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Advantages of Using Social Networking in Business Organizations


Identify the advantages and the disadvantages of the use of social networking in the Business.

Social media was once considered only a medium of connecting people. It was basically a kids’ tool and no business can use it to gain profit out of it. Soon these sceptics proved to be wrong and now it is considered as a useful tool for every business in various grounds primarily in their promotion. It is useful in gaining customers’ valuable insights, increase brand awareness and loyalty, run targeted ads with real time results, generate higher converting leads, provide rich customer experiences, increase website traffic and search ranking, identify competitors’ activity, share content faster and easily, geo-target content, build customer relationship and many more. As there are advantages, there must be some disadvantages that come along with it. The report will be flowing in a direction to identify these advantages and disadvantages of using social networking in the business organizations (Whiting and Deshpande 2014). A thorough literature review has been carried out in the following. Project objectives and scopes are also identified in the following research proposal.

  • To critically analyse the applications of social networking in Business Organizations.
  • To identify the advantages and disadvantages of using social networking in the business.
  • To critically evaluate the promotional activities of business organization through social networking.

The scope of the projects lies within the history of development of social networking and the point of views of business organizations towards it. The change in the viewpoint and the impact will also be considered.

Social networking and its use in Businesses

Social networking can be represent as a structure in the internet that joins people with common interest. Its sole purpose is to connect people. Facebook, Pinterest, twiter are the msot common social networking sites that are used by people around the world. It has become an integral part of almost every business around the world. It has considerably modified the thinking of the entrepreneurs. It not only contributes in providing information to identify new opportunities, but also helps to in the process of implementation. The social networks help in triggering the enactment of opportunities of the international businesses by bringing modification in the way business organizations see the feasibility and desirable opportunities. The evaluation of opportunities by experienced international businesses inclined to be linked with their strong network ties. The new companies gain benefits from these experienced well-established organization for setting up their business. Marketing and promotions are the two important grounds where the social networking comes into action for the international organizations. It is considered as the fastest means of getting public attention and recommendations (Nowi?ski and Rialp 2016).

Disadvantages of Using Social Networking in Business Organizations

Business transformation

Social network is playing vital role in changing way of communication, creation, collaboration and consumption. It is one of the important transformative approaches taken by the business organizations in information technology, within and outside the organization. It directly influences in promoting the products and services and transformed the way.  Popular social networking sites like facebook, twitter, instagram and many more are used in the process. Business organizations are using these social networking sites not only for promoting their products but also to build customer relationship by allowing them to place their opinion asking their feedback. It helps organizations in their social and economic value creation. They are placing ads with the help of e-business management team that is often found in the social networks that directly links to the business page of the company. It completely reframed the business models of the companies. It has also impact on the CSR policy of the companies (Aral, Dellarocas and Godes 2013). It also has advantages on Customer Relationship Management. CRM is influenced by both social network marketing and customer-centric management, which believed to have interactive effect in formation of firm level capabilities (Trainor et al. 2014). The application of social media helps the organization to implement innovative form of communication and co-create content with the customers. Transformation in the society is currently forcing the business organizations to make their presence in the social network platform. The social network can be integrated in the business organization is several ways depending on the desired benefits and the usage. The relationship-based interaction model with the customers is improving the social value of the organization (Tiago and Veríssimo 2014).


Various advantages can be identified of using the social network as a valuable tool for the business organization. The following part of the proposal will be conducting research based on existing literatures that are available in the market. This part of the literature review will be identifying the advantages and a critical analysis will be done based on that.

Customer Insight

Social networking provides a huge amount of valuable data on the customers that can provide an insight of their likings and dislike which will in turn help the business to focus on the customer satisfaction. These relevant data help to take smarter business decisions. The business that did not include social networking in their business model needs to conduct survey, which needs greater capital investment. Moreover, question of reliability remains in the data acquired from the survey (Roy, Maxwell and Carson 2014). Amazon adopted this advantage and used it for serving their customers in an efficient way.

Brand awareness and loyalty

Presence in social network will increase the brand recognition as the business will be engaged in a global audience of customers. It provides a greater exposure of the company, which in turn will create a strong customer base. It can also show potential improvement in brand loyalty. Customer satisfaction and brand loyalty are two sides of a coin which cannot be separated from one another. For gaining high brand loyalty, it is important to get the customer insight from the social networking sites.  This process brings benefit to the company. It takes more time and money to spread brand awareness to the customers outside social network in the age of technology (Kim, Lim and Brymer 2015). Australia based digital marketing company WME has come a long way since their opening in 2007 with the help of various social networking sites as the promotional platform.

