Reflection: Social Media and Corporate Transparency

In this paper, I examined the role social media could play for corporate entities in terms of appearing

more transparent to the consumer. The focus of the paper was not just on creating a social media

identity, but on examining how corporations could use social media as a sort of public pulse. Through

this examination I discovered a growing shift in consumer interests to wanting more socially

conscientious companies, ecologically responsible products, and a consumer identity that doesn’t want

to be defined by the products they buy.

One article I found most interesting was an article by J. Juris about using social media as a platform for

organizing activist groups. Little would I realize that six months after I would write this paper, the world

would watch numerous uprisings in the Middle East—uprisings organized in large part through social

media.

If I had written this paper six months later, I think the focus would have been vastly different. There was

more scholarship available at the time about social media and activism, but part of me still doubted the

impact of social media. I realize that doubting social media’s impact is counterintuitive to the topic of

the paper; still I felt there was something to be gained from listening to criticism and gauging public

response of a company through social media. I just didn’t imagine the organizational impact it would

play in activism. Let me better explain what I mean.

I have noticed on countless occasions how social media is used as an outlet for frustration with a

corporation or group. An example of this could be seen with the outward criticism of Susan G. Komen

for the Cure and its removal of funding from Planned Parenthood. However, the argument quickly

shifted to many people speaking out against Susan G. Komen because it began suing smaller groups for

use of the famous pink ribbon and “for the cure” tag line. Much of the criticism started to deviate from

what was originally a much more focused attack.

This deviation from the original purpose makes organizing large groups particularly difficult. However, in

terms of impact on a corporate image, when one complaint about one thing becomes a thousand

complaints about a thousand different things, managing a crisis becomes even more difficult. In this

sense, there doesn’t have to be any sort of organized group to make a change. Susan G. Komen saw

their president step down and the board of directors make an immediate about face amid the

controversy.

Clearly, ignoring social media can have devastating and lasting impacts on a corporation or group, but up

to the point of Arab Spring, little large scale organizing of activist groups was done.

Satisfaction with this project:6.5

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Introduction

Social networking sites have become a significant source of public interaction, and the

proliferation of these sites has provided corporations with another media to reach their target

consumers. Corporations can use these networking sites to learn more from the public about

what consumers are expecting in terms of product, corporate identity, social responsibility and

overall corporate transparency. The downside of increased consumer connectivity is that

individual’s issues and poor experiences with a corporation or a company have a wider scope

and reach more people, faster. Relatively simple issues like a mistake with a customer’s order or

a single negative consumer experience can create a more significant impact on the company’s

audience. Corporate problems have a larger impact on consumer confidence and crisis

management, corporate identity and transparency become key concerns. To learn more about

their target audience’s needs and expectations and increase consumer confidence, corporations

should embrace social networking sites as a corporate tool.

Specifically, Wild Birds Unlimited has seen a drop in consumer confidence and is

looking for a way to increase their transparency for its consumers, employees and shareholders.

The corporation is examining ways that they can accomplish this transparency from the top

executive positions down to the individual store owners and employees. I propose that social

networking sites will not only increase transparency and corporate identity, but lead to happier

employees and higher productivity. Through analyzing the importance of a transparent corporate

identity, the expanded use of social media by consumers, and corporate use of social networks, I

describe how Wild Birds Unlimited can enhance their image, thus leading to increased consumer

confidence and spending.

The Sovereign Consumer

Understanding today’s consumer is crucial in solving the problem of decreased consumer

confidence. Without a proper analysis of consumers, corporations cannot match their attempts to

be transparent with consumer needs, nor can they align their corporate image with that of their

consumer’s expectations. This section is intended to define consumers and their role in a

corporations decisions in terms of transparency and corporate identity.

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Consumers are becoming an increasingly sovereign group, who make decisions to buy or

not to buy products for reasons like maintaining a personal identity, a corporation’s image, and a

corporation’s willingness to operate ethically and transparently to its employees, shareholders

and consumers. Transparency and ethical practices, in particular, are seeing rapid growth in

importance in terms of consumer sovereignty. Korthals (2001) suggest that consumers have

growing concerns about a corporations ethical production practices as well as the corporation’s

willingness to disclose those practices. He continues by citing the individual consumer’s need to

remain autonomous in an increasing global market as a reason why consumers are starting to

concern themselves more with transparency (pp. 202, 203).

Further analysis of a consumer’s corporate expectations details four principles to describe

an active, socially conscious consumer. Thos principles, discovered by Beauchamp and Childress

in their 1994 article and cited by Korthals are, respect of consumer autonomy, justice in terms of

cost and risk to the consumer, no deliberate evil action towards consumers and employees, and

finally, the benefits extended to consumers, employees and shareholders alike (Korthals, 2001, p.

