Open access peer-reviewed chapter

Social Media Ecosystem and Its Influence on Small Business Strategic Practices

By Shirumisha C. Kwayu

Submitted: October 26th 2020Reviewed: November 18th 2020Published: December 21st 2020

DOI: 10.5772/intechopen.95058

Downloaded: 248

Abstract

The plethora of social media applications creates an ecosystem that can assist strategies for small business. However, the abundance of social media applications is attributed as a cause for confusion to business owners and executives making it difficult to conceive strategies for engaging effectively with social media. Following a practice theory, this paper uses an autoethnographic methodology to study how the social media ecosystem influences strategic practices of a small business. The study found that the social media ecosystem is crucial for enacting a strategy of a small business and that changes within the ecosystem influence the whole strategy. In addition, the study shows how context is interwoven with the social media ecosystem to affect the strategy of a small business. The study underscores the importance of strategizing practices for small business to develop agility that is necessary for developing and embedding digital transformation. Practically, the study highlights the significance and the need for developing countries to synchronize their soft infrastructure in order to help small businesses exploit the benefits of globalization during this era of social media.

Keywords

  • social media ecosystem
  • autoethnography
  • practice theory
  • small business

1. Introduction

The abundance of social media application creates an ecosystem of social media [1] which business organizations can use to enhance their information system (IS) and strategic endeavors [2, 3]. The use of social media in business organizations is in the post adoption stage. For instance, Mahr and Lievens [4] highlighted that 80% of firms listed in Standard and Poor’s 500 index used social media. Although large organizations embraced social media, Kiron et al. [5] suggested that both large and small organizations practice social media. In addition, Braojos-Gomez et al. [6] suggest that small firms tend to use and leverage social media for strategic objectives such as marketing because of their low portfolio of financial resources to compete more effectively in the market compared with large business organizations. Although social media can be leveraged for strategic reasons, Kietzmann et al. [7] suggested that executives were struggling to build strategies for engaging effectively with social media. For instance, Omotosho [8] suggests small business entrepreneurs are familiar with major social media platforms and their relevance to their business endeavors but lack of continuity with platforms for business purposes was a factor for converting the platforms for their personal use. Likewise, Effing and Spil [9] finds that social media strategy within organizations is not yet well developed. The difficulty of developing a strategy is attributed to abundance of social media applications which exist in different forms such as blogs, content communities, or social networking sites (ibid). Kwayu et al. [3] found organizations used different social media platforms for different strategic activities, which explains why there is a co-existence of different social media platforms in organizations. Therefore, while social media platforms support different strategic practices, Hanna et al. [1] suggest that the social media ecosystem creates an understanding of the overall social media strategy. Social media ecosystem is an accumulation of social media applications which emerge as important e-commerce context for organization to engage [10].

Partly out of financial constraints, small businesses turn into social media strategies [6]. Small businesses understand that social media is crucial for the competitiveness of small businesses. The evidence that the practice of social media within organizations is far advanced than its recognition in the literature [11], further underscores the need for scholars to understand the practice of small businesses use of social media and how the social media ecosystem influences strategies of small business.

Considering the above, this paper explores how the social media ecosystem enacts strategy for small business. The paper draws from practice theory which focuses on how people interact with technology in their ongoing activities while enacting structures, which influence emergent and situated use of that technology [12]. Thus, the practice perspective offers us with an understanding of how technology is used and how the use of that technology affects the organization.

Motivated by the concerns above, this paper seeks to answer the following question: how does the social media ecosystem enact strategy for small business?

Accordingly, this research is an autoethnography research that adopts an interpretivist philosophy to gather empirical evidence from personal experience and self-reflection of owning and managing a small online business. In this respect, the paper makes the following contributions. First and foremost, it will help to understand how an ecosystem of social media produces, embeds and enacts strategic activities for a small business. Second, it will help to understand the role of context in organization and assist contextual inclusivity. Third, it will give insights on the digital divide that exists between developed and developing context and the role of social media at either bridging or expanding the divide. Lastly, the paper will be useful for small businesses that want to develop agility, which is required to successfully adopt and implement digital transformation.

