Journal of International Business Research and

Marketing
Volume 3, Issue 6, 2018
journal homepage: www.researchleap.com

Stakeholders' Engagement and Strategic Management of Social Media

1
Leila Meratian Esfahani, 2 Lester W. Johnson
1,2
Swinburne Business School, Swinburne University of Technology, Australia

ABSTRACT
2016 Research Leap/Inovatus Services Ltd. Social media is becoming integral to many organizations as a tool for marketing, customers’ service
All rights reserved. management, interacting with employees, etc. However, recent research shows that organizations
are still struggling to find an effective way to strategically manage social media and engage with
DOI: 10.18775/jibrm.1849-8558.2015.36.3004 various stakeholders. As a result, there is a need to investigate the issue in depth . T herefore, in this
URL: http://dx.doi.org/10.18775/jibrm.1849- paper, we develop a comprehensive conceptual model for organizations to engage with stakeholders
8558.2015.36.3004 and strategically managing social media.

Keywords:
Strategic management, Social media
management, Social media engagement,
Engaging stakeholders

1. Introducti on Social media allows information and ideas to be quickly spread

Social media refers to any activity or behavior of people who (Goh, Heng & Lin 2013). It also enables organizations to
gather online to share information, communicate together and contact the target market easier than traditional media. These
create and share user-generated content (UGC) online (Safko functions transform social media into an integrated part of
2010). There is general agreement that social media is organizations' branding and marketing strategies (Cawsey &
fundamentally changing the way people communicate, Rowley 2016; Mangold & Faulds 2009). Moreover, it enhances
consume and collaborate (Hays, Page & Buhalis 2013; Wu, Sun the communication and collaboration between employees
& Tan 2013). Social media has integrated itself into many within the organizations, so many organizations use it as a
aspects of personal and professional lives by using a broad knowledge management and product/service innovation tool
range of applications from instant messages, to blogs, Wikis (Grovera & Froesea 2016; Harmsen & Proper 2013; Kim, Lee
and social networking sites like Facebook and Twitter (Correa, & Lee 2013). Some researchers assert that the use of social
Hinsley & Zúñiga 2010; Kaplan & Haenlein 2010). media by organizations can increase their level of transparency
and accountability because it makes some of their activities,
While social media is primarily designed for individual use policies, and their stakeholders' concerns and claims visible
(Goh, Heng & Lin 2013), its use has extended beyond (Jaeger, Bertot & Shilton 2013; Qualman 2009). In summary,
individuals and attracted the attention of businesses (Kane et al. by engaging socially to build trustworthy relations with
2014). This is due to the fact that social media has stakeholders and society, social media allows organizations to
revolutionized the way organizations operate, enhancing their build a reputation through social capital which indirectly can
communication with their stakeholders and provides improve the organizations' performance (Mandviwalla &
organizations with an agile, cheap, fast responding, and reliable Watson 2014; Paniagua & Sapena 2014).
tool for their marketing and communication strategies
(Harmsen & Proper 2013; Kim, Lee & Lee 2013; Li & Li 2013; Organizations can also monitor their business partners or
Lin, Featherman & Sarker 2017). The use of social media can competitors on social media to evaluate the market and adjust
potentially improve customer service and increase the products and services in response to changes in the external
satisfaction of stakeholders (Nicholson 2012). environment, see how competitors work and realize what users
are saying about them (Luo, Zhang & Duan 2013; Mayeh,

47 Journal of International Business Research and Marketing, vol. 3, issue 6, pp. 47-56, September 2018
 48 Journal of International Business Research and Marketing

