Perceived risks and risk management of social media in an organizational context
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GENERAL RESEARCH
Perceived risks and risk management of social media in an organizational context Juha Munnukka & Pentti Järvi
Received: 2 February 2012 / Accepted: 5 July 2013 # Institute of Information Management, University of St. Gallen 2013
Abstract The use of new electronic media for marketing communication is gaining in popularity with organizations, and the adoption of social media (SOME) is enjoying particularly rapid growth. However, organizations are uncertain about using SOME and perceived risks are limiting their use. This study explores the key types of risks that business organizations associate with using SOME in their marketing communication. We also explore the effectiveness of procedural control and proactive focusing processes in managing these risks. The results show that organizations perceive three types of risks that deterred companies from increasing the use of SOME. Companies applied procedural control mechanisms to manage time-loss risks. An organization’s familiarity with SOME was found to have a strong effect on time-loss as well as on other types of risks. Research revealed that the role that proactive focus and procedural control played in managing SOME-related risks was less than had been anticipated. Keywords Social media . Perceived risk . Risk management . Procedural control . Proactive focusing Jel classification M31 Introduction to perceived risks, risk management and social media Although organizational risk and perception of risk have been widely studied in recent years, little research has been Responsible Editor: Shintaro Okazaki J. Munnukka (*) : P. Järvi Jyväskylä University School of Business and Economics, Jyväskylä University, P.O. Box 35, 40014 Jyväskylä, Finland e-mail: [email protected] URL: https://www.jyu.fi/jsbe/yhteystiedot/henkilokortit/munnukkajuha P. Järvi e-mail: [email protected]
done on identifying and managing specific risk types in the context of marketing communication. This applies especially to new channels of marketing communication, such as social media (SOME) (see Kaplan and Haenlein 2010; Dorfman 2008; Weber 2007). The perception of risk strongly influences the adoption and use of any new product, service, or medium of marketing communication. Therefore, in a business-tobusiness context, it is essential to understand the key sources of risks perceived by an organization and the main means of managing those risks in the context of adopting a new product, service, or medium (see Bunn 1994; Mitchell 1995 and 1998; Newall 1977; Woodside et al. 1999). A number of risk management strategies have been presented (e.g. Mitchell 1995 and 1999). Traditional theories include processes for managing risk and behavioural models for facing risks, such as avoidance, reduction, sharing, and retention (Dorfman 2008). Another important stream of research is Social Risk Management (SRM), which covers topics such as social policy, social protection, and preempting social problems in the community. A newer theoretical concept of risk management is Social Media R
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