly
independent, are mostly self-managed and are responsible for the collective
performance. These teams, formed using social media, offer opportunities for
employees to socially interact and learn through their course of work. Intuitive
thinking for problem solving may also be encouraged through these social
media teams. This is through the benefit of teamwork and collective
brainstorming of innovative ideas from the team. Additionally, the teams can
gather these ideas from its members and share this knowledge with other
teams in a more efficient and effective manner.
Other that the sharing of internal knowledge, multinational corporations can
look into the knowledge of their customers and use it to create improved
products and better services. An example would be General Motors, an
American multinational automobile corporation. Their team of social media
advisors monitors online vehicle owner forums closely, considering and
evaluating their comments and feedback. These comments and feedback,
which consists of innovative ideas or solutions to existing problems, would
then be included and implemented in General Motors new products. By doing
so, General Motors gained a competitive advantage through the sharing of
knowledge with their customers.

4.

Build Social Capital

Social capital refers to the resources and the value of these resources to the
corporation. Focusing on intangible resources, human capital refers to how
the knowledge of employees impacts the corporation (Leitch et al., 2013).
Through the knowledge of employees, a network to gather and share
knowledge is formed (Hamel and Prahalad, 1994).
Social capital can be identified into three dimensions, structural, relational and
cognitive. These dimensions can be improved further with the help of social
media (Jashapara, 2011). To achieve a competitive advantage, development
of social capital is vital to aid in the creation of knowledge for the corporation.
The table below portrays how usage of social media can benefit the structural,
relational and cognitive dimensions of the organizations social capital.
Structural
Relational
- Additional tool to
- Builds

and

Cognitive
- Good

working

knowledge

cultivates

relationships can

infrastructure
Crucial

relationships

help

between

employees

employees
Useful
since

thinking process
A strong unified

component of the
knowledge
infrastructure

if

to

align

multinational

bond would be

effectively

corporations

created

managed

have

mental

branches

all over the world

at

level,

promoting
positive

working

attitudes
With the use of social media, employees can also be effectively retained.
Latham & Watkins LLP is a full service international law firm and has a private
social network (Latham and Watkins 2014). This network allows employees to
create connections and develop good working relationships with each other.
However, when an employee leaves or retires from the firm, he or she would
then only be granted limited access to the network. This actually increased

the first year retention rate and the level of productivity.

The usage of social media can also help employees to improve their
communication with their colleagues. This is proven in multinational
corporations, since social media is used to assist employees from the different
countries to share their ideas and knowledge at ease. With the increase of
efficiency in knowledge sharing, capabilities of the business would then
naturally improve (Andriessen, 2002).
In order to contain creative ideas within the organization, corporations can use
social media to create a knowledge-sharing network

(Chiu et al., 2006).

Creating a social network at the workplace aids in enhancing employee

communication. This encourages staff awareness and helps employees to
understand each others job scopes and appreciate the roles that they play for
the company, increasing staff satisfaction and developing a sense of
belonging to the company.
5.

Support Innovation

An organizations knowledge management plays a key role to foster

innovative thinking and thus, produce innovative ideas. This promotes
sustainability and creates a competitive advantage (Ravenscroft et al., 2012).
Social learning, the learning through social exchanges of knowledge sharing,
aims to minimize the disparity between managers and staff. With the
development of social learning, employees are encouraged to embrace
innovation and use social media as a main communication tool to assist the
company. With this innovative development of social media, customers are
now able to feedback instantly and allow the company to reply promptly.
By using an online network to involve its employees in different countries for
discussion about groundbreaking technologies, industry developments and
economic factors, it leads to the birth of innovative ideas, thus influencing the
success of the company.

Additionally, absorptive capacity, defined as the ability of the company to

identify the values of new external data, integrates the knowledge and applies
it to business-related strategies (Cohen and Levinthal, 1990). Absorptive
capacity is essential to boost innovation for the corporation and help gain a
competitive advantage over its competitors. By using social media,
corporations can gather feedback from its customers in the shortest time
possible and respond accordingly, by means of assessing their feedback and
developing new innovative ideas. This is known as knowledge creation.
With the encouragement of using social media, core management teams have
enhanced their abilities to get hold of information and knowledge in the
shortest time possible. This convenience of accessing information and gaining
knowledge also helps them to conduct prompt assessments to improve the
corporation.
6.