Scheepers & Valos 2012). During social media monitoring, using social media, customers/potential customers expect to be
organizations do not create content to engage with their able to compare products and services from organizations
stakeholders, instead, organizations need to listen to others and around the world, compare prices and find out other customers’
monitor competitors’ social media to obtain the required experiences. In fact, in the era of social media, customers are
information. However, our focus here is only on the use of not as much under the influence of traditional media advertising
social media by organizations to interact with their and rely more on their peers’ and friends’ recommendations
stakeholders. that mostly is taking place online on different social media
platforms (Rohm & Weiss 2014). Thus, they are not passive
Despite the use of social media, its popularity and growing participants in organization-customer relations. They expect
body of literature about its use and potential benefits to two-way conversations and timely and updated information .
organizations, research into social media is still in its early stage They no longer want to be talked at; they expect organizations
(Ahmed, Stockdale & Scheepers 2014) and there are many to support them, engage and listen to them (Berthon et al. 2012;
unexamined issues. For example, practitioners' research show Kietzmann et al. 2011). Therefore, social media can play an
that despite the numerous claimed benefits from the use of important role for marketing (Harmsen & Proper 2013; Luo &
social media, it is not necessarily effective and efficient, and Zhang 2013), customer services (Kim, Lee & Lee 2013) and as
there are very few organizations that are near to achieving the a source of information (Rishika et al. 2013; Shi & Whinston
full potential benefit from its use (Chui et al. 2012). Social 2013) to engage customers and potential customers.
media applications may be underutilized or mismanaged , and
thus prevent organizations from reaping intended outcomes and Employees are another important stakeholder group. The
benefits of its use (Hoffman & Fodor 2010). expectation is that using social media inside the organization
can improve communication and collaboration among
There is some academic research on the tactics organizations employees, knowledge management and product/service
optimally can use social media. For example, Goh et al. (2013) innovation in organizations (Fulk & Yuan 2013; Hanna, Kee &
study the organization’s tactics concerning content creation on Robertson 2017). Social media can also solve some challenges
one specific social media platform. Another example is a study within organizations like the location of expertise, the
related to the organization’s tactics in leveraging social media motivation for sharing knowledge and creating social capital
for influencing word-of-mouth effects and seeding the right inside the organization (Gonzalez et al. 2013). Such
market (Dou, Niculescu & Wu 2013). However, academic deployments have implications for the organization’s
researchers claim that little is known about organizations’ performance and can help organizations optimize employees'
higher-level strategies about overall social media strategies. career paths (Harmsen & Proper 2013; Krüger, Brockmann &
Specifically, there is a lack of academic research on how Stieglitz 2013; Leonardi, Huysman & Steinfield 2013).
organizations should organize, govern and evolve social media Moreover, it helps organizations to capture and reuse
capabilities and how organizations should interact with their knowledge (as one of the organizations’ most important assets)
various constituencies through social media (Heath et al. of their employees (Grovera & Froesea 2016).
2013a). Due to the use of social media by organizations, it is
becoming important for organizations to understand the b est Social media is all about users' participation. Without users'
practice to integrate social media strategies into overall participation, social media has no value (Hvass & Munar 2012).
organization strategies, while there is a dearth of academic In the case of using social media by organizations, users of
research in the existing literature (Aral, Dellarocas & Godes social media will be the organizations' stakeholders. Thus to get
2013). value from social media, organizations need to encourage more
stakeholders to actively participate in their social media
Why are organizations still struggling to find an effective platform (Culnan, McHugh & Zubillaga 2010). Mohammadian
strategy for using and managing social media? Social media use and Mohammadreza (2012) claim that attracting the attention
requires a fundamental change in an organization's processes of stakeholders to attend to the organizations' social media is
and roles including a mental and management shift (Li & the most important key in an increasingly competitive social
Bernoff 2011). This shift often increases complexity and has media environment. Now the question is, how can
consequences in the way organizations approach stakeholders' organizations get attention from more and more stakeholders on
needs and concerns through business strategies (Hvass & social media? Organizations require having different strategies
Munar 2012). These all consequently impact the outcome of to encourage different stakeholder groups to actively participate
social media use. Due to the importance of social media in a in social media in alignment with the organization's goals. Also,
competitive environment, it is necess ary to understand these they require particular strategies for engaging employees
consequences and explore how organizations can use social through creating communities and social capital inside the
media to engage with stakeholders more effectively. organizations’ social media.
Different stakeholders’ groups have different expectations and Aral et al. (2013) emphasize the dearth of scholarly work on a
motivations to engage with an organization’s social media. By comprehensive strategy for managing social media. The little
 49 Journal of International Business Research and Marketing

