Advantages and Disadvantages of Social Media in Business: A Study

This report provides a comprehensive analysis of the advantages and disadvantages of social media in business. It begins with an introduction outlining the objectives and scope, followed by a literature review that explores the benefits of social networking, such as improved communication with customers and business partners, e-commerce opportunities, and foreign market expansion. The report also highlights the drawbacks, including cyber threats, increased maintenance costs, and ethical challenges related to data sharing and employee conduct. The conclusion emphasizes the importance of strict vigilance measures to protect social networks. References and an appendix with a visual example are included.

Running head: SOCIAL MEDIA IN BUSINESS
Advantages and Disadvantages of Using Social Media in Business
Name of the Student:
Name of the University:
Author Note:

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SOCIAL MEDIA IN BUSINESS
Table of Contents
1. Introduction..................................................................................................................................2
2. Project Objective:........................................................................................................................2
3. Project Scope:..............................................................................................................................2
4. Literature Review:.......................................................................................................................3
Advantages of social network:.................................................................................................3
Disadvantages of social networking to business organisations:..................................................4
5. Conclusion...................................................................................................................................6
6. Reference List:.............................................................................................................................8
7. Appendix....................................................................................................................................11

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1. Introduction
The aim of the assignment is to study the advantages and disadvantages of using social
networking in the business organisations. The business organisations today use social networks
to communicate with their external stakeholders like the business partners and customers. The
social networking activities can be offline and online. The offline activities compromise of using
references to get more profitable business deals and meeting with prospective clients. The online
networking consists of using emails, ecommerce websites and social networking media sites like
Facebook to conduct business. These social network has both advantages and disadvantages to
the business organisations using them. The assignment starts with project objectives followed by
the scope of the project. The next section is the literature review which delves into the
advantages and disadvantages of using social media in the business. The threats of using social
media in conducting business would be studied from both ethical and technical aspects.
2. Project Objective:
The objective of the assignment is to study the advantages and disadvantages of using
social network in the business organisations. The study would aim to show both the brighter and
the darker side of using social network to carry on business.
3. Project Scope:
The scope of the project is huge and covers area. The assignment will deal with how
business organisations use their physical networks like goodwill, references and other methods to
expand the area of their business. The paper would also deal with digital media and social media
which organisations use to conduct business activities like selling their products online and

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gaining customer feedback. It would point out the advantages of using social networking for
business purposes like reaching out to customers and building new partnership. The assignment
would also cover the threats to sharing databases online which companies do with their business
partners and customers. The threats would be explained both from ethical and technical view
point.
4. Literature Review:
Advantages of social network:
Drury-Grogan and Russ (2013) state that the advantage of social networking to busienss
organisations is that it helps the companies to communicate with customers and business
partners. The companies often use references from their business networks to avail more
profitable business deals compared to their competitors. Lwin, Wirtz and Stanaland (2016) in
their work state that business organisations use networks of distributors to deliver the goods to
their end customers. They also use their promotional networks to create and increase awareness
about their products among the customers. This analysis shows that networking has two forms
one is targeted at the customers while the other is targeted at business partners. References is the
networking channel which business organisations use to get more profitable business deals while
their delivery networks help them to deliver goods to the final customers.
The second advantage of networking is that it helps the companies to sell their products
to a vast number of buyers all over the world. Nawi, Fong and Tatnall (2014) point out that the
companies today to sustain the intense competition in their home and international markets take
to using the ecommerce network to advertise their products to a global consumer base.
Bosomworth (2015) supported Nawi, Fong and Tatnall though his work where he added that

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mobile phones have evolved into devices which allow customers to view and order for products
just like the computer. Riasi (2015) in his work support both opinion and points that e-marketing
has emerged as a strategic method which companies can use to advertise and sell their products.
This online receiving of orders and selling of goods have increasing contribution to the revenue
of companies. Thus, networking in form of e-commerce websites help the companies to sell
their products to a huge consumer worldwide and earn lump sum profits which in turn
yields competitive advantages in the global market.
The third advantage of using social networking channels by business organisations is that
it helps them in foreign market expansion and growth. Bharadwaj et al., (2013) state that
digital networking like e-marketing has emerged into powerful channels to find out business
partners, suppliers and distributors in a foreign market. The multinational can use the digital
platforms to create awareness about their products they are aiming to introduce in a new market
or the product with which they are aiming to enter the market. These marketing strategies attract
interested suppliers and distributors which agree to work with the company in the new market.
Laudon and Laudon (2016) point out that efficient supply chain which provide the companies
with high quality raw materials at low prices have become imperative to the increasing in profit
margin and reduction in production for the companies. Deresky(2017) states that this results in
supply of high quality products at low prices which helps the companies to gain cost leadership
in the market one hand and counteract the threats of newly entering companies. Moreover
the companies use social media websites like Facebook to advertise their products which attracts
both customers and logistics chains.

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Disadvantages of social networking to business organisations:
Social networking in various forms like reference building and digital marketing have
several advantages but it too has its disadvantages. Dawson(2015) contradicts Bharadwaj et al.
(2013) and throw light on the greatest threat facing companies who use social media networking
for business processes-cyber threat and cyber terrorism. Rotich et al. (2014) further supports
Dawson and enlightens the disadvantage that cyber threat can do to companies using social
networking sites. These writers states that the companies often have to share strategic
information like upcoming products and business expansion plans over the social media
websites. This exposes the crucial business data to unlawful elements who use the data to extort
money from the companies to finance their unethical practices. Leukfeldt and Yar(2016)
however states that social networking has become so imperative to the business processes of the
companies that they cannot do away with social media altogether. This increased necessity of
social media have led the companies to bear huge expenditure to maintain the social media
pages. Arief, B., Adzmi and Gross(2015) state that this regular maintenance ensures that the
social networking pages and the databases of the companies are safe from cyber threats.
However, Stubbs, J. & Polityuk, P. (2017) snubs this perceived security of data bases of the
companies due to regular checkups and warns the multinational companies of more powerful
cyber attacks. Thus, use of social networking exposes the companies, the multinational
companies in particular before cyber threats which cannot be prevented altogether.
The second disadvantage of sharing business related information over the networking
increases the knowledge base maintaining costs to the companies which erodes their limited
resources. Laudon and Traver(2013) point out that the multinational companies today spend
whopping crores of dollars and pounds to create the most advanced and stylish networking pages

