Social Networking – Changing the Context of Doing Business: Management Funda; V2 Issue 2

You find a perfect candidate for the new role in your department. You get insight into the management philosophy of your competition. Your company gets publicity.  All with some clicks of your mouse! Without attending networking conferences or exchanging business cards! Welcome to the new form of networking - social networking!

How does social networking work?

In general this is how social networking works…

1. A website owner establishes the style of the network, provides the functionality, creates/imports content and sets the rules.

2. A friend or contact invites you to join the networking service or you join by visiting the site and signing up. With most services the initial signup is free.

3. You create a profile describing yourself/your company and your interests.

4. You connect to your friends/colleagues or clients/suppliers and their network.

5. You further expand your own network via message boards, emails, blogs and by connecting with members with similar interests.

The best part of a social networking site is that it enables you and your company to connect with people who may not be familiar with you, or with your organization. Because you already know someone who knows them, you can begin a relationship with more trust and warmth than with a total stranger. According to the Hitwise, the online intelligence service, internet visits to the top 20 social networking websites in 2007 accounted for 6.5 per cent of all internet visits. The popular Orkut and Facebook are some of the networking sites used for personal purposes. and are some of the networking sites used mainly for professional and business purposes.

Social Networking changing business context

But should you or your company be investng time on networking? Because though it is in the early stages, social networking along with other web 2.0 tools (blogging, wikis) is changing the way we do business.

  • New customer relationship management tool: Entrepreneurs and small businesses can expand their contact base easily since social networks connect people at low cost. These networks can act as a customer relationship management tool for selling products and services. Companies can advertise in the form of banners and text ads. For businesses operating globally, social networks can make it easier to keep in touch with contacts around the world. It helps in being more responsive to customers. Gerson Lehrman Group’s expert network connects customers to subject matter experts who can address their concerns etc.

  • Increased internal and external communication: Social networking tools are easy and simple to use.So more and more people are communicating things they would otherwise not have communicated. Federal Aviation Administration (FAA)’s 200 or so disaster recovery specialists have invited people to join their networks so that post disasters, through communication with their contacts they can respond faster and more effectively.

  • Collaboration and better knowledge management: Individuals and organizations needing a capability or service that is not within their reach, use social networking to work together with other individuals, communities and organisations. Flowserve, an industrial manufacturer built an internal version of Facebook. Its employees spread across 55 locations could now develop relationships and communicate with each other to leverage on each other’s knowledgebase to solve common problems.       

  • Innovation: The collective intelligence of colleagues, peers in other companies, suppliers and customers can be tapped to develop innovative services and products. IBM India has seen that their social networking tools create healthy discussions around research and development thus contributing to the improvement of their products, processes and policies.

  • More transparency and accountability: With increased levels of communication comes greater tranparency and companies are becoming more accountable for their actions to their consumers and employees.

  • Hiring and working with people we know: Studies have found that those hired through social networks have a lower attrition rate and earn more than employees hired through other hiring methods.

  • More connected workforce: More than 300 Zappos (an online shoe retailer) employees use social networking to let friends, colleagues and customers know what they are doing at any given time in the day. This informal and frequent communciation keeps employees connected. In India TCS is developing an interactive corporate directory called My Site. Employees can create a buddy list and connect with others having similar interests thus increasing bonding among employees irrespective of hierarchy.

  • Increased C2C marketing: Messages being delivered from business to consumer (B2C) are being supplemented with consumer-to-consumer (C2C) messages about products and services through the social networks. So companies are finding ways to tap into them in order to be aware of them and influence them positively.

Looks like social networking will provide a new powerful way to get work done by making individuals and organizations more agile and efficient through better communications and sharing of expertise. Of course all this is possible if you use social networking effectively.

Using social networking effectively- few tips

  • Choose the networking sites wisely – those which suit your requirement rather than the ones people have sent you invites for or other companies are using.

  • Create a user friendly profile by ensuring it contains all the relevant details and gives the right impression about you or your company.

  • Extend invitations to connect to friends and people or in the case of a company, clients, suppliers who know you.  You don’t want to create spam for people who have not heard of you right. Also don’t be pushy. It may put off people.

  • When you make a request for connection clarify your intentions ie., is it to find a candidate, discuss common interests, get product improvement ideas etc.

  • Invest time in networking. Learn what works and does not work. Be clear what you are trying to accomplish through networking to use the time spent on it fruitfully.

  • Display networking etiquette like responding to requests promptly, being truthful about your employment status etc while connecting with people and by not connecting with people every time you have news about yourself /your company or need some help.

  • Aim for relationships rather than transactions. Help others before seeking help from them.


Is there a downside to social networking? Though networking sites are mindful of your privacy you cannot stop a person from writing to you or writing about your company. Maintaining your network will require taking out time from your already packed schedule. You may also feel emotionally disconnected with people you are in touch with only online. Valid concerns. But there are ways to take care of them. For instance you can talk to your contacts on phone or meet them in person to get a feel of the real people behind the emails.  And considering its various benefits it is worth making the effort. Soon social networking tools developed for use within organisations will be here (A McKinsey's survey found that 37 per cent of the executives interviewed were using or planned to use social networking functionality within their companies.) And when it does you and your organisation will be ready.


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