information available is mostly from practitioners and white use social media to engage interactively with different
papers (e.g., Dutta 2010; Owyang et al. 2011). These are useful; stakeholders and stage social media experiences for them. In
however, there is a lack of theory and scholarly research to help order to strategically manage social media, organizations
organizations to develop a comprehensive strategy for social require unique and difficult-to-replicate dynamic capabilities to
media engagement. In the absence of theory and academic continuously create, extend, upgrade, protect, and keep relevant
research to provide organizations an appropriate level of the organization's unique experience (Teece 2007). Teece
conceptualization, social media engagement is critical and (2007) argues that dynamic capabilities involve three stages:
challenging for organizations, resulting in many failure Sensing and Seizing opportunities and Managing threats.
outcomes. For instance, the research by Miller and Tucker
(2013) shows that, while the primary goal of social media in Each organization has specific characteristics and pursues
their study’s healthcare system context was integration with particular purposes for using social media, and each
clients, employees played a more active role in usin g the organization has different stakeholders who have different
organization’s social media compared to clients. motivations for using social media. Furthermore, social media
is a highly dynamic environment where things change rapidly,
Encouraging different stakeholders to participate in social so the suggested strategy for managing it now may not be valid
media is not a simple process. Social media is a dialogic in the future. Therefore, there is no single successful approach
medium where people participate in a conversation around to using social media for all organizations, in all social media
topics of shared interest. Thus, the key component of social platforms for all times. Each organization needs to develop its
media engagement is content that is of interest to many unique capabilities to manage social media and create unique
participants (Zeng & Wei 2013). Organizations need to create social media experience for its stakeholders. The three stages of
content based on their strategy and values and their dynamic capabilities provide organizations with a guide to
stakeholders’ needs. Thus to generate the right content in social thinking strategically and having a timeless perspective on how
media, organizations must understand to whom they should they can manage social media. The dynamic capability
engage in social media. For what purpose do they need to use framework of Teece (2007) is useful because, to strategically
social media? Which sort of information do they need to create manage social media, organizations need to sense different
for each purpose of using social media? How can they engage stakeholders’ motivations and behaviors in social media to
stakeholders in social media? If organizations do not have this develop new capabilities to respond and seize new
clear perspective, they cannot create the right content. opportunities and manage new threats in a fast-moving social
media environment. As a result, organizations adjust their
Furthermore, they cannot have a correct strategy to deal with social media conversation in response to stakeholders’ needs
different stakeholders who participate in the conversation. and expectations. Strategically managing social media includes
Thus, stakeholder engagement is a dynamic and multifaceted three steps (Capturing, Developing, and Governance). These
process that happens over time; and its understanding requires steps come from Teece (2007) and the synthesis of literature
obtaining information and considering various interpretations about social media use in organizations.
from different perspectives (organization and stakeholders'
perspectives). How organizations can strategically manage the 2.1 Sensing opportunities:
dynamic environment of social media is discussed in the next The main objectives of this stage are to develop a process to
section. identify the target market, understand customers’ needs, select
new technologies and tap competitor innovation. In a social
2. Strategic Management of Social Media media context, in this stage organizations need to capture
Organizations need to find a systematic way and develop a information about different stakeholders and social media
strategy for managing social media to achieve their goals. capabilities. The various processes of this stage are:
Social media management refers to high-level strategies of
organizations to organize, govern, fund, and evolve their social 1. A process to choose social media purposes aligned with
media capabilities (Aral et al. 2013). It is specifically about the organizational goals and choose an appropriate platform
ways organizations interact with their various constituencies in best match for each purpose.
social media. It is not about managing stakeholders, but about 2. A process to identify the target market and salient
managing conversations and dialogue happening in social stakeholders for each social media purpose.
media. It includes the way organizations realize the different 3. A process to understand different stakeholders' motivations
purposes of using social media and identify their salient and expectations (functional and emotional) about the
stakeholders for each of these purposes. Also how they develop organization's social media.
their strategy to explore the proper social media platform for 4. A process to explore the topic of shared interest (for both
those purposes and the process of creating content and organizations and stakeholders).
attracting the attention of different stakeholders. Thus, the main
intention of social media management is on how organizations
 50 Journal of International Business Research and Marketing

