Importance of Social Media in MNCs

This essay explores the importance of social media in multinational companies (MNCs) for knowledge sharing, building social capital, supporting innovation, and problem-solving. It also discusses the risks associated with social media and provides recommendations. The examples of Woolworths are used to illustrate the benefits of social media in improving brand image.

Running head: IMPORTANCE OF SOCIAL MEDIA IN MNCS
Importance of Social Media in MNCs
Name of the Student
Name of the University
Author note

1IMPORTANCE OF SOCIAL MEDIA IN MNCS
Table of Contents
1. Introduction..................................................................................................................................2
2. Social Media and Knowledge Management................................................................................2
2.1 Social Media..........................................................................................................................2
2.2 Social Media and Knowledge Sharing..................................................................................3
2.3 Social Media and Building Social Capital.............................................................................4
2.4 Social Media and Supporting Innovation..............................................................................5
2.5 Social Media and Aiding problem-solving............................................................................6
2.6 Risks of Social Media............................................................................................................7
3. Conclusions and Recommendations............................................................................................8
References........................................................................................................................................9

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1. Introduction
The essay throws light on analyzing the importance of social media such as LinkedIn,
Facebook and Twitter can be utilised to improve the sharing of knowledge, building social
capital, support the innovation process along with solving the problems in the different MNCs.
Furthermore, the various benefits along with risks are required to be analyzed that can create a
positive or negative impact on the MNCs. Social media is defined as the platform wherein the
different individuals connect. There are three most top platforms of the social platform which
have the most significant number of customers such as LinkedIn, Facebook and Twitter
(Stephen, 2016).
2. Social Media and Knowledge Management
2.1 Social Media
As commented by Tuten and Solomon (2016), with the growing social media platform
popularity, most of the MNCs are utilizing the respective platform to enhance their brand image,
and it plays an essential role in shaping the companies. In the present scenario, the different
organizations are trying to make the workplace more people-oriented rather than task-oriented.
Schivinski and Dabrowski (2016), have commented that such kind of platform is created which
helps employees in connecting and this helps them in generating new ideas and leads the
business in a new direction. With the implementation of social media tactics, it has assisted the
company in changing traditional marketing tactics which is inclusive of advertising, publicity
and public relations.

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With the proper utilization of the social media tools, it can be identified that
communication in business will help reduce uncertainty and ambiguity of the overall business
prospects. In the current business environment, there are various social media sites such as
LinkedIn, Facebook and Twitter wherein more than 90% of the organizations use the same to
improve the overall brand image of the organization (Leung, Bai & Stahura 2015). However, on
the contrary, organizations should restrict the usage of social media for different official aspects.
Therefore, building social capital, supporting innovation, knowledge sharing, supporting
innovation along with aid in the problem solving aspects are the various aspects through which
the companies can utilize social media.
2.2 Social Media and Knowledge Sharing
In the present scenario, most of the MNCs are encouraging the various employees in
sharing knowledge along with accessing intellectual capital. For instance- In PwC, it has been
noticed that more than 80% of the individuals and the company encourages the employees for
the knowledge sharing aspects. Additionally, the different employees can share the information
in an annual meeting that assists in the development of more than 30% of the development of the
organization (Ismail, 2017).
With the proper knowledge sharing programs in the organizations, it has helped the
companies to compete against the competitors as they receive different information regarding the
different innovations or the aspects which are being followed by the other companies which are
dealing in the same field and they can achieve the goals (Guesalaga, 2016). For example-
Companies like Woolworths have tried to create a web page of their own through which the
customers can follow them, and they can analyze the different programs, or the customers can
share with the feedback after their visit.

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As commented by Guesalaga (2016), through the usage of social media as the knowledge
sharing program, the organizations can connect personally with the customers and try to analyze
their views. With the help of the survey, it helps in encouraging the organizations to implement
the transformation aspects which will be beneficial for the overall growth of the companies in the
competitive business environment.
2.3 Social Media and Building Social Capital
As commented by Alalwan et al. (2017), the employees are the assets of the organizations
and with the help of social media; it helps to share knowledge and gain competitiveness over the
other competitors. Through the usage of social media, the employees are being able to share
knowledge which is valuable for the success of the company along with managing social capital
for the business as well. Additionally, Armstrong et al. (2015), have commented that the
significant merit of social capital is that it assists in creating communication among the different
employees in the company.
Moreover, with the help of social capital, it assists in boosting knowledge of employees,
and it helps to develop a proper relationship among the various employees. As commented by
Armstrong et al. (2015), social media helps to exchange the different important pictures that will
help gain competitiveness. Moreover, through social media tools, there can be an inclusion of
video-conferencing that will be assisting in sharing relevant information all over the world.
Through the incorporation of social media in companies, it has enhanced the overall performance
of the companies.
For instance- Woolworths have been able to connect with customers all over the world
through social media tools and showcased their brand. The new products developed by

