Impact of Social Media Usage on Organisation Performance: Lesson From Covid-19 Pandemic
Abstract
Companies have turned to digital and social media advertising due to the government's widespread limitation strategy implemented in response to the COVID-19 outbreak. Due to its potency and efficiency, social media may help intelligent businesses increase their chances of success and gain a competitive edge. Yet nuances of grey persist. This research focuses on how social media usage affects corporate performance. As part of this research, we break down the ways in which people use social media into three distinct types: social media for “customer relations and services”, “marketing”, and “information accessibility”. Through purposive sampling, data was collected through an online questionnaire using 5 Likert scales to organisational informants such as managers and senior staff in the Small Medium Enterprise (SMEs). Data were analysed using IBM SPSS, with descriptive, normality, reliability, and correlation analysis. The finding demonstrates the significant impact that social media may have on business operations, particularly in the areas of brand awareness, customer service, and information dissemination.
Keywords: Social media, marketing and branding, customer relations and services, ınformation accessibility, organizational performance, small medium enterprise (SMEs)
Introduction
Global economies have been severely impacted by the wide spread of coronavirus-related diseases, especially those caused by COVID-19 (Fendel et al., 2020; Rebucci et al., 2022). In all areas of the economy, COVID-19 has been detrimental. Growth has slowed, aggregate consumption has decreased, investment has been reduced, and the balance of payments has worsened. On the other hand, the COVID-19 pandemic has decreased people's ability to buy things and spend money because many people have lost their jobs and income (Dang & Nguyen, 2021). In addition, most individuals are being frugal because of the uncertainty brought on by the pandemic (Celik et al., 2020).
As the COVID-19 pandemic expanded and the Movement Control Order (MCO) was implemented, the financial situation in Malaysia deteriorated significantly (Annuar, 2020). A historic 17.1 per cent annual drop in GDP was seen in Q2 2020 in Malaysia. This problem illustrates how the COVID-19 dilemma has impacted SMEs' thriving capacity (Juergensen et al., 2020). Therefore, company owners must promptly adjust their sales plan (Lorentz et al., 2016). Increased digital and social media marketing is one strategy SMEs can employ to combat this trend (Dwivedi et al., 2021).
Social media's arrival ushered in a new era of communication and fundamentally altered the way businesses function. Companies' methods of reaching out to consumers have evolved in response to the popularity of social media platforms like Facebook, Twitter, LinkedIn, YouTube, and Instagram. These sites facilitate real-time conversations between people all over the globe with genuine and meaningful social interaction (Albarrak et al., 2020).
Corporations in Malaysia have recently begun to embrace the benefits of social networking. The Burson Marsteller Asia Pacific 2011 Report found that social media was widely used inside Malaysian companies for both internal communications and external marketing in 2011. The survey found that compared to the rest of Southeast Asia, organisations in Malaysia, Thailand, and the Philippines spend more heavily on social media. Organisations in South Korea, Australia, and Malaysia were also found to heavily promote their social media channels on their official websites. This indicates that SMEs recognise and embrace social media's value and integrate it into their daily operations.
As a result of its usefulness as a consumer communication channel, social media has become an inseparable companion for many. Organisations have made use of the current state of social media to further their market dominance and boost their profile inside. This research aims to understand how SMEs benefit from social media and how that benefits the businesses overall. This research sought to shed light on the possible benefits of using social media and to outline the justification for an organization's investment in social media, especially among SMEs, in order to solve a critical issue in the expanding field of social media management within organisations.
Literature Review
The first part of the chapter focuses on how social media is used for marketing, public relations, and providing easy access to information.
Social media usage
Social media incorporates different techniques, such as social networking, blogs sponsored by people, interactive platforms, websites sponsored by businesses, collaborative websites, podcasts, etc. Successful networking is an integral component of performance from the market viewpoint of every organisation (Karr-Lilienthal et al., 2013). SMEs can benefit greatly from using social media because of its low entrance barrier, ease of use, minimal maintenance costs, and a large pool of potential customers. (Tajudeen et al., 2018). Other than that, to attain or retain market share in a specific industry or country, SMEs in Malaysia need to compete actively among countless competitors (Ainin et al., 2015). Tan and Macaulay (2007) infer that the increased productivity afforded by social media advertising makes it a must-have for SMEs. Three types of social media users are identified in this research: customer service, marketing, and information dissemination. The selection of the three variables is based on a previous study by Dodokh and Al-Maaitah (2019), Koori et al. (2018) and Jong et al. (2021). All three variables are explained briefly:
Social media for customer relations and service
Social media has significantly enhanced connectivity between consumers and companies by creating and enabling two-way communication (Alam & El-Khatib, 2016). In order to improve the feeling of closeness of customer interaction, social media platforms also allow companies to interact with future and existing customers (Davis Mersey et al., 2010). This indicates that the usage of social media plays an essential part in customer service. The shared benefits of easy brand visibility through Twitter, Facebook, YouTube and others make it easy for consumers to communicate and participate in social interaction, providing brand building and wide-ranging contact through multiple platforms.
