Effects of Social Media on Business Growth

Research Methodology

Abdullahi Moahmed Hassan

 Chapter I: Introduction
1.0 Introduction
This chapter provides the general background of the study, problem statement of the study,
objectives of the study, research questions, and scope of the study, significance of the study,
concept framework and operational definition of key terms.

1.1 Background of the study

The Internet provides a new paradigm for communication and has empowered millions of people
to network socially beyond the confines of geographical proximity. Online social networking has
moved from a niche phenomenon to mass adoption (Wang, 2009). Social media includes various
methods such as social networking, user-sponsored blogs, multimedia sites, company-sponsored
websites, collaborative websites, podcasts, etc. From the business perspective for any business,
effective networking is an essential component to success (Krush, 2010). Today’s social media
tools are bringing rapid change to organizational communication and public relations. Social
media networks are enabling businesses to become more socially engaged, exploiting new
business model innovation based on firms‟ ability to monetize and extract value from crowd
generated data and content. Social media has enabled organizations to establish a stronger
relationship with the community of reference, in order to exploit the network effect and harness
collective intelligence.

Organizations are now building and maintaining social media public pages to improve their
social network salience, enhance interest in their organizations, and build relationships with the
online public (Parveen et al., 2015). In this context, social media has turned into the primary
drive behind Jordanians connecting to the Internet. The average age of Facebook users in Jordan
with over one million users is from 18-24, followed by 25-34 years old, which clears the
importance of adopting and utilising the right marketing strategy on social media for
organizations in Jordan to cover this vast audience (Stelzner, 2016).

Accordingly, it seems like that the most effective social media platform for over the world
organizations is on Facebook, whatsapp, twitter, Instagram, … , which has a varied range of
audience with over billions of users. Also, smartphone users are growing every day by using
social media platforms for online shopping, socialising, share knowledge and information about
products or brands (Al Tawara and Gide, 2017). Accordingly, Agnihotri (2014) argued that
social media is a vital marketing tool that will raise marketing efficiency in any organization, for
that reason it is an essential need to study how various industries and sectors use social media
and the purpose of adopting it. Therefore, many countries must adopt strategies to attain a new,
high-quality Internet infrastructure and increase national awareness of the Internet and social
media to the organizations by increasing investment in the ICT infrastructure (Berthon., 2011).

These technologies have shifted the emphasis of internet services from being consumption based
towards becoming interactive and collaborative, creating new opportunities for interaction
between organizations and publics (Henderson &Bowley 2010). Social media has revived more
ancient types of decision-making prevalent before the emergence of mass media, when the
exchange of opinions between one‟s families, relatives, friends, and neighbours was the basis for
product purchase (Dellarocas, 2003). Different from the one-way model of communication in
most mass media, social media represents two-way communication between consumers and the
materialization of the communication content. As the digital version of word-of-mouth, social
media represents the solidification, storage, and retrieval of the word-of-mouth content online
(Guesalaga et al., 2009).

1.2 Problem statement

Today, due to the spread of globalization and suppression of trade barriers that used to limit
foreign competitors, all companies either those offering services or those offering products are in
continuous competitions. One strategy used to make sure that a company beats its competitors
through the use of social media in their advertisement (Chive et al, 2008).

Social media is among the communication channels that companies have adopted and started
using in order to improve their performance. Despite widespread diffusion and use of ICT and
social media in the society, it is not yet reported how and to what extent the social media have
contributed to improvement of organizational performance. Some studies claim that the use of
social network sites makes employees happier and therefore, more productive (Hudson et al.,
2010). while other studies consider it as a reason for reduced productivity since it can waste time
and be addictive. (Accountemps, 2010) these studies argue that using social networking sites
reduces productivity in the workplace looked only on at the time wasted as a result of social
networking and ignored the possible indirect benefits such as enhanced job satisfaction, higher
organizational commitment, lower absenteeism, higher retention rates, higher innovative
behavior and increased productivity.

Therefore, with the aim to fill up the above gaps, the researcher sought to investigates the factors
that influence the business development through usage of social media and never have there a
study that explicitly tackled the problem and this necessitates conducting of the study. A case
study carried out in CIMERWA Ltd period 2016-2018.

1.3. Objectives of the Study

The present study is divided into two categories of objectives: General and Specific objectives.

1.3.1. GENERAL OBJECTIVES

The general objective of this study is to assess the effect of social media to the business
development in the company.

1.3.2 SPECIFIC OBJECTIVES

(i) To examine the types of social media used in CIMERWA Ltd

(ii) To assess the level of development in CIMERWA Ltd from 2016 to 2018
(iii)To find out the relationship between social media and business development within
CIMERWA Ltd.