The remainder of this paper is structured as follows. First, I discuss the literature on social media, followed by a discussion on practice theory. Then a methodology section follows. Thereafter is the presentation of the findings and a discussion on the implication to literature and practice. Finally, I conclude with limitations and avenues for future research.

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2. Social media strategy

Social media is now a mainstream practice within organizations [13]. It is a new form of information technology that allows interaction and interoperability of users [14]. Dabner [15] explains social media as an internet and mobile based application which integrates technology, telecommunication and social interaction to enable the creation and dissemination of words, videos, images and audio. Treem and Leonardi [16] suggest social media is distinct from previous forms of information technology (IT) in terms of affordances. For instance, it allows simultaneous and instantaneous exchange of information between users which has enabled social media usage to soar within a relatively short period of time. For example, Piskorski [17] highlights that most of popular social media such as Facebook, Twitter, Instagram and YouTube which were made in mid-2000 are now having more than billion users. Thus, with the affordances that social media offers to organizations and the influence that it has; organization are generating a considerable interest in understanding how to implement and develop strategies around social media.

Kwayu et al. [14] argues that social media is a broad term which embodies various forms making it difficult to apprehend. There have been various efforts to classify social media with Kaplan and Haenlein [18] developing six categories of social media which are: blogs, social networking sites, content communities, virtual game worlds, virtual social worlds and collaborative communities. Another attempt to offer understanding on different forms of social media was of Kietzmann et al. [7] which developed seven functional building blocks of categorizing social media platforms. The functional blocks are: Identity, sharing, conversation, presence, relationships, groups and reputations. Although the categorization of social media helps to understand a platform and its effect in organization, it obscures the understanding of the combined effect of social media applications that exist within the organization consequently denying organizations’ executives with means of developing the overall social media strategy within organization.

In efforts to understand how social media co-exist in organizations, Piskorski [17] argues that for social media to be successful they have to offer a single social solution. Once it offers more than one solution, it becomes less effective. Given this observation, social media platforms refrain from copying social solutions from other platforms, hence this is the reason why different platforms with non-overlapping social solutions can co-exist in an organization. Like Piskorski [17], Kwayu et al. [3] found different social media platforms engendered different strategic practices within an organization. Although different social media platforms serve different functions within an organization, understanding of social media as an ecosystem helps the organization to pursue overall social media strategy rather than being tactical [1, 10]. Piskorski [17] suggests that an overall strategy needs structural change and helps organization in the long run whereas tactics are limited to a function and they are short-lived. In practice many organizations tend to use a functional approach to strategy [19] which denies organizations with full potential towards a social media strategy. Therefore, this paper intends to help in understanding how the social media ecosystem shapes business strategy.

It is crucial to understand social media strategy in order to understand how the social media ecosystem shapes business strategy. Piskorski [17] defines social media strategy as the idea of using social media for value creation and competitive advantage. Though limited some studies have explored social media strategy. For example, Culnan et al. [20] proposed an outline for implementing social media strategy which includes three elements that are; mindful adoption of social media platforms, building community in social media platforms and creating absorptive capacity for sourcing value from the community in social media. Similarly, Piskorski [17] argues that successful implementation of social media strategy seeks to increase organization’s profit by improving interactions between people and making them undertake sets of corporate function for free. In addition, Piskorski [17] builds his argument using Porter [21] generic business strategy which gives organizations two choices of either differentiation or cost leadership. With differentiation an organization will use social media to pursue customers and ensure that they pay more without increasing the cost, while with cost leadership an organization will use social media to reduce their cost without reducing the customers willingness to pay. Another study that reviewed social media strategy is Effing and Spil [9], who developed a framework which comprises three stages and seven key elements of social media strategy. The first stage is initiation, which comprises targeting audience and channel choice. Most organizations focused on the first stage. Second stage is diffusion which has elements of goals, resources and policies. Whereas the third stage is maturity which involves elements of monitoring and content activities. While these studies provide significant understanding of social media strategy, their major weakness is that they focus on customers. The studies also ignore other issues such as impact of social media on processes, structure and strategy of business organization.