204). This approach uses sociological concepts to diagnosing consumer sovereignty, but

Korthals (2001) cautions that this four pronged approach is only useful in understanding large

consumer groups and diagnosing problems. In terms of policy making, understanding the

consumer as an active, socially conscious member of society is insufficient in that it only

provides a diagnosis and offers no value or scale to guide corporations through individual ethical

concerns. He continues by claiming that creating a dialogue between consumers and corporations

and policy makers completes the analysis and will allow corporations to balance their needs with

the needs and expectations of the consumer (pp. 205,206). This idea of an open dialogue

continues throughout the selected sources and can be solved by utilizing social networking sites,

as described later.

Zukin and Maguire (2004) add to Korthals’s consumer analysis by discussing the

influences drive consumers to purchase the things they do. The authors agree with Korthals that

more often than not, consumer analysis is often too broad and can lead to spurious results that

don’t offer any real insight to a corporation’s customer base, and those broad descriptions of

consumption and consumer trends lead to incomplete analysis (pp.173, 174). Zukin and Maguire

offer a justification for the improper consumer analysis by claiming the majority of the research

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is done by sociologist and psychologist and there is “little crossover between the academic and

applied domains” (2004, p. 175).

Zukin and Maguire (2004) do, however, assert that corporation can gain insight into the

purchase made by their target consumers. The authors claim that consumption is a statement of

personal identity. This personal identity is not established through what they own, but rather

from the conscious decision to buy one product over another. Korthals claims that the notion of

consumer sovereignty has empowered consumers to buy products based off of a corporation’s

willingness to align their goals with that of their consumers. Zukin and Maguire justify this

newly found sovereignty as the consumer’s need to establish personal identity. The authors refer

to this notion of consumer personal identity in terms of a whole society as Collective Identity

(pp. 184, 185). Technology, such as social networking sites, has expanded the role of consumer

identity by opening consumers to a larger audiences, and thus compelling them to create a strong

presence of personal identity (Zukin and Maguire, 2004, p. 188). Zukin and Maguire conclude

their argument by claiming two effects on corporations. Globally, technology has broadened the

social implications of consumption, arguing that companies can cast a wider net to reach a large

group of people. Conversely, they also claim that locally, on a much smaller scale than the global

community, companies must focus their message, image, and advertising to a very particular

audience whose needs are more specific and refined (2004, pp. 193, 194).

Transparency and Shaping Corporate Identity

Through understanding the consumer’s needs and expectations, we can see that a

corporation’s ability to operate fairly, have goals and an identity in line with that of its

consumers, and their willingness to share all of that information with their employees,

shareholders and consumer base are paramount in increasing consumer confidence and

increasing profit. Now, we will examine how corporations can create a transparent atmosphere,

how they can match their goals with that of the consumer, and how transparency and identity can

be related quickly and to the most people.

First, there is the issue of legality. There is a certain amount of information that must be

disclosed to shareholders and the public in order to remain legally compliant. Although,

Christensen (2002) claims that there are added benefits, often overlooked by corporations, which

come as a result of disclosing that information to the shareholders and the public. He asserts that

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the reason corporations overlook these benefits is that they don’t understand, fundamentally,

what transparency is. This misunderstanding of transparency leads to corporations lumping

disclosure documents into the broad category of corporate communication. He claims that

transparency, because of its added benefits of increased consumer and shareholder confidence,

should be seen a portion of the much more focused marketing communication (pp. 162-164). The

results of viewing transparency as a marketing venture are staging transparency as a part of

advertizing and, thus, making it more of a priority (Christensen, 2002, p. 166). While the legal

obligation of transparency has the added benefit of increased consumer and shareholder

confidence, there are several factors commonly overlooked by corporations in terms of

transparency that lessen its benefits.

Simoes, Dibb and Fisk (2005) claim that a portion of corporate transparency is left up to

the interpretation of the audience, a relatively inconstant variable, and that in order for a

corporation to be truly transparent each arm of that corporation must share the same goals and

reflect a consistent corporate image (p. 157). Elia (2009) asserts that simply disclosing the

information required by law is not enough to properly instill trust in shareholders and the public

(p. 147). He continues by saying the technology available to corporations, particularly

technology that increases the efficiency of communication to shareholders, should provide

corporations with plenty of opportunities to disclose more information than required by law and

network openly with employees and the general public. Ergo, more information means more

trust. Elia summarizes his point, and corroborates Christensen’s argument by claiming marketing

and public relations departments should drive transparency and corporate image, and that

transparency should not be lost amongst the endless stream of banal corporate communication

(Elia, 2009, pp. 149-150).

