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The Influence of Global Connectedness and Demographic Distance on Stakeholder Claims Via Social Media Within the Firm’S Issue Management Process

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The Influence of Global Connectedness and Demographic Distance on Stakeholder Claims Via Social Media Within the Firm’S Issue Management Process The influence of global connectedness and demographic distance on stakeholder claims via social media within the firm’s issue management process Master thesis International Management MSc. Business Administration – Specialization: International management University of Amsterdam Supervisor: Drs. Michelle Westermann-Behaylo Second supervisor: Drs. Francesca Ciulli Student: Carla Brouwer (10188134) Data: 29th of January, 2016 Word count: 22,144 1 Statement of Originality This document is written by student Carla Brouwer who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents. 2 Acknowledgements I would like to thank my supervisor, Drs. Michelle Westermann-Behaylo, for her guidance, feedback and patience during the execution of my research. Also, I would like to thank my Australian friend Ashton Pereira for reading my thesis and providing feedback. Last, but not least, I would like to thank my father for his unconditional support and encouragement. 3 Table of Contents Statement of Originality .......................................................................................................................... 2 Acknowledgements ................................................................................................................................. 3 Abstract ................................................................................................................................................... 6 1.Introduction .......................................................................................................................................... 7 2.Literature review ................................................................................................................................ 11 2.1 Social media use by stakeholders ................................................................................................ 11 2.2 Firm’s issue management process ............................................................................................... 13 2.3 Global connectedness, demographic distance and social media issues ...................................... 16 2.3.1 Institutional theory and Institutional distance ...................................................................... 16 2.3.2 Global connectedness ........................................................................................................... 17 2.3.3 Demographic distance .......................................................................................................... 18 3. Conceptual Framework ..................................................................................................................... 23 3.1 Stakeholder issues on social media and perception .................................................................... 24 3.2 Stakeholder issues on social media and interpretation ................................................................ 25 3.3 Stakeholder issues on social media and response ....................................................................... 26 3.4 Global connectedness .................................................................................................................. 27 3.5 Demographic distance, stakeholder issues on social media and firm’s issue management ........ 29 4. Methodology ..................................................................................................................................... 31 4.1 Research philosophy and approach ............................................................................................. 31 4.2 Research design .......................................................................................................................... 32 4.3 Data Collection ........................................................................................................................... 32 4.4 Data analysis ............................................................................................................................... 34 5. Findings ............................................................................................................................................ 36 5.1 Within-case analysis ................................................................................................................... 36 5.1.1 Case A: Google Inc. ............................................................................................................. 36 5.1.2 Case B: PayPal Inc. .............................................................................................................. 37 5.1.3 Case C: Lenovo Group Ltd. ................................................................................................. 39 5.1.4 Case D: Bharti Airtel Limited. ............................................................................................. 41 5.1.5 Case E: Walmart. ................................................................................................................. 42 5.1.6 Case F: Netflix Inc. .............................................................................................................. 44 5.1.7 Case G: IKEA. ..................................................................................................................... 45 5.1.8 Case H: H&M. ..................................................................................................................... 47 5.2 Cross-case analysis ..................................................................................................................... 49 5.2.1 Perception ............................................................................................................................ 49 4 5.2.2 Interpretation ........................................................................................................................ 53 5.2.3 Response .............................................................................................................................. 53 5.2.4 Global connectedness ........................................................................................................... 54 5.2.5 Demographic distance .......................................................................................................... 57 5.2.6 Process ................................................................................................................................. 60 6. Discussion, implications and limitations .......................................................................................... 62 6.1 Discussion ................................................................................................................................... 62 6.2 Theoretical and managerial implications .................................................................................... 65 6.3 Limitations and future research................................................................................................... 66 7. Conclusion ........................................................................................................................................ 68 References ............................................................................................................................................. 70 5 Abstract This study provides an answer to the issue of how global connectedness and demographic distance influence the way firms manage stakeholders issues that arise through social media. Using an explorative multiple case study approach, the concepts social media, firm’s issue management, global connectedness and demographic distance are all analyzed. The chosen cases are retrieved from Change.org and involve online petitions that are signed by certain stakeholders from developed or developing countries. The findings seem to support the working propositions stating that firms prioritize issues who they perceive as important and interpret and respond faster since the issues are exacerbated by internet and social media attention. Furthermore, a MNC headquartered in a developed country responds faster to stakeholder issues that arise through social media as there is greater internet use among the population in that country. Also, a MNC from a country with a greying demographic structure facing a stakeholder issue raised by stakeholders on social media in a host-country with a youth bulge demographic structure is most likely to pay attention and respond to the issue as the issue will be faster distributed in a country where more young individuals spend time on social media. Keywords: Social media; firm’s issue management process; global connectedness and demographic distance 6 1.Introduction The fact that blind people could not enjoy a new show about blind people on Netflix threatened to damage the reputation of the on-demand internet streaming company. Netflix lacked important accessibility features for the blind and was missing the “visual description” option that orally explains them what is happening on the screen. As a result, a Change.org petition to add a visual description option for original content for newer shows garnered thousands of supporters.1 Netflix responded on this issue within less than a week by adding
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