SOCIAL MEDIA AND THEIR IMPACT ON ORGANISATIONS: BUILDING FIRM CELEBRITY AND ORGANISATIONAL LEGITIMACY THROUGH SOCIAL MEDIA Francesca Bria Imperial College London Imperial College Business School PhD in Innovation and Entrepreneurship 1 DECLARATION OF ORIGINALITY This is to certify that: The thesis comprises my original work towards the PhD except where indicated, and appropriate reference has been made in the text to all other material used. 2 COPYRIGHT DECLARATION The copyright of this thesis rests with the author and is made available under a Creative Commons Attribution Non-Commercial No Derivatives licence. Researchers are free to copy, distribute or transmit the thesis on the condition that they attribute it, that they do not use it for commercial purposes and that they do not alter, transform or build upon it. For any reuse or redistribution, researchers must make clear to others the licence terms of this work. 3 ABSTRACT This thesis examines the impact of social media on organisations, and in particular focuses on the way firms are using social media to construct “online celebrity” and the way social movement organisations acquire legitimacy through a blending of offline and online illegitimate actions. This thesis embraces a perspective at the intersection between institutional theory, communications theory and strategy to deeply understand the impact of social media that enables and constrains organisational actions. The study finds that social media are affecting the information-intensive environment where organisations operate. Current shifts in communication technology, such as new patterns and modes of communication, provide a useful natural experiment to analyse how different types of organisations, including firms and social movement organisations, are strategically adopting social media to help maintain or acquire social approval assets. This research into social media strategy in one large technology firm and in one social movement organisation shows how social media may enable firms to achieve valuable strategic positions in ways that are underexplored by current organisation literature, ultimately leading to celebrity and legitimacy acquisition. This thesis makes several contributions to organisational strategy and institutional theory. First, it introduces and develops the concept of online celebrity, which is a firm’s ability to attract public attention and affective investment from networked publics through social media. Second, it expands our understanding of legitimacy acquisition by including a blending of illegitimate offline and online actions by social movement organisations that challenge taken for granted cultural norms, dominant frames and powerful actors. Third, it outlines key social media tactics which focus on shaping the external organisational environment and the cognition and perception of key audiences. This thesis also presents future paths of research that organisation and management scholars should consider in order to develop a more comprehensive understanding of how shifts in communication strategies facilitate larger shifts in social institutions and in the way organisations construct their interaction with stakeholder audiences. Key words: social media, reputation, legitimacy, online celebrity, illegitimate actions, technology firms, social movement organisations, social media tactics, symbolic value, network society, online identity, switching power, external cultural resources 4 ACKNOWLEDGMENTS I wish to express my sincere appreciation to all those who assisted me in the research process and supported me during my PhD. I would like to thank Prof. Markus Perkmann and Prof. Nelson Phillips for their precious feedback on my work and for their constant encouragement throughout these years. I would like to thank the Directors of the Doctoral Programme at Imperial College Business School, Prof. Erkko Autio, and the administrative staff, Julie Paranics, Frederique Dunnil, Donna Sutherland-Smith, and Catherine Lester. I am grateful to colleagues and Professors at the Imperial College Business School who provided constructive discussions and feedback on my work. I am also thankful to my informants for their collaboration on the data collection phase and made the field work possible . I am grateful to all my other academic colleagues that provided feedback and inspiration during conferences and presentations and to all my friends that supported me during the entire process. In particular, I am thankful to Prof. Daniele Archibugi who directed me towards this research at Imperial College. Finally, I am thankful to my family for their love, care, and crucial support. Without their encouragement my research would not have been possible. 5 TABLE OF CONTENTS GENERAL INTRODUCTION………………………………...................................... 7 PAPER 1. SOCIAL MEDIA AND THEIR IMPACT ON ORGANISATIONS: A REVIEW AND INTEGRATED DISCUSSION FOR FUTURE MANAGEMENT RESEARCH …….........................................................................................................12 PAPER 2. THE CONSTRUCTION OF ONLINE CELEBRITY: EXPLORING FIRM CELEBRITY BUILDING THROUGH SOCIAL MEDIA.......................................... 71 PAPER 3. RETHINKING LEGITIMACY THROUGH SOCIAL MEDIA: HOW SOCIAL MOVEMENT ORGANISATIONS ACQUIRE LEGITIMACY THROUGH A BLENDING OF ILLEGITIMATE ACTIONS AND SOCIAL MEDIA TACTICS…………………………………………………………………………….151 GENERAL CONCLUSIONS AND IMPLICATIONS…….......................................252 6 GENERAL INTRODUCTION Overall Theoretical Framework and Structure of the Thesis The popularity and economic relevance of social media has increased over recent years, enabling millions of users in sharing data, information and products, and affecting the way organisations are building their businesses around connected people. Communications scholars have argued that institutions are highly influenced by different communication structures and processes (Innis 1951; McLuhan 1962). Different authors have analysed the increasing mediatisation of organisations and the influence that news media and other information intermediaries have on organisations and on their relationship with external stakeholders (Carroll 2010; Fombrun 1996; Rindova and Fombrun 1999; Deephouse 2000; Rindova et al. 2007). However, despite the awareness of the central role of media in contemporary society, which affects the information- intensive environment where organisations operate, there is a lack of understanding of how institutional processes unfold in a mediatised society. In addition, there are few empirical studies that effectively demonstrate how shifts in communication patterns and strategies facilitate larger shifts in social institutions and in how organisations construct their interaction with stakeholder audiences. When I started this research it immediately became evident that in order to make sense of the broader impact of social media on organisations it was critical to investigate the phenomenon as a socially constructed process that contributes to shaping the institutional contexts, linking organisations, stakeholders and institutions (Deephouse et al. 2008). Organisations are in fact embedded in increasingly information intensive environments that enable and constrain organisational actions. Neo-institutional theory provided important insights on the influence of the environment on the organisation of a society. The institutional approach seemed to be the most relevant to research the impact of social media on organisations, and particularly insightful to explain key drivers underpinning these transformations in different types of organisations. However, somewhat surprisingly, organisational institutionalism has failed to adequately integrate communication theory, and social media in particular, which have thus far been overlooked by organisational research. Social media offer especially fertile grounds to explore questions related to the relation between modes of communication and institutional processes, potentially contributing to further expanding our knowledge of the role of communication technologies in structuring institutions. This thesis adopts a perspective at the intersection of 7 strategy research and institutional theory, and integrates it with communication theory to analyse the influence that social media have on diverse types of organisations. The insights provided in this thesis contribute to the understanding of social media as a phenomenon, but most importantly to the investigation of how organisations are adopting social media with the aim of increasing the positive relationship with their audiences, thus acquiring “social approval assets” such as celebrity and legitimacy. This research is motivated by the recent significant developments of social media and their widespread adoption by different types of organisations (ranging from large technology firms, creative intermediaries, to social movement organisations). I was interested in the way social media are affecting organisational strategies and generating new organisational tactics. Social media have been investigated from a variety of perspectives, producing a considerable body of knowledge. Still relatively unexplored through is the impact that social media have on organisations. Furthermore, little effort has been made to integrate the outcome of research in different disciplines and develop a future research agenda for management and organisation studies. In order to address this gap and generate a theoretical account of the impact of social