Facebook…where are the news?

Social networks are one of the hottest topics in today’s media and business research. Just yesterday, you could read in the newspaper that Facebook is now worth round about $50bn and that firms such as Goldman Sachs start obtaining shares (http://tinyurl.com/facebook-50bn). When you than check the top 10 business books in marketing on Amazon you can see that most of them are about social networks (http://tinyurl.com/top10business-books).

During this blog we have not really covered this topic before, so that I thought it might be for interest for all of you. Katrin and Maria once related to the topic with her articles Women and networking and  Women 2.0. Until now, we have more focused on general management issue.

However, I am really struggling to get the hype about social networks. Why is there such hype about it? The basic idea about networks is that they “allow individuals to present themselves, articulate their social networks, and establish or maintain connections with others.” (Ellison, 2007)

But the importance of networks in private and business context are not really new. For instance in university, you constantly hear about Toyota’s success and the importance of networks.

Moreover, I have conducted some research on the topic of the internationalization process of firms over the last weeks. Back in the 70s two Swedish academic published a basic mechanism of the internationalization of firms commonly known as the Uppsala model. However, over 30 years later they revisited their original model based on the findings in the area of business networks from Coviello (2006)Welch & Welch and many more such as the German professor Sydow with its model: Make, Buy and Cooperate.

Based on that, it appears to me that social networks such as Facebook, Twitter, MySpace are just a consequence of the general network idea and maybe just another tool in order to interact in today society and business environment or what do you think about that?

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7 Responses to “Facebook…where are the news?”
  1. Mary says:

    Thanks for your post, Martin! I really like your writing style and how you manage to bring together management theory with topics that really matter in practice!

    Of course social networks are “consequences of the general network idea”, but a social network becomes ‘social’ once the individual is the most important factor (as you already said in your post).

    Social networks build up relations between e.g. organisations and individuals and enable organisations to listen to the individual consumer – in terms of lead users, branding (remember how valuable it is to know a person ‘Likes’ your stuff) and, very important – monitoring real-time opinions of the individual and the whole crowd. You can find a great deal of information on the web – you might wanna start at http://mashable.com/ .

    Think about diversity – social networks allow diversity within worldwide users – I will probably get back to that topic in my next post.

    Used within an organisation, they do a lot in terms of employee motivation, communication and commitment. Take Yammer, an ‘internal Twitter’, which is used at more than 100,000 businesses worldwide. This lovely tool which I myself use at work every day, simplifies communication (even within worldwide affiliates) and helps to break down barriers between me and the CEO, because both of us follow each other and I don’t have to think about hierarchies when posting a short interesting thing.

    If you’d like to read (watch) further, I found a very nice BBC documentation explaining the ‘6 degrees of separation’ theory which is a huge topic within modern net theory!!

    • thob84 says:

      Thank you for this very well researched post! You have name a lot of theory whicht underlines the academic ambition of our blog. Therefore, we can be sure that our writing and argument are backed up by reliable sources.

  2. martinjaja says:

    Thanks Mary for your comment! You are absolutely right in what you are saying and your suggestions and links are really great. You can obviously see that you have a huge amount of expertise in this area.

    I have just one aspect I disagree. I don’t think that social media will really reduce the barriers between the “normal” employee and the CEO. That is maybe true in smaller firms but I cannot imagine that in multinational corporations with billions of revenue. I would guess the power distance is simply to long.

    Or what do you think? Maybe you have some more insights to share. I am really not an expert on that…

  3. Mary says:

    One thing I will never understand is why in people’s minds the amount of revenue should be a dimension disproportional to using cutting-edge technologies which would bring so many benefits! Here’s a link to a slideshow named ‘Web 2.0 in the Enterprise’ (one of millions). The (fictional) guy in there, who has been asked what he would have done without collaboration tools in his company, is saying: “I would never have been able to collaborate with so many colleagues from across the world. My expertise would have been trapped up here or would have had limited reach.” In my eyes ‘conventional’ companies give away so much opportunities by insisting on long-time ago ‘power dimensions’, above all MULTINATIONAL corporations!

    http://slidesha.re/eEuyto

    “I don’t think that social media will really reduce the barriers between the “normal” employee and the CEO.”

    Social media is definitely reducing barriers between employees and CEO. ‘Reducing barriers’ does not mean chatting with your CEO about what he has done last night – it’s something that has to be implemented into company culture. Here’s a snapshot of another slideshow which demonstrates my thoughts of how culture can be changed (with the help of social media). What is wrong about being fully networked instead of reporting to the guy above and getting information from the guy below? This approach is the basic principle for efficient knowledge transfer. Just take a look at what Blogs, Wikis or Mashups do in terms of knowledge management! Anyway, Change is 90% about ourselves and only 10% about technology.

    Here are some other links you could check out:

    http://www.springerlink.com/content/g509739lp56gk040/
    http://slidesha.re/yCcvM
    http://slidesha.re/ykIlL
    http://slidesha.re/2jPJzl

  4. Mary says:

    …by the way: http://www.slideshare.net/ is a very good source for inspiration if you guys want to do a presentation! Take a look!

  5. diiasg says:

    Very good post. I do have a question to a question that has come about through these comments.

    I realize the power distance may be too long at moment, and that therefore social networks havent fully come into play in the upper levels of management…or at least the communication via them has not. But what happens in 10 years when the old guard is giving way to the new guard? If we were to believe in evolution wouldnt it be odd if someone was born today and spent their entire life crawling on all fours?

    I feel like in the same sense it would be odd if mutli-nationals, companies that are so focused on innovation and staying ahead of the curve, decide that this social netowrking idea is not for them. If i were a betting man i would say that work relations in general are going to continue moving towards the networking realm.

  6. diiasg says:

    Very good post. I do have a question to a question that has come about through these comments.

    I realize the power distance may be too long at moment, and that therefore social networks havent fully come into play in the upper levels of management…or at least the communication via them has not. But what happens in 10 years when the old guard is giving way to the new guard? If we were to believe in evolution wouldnt it be odd if someone was born today and spent their entire life crawling on all fours?

    I feel like in the same sense it would be odd if mutli-nationals, companies that are so focused on innovation and staying ahead of the curve, decide that this social netowrking idea is not for them. If i were a betting man i would say that work relations in general are going to continue moving towards the networking realm.

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