If transparency is a marketing initiative, then how can that message be shaped and

marketed correctly to the consumer? Furthermore, How can this information be transmitted in

the most efficient way possible? Peter Madsen coins the term Dynamic Transparency as the use

of internet technology and resources to interact with shareholders and consumers, a way to open

dialogue between corporations and the public. He claims that internet technology quickly passes

information on to the public and provides timely and accurate feedback of a company’s message,

identity and strategies. In fact, Madsen cites directly that the social media-sphere is useful tool

for this exchange of ideas (Madsen, 2009, p 640). Later, Madsen pairs with Vaccaro to reinforce

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and expand upon this notion of Dynamic Transparency. Once again, the idea shared by

Christensen, Elia and many other authors of the growing ethical responsibility to expand

transparency is corroborated here (Madsen and Vaccaro, 2009, p.119). The need to expand

transparency is a direct effect of increased networking and communication abilities shared by

corporations and consumers. Madsen and Vaccaro (2009) argue that corporate use of social

networks to transmit public disclosure information allows the consumer to react directly and in a

timely matter, thus creating a dialogue between consumer and executives. This dialogue results

in a more socially responsible company that responds and reacts to customer needs (pp. 116,

117). To answer the questions proposed at the beginning of this paragraph and to summarize the

arguments of Christensen, Elia, Madsen, and Vaccaro, internet technologies provide corporations

with the capability to deliver information to the consumer and shareholder quickly and retrieve

feedback to make for a more socially responsible company. However, where does this need to be

socially responsible stem from?

Social Responsibility, Green Management and the Consumer

As noted previously, understanding today’s consumer reveals the consumer’s need to

achieve personal identity, and typically, that consumer will extend its image to the products he or

she chooses to buy and, more importantly, why he or she chooses to buy them. Cardon and

Granjon (2005) argue that consumers will extend their identity into the realm of social

networking sites. With the proliferation of such sites like “Facebook,” “Myspace” and various

blogs and other networking sites, Cardon and Granjon claim that consumers feel the need

express their personality even more to connect with others with similar interests. Cardon and

Granjon refer to this need to create identity and connect with others as the “specialized” dynamic

(p.310). Liu reinforces this idea of social network profiles as an extension of consumer identity.

The author then claims that the “taste profiles” can be used by corporations as a way of

understanding their consumer, therefore opening the lines of communication between consumer

and company (Liu, 2007, p. 25).

McIvor, McHugh and Cadden discuss that not only is important to communicate socially

responsible practices, a corporation must communicate internally as to create a consistent

message to be displayed to the public and to open communication internally to better the

company’s image. The authors note several ways to communicate with their employees, namely

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intranet. They argue that the security of intranet connectivity and the speed at which they can

connect with employees provides corporations with the ability to speak openly and freely with

their employees without fear of incomplete information being transmitted to the public. (McIvor,

McHugh, Cadden, 2002, p.176, 177). While the technological advancements that the author point

out are useful, the more important point here is the need to connect not only with the public but

with employees over socially responsible practices. So, what now can corporations learn from

the consumer in terms of social responsibility, and how can they apply that knowledge into their

transparency and identity?

A primary concern for consumers, developing from the threat of global warming and the

growth of the socially responsible consumer, is green management. Kaman Lee (2008) describes

the need for green management as a sociological effect of two different causes. First, individual

consumers, particularly adolescent consumers, are influenced by society as a whole. Secondly,

the consumer is generally concerned with the impact that he or she has on the environment. This

concern stems from their need to have a satisfying self-image (pp. 573-575). As was discussed

earlier, consumers will extend their self image into the rationale for the items they purchase.

Vaccaro and Patino Echeverri (2010) reinforce this idea with their article, “Corporate

Transparency and Green Management.” In the article, the authors interviewed over a thousand

people and, through analysis of those interviews, determined that are more likely to accept a

corporation’s image if that corporation displays social responsibility in terms of green

management (pp. 487,488).

Many authors note that it is largely the responsibility of large corporations to take the

lead in socially responsible practices. However, it’s equally as important to note that every

company, large and small, must take the same care in educating their customers, employees and

shareholders with how they are partaking in socially, ethically and environmentally sound

practices. The authors of the article, Exploring Corporate Socially Responsible Education, note

that smaller companies do not take the same care as larger corporations in informing their

audience of their sound practices. The authors continue by illustrating the benefits of continual

socially responsible education and they note that many of the benefits can be translated to

smaller companies and are not limited to large conglomerates (Yen-Chun, Wen-Hsiung, Chun-

Yu, Ya, 2010, pp. 1514-1516). This is important specifically for Wild Birds Unlimited, the focus

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of this review, to understand that even as a small company; they can impact consumer

confidence by informing their audience of their socially responsible practices.