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3. Practice theory

As mentioned earlier, practice perspective view how people interact with technology in their ongoing practices to enact structure that shape emergent and situated use of the technology [12]. This implies that practice theory emphases the latent connection of material aspects of social reality [22]. Golsorkhi et al. [22] argues that practice enables a researcher to deal with the most fundamental issues in contemporary social analysis by showing how social action is linked with structure and agency. Furthermore, they suggest practice perspective has potential to explain why and how social action sometimes follows and reproduces routine, rules and norms and sometimes it does not (ibid). The underlying belief of practice theory is that activities of social life are carried out through ordinary acts of life.

Halkier [23] suggests that practice theory is not a coherent theory, but it attempts to synthesize conceptual elements regarding the performing of social action. Thus, practice theory is concerned with performativity, meaning that activities of any kind in human life are continuously carried out and through ordinary life performance organized through multiplicity of shared practice (ibid). Thus, practice theory offers a way to explain why a social phenomenon comes to be the way it is, making it a better way to understand how strategy is enacted.

Within the IS field it is believed that technologies embodied structure with them, and the structures were appropriated when the technology was in use [24]. However, Orlikowski [12] proposed a practice theory which advances the notion of embodied structure with enactment of structure and the notion of appropriation with emergent use of technology. This means that practice theory acknowledges that structure is enacted when technology is used, and consequently when there is recursive use of technology a structures of technology use emerge. Hence, Orlikowski [12] made a distinction between technology in practice (use) and technology as artifacts. The practice theory thus focuses on the use of technology, which makes it useful means of exploring how people organize themselves when interacting with technology. Thus, the practice theory explains organizing phenomena as interweaving of social and material. In this way, and by focusing on activity the practice theory does not distinguish social and material as there is no social without material and no material without social [25]. Therefore, practice theory acknowledges that social activities depends on material arrangement in which the activity is taking place (Ibid). Furthermore, practice theory has been used in the study of social media, for instance Kwayu et al. [2] used practice theory to explore how social media is a tool for competitiveness and its influence on organizational practice and strategy. Likewise, Huang et al. [26] used practice theory to study social media used in a ticketing company in china. The theory was useful to explain the phenomenon of site-shifting and how practices where bundled to produce emerging, dynamic and fluid nature of ambidexterity. Considering this, practice theory becomes a suitable theory for explaining how the social media ecosystem affects the strategy of a small business.

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4. Methods

4.1 Research philosophy and design

This research is an autoethnographic research which follows an interpretivist philosophy. The interpretivist philosophy is suitable for this research as it views knowledge as being socially constructed through language, consciousness and shared meaning [27]. Interpretivist philosophy is in line with autoethnographic research. It’s a form of research, writing and method that connects the autobiographical and personal to the cultural and social [28]. Cunliffe [29] insists that autoethnography is not a method but a methodology. This means that autoethnography is more than techniques of data collection and analysis.

Wall [30] suggests that autoethnography draws on personal experience that extends to provide insights on a social behavior making it reflexive and better suited to explain social phenomenon since it acknowledges an inextricable link between personal and the wider context. Thus, autoethnography research provides means of organizing reflection on everyday life as experienced by researchers [31]. Furthermore, autoethnography is suitable for this research because it is enactive as it is concerned with material and physical domain that relates to the researcher domain of research (ibid). Therefore, autoethnography is beneficial for the research as it offers opportunity for making latent and tacit knowledge ordinary. This is because personal experience removes the access boundary of generating knowledge on the interdependencies between researched phenomenon being enacted and researchers. Therefore, despite autoethnography research being in line with interpretivist philosophy it is also in line with practice theory and the research phenomenon of understanding how the social media ecosystem enacts strategy of small business.

4.2 Case description and analysis

This research draws from my personal experience of establishing an online shop on ETSY platform. My shop sells handmade crafts from Africa with the main source being Ghana. My business started in 2018. The business significantly depends on several social media platforms, which create an ecosystem that shape the strategy of my business. I started the shop while in the UK and I continue to manage it from Tanzania. This transition has offered me a good experience of navigating/conducting business between developed and developing countries. My data is a recollection of my personal experience and reflection.