1.4. Research Question

(i) What are the types of social media is used in CIMERWA Ltd?
(ii) At which extend level of development of CIMERWA Ltd from 2016 to 2018?
(iii)Is there any significant relationship between social media and business development within
CIMERWA Ltd?

1.5. Scope of the study

The scope of this research is divided into domain, geographical and time frame.
1.5.1 DOMAIN SCOPE

In regard to the domain, this study assesses the effect of social media to the business
development in the company

1.5.2. GEOGRAPHICAL SCOPE

In terms of space, CIMERWA ltd is located in Western province, Rusizi District here chosen as
case study for this study

1.5.3. TIME SCOPE

As for the time, the focus of this research is relatively to 3 years (2016–2018).

1.6. Significance of the study

This study has the benefits not only to the researcher but also to the management of CIMERWA,
and all academics.

1.6.1. TO RESEARCHER

This study helps in gaining an insight into effect of social media on the business development. It
is within the expectation of the researcher that information gathered and compiled in this study
and served as an eye opener to social media. Now this research is important to me in order to be
awarded with a Bachelor degree in marketing.

1.6.2. ACADEMICIANS AND FUTURE RESEARCHERS

The study serves as source of reference for future researchers in advanced studies and to the
community by taking into account the findings, results and recommendations. The copy of this
research will be available in library of UNILAK and it will be used by other researchers who are
interested in this area of research.

1.6.3. TO CIMERWA LTD

The study is intended to give recommendations of how CIMERWA-Rwanda can create a better
environment needed by using social media. The findings of the study, conclusions and
recommendations, are great of importance in improving CIMERWA’s development in particular.
The study finding on social media usage embodies an added knowledge to Rwandan’s institution
in general.

1.7. Conceptual framework

According to Colander (2003), a conceptual framework is an analytical tool with several

variations and contexts. It is used to make conceptual distinctions and organize ideas. Likewise,
conceptual frameworks are abstract representations, connected to the research project’s goal that
directs the collection and analysis of data (Shields &Rangarjan, 2013). A concept framework
interlinks the two variables dependent and independent.

1.8 Operational definition of key terms

The terms in this study are scientifically operationalized to come up with the meaning of each
concept under study.

1.8.1 SOCIAL MEDIA

Social media is a sociological not technological concept. Emerging in the late 1800’s social
network analysis flourished as a field of study during the 20th Century and is based on the study
of, and interactions within, communities of people. According to social scientists, social
networks are groups or organizations made up of individuals connected by some form of
interdependency, such as kinship, friendship, membership status, common interests, beliefs,
orientation, profession, political action, knowledge, and location (Livingston, 2016). The
individual agents within social networks are known as nodes and the interdependency among
nodes forms what is referred to as ties (also known as links or connections). Social capital plays
a crucial role in the success of social networks and refers to the strength of the trust, norms, ties,
resources, and relationships within a social network with the idea that networks with high social
capital have a greater ability to achieve positive outcomes (Bordieu, 2015). In recent decades, the
introduction of the World Wide Web has taken social networking to larger, richer, and more
complex levels. According to Brian Solis some prominent examples of social media are:
Facebook

Facebook is a popular free social networking website that • allows registered users to create
profiles, upload photos and video, send messages and keep in touch with friends, family and
colleagues. According to statistics from the Nielsen Group, Internet users within the United
States spend more time on Facebook than any other website.

LinkedIn

LinkedIn is a social networking site designed specifically • for the business community. The goal
of the site is to allow registered members to establish and document networks of people they
know and trust professionally.

Twitter

Twitter is a free microblogging service that allows registered • members to broadcast short posts
called tweets. Twitter members can broadcast tweets and follow other users’ tweets by using
multiple platforms and devices.

WhatsApp

WhatsApp Messenger is a cross-platform instant messaging application for smart phones. In

addition to text messaging, users can send each other images, video and audio media messages.
The client software is available for iOS, BlackBerry OS, Android, Series 40, and Windows

Phone. WhatsApp handles two billion messages per day as of April 2012, growing from one
billion in October 2011. According to the Financial Times, “WhatsApp has done to SMS on
mobile phones what Skype did to international calling on landlines (Cavus, & Ibrahim. 2008)

