Impact of Social Media on Business Today

This report explores the impact of social media on business today. It discusses the importance of social media as a marketing strategy, the development of this topic, the technology used, and its various purposes. It also examines the relationship between digital technologies and management theories, including old theories like contingency theory and new theories like modern theory. The report concludes that social media is an effective and influential tool for businesses.

Report

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
a. Why you deem this topic to be of importance.........................................................................1
b. How this has topic has developed............................................................................................1
c. A detailed description of the technology used in this topic and what it is used for.................2
d. What technological platforms and software are used in the topic...........................................2
e. What type of business and organisation uses the technology..................................................3
f. How is it used as business tool and is this effective.................................................................3
Nature of the relationship between digital technologies and both old and newly emerging
theories on business and management.........................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Digital business refers to the business which uses digital and new technologies to smoothly
operate in market and to resolve their issues (Hynan, Murray and Goldbart, 2014). A topic
related to digital business has been selected which is “social media and its influence on business
today”. The main aim of this report is to build an understanding about the role which
technologies play in business environment and their significance. For the completion of this aim,
justification of the selected topic has been provided along with the technological platforms and
software used in this topic. The second section of this report will include nature of the
relationship between digital technologies and emerging theories on business and management
structures and practices.
MAIN BODY
a. Why you deem this topic to be of importance
The topic selected in this report is “social media and its influence on business today”. This
topic is selected as social media is the most impactful marketing strategy of any business in
today’s business environment. This topic is considered to hold importance as it is important for
business organisations to understand how their organisation can gain benefit from the social
media and what are the challenges which they can face while implementing social media in their
business. There are few points of importance as well which are as follows:
 Social media is the least expensive and most influenced platform due to which it is
important to analyse this topic.
 The topic of social media is a latest and impactful technology in digitalisation due to
which it holds great importance (Postill and Pink, 2012).
b. How this has topic has developed
The area of investigation for this report is digital and new technologies; considering this
area, it was analysed that the topic subject must be related to an impactful technology which has
existence in current business environment and hence, the topic subject of social media was
developed. After the development of subject topic, the most recurrent issue for current business
organisations was identified and ultimately the topic of “social media and its influence on
business today” was developed.
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c. A detailed description of the technology used in this topic and what it is used for
The technology used in this topic is social media. Social media is a computer based digital
technology which facilitates in sharing of content, information, ideas and other data by using a
virtual network and community. The technology of social media is based on an electronic
communication interface that provides ability to communicate to any server connected to internet
around the world. The accessibility to social media can be gained through digital devices of
Personal computer, laptops, mobile phones and more. There are various platforms that allows to
use the technology of social media; some of these platforms include Facebook, Instagram,
Twitter, Snapchat and many more. These platforms are accessed by its users from the ways of
software applications and websites connected from worldwide network (Giaccardi, 2012).
This technology of social media is used for various purposes and some of those purposes
are shortlisted below:
 Individuals use social media to share their content, creativity and thoughts with their
friends and to their followers.
 Individual entrepreneurs and innovators use the platforms of social media to share their
experience, thoughts and content including video diaries and blogs to raise their
popularity so that they can earn revenue.
 Businesses use social media to promote their products and services with the public and
communicate with their consumers in order to provide them after sales services and
customer care services. Along with this, businesses also use social media to build brand
loyalty as well.
d. What technological platforms and software are used in the topic
The topic of social media is a technology which is used by accessing various platforms. A
user or a business first has to make their profile on these social media platforms by providing
basic information and contact details. These platforms of social media include Facebook,
Twitter, Instagram and more. The software used by social media is the individual software
application of each platform such Facebook application, Google+, LinkedIn application and
more.
e. What type of business and organisation uses the technology
There is no specific type of business organisation which uses social media technology as
the social media is most feasible and validate technology which can be used by any business
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organisation which aims to grow their business activities and wants to promote their products
and services.
f. How is it used as business tool and is this effective
There are various ways by which social media is used as a business tool; some of these
ways are:
 The organisations create content as advertisements and then post on social media to
attract potential customers (Verčič and Verčič, 2013).
 Organisations also hire blogs and vlogs content creators to advertise their product so that
their followers can be influenced.
 Organisations also use social media to distribute coupons and discounts to their potential
customers in order to increase the revenue and bran equity of the company.
Social media is surely an effective business tool that helps organisations in communication
and promotion. In order to evident the effectiveness of social media, the report of smartinsights
can be used which states that 3.80 billion users use social media and such audience is used by
almost half of the businesses of the world (Global social media research summary 2020, 2020).
Nature of the relationship between digital technologies and both old and newly emerging
theories on business and management
The course content is based on the digital and new technologies in the business environment.
The selected topic for this report is impact of social media on businesses today; this topic is
highly related to the course content as even after considering that social media is successfully
influencing from last two decades but then also this technology is regularly updated due to which
it is a new digital technology used by digital businesses and hence directly related with the
course content.
As it can be observed that digital technologies are now becoming an integral part of business
environment, it is important to analyse the relationship between the digital technologies and the
theories of management and business structures and practices. The digital technology selected in
this report is social media which will be used to analyse the relationship and nature of
relationship with the management theories. As per the investigation, various old and new