2.2 Seizing opportunities (interactions with employees) purposes. They interacted

This stage is about architecture and design of the opportunity directly with stakeholders either individually (e.g.,
that is sensed and creating engagement among stakeholders. In asynchronous media such as email) or in mass communications
a social media context, it is about developing content that meets (e.g., Web and TV advertising; Gallaugher & Ransbotham
stakeholders’ needs and attracts their attention to engage in 2010). During those transactions, stakeholders had limited
social media to build social media experience. It includes: ability to observe or influence other stakeholders (Luo, Zhang
& Duan 2013).
1. Delineating suitable sorts of information for each group of
stakeholders. Social media breaks this and it has transformed the
2. Creating content to attract the attention of the target market organization's relationship with their stakeholders as it provides
and salient stakeholders to accomplish each social media a two-way channel to communicate to stakeholders (Wu, Sun
goal. & Tan 2013). The transformation needs a management shift in
3. Creating content to respond to stakeholders who asked organizations as stakeholders no longer want to be talked at,
questions in social media. they expect organizations to support them, engage them and
4. Creating content around the topic of shared interest listen to them (Berthon et al. 2012; Kietzmann et al. 2011).
explored in social media. Managers need to accept a loss of control and share power with
5. Creating ways to attract stakeholders’ attention (e.g., stakeholders (Bernoff & Li 2008). Different stakeholders
creating virtually attractive content, using techniques to create content on organizations’ social media. The amount of
monetize social media). content created by people in social media has grown
6. Integrating information on all social media platforms and tremendously in the past few years (Lu & Stepchenkova 2015).
other organizations’ channels with the latest information. The interesting content passes from one person to another and
consequently, its value increases, because ‘it will be a content
2.3 Managing threats: post from a “trusted source” [family/friend or expert] rather
The last stage is about continuous alignment, and realignment than one directly from the brand or organisation itself’
of opportunities sensed and seized in previous steps and (Hopkins 2012 p.106). Research shows that the content created
managing threats. In the context of social media, it is about by users influences other stakeholders over 22 times more than
managing crises and governance of social media platforms and the content created by organizations’ marketers (Goh, Heng &
conversations. Organizations should be: Lin 2013). Thus, it becomes a valuable bus iness asset for
organizations (Amaral, Tiago & Tiago 2014).
1. Continually checking social media to remain informed on
threats. Moreover, academic research shows that some executives do
2. Creating content to respond to threats case by case. not have consistent strategies for managing social media, so
3. Avoiding controlling and steering the conversation around they may mismanage using social media. They also transfer
the threat, unless the threat is critical. traditional advertising strategies to social media as well (Baird
4. Developing guidelines and terms for social media use and & Parasnis 2011; Heath et al. 2013a; Hoffman & Fodor 2010;
put it in each social media platform. Lovejoy, Waters & Saxton 2012). Managers need to realize that
5. Consistently training employees to make informed the context of social media is about new relationships between
decisions that are in line with the organization’s values. organizations and different stakeholders, not just technology
6. Transparent with stakeholders about the threat, mis take or deployment (Li, Webber & Cifuentes 2012). Therefore a new
crisis that has happened. approach is required to focus more on the social aspect of this
new medium (Heath et al. 2013a). The new approach should
Once an organization passes through strategically managing explore how organizations can use social media to engage
social media, it will be able to engage stakeholders to interactively with different stakeholders.
participate in social media and to engage, and consequently, it
will be able to stage a unique social media experience for its 3.1 Organizations’ Stakeholders in Social Media
stakeholders. However, there are some challenges Stakeholders are defined in the literature as ‘any group or
organizations face to strategically manage social media and individual who can affect or is affected by the achievement of
engage stakeholders. the organization's objectives’ (Freeman 1984, p.48). Also, they
are identified by ‘their interest in the corporation, regardless of
3. Organizations’ Challenges in Engaging Stakeholders on whether the organization has any corresponding functional
Social Media interest in them (Preble 2005, p.409). From this perspective,
Historically, organizations' approach in traditional media participants who are interacting with the organization via social
focused on command and control of messaging around their media are the organizations' stakeholders. Many scholars
brand. The organization was the only official voice for both classify stakeholders into categories of stakeholders who have
external (e.g., marketing and customer services) and internal an almost similar function or interests from the organizations'
 51 Journal of International Business Research and Marketing

perspective to help organizations to set a strategy to respond to engagement can be either stakeholders or the organization and
each group (supplier, customer, potential customer, employee, the medium is one of the organization’s social media platforms.
etc.) (Chan & Pan 2008). All organizations have different The stakeholders’ engagement is the behavior resulting from
groups of stakeholders, many of whom use social media. Social motivational drivers manifested in consuming User Generated
media users can affect, or be affected, by organizations via their Content (UGC) like tagging and commenting, posting, sharing
participation in organizations' social media. Thus, and forwarding organization’s UGC and referring others to the
understanding their expectations and needs in social media, as organization, responding to others’ questions and providing
a new environment, is essential for the long-term success of the product/service feedback and new ideas to organizations
organization (Freeman & McVea 2001). (Rohm & Weiss 2014).