1.8.2 BUSINESS DEVELOPMENT

Business development entails tasks and processes to develop and implement growth
opportunities within and between organizations. It is a subset of the fields of business, commerce
and organizational theory. Business development is the creation of long-term value for an
organization from customers, markets, and relationships (Sørensen, H. E, 2014). Business
development can be taken to mean any activity by either a small or large organization, non-profit
or for-profit enterprise which serves the purpose of ‘developing’ the business in some way
(Davis. C, 2006). In addition, business development activities can be done internally or
externally by a business development consultant. External business development can be
facilitated through planning systems, which are put in place by governments to help small
businesses. In addition, reputation building has also proven to help facilitate business
development.
CHAPTER TWO: LITERATURE REVIEW
2.1. Introduction
This chapter concentrates on the overview of existing literature review and the explanation of
key words. It focuses on available literature in the field of study by different authors. The
classical theory of concepts, also referred to as the empiricist theory of concepts, the classical
theory of concepts says that concepts have a definitional structure. Adequate definitions of the
kind required by this theory usually take the form of a list of features. Features entailed by the
definition of a concept must be both necessary and sufficient for membership in the class of
things covered by a particular concept. Then this chapter presents the critical review and research
gap identification of the study.

2.1. Theoretical Review

This section discusses the theories related to social media and business development as drawn
from several written related materials.

2.1.1 social media

Social media consisted of a collection of internet-based tools work on web technology and
ideological basis which help users to create content and share it with other users (Kaplan and
Haenlein, 2010). Social media have several forms and types like; blogs, microblogs, social
networks, media-sharing sites, social bookmarking and voting sites, evaluation sites, forums, and
virtual worlds (Zarella, 2010). Social media are characterized by user generated content, which
has been found to be more effective than traditional marketing communications in influencing
the attitudes and behaviours of other users (Thackeray et al., 2008). The use of social media in
businesses was considered a failure, but this changed quickly as the rapid increase trend of social
media. For instance, over 4 billion internet users exist today of which more than 3 billion users
are active in social media (Chaffey, 2018). Therefore, organizations must know how to make use
of social media sites to force traffic to their business sites (Weinberg, 2009). Social media first
started with LinkedIn in (2003), taken after by MySpace and Facebook in (2004), YouTube in
(2005), and Twitter in (2006). In less than ten years, it has achieved billions of users around the
world (Barker et al., 2016). People used tools like Facebook and blogs long before organizations
became aware of social media and grasped the potential they held (Gonzalez et al., 2015).
Accordingly, using online networking widely spread to organizations and firms as a feature of
their systems. For example, Facebook’s vice president of small business stated that paid
advertisement of Facebook has become effective and companies should put their efforts to their
Facebook page for growing their business and boost the marketing (Loten et al., 2014). Also,
86% of 100 biggest organizations on the Fortune 500 rundown use at least one of the online
networking platforms, and 28% of them utilize every online networking platform available
(Tsitsi et al., 2013). Accordingly, companies are using social media to promote their products in
a new way, and each social media has its distinct purpose that the other media may not have.

2.1.2 SOCIAL MEDIA IN A BUSINESS CONTEXT

According to Tallon et al., (2000) IT can contribute toward business growth in regards to process
level as IT also assists the communication and coordination, which results in the improvement of
process planning and support. In addition, IT can also raise production and operation processes
thereby contributing to the growing of economic scale. Besides, markets can become expanded
with the help of IT since it establishes, maintains and strengthens customer relationships (Tallon
et al., 2000). Social media is a type of new IT technology; the adoption of social media in
business will result in driving business growing as it improves the customer relationships
(Blanchard, 2013). Cook (2008) has defined social media as “the way in which content
(particularly news and opinions) has become democratized by the Internet and the role people
now play not only in consuming information and conveying it to others, but also creating and
sharing content with them” (Cook, 2008, p. 7). Edosomwan et al., 2011) further added that social
media is an development of traditional media, it employs a more advanced digital technologies
which enable the user of virtual community to connect, interact, building relationships and work
together.