The analysis of my reflection follows a reflexive thematic approach, which is considered a fully qualitative approach [32]. Reflexive approach is centred on deep engagement, commitment and rigor as it emphasizes meaning as contextual or situated, reality or realities as multiple and researcher subjectivity as not just valid but a resource [33]. In addition, Braun et al. [32] suggest in a reflexive analysis a researcher becomes a storyteller, actively engaged in interpreting data through the lens of their own cultural membership, social positioning, theoretical assumptions, ideological commitments and their scholarly knowledge.

The finding of this research is drawn from my personal experience, which can make it hard to generalize the results. Nevertheless, Halkier [23] suggests that it is possible to generalize but with a change on how we view generalizability. First generalizability should be specific and bound by context rather than taking it as universal. Second, generalizability must attempt to present dynamism, uncertainties, conflicts and complexities that constitute various overlapping context and knowledge production processes (ibid). Thus, generalizability is not supposed to produce stable representations but possibilities and instability [34]. This form of generalizability can be done by positioning as a way of drawing inferences on narratives and discourses to enable representation of dynamics that constitute social construction of things, relationship and performances [23]. Hence this type of analysis is suitable to analyze practice which is performative of social action making it a suitable method for understanding how social media ecosystem enacts strategy for small businesses like mine.

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5. Findings

The findings are presented in a narrative form. This is because they are from my personal experience and reflection. My narration is structured to first provide a background including outlining the objective of my business. Second it outlines the products of my business. Third, it explains the use of social media applications. Finally, I conclude with my reflection on the influence of the social media ecosystem on my business.

In the last quarter of 2018, I started an online shop on Etsy. I had planned to start earlier but I delayed perhaps due to procrastination. The idea of starting an online shop originated from conversations with my extremely practical sister. She was selling handicrafts on Saturday markets. I thought it took a lot of energy from her hence I suggested that she should explore a way of selling online. Being practical, she immediately started to sell online. Her online business picked up. As it did, she gradually stopped going to the Saturday markets. She found more time to spend with her daughter. As her online business kept rising, I shared strategies from theoretical understanding of the information system (IS), but I never practiced anything. It was until I saw the benefits and gains she was getting that I was personally prompted to start my own online digital shop. My objective was to get income and build capital. I had gained insight and considerable understanding of business from her experience. She also linked me with people who she had met through social media. I manage to source items following her example. My business strategy is a digital business strategy, which is a fusion of IT and business strategy [35]. Thus, for me, the IT strategy is the business strategy. The digital business strategy was informed and influenced by my research in IS.

In Etsy, I sell handmade products from Ghana, Zimbabwe and Tanzania. The products include different types of handwoven baskets such as baby bassinets, laundry baskets, handbags, buckets and wall hanging basket decors.

My business significantly relies on different social media applications, which enable different functions for my business. From the outset I knew that I would need to use different social media applications because I knew one social media application could not do everything. Also, I wanted to get the synergy by using different social media applications in combinatorial fashion. In my business I use WhatsApp to communicate with local artisans. For marketing and promotion, I use Pinterest, Facebook and Instagram. For Logistic and tracking I use ParcelsApp. Whereas, for financial operations I use Wave, PayPal and internet banking applications. Wave enables people to send money to some African countries and the recipient receives their money on their mobile wallet such as MTN. There are other applications which send money to Africa, but their cost structure is different. Wave deals with exchange rate but other applications such as World Remit charge a percentage which can reduce or take off the profit margin of the business. These applications work as an ecosystem, a change in function of one application changes the whole structure and strategy of the business. For example, in December 2019 Wave was unable to send money to Tanzania. With that inability, it was hard to pay for products from Tanzania and consequently I thought to change my operation strategy. For example, I thought instead of shipping from Tanzania to ship from neighboring countries (Kenya or Rwanda) but this would increase the costs, which could affect my competitiveness or make it impossible to sell. My competitiveness to sell depends on my process design and the context that is created by the social media ecosystem. Similarly, when the Covid-19 Pandemic started it was difficult to ship due to flight cancelation, only DHL could ship but it was too expensive and this prompted me to cancel operations in other countries apart from Ghana, where DHL shipping was reasonable. The business process is a two-way highway - one is money/cash and information flow from the consumer to me (merchant) to supplier (producer/artisan) and the second way is the product from the producer to the consumer. The portfolio/context of my social media applications (ecosystem) needs to support this process in a perfective way. In other words, a change in context changes my business process, efficiency and strategy.