Organizations need to have a clear perspective about their Social media engagement includes three types of users; the
stakeholders for each activity of using social media. For most prevalent users are individuals who browse and consume
example, when managers decide to use social media for UGC but do not contribute it. The second group of users is
marketing, their salient stakeholders are customers/potential content contributors who ask for the information they want
customers, so they will be different from using social media for from others. These two groups are mere ‘lurkers’ (Nonnecke &
knowledge sharing within the organization (salient Preece 2001) as opposed to individuals who actively participate
stakeholders are employees). If organizations do not have this in social media to respond to others’ questions and create
clear perspective, they will not know the needs and interests of content (Yoo & Gretzel 2011). Thus, the concept of
salient stakeholders to create content for them. engagement is a process, starting when users understand that a
particular organization has a social media platform, and then
3.2 Social Media Management they start to browse information, contribute to social media and
Social media management refers to high-level strategies of finally, users actively create UGC. Therefore, an organization
organizations to organize, govern, fund, and evolve their social first needs to inform their stakeholders that it has a social media
media capabilities (Aral et al. 2013). It is specifically about the platform, and then try to attract their attention to participate
ways organizations interact with their various constituencies in more from only a lurker user to an active participant. However,
social media. It includes the way organizations realize the far too little attention has been paid to this in the existing
different purposes of using social media and identify their literature.
salient stakeholders for each of these purposes, and also how
they develop their strategy to explore the proper social media After realizing to whom the organization should interact in
platform for those purposes and the process of creating content social media, organizations need to understand the motivational
and attracting the attention of different stakeholders. Thus, the drivers of various stakeholders to engage in social media. By
intention of social media management is on how organizations realizing that, the organization can motivate stakeholders to
should use social media to engage interactively with various engage in social media.
stakeholders.
3.4 Motivational Drivers of Various Stakeholders for Using
3.3 User Engagement in Social Media Social Media
There is some research about customer engagement in social Zyglidopoulos and Phillips (1999) claim that managers can
media (e.g., Cabiddu, Carlo & Piccoli 2014; Harrigan et al. realize stakeholders' concern and take appropriate actions by
2017; Yoo & Gretzel 2011). Customer engagement is a analyzing their conversations in case of an event. As
customer’s behavioral manifestation toward a brand or stakeholders have conversations around topics of shared
organization, beyond purchase, resulting from motivational interest in social media, organizations can identify stakeholders
drivers. Customers’ behaviors include customer purchasing and realize their concerns via analyzing their conversations in
behavior, word-of-mouth activities, recommendations, helping social media. However, many organizations fail to extract
other customers, blogging, writing reviews, and even engaging information about different stakeholders’ needs and concerns
in legal action (Van Doorn et al. 2010). Customer engagement from social media and consequently they mislead their
can cause sales growth, customer involvement in product stakeholders. One example of this mistake in identifying and
development and feedback and recommending the organization managing the targeted group of stakeholders is the research of
to others (Harrigan et al. 2017). Miller and Tucker (2013) mentioned earlier. They found that
employees play a more active role in creating active social
While customers are one of the most important groups of media content than clients in a healthcare system, while the
stakeholders, other groups of stakeholders like employees, primary goal of social media was integration with clients
potential customers, suppliers are not considered in the because the content posted did not focus specifically around the
academic literature on their engagement in social media. clients’ needs. Therefore, they highlighted that if ‘firms wish to
Stakeholders’ engagement is the interaction of stakeholders use social media primarily for client facing reasons, their efforts
with one another or with an organization. The initiators of may be more effective if social media content posted is
 52 Journal of International Business Research and Marketing