Kaplan and Haenlin (2010) argue that social media is more compelling than other media, the
quick and low-cost communication of social media assists in the reduction of uncertainty and
create close relationship. Companies use different social media (social networks, blogs, podcasts,
wikis, RSS feeds, forums, media sharing and social bookmarking) to promote their services,
technologies and applications (Safko, 2010; Kaplan and Haenlein, 2010; Cook, 2008). Kaplan
and Haenlein, (2010) further classified social media to different form: social networking sites
(e.g. Facebook, LinkedIn); Content communities (e.g. YouTube); Blogs(Twitter); Virtual social
worlds (e.g. Second Life); Collaborative projects (e.g. Wikipedia); Virtual game worlds (e.g.
World of Warcraft)( Kinyua, C., 2013). Regarding to those social media tools, Jagongo, A.O.
and Kinyua, C (2013) point out that half of users using social networking, micro blogging has
29% user, while 20% users utilize other different social media tools and the percentage of Wiki
is 1%. Facebook, Instagram, LinkedIn, Snapchat, Youtube and Twitter have attained their
popularity in business area (Landström, 2017) as social media gained huge popularity annually,
for example, in 2015, Facebook had nearly 901 million users who are activating every month,
LinkedIn obtained approximately 161 million members and Twitter had almost 140 million users
(McCann, M. & Barlow, A., 2012). The statistics show that a company can take advantage of
social media to obtain business worthiness and increase business profit since it is easy for
company to use social media to access their target customers anytime and anywhere with a low
cost (Kaplan and Haenlein, 2010). Company can incorporate social media for different
operational purposes, McCann, M. & Barlow, A., (2015) illustrate that companies
communication with customer, build close relationships with older or previous customers, attract
new customers, and maintain customer relationships. In addition, social media is used by
organizations to promote the product or service of the company, improve brand awareness and
grow traffic volume on a website (Reuber, 2015). The significant impact of social media in
business has increased the popularity of social media platforms, which contributes to how a
company can implement social media to enhance the competitiveness of a company which has
been widely discussed. Several studies confirm that firms can boost business growth by adopting
social media, both in external and internal collaboration (Smith & Lewis, 2014). Social media is
accessible for both skilled and inexperienced people since it is perceived as easy to use and
provides simplicity to direction of those various applications (Lacho & Marinello 2013).

2.1.3 BENEFITS OF SOCIAL MEDIA FOR BUSINESSES

Companies can benefit from social media in diverse ways, which can include the following: an
increase in its ROI,

a. Productivity Benefits:
When businesses begin to use social media as a marketing tool by building a strong visible
digital/online presence, these businesses tend to gain in terms of productivity because they are
able to reach to a wider market on the Internet. This in the long run brings about an increase in
the business‟ ROI.

b. Increase in Customers/Clientele:
Businesses are able to increase their number of potential customers when they use social media.
For example, when one client or customer hits the like button of your company’s page on say
Facebook, it is seen on her wall and in all her friends’ feeds which can intrigue another friend
who might probably be not a customer to click on the link to your page to see why his/her friend
liked your page and this will not just bring you followers but potential customers as well.

c . Wider Knowledge Pool:

According to KPMG (2009) International publication on Going Social: How Businesses are
making the most out of social media, 88.8% of experienced managers believed that social media
increased their companies’ knowledge pool.

d. Cost Savings & Insights:

The use of social media can eliminate months of slow and expensive production by getting real-
time data and feedback and being able to adjust quickly multiple campaigns to make the highest
impact where possible. Also, the social media platform will provide the insight you need to know
about buyers‟ dynamics and motivations, which can be used to refine and tailor your content to
launch rich campaigns.

e. Establishing Brand Awareness

Through social media it is possible to increase the brand awareness among customers as
businesses can create awareness by building company image.

f. Cost efficient
When a business in running on a fixed marketing budget, social media is the most cost-efficient
way to market and promote the business. Websites like facebook, twitter, pintrest, etc, allow any
business to share their content for no cost at all. Hence social media is an affordable advertising
platform.
g. Connectivity
The business will always be connecting to the customers in terms of changing preferences,
lifestyles and resources and adapt to the changing interest of the consumers. Companies will also
be able to cater to the dynamic interests and innovate on their marketing campaign accordingly

2.2.1 AUDIENCE
Social media can communicate information about your product, your service, your business
philosophy, your way of doing business, or our unique approach to solving the customer’s
problems through mass audience. Advertising would highlight this key difference, explain why it
was chosen and how it works, and stress the benefits of this type of network (better performance,
higher reliability, greater effectiveness, lower operating costs, etc.) other audience. Service
businesses are often successful within communication in audience, (Trainor, 2014).

2.2.2 NEW CUSTOMERS’ ENGAGEMENT

Customer retention refers to the ability of a company or product to retain its customers over
some specified period. High customer retention means customers of the product or business tend
to return to, continue to buy or in some other way not defect to another product or business, or to
non-use entirely. Selling organizations generally attempt to reduce customer defections (Yanga,
2000).

Increase in customer starts with the first contact an organization has with a customer and
continues throughout the entire lifetime of a relationship and successful retention efforts take this
entire lifecycle into account. A company's ability to attract and retain new customers is related
not only to its product or services, but also to the way it services its existing customers, the value
the customers actually generate as a result of utilizing the solutions, and the reputation it creates
within and across the marketplace (Yangwei, 2000).