Aid Problem Solving

Problems are easily solved when knowledge is being shared within the entire
corporation. Therefore, it is crucial for social media to be used effectively for
this purpose.
Within the corporation, social media can be a valuable tool in opening up
communication channels that aid in problem solving. Statistically, more than
half of large organizations are using social networking of any types (Ennes,
2010). Of these, some companies have their own in-house social networking
applications such as Microsofts Town Square and IBMs The Blue Pages.
Gradually, as these employees become more comfortable with the use of
social media, their ability to share knowledge and communicate across the
different departments and also countries actually increased tremendously.
This enhanced the problem solving capabilities of the corporation.
Additionally, by providing the employees with a comfortable stage to indicate
their professional interests and talents, other departments can easily access
this knowledge and potentially help with their projects, provide guidance or
even act as a consultant (Wiewiora et al., 2014). Employees would be

delighted to have the chance and ability to showcase their talents to do a

project pertaining of their own interest. This is especially in the case of
Google, where their employees are given a monthly project budget for their
professional interests and are encouraged to cooperate with colleagues to
obtain a positive outcome.
Traditionally, to help solve problems, airline companies approach customers
of various demographics to obtain a survey result to plan their future flight
destinations. This is highly inefficient and incurs high cost as compared to the
using social media. With social networking sites, airline companies can now
effectively gather information and gain knowledge on which are the highly
sought-after flight destinations and work towards providing the supply to its
customers.
Externally, social media can also be used to solve problems with their
suppliers by assisting and equipping them with the relevant knowledge and
required skillsets. Besides creating enhanced communication channels with
its suppliers, social media will further increase and improve the relationship
between the corporation and its suppliers and external-working partners.
Also, by providing customers with the knowledge of the business, trust and
confidence of the customers will increase exponentially (Yoon et al., 2008).
Social media presents a possibility to go beyond the normal businessconsumer relationship and in turn creates a person-to-person relationship,
breaking down the historical interaction barriers of customers to businesses.
To demonstrate how a company can use social media to improve both internal
and external problem solving abilities, the case of Southwest Airlines is
discussed. Due to a technical glitch, Southwest Airlines flights were grounded,
delaying thousands of passengers. Complaints start to pour in onto social
media platforms, Twitter. When it could have been worse, Southwest Airlines
made good use of social media and responded to every single tweet and post,
which numbered in the tens of thousands. Because social media was used to
reach out to its customers, the airline was praised for its crisis management,

for it could have caused a devastating impact to the companys reputation

(Pathak, 2015).
Southwest Airlines also started a social media unit that aims to work with
every single department in the company, including logistics, operations and
human resources. As such, communication between departments was vastly
improved.
7.

Risks of Social Media

The use of social media in the corporation can open up breaches of security.
Fraud, online threats and hacking can occur with the use of social media.
Good practices need to be considered to avoid the possibility of software and
hardware security breaches. While some recommends that corporations
should be vague with their contents in order to avoid brand or identity theft,
corporations need to consider the level of information to be shared and the
possibility that this information can be used against them. Since it is possible
that any corporation or individual can be impersonated, knowledge of the
company could be easily leaked out. Thus, a cautious approach is a must
when using social media. However, should a corporation chooses to only
listen due to being overly careful, one may wonder about the purpose of
having a social network.
From within, since social media is being integrated with the corporation, the
risk of customer information being leaked may also easily occur. For example,
when employees leave, there is a possibility that customers that are linked to
the employees social media accounts may stop patronizing the companys
products and services. This is difficult to eradicate and prevent, as the web is
a public domain.
Also, the freedom of speech over social media accounts may also have a
negative impact to the corporation. Ms. Amy Cheong, a staff of NTUC, made
racist remarks with regards to traditional Malay weddings held at void decks. It
resulted in a detrimental impact on the corporations brand image and social
awareness. In order to address the issue and bring the incident to a closure,

NTUC dismissed her (Singapore Press Holding, 2013).

By integrating social media into the organizational structure, customer
relationship may surprisingly be affected. Perhaps due to a lack of experience
in managing social media, which has only been around for less than a
decade, companies actually make impactful errors when implementing social
media.
This is due to the fact that companies often fail to develop guidelines and
controlled measures on how to enable this strategy to align with their current
business model. This is the primary issue.
Secondary issues are due to a lack of corporate strategies. These companies
often end up being too focused on the advertising aspect of the social media
and failed to leverage it to build rapport with its customers. Secondly, these
companies lack social media corporate policies or strategies. This may cause
an issue with online corporations that have specific guidelines and
regulations. Only with the proper establishment of these policies and
strategies can these companies prevent any legal or adverse risks that would
have a detrimental impact. Finally, fraudulent online remarks may portray a
poor image of the company to the public, either through badly handled social
media interactions or the lack of interactions.
8.

Benefits of Social Media

It is evident that the use of social media in corporations does provide

numerous advantages to the companies, as discussed above. In summary,
social media is able to improve the working relationships of employees and
business partners. Social media is also able to remove communication
barriers, thus allowing new ideas to be generated and knowledge sharing to
be enhanced.
9.

Conclusion and Recommendations

Corporations should consider the threats from both external, fraudulent

parties and internal, miscommunicated staff. With the use of social

networking, companies can use their social assets, manage their knowledge
and retain their employees in a more efficient and effective manner.
In order for multinational corporations to reap the benefits of social media,
effective guidelines and strategies to reduce the threats through social
networking must be introduced and implemented. Only then can social media
assist the corporation to improve knowledge sharing capabilities, build of
social capital, support innovation and aid problem solving.
This essay discussed about the benefits and risks of using social media in
corporations. It proved that the benefits of social media do outweigh the risks,
albeit with the right management team and strategies.