Social Networking Sites and Corporations

There is no denying the proliferation of social networking sites, no dismissal of its

importance in terms of connecting people in today’s global society. In this sense, corporate use

of social networks is more an inevitability rather than a convenient idea. This increased use of

social networking sites is referred to by academics as “Web 2.0.” Flores and Bonson hypothesize

that social networking sites will become the primary communication tool for corporations and

how it is already being used by several financial institutions as a way for the corporation to

transmit information via internet to shareholders and the public and intranet as a way to securely

communicate with employees (Flores and Bonson, 2010, pp. 35, 36). Facebook, the predominant

social media site, was originally conceived as a way for college students to connect to their

peers. However, Stroud provides information about how social networking sites have seen an

increase of use by older generations rather than just twenty-somethings. He claims that older

generations have begun to use various sites such as LinkedIn and Monster as a way to reconnect

with friends from earlier in their lives and as a way to professionally connect to companies and

corporations, networking their resume and searching for jobs (Stroud, 2008, p. 281-282). This

increased online presence shows how corporations can be sure that their message and

transparency information will reach their entire audience.

However, the expansion of social networking sites also means the inclusion of many

differing points of view. Juris discusses the use of social networking sites by anti-globalization

and anti-corporations groups. Juris provides examples of how these groups use the sites to

organize with other members within close proximity as well as to communicate with other

groups and people that may be half a world away. He claims that the instant connection with a

massive audience allows information to be passed quickly and proved these groups with the

opportunity to network and recruit openly in countries where speech and isn’t necessarily a

protected right (Juris, 2005, pp.191-192). This information is useful to corporations in two ways.

First, it allows corporations to see how these groups interact and use that information for their

own connectivity. Secondly, it provides corporations with an opportunity to prepare for the

different points of view they will encounter when using social networking sites.

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Bennett, Owers, Pitt and Tucker claim that another benefit of social networking sites is

increased input from employees, the public and shareholders which will lead to increased

productivity and a better, socially-centered, public image. The authors claim that intranet social

networking is an undervalued resource for corporations and estimate that it will become an

important interface for corporations and employees (Bennett Owers, Pitt and Tucker, 2010, pp.

138, 139). Barnes and Barnes reaffirm Stroud’s assertion that using social networking sites will

allow corporations to reach the public quickly and react quickly to negative press (Barnes and

Barnes, 2009, p. 28). However, many authors caution that corporate use of social networking

sites does not come without its inherent risks.

Kelly describes, in the article “Herding Social Media: The use of technologies like blogs,

Facebook and Twitter is spreading faster than companies can cast policies to control the risks,”

how corporations are often ill prepared to use social networking sites or do not use the sites

entirely. The author claims that because of this, corporations do not react quick enough to

negative press. Kelly also warns that disgruntled employees may use the networking sites to

smear their employer (Kelly, 2010, p. 31). This is a growing concern for many companies, and

these companies have begun to include prohibited uses of social networking sites in their non-

disclosure agreements. Van Zyl reinforces Kelly’s argument by reiterating her points exactly.

However, Van Zyl takes more care and time in describing how corporations can effectively use

social networking sites. Van Zyl asserts that corporations should not limit their use of social

networking sites to just intranet connections or top tier networking sites like Facebook. She

claims that in order to reach as much of the public as possible corporations must embrace and

monitor as many different types of sites as possible. She describes the process of use and

monitoring as a combination of efforts from marketing, IT and executive groups (Van Zyl, 2009,

p. 907). She also outlines several benefits of social networking sites: increased one-on-one and

one-to-many communication will lead to faster productivity; one-to-public communication will

lead to increased transparency; the general increase of technology will lead to increased

consumer confidence (van Zyl, 2009, pp. 911, 912).

Conclusion

Today’s consumer is a socially conscious individual, empowered by their decision to

purchase what they do. They are socially responsible, looking for corporations to make socially

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responsible and ethically sound decisions. To increase consumer confidence, corporations must

communicate to their consumer how they are making the efforts to be green, and socially

responsible or they may be on the receiving end of public backlash. One growingly popular way

that corporations are opening this line of communication is to extend their transparency

compliance information to the general public, including it in their marketing efforts. Previous

modes of communication have proved to be too slow to provide timely and accurate information.

However, with the advent of Web 2.0 technologies now readily available to almost anyone,

corporations can extend their message, image and transparency to the general public, employees

and shareholders with much greater efficiency, making the use of social networking sites almost

an inevitability. The benefits of such use are creating a stronger corporate image that reflects the

consumers’ needs, increasing productivity with increased communication between different arms

of the corporation, and increased consumer and shareholder confidence. While corporations

should be wary of the increased exposure of their image and corporation, there are ways to

manage and monitor negative press, and the benefits of using social networking sites entirely

outweigh the risks.

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