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Q8-3 How Do SMIS Increase Social Capital?

How Do Social Networks Add Value to Businesses? 337
Organizations have social capital just as humans do. Historically, organizations created social
capital via salespeople, customer support, and public relations. Endorsements by high-profile
people are a traditional way of increasing social capital, but there are tigers in those woods.
Today, progressive organizations maintain a presence on Facebook, LinkedIn, Twitter, and
possibly other sites. They include links to their social networking presence on their Web sites and
make it easy for customers and interested parties to leave comments.
To understand how social networks add value to businesses, consider each of the elements of
social capital: number of relationships, strength of relationships, and resources controlled by “friends.”

Using Social Networking to Increase the Number
of Relationships

In a traditional business relationship, a client (you) has some experience with a business, such as
a restaurant or resort. Traditionally, you may express your opinions about that experience by word
of mouth to your social network. If you are an influencer in your social network, your opinion
may force a change in others’ behavior and beliefs.
However, such communication is unreliable and brief: You are more likely to say something
to your friends if the experience was particularly good or bad; but, even then, you are likely only to
say something to those friends whom you encounter while the experience is still recent. And once
you have said something, that’s it; your words don’t live on for days or weeks.
However, what if you could use SM to communicate your experience using text, pictures, and
video instantly to everyone in your social network? For example, suppose a wedding photographer
uses social media to promote her business by asking a recent client (user 1) to “like” her Facebook
page and the wedding photos posted there (Figure 8-6). She also tags people in the client’s pictures
on Facebook. She may even ask the client to tweet about her experience.

Social Network 2
Social Network 3
User
4
User Social Network 1
10 User
5 User
User 1
11 User
6
User Wedding
12 User Photographer’s
2 Facebook
Page

User User
7 3
Social Network 4 User
8

User
9

Figure 8-6
Growing Social Networks