Empirical study about the role of social networks in SME performance
| Published date | 14 November 2016 |
| Date | 14 November 2016 |
| DOI | https://doi.org/10.1108/JSIT-06-2016-0036 |
| Pages | 383-403 |
| Author | Mário Franco,Heiko Haase,Ana Pereira |
| Subject Matter | Information & knowledge management,Information systems,Information & communications technology |
Empirical study about the role
of social networks in
SME performance
Mário Franco
Management and Economics; CFAGE-UBI Research Center,
University of Beira Interior, Estrada do sineiro, Covilhã, Portugal
Heiko Haase
Department of Business Administration; Center for Innovation and
Entrepreneurship, University of Applied Sciences, Jena, Germany, and
Ana Pereira
University of Beira Interior, Covilhã, Portugal
Abstract
Purpose – This study aims to show the role of social networks in the performance of small- and
medium-sized rms (SMEs) in an inland region of Portugal. The main objective is to ascertain the
motives for adhering to social networks and to understand if this type of network inuences
performance in this rm sector.
Design/methodology/approach – To fulll this aim, a quantitative research was adopted, based on
application of a questionnaire, the nal sample being formed of 86 SMEs.
Findings – Based on the results obtained, it is concluded that the SMEs studied are connected to social
networks, especially Facebook. The principal reason for this type of rm connecting to social networks
has to do with the possibility of presenting services to a greater number of potential customers.
Practical implications – The empirical evidence obtained also shows that the motives associated
with cost reduction inuence both nancial indicators (prot growth) and non-nancial indicators
(human resource results), and communication and innovation inuence only non-nancial performance
(level of satisfaction).
Originality/value – This study contributes to advancing theory in the eld of social networks in
SMEs. More precisely, this study suggests that to assess their performance, SME leaders should not use
only measures of a nancial nature (sales volume, level of growth, etc.), but rather in combination with
non-nancial indicators such as customer satisfaction, reputation and others.
Keywords Performance, SMEs, Facebook, Information technology, Social networks
Paper type Research paper
1. Introduction
The uncertainties in the economic panorama, such as instability and increasingly rapid
and wide-ranging transformations, have forced rms to look for competitive strategies
that ensure their performance and sustainability in the market. The business
The authors thank the anonymous reviewers for their very helpful comments, which contributed
to the development of this paper. The authors gratefully acknowledge nancial support from FCT
and FEDER/COMPETE through grant PEst-C/EGE/UI4007/2013.
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1328-7265.htm
Social
networks in
SME
383
Received 6 June 2016
Revised 14 September 2016
Accepted 14 September 2016
Journalof Systems and
InformationTechnology
Vol.18 No. 4, 2016
pp.383-403
©Emerald Group Publishing Limited
1328-7265
DOI 10.1108/JSIT-06-2016-0036
environment has become more competitive and complex, leading rms to seek to
develop strategies for survival and growth. Therefore, rms’ involvement in social
networks can be a source of competitive advantage.
A social network, in its widest sense, is determined by an aggregate of two elements:
actors (people, institutions or groups) and all the connections between these actors,
forming a group structure. Social networks are a new phenomena that changed how the
business environment operates. Firms are able to access resources that otherwise would
not be available (Andersson et al., 2002). This phenomenon has also helped rms to raise
their prole, form strategic partnerships and increase their contact with customers and
suppliers.
Investing in social networks with people inside and outside the organization can
make it easier to fulll rms’ growth ambitions. However, small- and medium-sized
enterprises (SMEs), with their vitally important role for any economy (Aragon-Sanchez
and Sanchez-Marin, 2005;O’Regan and Ghobadiah, 2004;Stokes, 2003), do not always
fully exploit their innovative and creative capacity because many of them are far
removed from technology (Thach, 2009).
Achieving competitive advantage is increasingly found to be dependent on access to
resources beyond the physical boundaries of the rm, with recognition that a rm’s
critical resources can lie outside (Dyer and Singh, 1998,Andersson et al., 2002). This
situation is even more evident when observing the SME universe, where limited
resources force them to seek complementarity.
Despite the many advantages of using social networks, research at the organizational
level and its impact on business performance have not grown as quickly as would be
desirable (Lovejoy and Saxton, 2012;Hassan et al., 2012). Previous studies have
investigated the use of social networks in rms, but only a few have examined the
impact on performance in SMEs (Vásquez and Escamilla, 2014;Öztamur and
Karakadılar, 2014). For example, Rodriguez et al. (2014) supplied elements proving that
social network technologies have a positive impact on customer-oriented processes,
which in turn causes an impact on a rm’s sales performance.
Irrespective of the existence of these studies, it becomes fundamental to study the role
of social networks in stimulating SME performance. Therefore, this study aims to
identify the reasons for SMEs adhering to social networks and their inuence on
performance on this rm segment. In doing so, the study contributes to showing how
SMEs can overcome their limited resources through these networks.
The paper is divided in ve sections. The second presents a review of the literature
dealing with the reasons for SMEs adhering to social networks, SME performance and
how social networks are related to performance in this type of rm. The third section
will describe the methods used, namely, data collection and analysis, and the fourth will
present and discuss the results obtained. Finally, the general conclusions will be
presented, together with some implications for theory and practice.
2. Literature review
2.1 Social networks and reasons for adhesion
According to Pohjola (1991), there was an increasing interest in analyzing social
networks in the 80s. Through social networks, organizations can gain access to
resources beyond their borders, such as goods, services and innovation (Andersson
et al., 2002). Eiriz and Wilson (2006) presented the main contributions to the evolution of
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