Inbound Traffic

The number of customers is restricted to the usual customers for the companies who did not make their presence in the social networking sites. Hence, it can be said that, social networking is a gateway for the business to develop the number of customers. It will reduce the difficulties in reaching anyone other than the loyal customers. More the number of profile one make for their business in social media, more the chances are to get customers’ attention (Leung et al. 2013). Making different pages for different target population will increase the brand awareness among the customers. It will also supplement in increasing conversion rate. The higher conversion comes with increased visibility. Increased interaction like frequent commenting, sharing content, and posting status will in turn increase the visibility of the business which will increase the conversion rate (Nord, Paliszkiewicz and Koohang 2014). Macy’s is a international clothing store who actively uses the social networking sites like facebook, instagram in the process.

Reduced marketing Cost

Potential advantages can be identified in making marketing budget of the business organizations. It is also the most cost-efficient advertising strategy that is available today. It is also gaining importance in destination marketing organizations. The popularity of the strategy is due to the low cost and wide range of accessibility. The businesses can access the global market with ease. Almost everyone in developing and developed countries is accustomed with the social network and uses them in their daily life. Hence, it is a golden opportunity for the companies to promote their products and services (Fan and Gordon 2014). It also cut down the marketing budget of the company. They can access global market with such low price using the social networks. The impact of this on the customers also shows higher potential than other marketing strategies for the same reason. With low investment in marketing, business can utilize their capital in other fields which will gain benefit to the organization (Hays, Page and Buhalis 2013).

Customer Satisfaction

The use of social networking sites as an integrated tool of business management has considerably changed the seller and buyer interaction. The use of social media by the salesperson has indicated improvement in information communication behaviour, which simultaneously enhances customer satisfaction and salesperson’s responsiveness. Customers are enabled to provide opinion about the company on their social networking websites which can supplement in creating value of the company by bringing modification to satisfy customers’ needs. The salesperson’s better responses in social network proved to show positive impact in customer satisfaction. It is a promising medium business can use to communicate information to customers. For the purpose, the salesperson needs to enhance their behavioural skills to increase customer satisfaction. Goals with relation to social media need careful assessment from the manager to make proper use of their sales force. Hence, using social networking made it easier for the company to provide customer satisfaction which out facing major challenges like collecting data on the customers’ opinion (Agnihotri et al. 2016; Hudson and Thal 2013).  Dan Murphy’s, a Australian liquor company using facebook as a platform to interact with the customers to gain better insight for look after the customer satisfaction issue.

Thought Leadership

Creating a good profile by making well written and insightful content on the social media can brush up the leadership skills in the particular field. There is no single way of becoming thought leader; it demands work that can be supported by online networking tool. To become an expert in the field, social media is a good medium to establish one’s presence (Jeske and Shultz 2016).


As there are advantages in using social network in the business strategy, there are disadvantages too. Different approaches are required for making profitable use of the social network, failing of which can also have negative impact on the business. Proper planning is necessary for avoiding these unwanted circumstances. Some of the major disadvantages are identified in this report.

Promotion Management via Social Networks

Promoting through social networks requires active management of the presence, lack of which can bring no real time benefits. Moreover, mismanagement can also create negative impression of the business to the potential customers, which requires utmost avoidance. Potential risk lies on unwanted or inappropriate behaviour on the social network page (Ngai, Tao and Moon 2015). Moreover, exposure needs to be managed in appropriate manner. The low exposure will fail to establish the brand value to the customers. Likewise, high exposure also has its effect on the social networks. Extra exposure will attract the risks like negative feedback, information leaks or even hacking. These risk factors need to be eliminated with utmost priority (Sharda, Delen and Turban 2013). Burger King is one of the companies whose social networking promotion backfired on them due to their inconvenient tag line.

Maintenance effort

As the social network needs daily update, it requires daily monitoring on regular basis. Failing in monitoring the pages on a daily basis can potentially reduce the brand value of the organization. One needs to implement additional resources for the above reasons.  It will help maintaining the online presence of the business. Hence, it is important for appointing extra force that will again require extra investment in the business (Laroche, Habibi and Richard 2013). On the other hand, it will become easier for the owner to handle the situation much easier.  The handler must have experience of marketing and also social network strategy as these are required to maintain and increase the benefits of the business. The manager with low expertise will surely fail in preparing clear marketing strategy based on social networking will in term reduce the benefits of the business (Zeng and Gerritsen 2014). Company like Amazon spends a huge amount of money in maintaining their social network pages for their promotion which consumes a noticeable portion of their profit. They need to decrease their investment in social networking pages to increase their profit margin.

Policies and procedures

These risk factors regarding the social networking can be managed by preparing policy and following proper procedures carefully beforehand. Claiming something about one business, that is not true or misleading on the social network page can reduce customer base. Business can also be fined judging on the severity of the crime. Misleading information about the competitors or the rank of the business in the market or customer testimonials and fan posts are such things that can make business pay for the crime (Dijkmans, Kerkhof and Beukeboom 2015). EBay is currently facing challenges due to their poor policies in customer’s feedback channel in their social networking pages. It resulted in a continuous downfall in customer’s satisfaction of the company.