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on the social media like Facebook. This high additional cost to attract customers and business
partners adds to their advertising costs which in turn increases their cost of goods sold. This
analysis clearly shows that social networking particularly in the digital space increases the
expenditure of the multinational companies which puts immense pressure on their resources.
Hilman and Kaliappen(2014) further points that increase in cost of production and its erosion of
capital effects the cost leadership of multinational companies which badly impacts their capital
maximisation and market competitive advantage. Thus, it can be inferred from the discussion
that usage social networking by the multinational companies has dire effects on their cost
leadership and long term competitive advantage.
The next disadvantage of using social networking is that it exposes the companies before
ethical issues. According to George, Haas and Pentland(2014) the multinational companies often
share strategic business information with their local business networks using social networking.
This puts these multinational companies into ethical challenges from these local business
entities. Almirall, Lee and Mjchrzak(2014) further points out that local business entities may
manipulate and steal the data of the multinational companies to bring about their own business
development. Moreover, unethical employees may share the data with unauthorised persons to
gain advantages and favours from them. These ethical challenges put multinational companies in
risky situation. Thus, use of social networks may lead to ethical issues and business losses to
multinational companies.
5. Conclusion
It can be clearly pointed out that multinational companies use social media on massive
scale on to carry out business. It can also be summed up that this trend of using social networks

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has both advantages and disadvantages. The advantages are that it helps the multinational
companies to attract business partners and customers. It can summed that social networks more
particularly the ecommerce companies have emerged as important sources for the company to
earn profit. However, this exposes the MNCs before cyber threats and leads to huge expenditure
to check these threats. The companies cannot do away with application of social media due to a
multiple benefits of using it to conduct business. However, they can protect their social networks
using strict vigilance measures like passwords and authentication of the identity of the users.

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6. Reference List:
Almirall, E., Lee, M., & Majchrzak, A. (2014). Open innovation requires integrated competition-
community ecosystems: Lessons learned from civic open innovation. Business
Horizons, 57(3), 391-400.
Arief, B., Adzmi, M. A. B., & Gross, T. (2015). Understanding cybercrime from its stakeholders'
perspectives: Part 1--attackers. IEEE Security & Privacy, 13(1), 71-76.
Bharadwaj, A., El Sawy, O. A., Pavlou, P. A., & Venkatraman, N. V. (2013). Digital business
strategy: toward a next generation of insights.
Bosomworth, D. (2015). Mobile marketing statistics 2015. Leeds: Smart Insights (Marketing
Intelligence) Ltd.
Country Road | Women's, Men's & Kid's Clothing & Homewares. (2017). Countryroad.com.
Retrieved 18 August 2017, from https://www.countryroad.com/
Dawson, M. (Ed.). (2015). New threats and countermeasures in digital crime and cyber
terrorism. IGI Global.
Deresky, H. (2017). International management: Managing across borders and cultures. Pearson
Education India.
Drury-Grogan, M. L., & Russ, T. L. (2013). A contemporary simulation infused in the business
communication curriculum: A case study. Business Communication Quarterly, 76(3),
304-321.

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George, G., Haas, M. R., & Pentland, A. (2014). Big data and management. Academy of
Management Journal, 57(2), 321-326.
Hilman, H., & Kaliappen, N. (2014). Do Cost Leadership Strategy and Process Innovation
Influence the Performance of Malaysia Hotel Industry?. Asian Social Science, 10(10),
134.
Laudon, K. C., & Laudon, J. P. (2016). Management information system. Pearson Education
India.
Laudon, K. C., & Traver, C. G. (2013). E-commerce. Pearson.
Leukfeldt, E. R., & Yar, M. (2016). Applying routine activity theory to cybercrime: A theoretical
and empirical analysis. Deviant Behavior, 37(3), 263-280.
Lwin, M. O., Wirtz, J., & Stanaland, A. J. (2016). The privacy dyad: Antecedents of promotion-
and prevention-focused online privacy behaviors and the mediating role of trust and
privacy concern. Internet Research, 26(4), 919-941.
Nawi, N. C., Fong, M. W., & Tatnall, A. (2014). Using Research Case Studies in eCommerce
Marketing Courses: Customer Satisfaction at Point-of-Purchase and Post-
Purchase. Journal of Information Technology Education: Research, 13, 15-25.
Riasi, A. (2015). Competitive advantages of shadow banking industry: An analysis using Porter
diamond model. Business Management and Strategy, 6(2), 15-27.
Rotich, E. K., Metto, S. K., Siele, L., & Muketha, G. M. (2014). A Survey on Cybercrime
Perpetration and Prevention: A Review and Model for Cybercrime Prevention. European
Journal of Science and Engineering, 2(1), 13-28.

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Stubbs, J. & Polityuk, P. (2017). Cyber Attacks Cripple Companies Worldwide. [online]
HuffPost. Available at: http://www.huffingtonpost.com/entry/cyber-attacks-
europe_us_595270c5e4b0da2c731ead25 [Accessed 18 Aug. 2017].

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7. Appendix
Figure 1. Figure of COUntry Road showing the online purchase portal
(Source: countryroad.com, 2017)