When my business started to grow, I wanted to sell on other platforms such as Facebook and Amazon. In Facebook to integrate any app one needs to have more than 2000 followers, I had to do so and managed to integrate my Etsy shop with my Facebook page. Nevertheless, after doing so I realized that it was not effective. It was difficult to sell products on Facebook which has lots of potential buyers. The affordance of Facebook Shop Page does not facilitate quick sales in that potential buyers may not see the products as visible as it could be. Considering that, I tried to register for Facebook Marketplace only to find out that it is limited to America. I tried to sell on Instagram, which is also connected to Facebook, but I was also not able since it only allows big selected brands from the US. After failing to do so I managed to register on Amazon UK, which also offers the opportunity to sell in Europe. I was not able to sell lots of products perhaps because I am new, and my pictures are not very sophisticated. Hence, I tried to register on Amazon.com. However, Amazon did not allow me because of my nationality. This is an example of how I strategize, by trial and error. Through it I have learnt different barriers as well as enacting ways to process and strategize my business.

In reflecting my own experience as briefly described above, I have come to appreciate the importance of what I call ‘soft infrastructure’. Unfortunately, ‘soft infrastructure’ is an ill way of referring provision of human services from more common recognized hard infrastructure [36, 37]. Thus, it is difficult to define soft infrastructure because its intangible, hard to measure and often described in a subjective and qualitative way that may not be easily understood (ibid). Therefore, by soft infrastructure, I mean intangible facilities that enable successful operation of my business. This includes things like bank details, identity information, postal address, national and international policies, and software applications. For instance, sometimes we can be on the same platforms but due to differences in identity such as nationality or location, size can be limited. This is due to the way those platforms are structured. For instance, a small business can fail to register because it cannot fill a required field that is not oriented to their context. Sometimes, network issues and even cost for maintaining platforms is a factor hindering small business from exploiting social media platforms [8]. Different contexts, for example countries have different institutions which have different arrangements and agreements. Thus, although social media platforms are global, access to some services from these platforms can be constrained due to different institutional arrangements and agreements. Thus, the ecosystem of application can enable or constrain a business strategy for a small business. My business has been successful because of the information and technology developments which are occurring in Africa. Most of these developments in information and technology are recent, perhaps less than two decades. For example, most local artisans do not have bank accounts, but they do have mobile wallets. Thus, the money I transfer goes straight to their mobile wallets in the cell phones. This sort of transaction I cannot do with my UK bank. For example, I cannot transfer cash from my UK bank account straight to the mobile wallet in Africa. I can only do that via social applications such as Wave to a mobile wallet in Africa. If it is sent straight from my UK bank account, the only way is to go to another bank account in Africa. This would have been an impediment since it is often the case that my local artisans in different countries in Africa do not hold bank accounts, yet they all have mobile wallets. Technological progress makes it easier to send to mobile wallets because the money is received instantly and with the notification on both phones. Further confirmation and acknowledgement of receipt is done through WhatsApp. Thus, the ecosystem of social media creates a context that facilitates business. Lastly, my business has thus been successfully due to access to soft infrastructures in the developed world as well as some of the developments that are taking place in Africa. Thus, my business strategy operates in overlapping contexts of the developed and developing world.

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6. Discussion

The above findings show that each social media platform plays a role as identified by Kwayu et al. [3] and Piskorski [17]. In addition, they show that although each platform plays a role they collectively function as a system. This highlights Omotosho [8] argument that small businesses are failing to use social media platforms due to lack of continuity with platforms for business purposes. Thus, it underscores the importance of understanding social media ecosystem and its role in forming continuity with platforms for business purposes. Changes in one platform can affect how the whole ecosystem works. This is a significant finding as it shows how an ecosystem enacts a strategy for a small business. It further signifies the synergetic effect of co-existing social media platforms in an organization. This extends Hanna et al. [1] research on ecosystems by explaining why people use different social media platforms in simultaneity.