specifically focused around their clients’ needs and interests Creating Sense People can form Culnan et al.,
rather than being of broader organisational interest’ (Miller & of Communi ty communities in social 2010; Goh,
Tucker 2013, p.53). and Social media. Feeling of Heng & Lin
Capital being part of 2013; Hajli
community 2014;
Participation in social media is voluntary. Individuals can use
encourages users to Kietzmann et
social media to communicate with organizations and other interact and exchange al., 2011; Lin ,
stakeholders. Some of the individuals’ motivations to their knowledge and Featherman &
participate in organizations’ social media are summarized in information. Sarker 2017;
Table 1. Xu, Ryan,
Prybutok, &
Wenb, 2012;
Table 1: Individual motivation to participate in organizations’
Building Individual expect to Forte, Larco, &
social media Professional receive social rewards Bruckman,
Reputation such as approval and 2009; Lin ,
Indivi duals' Description References respect by Featherman &
Motivati on participation in social Sarker 2017;
Self Individuals have DeVito, interaction. Thus, the Wasko & Faraj,
Presentation desire to disclose and Birnholtz & perception that 2000; Tang et
and Self reveal themselves to Hancock 2017; contributing UGC will al., 2012;
Disclose others in cyber space. Djafarova & enhance user'
This can include Trofimenko reputation in the
disclosing some 2017; Kaplan profession will
information like & Haenlein, motivate individuals
name, age, gender, 2010; Schau & to share their valuable,
occupation. They also Gilly, 2003; personal knowledge to
can express Tang, Gu, & others in the network.
themselves by posting Whinston, Enjoyment of Helping others is an Lin,
UGCs, responding to 2012 Helping Others intrinsic motivation Featherman &
others and and Hedoni c for individuals Sarker 2017;
participation in Use of Social because they feel good Wasko & Faraj,
discussion board. Media to help other people. 2000, ; Xu et
Using Social Individuals like to use Enders, Social media use is al., 2012
Media as a social media as a Hungenberg, sometimes considered
Means of channel to Denker, & as enjoyable way to
Communicatio communicate. Mauch, 2008; connect with
n with Conversation can lead Kietzmann et organizations and
Organization to friendship and al., 2011; other users.
and other relationship between Meijer & Revenue Shared revenue Tang et al.,
Stakeholders strangers that would Torenvlied Sharing provides an extra 2012
not otherwise happen 2016; incentive for
and between 'latent Michaelidou, contributors who have
ties' who may have Siamagka, & joined revenue-
some offlin e Christodoulide sharing programs.
connection. s, 2011
Using Social Social media is a Ahmed et al., Understanding the motivation behind using social media by
Media as a source of collective 2014; Grovera individuals is useful to explain how social media engagement
Source of knowledge and & Froesea is working. Once an organization understands these
Knowledge/ information because it 2016; motivations and behaviors, it can develop appropriate strategies
Information generates new sources Kietzmann et
in order to develop better social media engagement by tailoring
of online informatio n al., 2011; Lu &
the right messages for the right stakeholders to impart at the
about users’ Stepchenkova
experiences. Users 2015; Leonardi right time in the right social media platform to convert the
can get 2017; individual to become engaged in the organization’s social
information/knowledg Malthouse et al. media (Powell, Groves & Dimos 2011).
e through content 2013; Song et
created by al. 2016 4. Contribution to Practice
organizations and
Once organizations have decided to use social media, one of
content created by
other stakeholders their managers' main concerns is how to use social media to
(UGC). achieve organizational goals and engage with more
stakeholders (Mohammadian & Mohammadreza 2012;
 53 Journal of International Business Research and Marketing

Paniagua & Sapena 2014). This paper offers practical and there is a need to examine practices in non -IT/IS
suggestions to managers and helps them to understand how organizations.
organizations can engage with stakeholders in social media.
Furthermore, this paper helps organizations to progress from This research paper extends the current knowledge of
isolated social media projects to having comprehensive social organizations' social media management strategy to accomplish
media management to stage a social media experience for their social media related goals. It develops a guideline to
different stakeholders that is unique to the organizations’ brand. thinking strategically and timelessly about managing social
It adds to an understanding of why and how different media in organizations. This can potentially address the issue
stakeholders engage (or do not engage) in organizations' social of organizations that are struggling to find an effective
media activities. It is useful for practitioners who are management strategy for using social media as claimed by Aral
considering utilization of social media for stakeholder et al. (2013).
engagement.
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