A Literature Review on Social Networks in Business Development

This literature review explores the advantages and disadvantages of using social networks in business. The advantages include communication platform, business advertisement, feedback mechanism, contact information, business research, online retailing, increased opportunity, and marketing avenue. The disadvantages include cyber insecurity, low production due to misuse by employees, negative comments, scams, and frequent software updates. The review concludes that the advantages generally outweigh the disadvantages but highlights the need for further research on the connection between social media engagement and actual sales.

Running head: BUSINESS RESEARCH 1
Business Research
Student Name
Institution

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Advantages and Disadvantages of Using Social Networks in Business
Introduction
Social media has been in the fore front means of advertisement globally with many
businesses currently focusing on social media as communication and marketing platform. In this
sense, social media can refer to website or application that facilitate or enable users or
subscribers to socialize and share ideas. Social network allows people from all over the world to
register, connect, and comment on any topic posted. Therefore, social network enables network
between different users that are particularly good for marketing or advertisement. Business can
use the social network as its main marketing or advertisement. Social media being modern
business advertisement platform is coupled with both advantages and disadvantages. Some
examples of social include Instagram, twitter, Hangout, Google+, WhatsApp, Facebook,
MySpace, and YouTube. The statistic shows that most businesses, companies, and institutions
throughout Australia are connected to a social network. The following paper is a literature
review that explores the advantages and disadvantages of a social network in business.
Literature Review
Advantages of Using Social Networks in Business
The social network is one of the technological improvements that have to lead to the
growth of many businesses in the world. This, therefore, explains the many advantages of a
social network to business. There is much business that today its can attribute their success to the

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vast network of social media. Some advantages of a social network are communication platform,
business advertisement, feedback mechanism, contact information, business research, online
retailing, increase opportunity and marketing avenue.
Modern business considers the social network as the mode of communication where
business management can use to pass information to junior employees or customers. As Baker et
al (2012) can explain social media or social network being the fastest form of communication
that currently attracts many users gives both public and confident information. For instance,
Heerde, Leenheer, Bijmolt & Smidts (2007), indicate that WhatsApp is one of the best social
media applications that can be used to pass confidential communication between management.
Most of the businesses currently have switched from formal communication that mostly
composed of memos and letters to social media since it’s the current trending mode of
communication. In addition, Cristina (2012) explains that social network has proved effective
especially as its facilitate faster delivery of information as compared to other former modes of
communication. This means that social network can facilitate immediate feedback and often
reach a large number of people at the same time.
The social network in business has proved to one of the successful advertisement media
with most users in Australia and globally. Using social network helps advertisers to reach over
16 million users within Australia alone. According to Trudy & Chang (2016), manufacturers, and
companies, in general, can introduce new products into the market through social network
campaigns. A good design advertisement disseminated into social media or network may pick
immediately leading to the success of the new product in the market. As cited by Peter & Scott
(2011), the social network also enables advertisers to share all the necessary information about a

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product that allows consumers to make an informed choice about the product. The social
network has; therefore, transform business advertisement within Australia and around the world.
Social network enables a business to collect all the feedback information about a product
or service. According to Gentle (2012), both advertisers and business, in general, can currently
collect all comments about a product especially from users and potential customers. Nowadays
some social networks such as Facebook and Twitter allow users to comment as express their
thought about products or advertisement. As Wellman (2008) explains, a social network can help
review help manufacture evaluate the product performance. A study by Bowler & Brass (2011)
indicates that currently, most social network application has customer rating system enabling
rating of satisfaction. As Denise (2013) confirms social media application especially those
mobile software that easily integrated to devices hence users can use at their comfort.
Paniagua & Sapena (2014) explains the far social media has taken marketing research as
many social networks have been turned into surveys. Customers who purchase products over the
social media are allowed to comment on products and their taste of the product. According to
Stretton & Karklins et al (2015), marketing research can easily be conducted online as customers
and potential customers are given chance to express their opinion about products. Moreover,
business research is easier on a social network as users feel involved as compared to other
surveys. The business research utilizes application cookies that allow site visitors leave
information about products. Cranmer & Desmarais (2011) cites some organizations that
currently utilize data from a social network to evaluate advertisement viewers. In addition, pay
per click adverts is used to show the number of viewers that click adverts within the social
media.