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Woolworths are being showcased on Facebook, and it assisted them in improving their brand
image in comparison to the companies who follow traditional marketing tactics.
2.4 Social Media and Supporting Innovation
As commented by Ashley and Tuten (2015), the companies need to innovate themselves
constantly as to sustain in the competitive business environment. Furthermore, in the
technological era, companies have the chance to enhance their brand image with the
implementation of social media platforms. Through the increased usage of the social media
platforms, it is helpful for the employees to innovate different ideas that will be beneficial for the
success of the firm and it will be able to gain the competitive advantage over the other
competitors.
In the particular scenario, the employees and the managers have to keep themselves updated
with the various information that can assist them in being ahead of the different competitors
present in the market. For instance- Woolworths have started with the click-and-collect offering
to “Pick Up” to the customers wherein the customers can place and pay for the order online and
collect the items on the same day or the next day whenever it is convenient for them. It is one of
the innovations through the digital technological implementation, and it has helped them to be
ahead of the other competitors present in the competitive business environment as well
(Smartcompany.com, 2019).
From the respective example of Woolworths, it can be identified that social media
applications can help create socially changed work atmosphere which fosters collaboration and
innovation. With the help of the social applications, it will be providing the different employees
with the spaces wherein they can engage with one another and discuss the ideas and express

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themselves. After the application of the click-and-collect offering to “Pick Up”, the other
companies such as Wesfarmers are trying to adapt to the respective technology, and it has been
beneficial for Woolworths to become more competitive.
2.5 Social Media and Aiding problem-solving
As commented by Stelzner (2016), it has been noticed that the different companies face
various problems relating to the different aspects of the business that affects the overall
productivity and profitability of the business negatively. Moreover, there can be different
problems relating to the external suppliers and the employees as they are not able to
communicate with one another appropriately. However, with the implementation of social media
technologies, companies can reduce such issues with the help of proper communication. Through
social media tools, the employees can be in connection with one another and external suppliers
of the organization as well.
For example- In the case of Woolworths, the employees utilise the social media tools to
connect with the employees, suppliers and customers. There is an option in the website wherein
the customers can write their reviews, and their grievances can be addressed (CNBC.com, 2019).
On the other hand, there is strong communication between the employees and the suppliers in
which the company can gain knowledge on the stocks which are required to be filled in.
Through the respective social media communication channels, the companies can be able to
interact with one another, and the proper communication will help improve the overall decision-
making process and provides problem solving solutions as well (Godey et al., 2016). Moreover,
with the help of the social media channels, it is appropriate for the customers to communicate

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with the customer service department and solve their queries regarding any details or other
aspects related to the products and services which are sold by the company.
2.6 Risks of Social Media
As commented by Sajid (2016), there are different disadvantages of social media which
can affect the business negatively. Firstly, there has been a massive increase in the rate of frauds
and crimes in companies due to technological advancements. Due to the same, the organizations
need to be aware regarding the sharing of the knowledge as the increased rate of the cybercrime
can be a considerable risk for the business. As due to the cybercrime increase, the
communication of the different employees is under the threat of impersonating and therefore, the
organizations need to stop piracy of the different confidential information.
Additionally, there is a threat of making the information public, in which it can be seen
that there is the higher risk of the information becoming public when the organization is using
the social media tool for sharing the different information to the customers. Moreover, there is an
increased risk of the employees sharing information outside the company and leaking the same to
the other competitor organizations (Felix, Rauschnabel & Hinsch, 2017). However, there is also
a chance that the different information of the products of the company that can be criticized in
the media and it will create a substantial negative impact on the brand image of the company as
well.
Lastly, there can be a decrease in the level of productivity in the organization that can hamper
the overall productivity of the company negatively. When the different employees spend most of
the time in the social media platforms, it is difficult for them to cope up with the tasks and their
performance will be affected as well (Dwivedi, Kapoor & Chen, 2015). Social media is the

