The Role of Social Media in Business


Engdahl (168) defines social media as “mobile-based and web-based technologies that allow interactive communication through the internet.” In this information age, social media has become an integral part of people’s daily life across the globe. In contrast with the conventional media such as radio, television and print, the social one extends beyond mere information and ideas sharing. Regardless of the fact that social media is a relatively new phenomenon; it is increasingly becoming an essential component of a firm’s marketing and customer base development platform. Bosari (no pag.) reports that 94% of firms which have marketing department use the social media as the vital component for their marketing platform. In addition, 85% of all firms own a dedicated media platform, which acts as an integral component of their marketing approaches; such firms have reported increased market exposure. With social media increasingly becoming embraced by people, businesses are taking advantage of this trend and incorporating it in their business-level and corporate-level strategies However, there is a number of challenges and concerns associated with the use of it by business organizations. This paper discusses the issues underpinning the role of social media in business at global and societal level, and any other ethical and contemporary problems arising from the same.

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Apparently, at the global level, the social media has a substantial impact on multinational firms. Various organizations worldwide embrace the fact that it is cheap and convenient way of achieving business growth. This is because corporations can develop their brands easily and cheaply by using the influential nature associated with the social media. According to Penenberg (125), social networking sites were responsible for more than 13.8 billion display advertisements in August 2009, which accounted for at least 25% of all display advertisements viewed via the Internet. Social media has also revolutionized global marketing, wherein marketers depend not only on communication with their target audience, but also have to devising the new methods of influencing people’s choices. It also helps in cutting marketing costs. Overall, the social media has positive impacts on global businesses, particularly with regard to customer relationship management, customer retention, expansion of client base, market research and public relations. Nevertheless, it also has certain negative impact on global businesses. For example it tends to reduce workplace productivity, which costs organizations millions of dollars. For instance, in Australia, Penenberg (185) estimates that accessing Facebook while working costs Australian firms more than $4.5 billion annually.

At the community level, social media produces both positive and negative impact. Engdahl (178) summarizes the positive impacts on the society and argues that it offers an effective platform for people to interact and socialize. It is an opportunity to link despite their busy schedule associated with the modern social discourse. In addition this type of media serves as a platform for social change, and benefits education through enhancing communication and feedback between students and teachers. Regardless of the benefits of social media, there are also certain drawbacks associated with it. For instance, Acar (67) asserts that it reduces individual productivity because of addictive nature, increases cyber bullying, identity theft, and weakens strong ties between people. The study by Acar (70) reported that about 17.3% of students in the US fell victims to cyber bullying. In addition, Engdahl (178) argues that social media was only created with the intention of making money and not improving the lives of people.

Even though the social media is widely used by businesses, Acar (71) claims that there are several ethical concerns associated with businesses using it. According to Acar (71), the most common ethical concerns related to organizations using include privacy and reputation, truth and honesty, advocacy (identity theft), and security. Acar states (72) that social networking sites, gather personal data for the purposes of advertising, which is an example of privacy invasion. People have reported cases of firms misrepresenting themselves in order to promote their businesses, political or personal interests. Engdahl (180) also claims that a core ethical issue in business involves credibility and ensuring trust and honesty during advertising and marketing. In order to ensure credibility, honesty and trust when utilizing social media, a number of issues should be taken into consideration. For example, companies should avoid pop ups, spam and other misleading methods of marketing and advertising in order to ensure that they appear credible, honest and trustworthy for their customers (Park, Kerk and Valenzuela 145).

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There is myriad of contemporary issues arising from the use of social media in business. The first one involves identity theft, which stems from rapid expansion and accessibility of internet, and the availability of personal data posted in online resources such as Facebook and Twitter (Penenberg 188). Identity theft is a common problem in social networking because these sites do not have mechanisms through which people can authenticate their identity. It can result in economic losses initiated through fraud, whereas firms can face legal lawsuits if their online identity has been compromised. Apparently, the very nature of social media, especially social networking is a subject to malicious activities on the internet such as hacking, cyber crime and cyber bullying.

Another contemporary issue arising from the use of social media by businesses relates to how firms utilize the information they collect from users. According to Acar (180), social media is a business itself, and information posted is used mainly for marketing purposes. However, there is a need for organizations to come clear regarding their use of this phenomenon. In cases where they fail to do this, it is considered as privacy invasion since social media sites have a tendency of placing cookies on users’ personal computers, collect information, and track interests in order to display personalized ads. The advertising practices adopted by businesses build privacy invasion.


In conclusion, it is obvious that social media is a valuable tool for businesses at the global and community level; however, there are ethical concerns and other issues associated with the use of it by business organizations. The paper has shown that this type of press has positive impact on global businesses, particularly with regard to customer relationship management, customer retention, expansion of client base, market research and public relations. Nevertheless, social media produces negative impact as well; for instance, it tends to reduce workplace productivity which costs organizations millions of dollars. The most common ethical concerns associated with organizations include privacy and reputation, truth and honesty, advocacy (identity theft), and security. Overall, businesses can benefit significantly and increase the effectiveness of social media marketing if they address the ethical issues relating to the use of it.

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