Literature Gap

The scholarly works that are available in the internet have focused more on the advantages of using social networks by various businesses. The literatures on the disadvantages or the cons of using social networking as an integral part of the business strategy are comparatively few in number. Moreover, only a few literatures provide insight on the necessary procedure required in earning these advantages and fewer talks about the procedure of overcoming the disadvantages. This is a wide range of vacuum in the research work which can be studied. Nonetheless, there are hardly any study is engaged in the analysing scopes for the small businesses firms in using social network marketing. The procedure and advantages mentioned in the articles are for the big international firms. Hence, it is necessary to conduct a study on the ground level and identify the small businesses that are using social networking for their promotional activity and the advantages they are enjoying out of it.


Conclusion can be drawn from the above discussion that there are potential advantages of social networking in business organizations. It has various applications in the business, apart from only marketing. Social and economic value can be increased using social networking websites and also the customer value can be hiked. Advantages of using social network are identified from the studies that have been conducted earlier. They are brand awareness and loyalty, customer insights, inbound traffic, business transformation, reduction advertising cost and many more are identified and discussed thoroughly in the report. Different disadvantages are also identified and analysed. Suggestion is also provided in overcoming the cons of using the social networking in business. The final part of the business proposal is the literature gap, where the required areas of study have been identified with valid reasons.

Reference List

Agnihotri, R., Dingus, R., Hu, M.Y. and Krush, M.T., 2016. Social media: Influencing customer satisfaction in B2B sales. Industrial Marketing Management, 53, pp.172-180.

Aral, S., Dellarocas, C. and Godes, D., 2013. Introduction to the special issue—social media and business transformation: a framework for research. Information Systems Research, 24(1), pp.3-13.

Dijkmans, C., Kerkhof, P. and Beukeboom, C.J., 2015. A stage to engage: Social media use and corporate reputation. Tourism Management, 47, pp.58-67.

Hays, S., Page, S.J. and Buhalis, D., 2013. Social media as a destination marketing tool: its use by national tourism organisations. Current issues in Tourism, 16(3), pp.211-239.

Hudson, S. and Thal, K., 2013. The impact of social media on the consumer decision process: Implications for tourism marketing. Journal of Travel & Tourism Marketing, 30(1-2), pp.156-160.

Jeske, D. and Shultz, K.S., 2016. Using social media content for screening in recruitment and selection: pros and cons. Work, employment and society, 30(3), pp.535-546.

Kim, W.G., Lim, H. and Brymer, R.A., 2015. The effectiveness of managing social media on hotel performance. International Journal of Hospitality Management, 44, pp.165-171.

Laroche, M., Habibi, M.R. and Richard, M.O., 2013. To be or not to be in social media: How brand loyalty is affected by social media?. International Journal of Information Management, 33(1), pp.76-82.

Leung, D., Law, R., Van Hoof, H. and Buhalis, D., 2013. Social media in tourism and hospitality: A literature review. Journal of Travel & Tourism Marketing, 30(1-2), pp.3-22.

Ngai, E.W., Tao, S.S. and Moon, K.K., 2015. Social media research: Theories, constructs, and conceptual frameworks. International Journal of Information Management, 35(1), pp.33-44.

Nord, J.H., Paliszkiewicz, J. and Koohang, A., 2014. Using social technologies for competitive advantage: Impact on organizations and higher education. Journal of computer information systems, 55(1), pp.92-104.

Nowi?ski, W. and Rialp, A., 2016. The impact of social networks on perceptions of international opportunities. Journal of Small Business Management, 54(2), pp.445-461.

Roy, A., Maxwell, L. and Carson, M., 2014. How is social media being used by small and medium-sized enterprises?. Journal of Business and Behavior Sciences, 26(2), p.127.

Sharda, R., Delen, D. and Turban, E., 2013. Business Intelligence: A Managerial Perspective on Analytics. Prentice Hall Press.

Tiago, M.T.P.M.B. and Veríssimo, J.M.C., 2014. Digital marketing and social media: Why bother?. Business Horizons, 57(6), pp.703-708.

Trainor, K.J., Andzulis, J.M., Rapp, A. and Agnihotri, R., 2014. Social media technology usage and customer relationship performance: A capabilities-based examination of social CRM. Journal of Business Research, 67(6), pp.1201-1208.

Whiting, A. and Deshpande, A., 2014. Social media marketing: A myth or a necessity. The Journal of Applied Business and Economics, 16(5), p.74.

Zeng, B. and Gerritsen, R., 2014. What do we know about social media in tourism? A review. Tourism Management Perspectives, 10, pp.27-36.

Fan, W. and Gordon, M.D., 2014. The power of social media analytics. Communications of the ACM, 57(6), pp.74-81.

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