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interactive platform wherein the individuals can virtually meet people, and it will affect the day
to day activities of the company negatively. Due to the same, it completely shifts the overall
focus from performing the different roles efficiently, and hence it will reduce their input in
ensuring that the work is done accordingly.
3. Conclusions and Recommendations
Therefore, from the above, it can be recommended that social media is one of the most
recent developments in the 21st century and it is widely utilised by the different companies to
improve their productivity and brand image in comparison to the other competitors present in the
market. The social media plays a vital role in the different multinational companies, and it
improves the process of communication of the various employees in the companies as well.
Furthermore, with the help of the social media platforms, it helps in the development of both
external and internal relationship among the different employees who are the ones assisted in the
generation of the new ideas.
The information transformation in the organizations is the process that is created from
the creation of the knowledge along with sharing of the knowledge. Therefore, the different
multinational companies will get the advantage if there is an integration of social media along
with the management of knowledge. However, there are various negative impacts of the social
media on the organizations which has increased the rate of crimes in the companies and there is
massive miscommunication between the multinational companies.
To improve the overall crime rate in the organizations reduces, there should be the
implementation of the various corrective actions that should be adopted by the companies that
will be inclusive of different policies, and it will bring the overall situation under control. By

9IMPORTANCE OF SOCIAL MEDIA IN MNCS
performing the respective steps, the organizations will be able to improve the situation and gain a
competitive advantage in comparison to the other competitors which are present in the market.
From the examples of Woolworths, it can be analyzed that the usage of social media should be
able to improve the brand image of the firm.

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References
Alalwan, A. A., Rana, N. P., Dwivedi, Y. K., & Algharabat, R. (2017). Social media in
marketing: A review and analysis of the existing literature. Telematics and
Informatics, 34(7), 1177-1190.
Armstrong, G., Kotler, P., Buchwitz, L. A., Trifts, V., & Gaudet, D. (2015). Marketing: an
introduction.
Ashley, C., & Tuten, T. (2015). Creative strategies in social media marketing: An exploratory
study of branded social content and consumer engagement. Psychology &
Marketing, 32(1), 15-27.
CNBC.com (2019) It's getting easier for shoppers to skip the line by buying online and picking
up in-store (online) Retrieved from https://www.cnbc.com/2018/12/11/its-getting-easier-
to-skip-the-line-and-buy-online-pick-up-in-store.html [Accessed on 23 Mar 2019]
Dwivedi, Y. K., Kapoor, K. K., & Chen, H. (2015). Social media marketing and advertising. The
Marketing Review, 15(3), 289-309.
Felix, R., Rauschnabel, P. A., & Hinsch, C. (2017). Elements of strategic social media
marketing: A holistic framework. Journal of Business Research, 70, 118-126.
Godey, B., Manthiou, A., Pederzoli, D., Rokka, J., Aiello, G., Donvito, R., & Singh, R. (2016).
Social media marketing efforts of luxury brands: Influence on brand equity and consumer
behavior. Journal of business research, 69(12), 5833-5841.

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Guesalaga, R. (2016). The use of social media in sales: Individual and organizational
antecedents, and the role of customer engagement in social media. Industrial Marketing
Management, 54, 71-79.
Ismail, A. R. (2017). The influence of perceived social media marketing activities on brand
loyalty: The mediation effect of brand and value consciousness. Asia Pacific Journal of
Marketing and Logistics, 29(1), 129-144.
Leung, X. Y., Bai, B., & Stahura, K. A. (2015). The marketing effectiveness of social media in
the hotel industry: A comparison of Facebook and Twitter. Journal of Hospitality &
Tourism Research, 39(2), 147-169.
Sajid, S. I. (2016). Social media and its role in marketing.
Schivinski, B., & Dabrowski, D. (2016). The effect of social media communication on consumer
perceptions of brands. Journal of Marketing Communications, 22(2), 189-214.
Smartcompany.com (2019) Woolworths’ “Pick Up” strategy reveals a secret about the future of
shopping in an Amazon era (online) Retrieved from
https://www.smartcompany.com.au/industries/retail/woolworths-pick-up-strategy-
reveals-a-secret-about-the-future-of-shopping-in-an-amazon-era/ [Accessed on 23 Mar
2019]
Stelzner, M. (2016). 2014 social media marketing industry report. Social Media Examiner, 8(1),
57.
Stephen, A. T. (2016). The role of digital and social media marketing in consumer
behavior. Current Opinion in Psychology, 10, 17-21.

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Tuten, T. L., & Solomon, M. R. (2017). Social media marketing. Sage.