Social networking and the family business performance: A conceptual consideration.

• Author: Agbim, Kenneth Chukwujioke
• Position: Report

INTRODUCTION

Social networking is as old as man himself. Before the advent of the internet and social media, social networking was practiced traditionally or through physical contact with other businesses or their stakeholders in business association forums. Al-Mommani, Al-Afifi and Mahfuzi (2015) assert that the emergence of the internet revolutionized virtual communication and social networking. Social networking through the new media allows business owner-managers to acquire new business skills, knowledge, customers and suppliers faster. Additionally, the new media enables owner-managers to market their products/services, access business opportunities, relate with other business owner-managers and expand their businesses faster (Jagongo & Kinyua, 2013). The new media used for social networking includes Facebook, YouTube, Instagram, LinkedIn and Twitter (Harris & Rae, 2009; Icha & Agwu, 2015).

As at January 2018, Facebook had 2.2 billion monthly active users, while YouTube had 1.57 billion active monthly viewers. The monthly active users of Instagram, LinkedIn and Twitter, are respectively 800, 530 and 330 million (Statistics, 2018). This implies a large market size. Moreover, social networking is not the only factor that influences firms' financial and non-financial performance. However, firms are getting involved in it because of the large market size it offers. Icha and Agwu (2015) opine that these channels have gained more than one billion users worldwide in less than two decades of existence. This explains why customers follow their brands through social networking (Turkle, 2011; Technoratimedia, 2013). Family firms that are actively involved in social networks and advantageously positioned on social websites obtain resources and contacts that enhance business performance and promote the internationalization process more quickly (Coutinho & Moutinho, 2012). Owing to the effects of social media on family relationship, customer relationship management, product/service design and customer education, families and businesses are beginning to embed social media into the family and the business systems.

The performance of family businesses is enhanced by the enabling environment created by social media interactions. However, today's business environment is becoming more turbulent owing to the advances in the internet, information and communication technology. This has by extension rendered traditional social networking ineffective. Researchers (e.g., Surin & Wahab, 2013; Ogunnaike & Kehinde, 2013) have examined the relationship between networking and the performance (financial and non-financial) of family and non-family businesses in both developed and developing countries. The results of these studies show that performance is a multi-meaning concept and a cultural artifact (Colli, 2011). Aside, family businesses do not exist solely to achieve financial performance (Zellweger & Nason, 2008; Salvato & Moores, 2010). The culture-specific nature of a family business (Sharma, 1997) makes a family business embedded in the family system and the community of location.

However, the contributions of social networking to the embeddedness of the business in the family, the family reputation, family members' commitment and family social capital are not quantified and captured in the computation of the financial performance of the family business. This issue has given rise to a debate about whether financial measures are preferred to non-financial measures in the assessment of family business performance. Salvato and Moores (2010) assert that other factors that lend support to this debate are: the poor quality of available financial data; and the difficulties in the application of financial ratios on the available data (Colli, 2011). Based on the foregoing, this study, therefore, seeks to review the contribution of social networking to both the financial and non-financial performance of family businesses.

RESEARCH METHODOLOGY

This study adopts a literature review research method. This is a systematic process of selecting and analyzing published journal articles that is similar to that employed by Pukall and Calabro (2014). This method is selected so as to facilitate the identification of the different measures of family business financial performance and the various measures and proxies of family business non-financial performance. The selection of the journal articles was done according to the steps below.

The review was restricted to journal articles published from January 2006 to December 2017. This was done to generate conceptual and empirical journal articles on current research that focus on social networking and family business performance. Additionally, the time frame was chosen to avoid a never-ending search.

Different journal databases (Google Scholar, EBSCO, and CrossRef) were searched for journal articles that focus on social networking and family business performance. This initial search gave journal articles that are too narrow in their scope of coverage. For instance, it was found from the 122 journal articles that were initially selected that there is a dearth of studies relating social networking to family business performance; particularly non-financial performance.

The titles, abstracts and keywords sections of the published journal articles on family business were searched for a combination of the following keywords: family firm, non-financial performance, financial performance, social network, social networking and social media applications. This broader search was done in the different databases based on the keywords so as to increase the number of journal articles generated for the study. However, only peer-reviewed academic journal articles were selected since they assure increased academic rigor. Conceptual journal articles were selected to develop the analysis of the non-financial performance measures and proxies, and the interplay and interdependence of social networking tools. On the other hand, empirical journal articles were selected to help in the analysis of financial performance measures. Consequently, 43 more journal articles that focused on financial and non-financial performance were added. The final sample selected for review from a total of 165 journal articles was 55.

The selected journal articles were read to check for the following information points: discussions related to the contribution of social networking sites (e.g., Facebook, YouTube, Instagram, LinkedIn and Twitter) to family business financial and non-financial performance; the interplay and interdependence of social networking tools; benefits of social networking tools to family business; measures and proxies of non-financial performance; measures of financial performance; and the differences between financial and non-financial performance. Before commencing the reading of the selected journal articles, the titles, abstracts and keywords were manually screened to ensure they all match the objective of the study. However, journal articles in which the author(s) did not state that the businesses studied are family businesses were included. This was done for only studies that highlight the unique characteristics of a family business (i.e., family, ownership and management). All the selected journal articles were thoroughly read. During the reading, notes were made on the different information points of the study. At the end of the reading, the notes were linked together to review the relevant literature, state and discuss the findings, and state the conclusion.

LITERATURE REVIEW

Social networking and social network

The concept "social media" is made up of two words; social and media. The term "social" implies the interaction between individuals of common interest, a group, or even a community, while the term "media" implies the medium, channel or platform through which the individuals, group or community interact. Shabbier, Ghazi and Mehmood (2016) note that social media is also known as consumer-generated media, new media and citizen media. Prior to 1997, the known traditional media were television, radio and newspaper (Singh & Sinha, 2017). The new or social media started in 1997 with the launch of sixdegrees.com (Shabbir et al., 2016). Kaplan and Haenlein (2010) define social media as a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0 and allow the creation and exchange of user-generated content. Web 2.0 is the total of open-source, interactive and user-controlled online applications which expand experiences, knowledge and market power of users as participants in business and social processes.

However, the social interactions or networking activities which social media facilitates is viewed by Chi (2011) as a connection between brands and consumers that offer a personal channel and currency for user-centered networking. Through social networking, individuals (1) construct a public or semi-public profile within a bounded system, (2) articulate a list of other users with whom they share a connection, and (3) view and traverse their list of connections and those made by others within the system (Agwu & Murray, 2015). Kaplan and Haenlein (2010) argue that social media is different from social networking; social media is the environment in which social networking thrives. Before now, social media was used exclusively in the context of creating and maintaining relationships. However, today, it is now being incorporated into all business functions (Palanissamy, 2014).

Owing to the turbulence in today's business environment, owner-managers consider social networking as a process that facilitates access to important resources (Garcia & Carter, 2009). Many firms do this by cooperating with not just individuals but small and large organizations to exploit new technologies (Acquaah, Gyampah & Jawaram, 2011). Therefore, social networking is the forming and...