BACHELOR THESIS Utilization of social media in an organizational context A qualitative study Michael Bork Nicolas Behn Bachelor of Science in Business and Economics Business Administration Luleå University of Technology Department of Business Administration, Technology and Social Sciences LULEÅ UNIVERSITY OF TECHNOLOGY ÅUGSBURG UNIVERSITY OF ÅPPLIED SCIENCES Utilization of social media in an organizational context A qualitative study 12/05/24 Department of Business Administration and Social Sciences Division of Industrial Marketing and e-Commerce Supervisor: Anne Engström ABSTRACT Since the Internet penetration rate is nearly at one third of the world’s population and social networks experience an ongoing exponential growth, becoming a part of our everyday life, companies feel forced to join this trend. Concerning this development, a lot of scientific articles and studies were published about how organizations can also benefit from this growth. The main focus of this research was mainly based on the marketing aspect and social networks, neglecting the other possible application fields and especially disregarding the remaining types of social media. Therefore, the purpose of this study has been to investigate how social media can have an influence on companies' activities in regard to their value chain, according to the theory by Michael E. Porter. In terms of the methodology, the thesis pursued a qualitative approach, as four semi- structured personal interviews were conducted to collect data, which was subsequently presented and analyzed individually. Afterwards, a cross-case analysis, comparing all four cases, was carried out in order to detect similarities and differences, as well as to be able to draw conclusions from the collected data in regard to the research problem. The results indicate that the main focus of social media usage is still in the fields of marketing and sales, but became similar important for service, respectively CRM purposes. In addition, it was discovered that it is utilized to a greater extent in the support activity firm infrastructure and started to influence human resource management, as well. All companies mainly applied the market leading platforms for the respective type of social media. The study further revealed that the sampled companies are especially concerned about challenges like the required extensive commitment of all employees, the accompanied time-intensive learning process, as well as the fast paced and complex environment of social media. Regarding the mentioned challenges, it became apparent that very important tasks are to continuously observe the current developments and encourage the employees in order to exploit the potentials of social media successfully. i ACKNOWLEDGEMENT The topic of this research, combining several aspects of our studies, was very interesting to investigate. We wrote this thesis during the spring term of 2012 and gained a deeper understanding and knowledge about social media, its huge field of application and the challenges and risks associated with it. Although, we faced two very stressful and demanding months, this thesis has been a culmination of our studies at Luleå University of Technology. During these two months, we achieved a lot of support from our friends and families, but we want to thank especially our thesis advisor, Anne Engström, who guided and provided us with helpful suggestions throughout the whole time. We furthermore want to thank Prof. Dr. Wolfram Schönfelder, who made it possible for us to study in Luleå and encouraged us during this time. Finally, we want to thank Mr. Lepges, Mr. Bork, Mr. Minde and Mr. Goetz for taking their time and providing us with useful information in the interviews, as without them, this study would not have been realizable. Luleå, May 2012 ii TABLE OF CONTENT 1 INTRODUCTION ....................................................................................................... 1 1.1 Problem Discussion .............................................................................................. 2 1.2 Research Questions .............................................................................................. 5 2 LITERATURE REVIEW .............................................................................................. 6 2.1 Social media .......................................................................................................... 6 2.1.1 Types of social media ....................................................................................... 8 2.1.2 Classification of social media ......................................................................... 11 2.2 Value chain .......................................................................................................... 13 2.3 Social media along the value chain ................................................................... 16 2.3.1 Firm Infrastructure .......................................................................................... 17 2.3.2 Human Resource Management ...................................................................... 17 2.3.3 Technology Development ............................................................................... 20 2.3.4 Procurement .................................................................................................. 22 2.3.5 Logistics ......................................................................................................... 24 2.3.6 Operations / Production: ................................................................................. 26 2.3.7 Marketing and Sales....................................................................................... 27 2.3.8 Service ........................................................................................................... 34 2.4 Challenges and Strategies .................................................................................. 38 2.4.1 Measuring ROI ............................................................................................... 39 2.4.2 Content / Control ............................................................................................ 39 2.4.3 Commitment ................................................................................................... 40 2.4.4 Information Overload ...................................................................................... 41 2.4.5 Headhunting ................................................................................................... 41 2.4.6 Competition .................................................................................................... 42 2.4.7 Data Security.................................................................................................. 42 3 FRAME OF REFERENCE ......................................................................................... 44 4 METHODOLOGY .................................................................................................... 46 4.1 Research Purpose ............................................................................................... 47 4.2 Research Approach ............................................................................................ 48 4.3 Research Strategy ............................................................................................... 49 4.4 Sample Selection................................................................................................. 51 4.5 Data Collection .................................................................................................... 53 4.6 Data Analysis ....................................................................................................... 54 4.7 Quality Standards................................................................................................ 56 iii 5 DATA PRESENTATION ........................................................................................... 58 5.1 Case A: Sony Music Entertainment Germany GmbH ....................................... 58 5.1.1 Data from observation .................................................................................... 59 5.1.2 Data from the interview .................................................................................. 59 5.2 Case B: Ericsson Labs ....................................................................................... 65 5.2.1 Data from observation .................................................................................... 65 5.2.2 Data from the interview .................................................................................. 66 5.3 Case C: Sony Pictures Home Entertainment GmbH ......................................... 71 5.3.1 Data from observation .................................................................................... 71 5.3.2 Data from the interview .................................................................................. 72 5.4 Case D: RUD Ketten Rieger & Dietz GmbH & Co. KG ....................................... 76 5.4.1 Data from observation .................................................................................... 76 5.4.2 Data from the interview .................................................................................. 77 6 DATA ANALYSIS ................................................................................................... 80 6.1 Within-case analysis: Case A – Sony Music Germany GmbH .......................... 81 6.1.1 Types of social media used by companies in