2.2.3 INNOVATION AND QUALITY

One other commonality between quality improvement and innovation processes noted in the
literature is that both are often difficult to implement leading to significant lags in the realisation
of any related benefits. Pekovic and Galia (2009) comment, for example, that ‘implementation of
the ISO 9000 standard … concerns the whole organisation and involves changes in the
fundamental behaviour and applied routine of employees’ (Pekovic and Galia, 2009, p. 831).
Likewise, innovation may result in short-term disruption before any longer-term performance
benefits are accrued by the firm (Roper et al., 2008). Understanding the performance benefits of
innovation and quality improvement, and their interactions, is therefore likely to require
longitudinal data covering a period of years in which causal mechanisms are clearly identifiable.

2.2.4 THEORY ON PROFITABILITY

Positive profitability in companies can be achieved by eradicating waste in benefits services

processes and systems. The “critical success factor” for a industry is the degree to which it
fulfills its set objectives and mission in terms of being efficient, effective and economical. The
information obtained from a sound social media as reflected from financial statements provided a
report on profitability and position that is useful to a wide range of users for assessing the
stewardship and making economic decisions (Glen dinnig, 1998).
CHAPTER THREE
3.0 METHODOLOGY

3.1 Introduction
This chapter focuses on the methodology of the study. The chapter consists of several sections.

First section is research design folloid by research target population including sample size and

sample selection procedure. The third section provides research instruments with the validity and

reliability test of the data and the data gathering procedure, to analyze the data. Section five

presents’ data analysis folloid by the ethical consideration of study and limitation of the study.

3.2 Research Design

I investigate effect of social media on Business Growth. This study adopts explanatory research

design using questionnaire and interview to gain data about the causal effect of effects of social

media on Business Growth. I will describe the respondents, compare the information, analyze

and interpret variables. I will use quantitative method specially questioner because it is time and

cost effective – data can be gathered once over a short period.

3.3 Research Population

My target population of the study will be social media company users in Mogadishu Somalia.

3.3.1 Sample Size and Sampling Procedure

During this research, I will use random selection, because of the time I have and I believed that

10 companies can represent the rest. I will use Probability sampling specifically Random

selection Sampling.

3.4 Data Collection Technique

This study uses a questionnaire as a tool for data collection from every respondent and hopefully

an interview. The main objective of the questionnaire is to gather sufficient information in a

short period of time. They are suitable for large populations while time is limited. Also,

Interviews will help us to deeply understand the respondents credibly. I have decided the number

of questions which I will ask the respondents of the study but surely, I will use the following

scale “strongly disagree, disagree, neutral, agree, and strongly agree”. The questionnaires will be

distributed equally to all members of the target sample by avoiding any contradiction and

invention questions in questionnaires.

3.5 Reliability and Validity of the Instrument

In order to make sure the accuracy and consistency of the survey i apply instrumental tests such

as reliability, and validity (0.5) tests. Reliability refers to the extent to which data collection

technique or techniques will yield consistent findings. Similar observation would be made or

conclusion reached by other researchers or there is transparency in how sense was made from the

raw data. In order to keep the quality of my study i will measure the internal consistent of the

reliability test for the confidence of the output, the study can be applicable the measurement

should exceed 0.7. (Cronboch alpha, 1951), so the research team will use show testing than

reliability test, in order to maintain the consistent and validity of the instrument by using

statistical package for Social Sciences, (SPSS Version 16.0).

Validity refers to how ill the data collection and data analysis of the research captures the reality

being studied. In other words, the researchers must obtain the reality of responses of those people

who are under the test through comparing their responses with such truth that in deed is truth.

(Kothari, 2004)
3.6 Data Gathering Procedure
Legitimacy is my priority. Before gathering the data, i will ask acceptance to the companies so

that i can precede my research legally in my target operators. Data collection will be done

through distribution of questionnaire and face-to-face personal interview method and it is

important, because it helps the respondents to understand the questions ill by interpreting the

questions to fit to the respondent`s understanding, this will be done to ensure that the respondents

ansir the questions into appropriate sequence. When distributing the questionnaire, i will avoid

any kind of bias and prevent from irrelevant or any deviation from my target population.

3.7 Data Analysis

After collecting questioners from respondents, the research will use quantitative method for

analyzing and interpreting date, the date will be analyzing through correlation analyze by using

statistical package for social science technique (SPSS version 16.0.)