management theories are identified and one per each management theory is used in below
content:
Old management practice theory: Contingency theory
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Contingency management theory was provided by Fred Fiedler in 1950s due to which this
theory is considered as a 20th century old management practice theory. The author of this theory
was Fiedler who convinced the business management world from his theories that effective
leadership was directly related with the situation which are dealt by the leader (Otley, 2016).
According to this theory of contingency, there are three variables which determine the business
management and structure and these three variables are the size of organisation, the technology
employed and the leadership employed at the levels of a business organisation. Considering these
three variables, contingency theory states that an effective manager is an individual who is
capable to change his / her management style according to the suitability of the situation. This
old management style is considered to be really effective as according to the contingency
management style, no particular management style is suitable for all business situations due to
which it is important for a business manager to build a capability where business management
style can be changed whenever there is a requirement.
This management theory of contingency management is highly related to the social media
digital technology. Contingency management demands capability of the manager to its
management style quickly with no damages. But such quick transition requires ample efforts and
technologies. Social media is the only digital technology which can support the quick transition
of management style (Mikes and Kaplan, 2014). This relationship between contingency theory
and social media digital technology can be understood with the help of example. For example, a
car manufacturing company is currently selling their products on face value but government
passed a bill stating that every car manufacturing company has to close down the manufacturing
of pollutant cars in a mere period of one month. In this situation of crises, manager of this
company will adopt contingent management and will change their management style. In order to
change their management style, the technology of social media will be used. As by using social
media, the car manufacturing company can provide heavy discounts on selling their pre
manufactured pollutant cars in order to eliminate their losses. Considering this example, it can be
said that social media technology and contingency theory are related as both the variables has the
few common aspects of flexibility and quick transition. Hence, it can be said that the nature of
relationship between these two variable is positive as with the quick changes on social media, the
transition of management style in contingency theory is facilitated.
Old management model: Ansoff matrix
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Ansoff matrix is a business growth model which was developed by Igor Ansoff in 1957.
This model stated that widely there are four directions using which growth can be acquired by a
business organisation. These directions include market penetration, market development, product
development and diversification. This theory of ansoff matrix is related to the digital technology
of social media as both the concepts has a sole purpose to ensure growth of the business. Social
media technology can help an organisation to adopt growth strategy of market penetration as by
using social media platforms such as Facebook and Instagram, a business organisation can easily
promote their existing products in existing market with a negligible cost and can acquire growth.
New management practice theory: Modern theory
There are few new management theories that are developed as direct response to the bridge
the flaws in classical theories. Out of these theories, the “Modern quantitative theory” is selected.
This theory states that the modern business environment of 21st century requires modern
solutions and technology is the both cause and solution of such issues (Dent and Bozeman,
2014). According to this theory, a management style must be the combination of mathematical
and human interaction elements. Under this theory, business manager must first quantity every
situation before making any decision. This procedure of quantification is quite complex and
requires personalised skills. In this theory, the approach to management is clear cut and number
oriented which eliminates the issue predictability. This theory represents the shift of business
managers from classical to modern management theory as in this theory beliefs are developed
from logic, science and maths. The theory of modern management is considered as more
effective as along the variables of logic and science does in this theory does not replace the
managerial expertise and judgment as logic and science are used along with the support of
managers in such theory (Management theories, 2020).
The modern management theory and digital technology of social media are related to each
other as social media provides the data which is used by managers under modern management
theory. The relationship between these two, can also be understood by an example. A small retail
organisation of United Kingdom sells their products by offline stores and online website. This
business promotes their services by using social media platforms of Instagram and Facebook.
The business manager of this company uses social media business tools of Facebook insights and
Instagram insights. By using these tools, business manager of this retail store collects the data
regarding, to how many users the promotional advertisement video has reached, how many users
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has shared and re-shared this video. By this data, manager will quantify their decision that
whether or not their promotional campaigns have resulted into enhancement of their monthly
revenue and then finally make the decision about future marketing campaigns (Unger, 2011).
This relationship between modern management theory and digital technology of social media has
positive nature as the insights of social media can help in effectively executing modern
management theory.
CONCLUSION
From the above report, it has been summarised that social media is a digital technology
which is a significant topic to be researched upon as it impacts current organisations involved in
business environment. This summarisation has helped in gaining the conclusion that social media
is an effective and latest digital technology which is related positively with both new and old
management styles.
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REFERENCES
Books and Journals
Dent, E.B. and Bozeman, P., 2014. Discovering the foundational philosophies, practices, and
influences of modern management theory. Journal of Management History.
Giaccardi, E. ed., 2012. Heritage and social media: Understanding heritage in a participatory
culture. Routledge.
Hynan, A., Murray, J. and Goldbart, J., 2014. ‘Happy and excited’: Perceptions of using digital
technology and social media by young people who use augmentative and alternative
communication. Child language teaching and therapy. 30(2). pp.175-186.
Mikes, A. and Kaplan, R.S., 2014, October. Towards a contingency theory of enterprise risk
management. AAA.
Otley, D., 2016. The contingency theory of management accounting and control: 1980–
2014. Management accounting research. 31. pp.45-62.
Postill, J. and Pink, S., 2012. Social media ethnography: The digital researcher in a messy
web. Media International Australia. 145(1). pp.123-134.
Unger, D., 2011. Modern innovation management theory and the evolving US lighting
industry. Journal of Management History.
Verčič, A.T. and Verčič, D., 2013. Digital natives and social media. Public Relations
Review. 39(5). pp.600-602.
Online
Global social media research summary 2020. 2020. [Online]. Available through:
<https://www.smartinsights.com/social-media-marketing/social-media-strategy/new-
global-social-media-research/>.
Management theories. 2020. [Online]. Available through:
<https://getsling.com/blog/management-theories/>
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