Second, these findings show how contexts overlap and interact with each other thus creating a narrow path for small business to enacts its strategy. For example, there are different types of social applications that transfer money abroad, however they function differently. As explained above, some apps transfer money but they charge a percentage which can reduce or take off the profit margin hence making the business meaningless. Therefore, although there is an abundance of social media applications, the choice is limited due to the multiplicity of overlapping contexts such as business context and geopolitical context. All of these factors affect business in their totality. Walsham [38] suggests the use of IT in sub-Saharan Africa is recent and its associated with mobile phones and social media. This explains why I have to use a combination of internet banking (UK) and social application (Wave) to send money to Africa mobile wallet (M-Pesa). Thus, not one social media can navigate different contexts on its own. It is a link of different social applications that creates an ecosystem that enables to carry out business financial functions. Thus, this paper contributes to literature on context and ICT4D (information communication technology for development) research by showing how the digital divide exists between developed and developing context [39]. This insight is helpful to assist digital inclusivity especially for less developed countries which are left behind with widening inequality that is created by digital companies such as GAFA (Google, Amazon, Facebook and Apple). Furthermore, the digital inequality (i.e. rural – urban, developing and developed) is exacerbated by neglect of research on social media and its influence on small business even within context of developed world [40].

Third, the findings show the importance of social and material arrangements in supporting small business strategies. As much as a single platform embodies a structure that can enable or limit a function, an ecosystem of social media platforms enacts a structure which creates an emergent strategy. For example, if Facebook opens its marketplace to other countries, this will influence our strategy because it will afford us with a new market from Facebook. Thus, any change in social or material arrangement as explained in the finding enacts an emergent strategy. Hence, this study enhances our understanding of Orlikowski [12] proposition that enactment and emergence are complementary to embeddedness and appropriation of technology structure. It enhances this understanding by showing where embodied structure plays a role and at what point enactment of structure becomes dominant.

In practice, the findings in this paper have the following significance.

Through highlighting the importance of soft infrastructure, this study shows the importance of synchronizing development of soft infrastructure. The misalignment of soft infrastructure between the developed and developing world exacerbates the digital divide that exists between the two. Synchronization of soft infrastructure will enable small businesses to grow and be able to access global markets with seamless effort. This will be successful if stakeholders and policymakers create conducive environment for use of social media for business activities among entrepreneurs and small businesses [8]. The policy holders and stakeholders will be in a better position to do this if they take a holistic view of understanding the social media ecosystem.

Second, this paper underscores the importance of strategizing practice for small business. Strategizing is a dynamic, iterative, interactive and continuous social process [41]. Social media platforms are dynamic, and they change continuously, thus small businesses need to constantly practice strategizing processes as business strategy is enacted continuously depending on changes that are happening in the social media ecosystem. Thus, what is right or what functions today might not be the same tomorrow. Therefore, small businesses that want to develop agility, which is required to successfully adopt and implement digital transformation need to have a continuous strategizing practice.

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7. Conclusion

This study has provided a fresh insight on how the social media ecosystem influences a strategy of small business and how the ecosystem performative is interspersed with context. The study is subjective to my view and personal experience with the sole objective of understanding how the ecosystem of social media influences business. This is because being a situated actor and a researcher engenders a strong feeling of attachment and responsibility for the research subject. Therefore, although this is limited to my personal experience future research can bring objectivity in the same phenomenon by deploying other research methods such as surveys. Furthermore, this research implies Africa as a developing world, future research can explore other emerging markets such as Asia and South American countries. Inferences from other areas will provide deeper insights that will help our understanding of globalization and its influence on small businesses especially during this era of social media.

© 2020 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution 3.0 License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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Shirumisha C. Kwayu (December 21st 2020). Social Media Ecosystem and Its Influence on Small Business Strategic Practices, Digital Service Platforms, Kyeong Kang, IntechOpen, DOI: 10.5772/intechopen.95058. Available from:

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