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Social network helps expands online retailing since it has enabled online selling of
connection between sellers and buyers. The social network is currently connected to most online
retail shops or online marketplace. This according to Agozzino (2012), social network makes a
good traffic control element that attracts views from a social network which is healthy. The
social network also works to popularize online businesses since its has capability of opening the
same retail page within social media. As indicated by Granovetter (2005), online retailing is an
innovative idea that can be traced to increase social network, online users. Though Stretton &
Karklins et al (2015) contradicts use of social media in online shopping by an indication that not
all users can buy products, the social network remains good online market place.
Yochai (2006) conducted a study on a social network and indicated that social network
also widens the business opportunity to sell products both online and in shops. Social network
increase business opportunity beyond location limits since social network connect the business
with other new people. According to Rodrigo & Abraham (2012), developing appealing adverts
attracts several users that are potential customers who buy products and services. In an
agreement, Kassotakis (2010) explains that catchy adverts attract many viewers that are curious
to find more about the service or products leading to contact. This remains a single problem of
utilizing opportunity as pointed out by Granovetter (2005). As Cristina (2012) concludes those
businesses that are connected to social network remains attractive and has wider opportunity to
sell products abroad. This does not leave a clear connection between opportunities widen and the
exact change in the purchase of products within the business.
Disadvantages of using social networks in business

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Rodrigo & Abraham (2012) shows that despite the many advantages that may be cited on
a social network to the business, it could not lack challenges or disadvantages that can result
from using a social network. Some of the most common disadvantages of in cooperating social
networks in business include cyber insecurity of business due to hacking, low production due to
misuse of a social network by business employees, negative comments by social network users,
the potential avenue for scams and requires frequent software updates.
According to Gloor, et al (2013), one of the most serious concerns about using the social
network in business is cyber insecurity. Trudy and Chang (2016), also affirms that hackers have
currently increased in number making social network security lower than before. Cyber
insecurity may result in the downfall of business in the event of cyber attack as most hackers
currently target social network due to many users. Moreover, as Stretton & Karklins et al (2015)
confirms, cyber attack makes business to lose millions of dollars and this is the recipe for
business collapse. Similar research by Bowler & Brass (2011) shows that social network is a
major catalyst for hackers entering the system that can vastly affect numerous businesses
especially those connected to one social media page or application.
Though social network has been advertisement platform, expression of opinion on a
certain product has proved destructive. Rodrigo & Abraham (2012) indicates that negative
comments on the social network may derail product performance leading loss of funds by
advertisers. A similar study by Cristina (2012) also confirms that sharing of adverts in social
media may also trigger emotional gung against a product or service as users respond differently
on adverts. In addition, according to Huan and Kathleen (2016), dissatisfied customers can write
or comment negatively about a service or product though there are minimal adverse feedback

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about that service or product. Stretton and Karklins et al (2015) summarizes cyber bulling of an
employee is the worse experience that a business can get on a social network.
Another disadvantage of a social network is the misuse of social media’s pages or
resources by business employees. As explained by Peter and Scott (2011), business with social
networks normally suffers from misuse of internet resources for their own benefits. Social
network such as Twitter or Facebook page for an organization has been reportedly misused by
business employees who update their individual profiles instead of business. The productivity
tied to adverts on the social network may reduce due to misuse of pages by employees as Denise
(2013) comment on the disadvantage of social network and subsequently systems.
Software frequent update is the grievous challenge to business using social media or
network since it poses more security challenge. As reported by Estrada (2011), most mega online
businesses like Amazon have good e-commerce software that is linked with security firewalls
before connection to social network plugging. In order to effectively use social media, George
(2011) advises every business to update its software especially security firewalls so that it can
shield the business from hackers and virus. Kassotakis (2010) contrast the issue of software
update indicating that software update is taken care of by social network website and application
developers. Paniagua and Sapena (2014) also agree on the software update as one of the business
threat links on a social network.
Another area of challenge according to Gloor, et al (2013), is the growing scam and sales
of fake services or products. A Recent study by Huan and Kathleen (2016) shows that many
business and employees have become victims of a scam or fake services that are advertised on
the social network. Agozzino (2012) cites some of the businesses that have experience theft or

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loss of millions of dollars to scam suppliers. Cranmer & Desmarais (2011) explains that some
fake business was not initially scam but due to huge sums of money they trade in leads to
challenges of handling customers hence scam. In contrast, Yochai (2006) claim has been refuted
by Rodrigo & Abraham (2012), the author cites that once a business has been entrusted to handle
sums of money there is a need for a good monetary system. When confirming this Ariel &
Avidar (2014) also indicates that business that deals in a monetary system need to remove any
fear of mishandling of funds leading to scam.
Knowledge gap
The literature evidently reveals that social media advantages outweigh the negative
effects of the social network. According to Chan (2014), a social network can lead to good
performance of the business though the performance can sometimes not trance. The only part
that remains is the ability to trace the connection social media or network subscribers and the
customers in the business. In addition, research needs to be done to trace the connection between
site viewer and buyers though some other researches indicate that more page views are correlated
to sales as it attracts more customers.
Conclusion
In conclusion, a social network is an important aspect of business today that has both
advantages and disadvantages. Some of the cited advantages of a social network are social
network are communication platform, business advertisement, feedback mechanism, contact
information, business research, online retailing, increase opportunity and marketing avenue.
Disadvantages on the other hand are cyber insecurity of business due to hacking, low production

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due to misuse of a social network by business employees, negative comments by social network
users and a potential avenue for scams requires frequent software updates. Upon examining the
literature on advantages and disadvantages of the social media it is evident that the connection
between a social network and business performance remains an issue of concern.

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