H1: There is a significant effect of social media for customer relations and service on organisational performance
Social media for marketing
"Social media marketing" refer to the process of promoting a product or service through social media channels such as Facebook, Twitter, and blogs (Felix et al., 2017). Despite the widespread acceptance of terms like "e-marketing" and "digital marketing" in the scholarly community, "social media marketing" has recently emerged as a topic of interest (Shaltoni, 2016). Data analytics tools have become standard features on many social media sites, letting companies track metrics like the reach and engagement of their marketing efforts. Data analytics tools have become standard features on many social media sites, letting companies track metrics like the reach and engagement of their marketing efforts. Social networking marketing allows companies to establish a strong partnership with their clients and strengthens meaningful contact with them (Cain et al., 2010). For example, Hwang and Kim (2015) examined whether social media marketing would increase consumer equity in luxury fashion brands.
H2: There is a significant effect of social media for marketing on organisational performance
Social media for information accessibility
New information technologies offer numerous information resources needed to support organisations. For example, people often directly use wikis to exchange knowledge in organisations, YouTube videos to train people and spread knowledge, blogs and microblogs to disperse information such as Twitter, and mashups to compile and frequently update information from external sources (Ali-Hassan & Nevo, 2016). Social media relates practically to technologies that enable users to develop, post, exchange and redistribute user- generated content. Organisations may also utilise social networking, among many other uses, to manage information and find skills both inside and beyond their organisations, as well as in the recruiting and recruitment phase (Kaur et al., 2015; Stone et al., 2019).
H3: There is a significant effect of social media for information accessibility on organisational performance.
Organisational performance
There is a widespread belief in Malaysia that its robust economic growth is due in large part to the success of its many SMEs. Increases in employment, company size, and profits are all indicators of a successful SMEs, which are all indicators of the expansion of that business (Malik & Pfeffer, 2016). With respect to this study, the organisation success of social media SMEs is assessed by rapid adaptation, speed to market, cost savings and creativity. Organisational performance is the capacity of an organisation to respond to the competitive climate, coupled with shifts in the consumer environment comprising of consumers, rivals and other influential factors that can modify the way business functions (Rekarti et al., 2018). Appropriate administration will generally improve communications strategies, and sound financial preparation is therefore essential for better organisational performance (Ramayah et al., 2017).
Method
The quantitative method was used to gather information for this investigation, and the questionnaire was formed after those of other studies but with specific key changes to better serve the study's aims. Social media use is segregated into three subconstruct: (1) social media for marketing; (2) social media for customer relations and services; and (3) social media for information accessibility (Parveen et al., 2016). All three sets of items were adapted from previous research in an attempt to more thoroughly investigate the utilisation construct (Elliot & Boshoff, 2005; Moen et al., 2008; Papastathopoulou & Avlonitis, 2009; Teo & Choo, 2001). This research also categorised organisational performance into four different constructs: speed of adaption, speed to market, cost savings, and new product development and the questions were modified from those used in earlier research (Feher & Towell, 1997; Teo & Choo, 2001). The 5 Likert scale were used to measure all items representing 1 = strongly disagree and 5 = strongly agree.
This research aims to examine the impact of social media on the growth of SMEs. Our representative sample consists of SMEs that have an active online presence, as determined by an examination of their respective homepages. Each unique SMEs is treated as a separate case study. The respondents (manager and senior staff) were identified based on their job titles and company positions. These individuals are believed to be acquainted with and competent in their business activities related to the issues under investigation.
Initially, 300 questionnaires were distributed online; however, only 160 questionnaires were completed. We sorted through the returned questionnaires and discarded the ones that were either completely blank or missing key information. Five were excluded from the analysis. With one hundred and fifty-five (155) useable questionnaires, the response rate was 51.6%. Due to its versatility, the Partial Least Squares Structural Equation Model (PLS-SEM) has found widespread application in numerous fields (Chin et al., 2003). When working with small to medium samples, the Partial Least Squares Structural Equation Model produces more trustworthy parametric findings than other statistical methods. As a result, it is highly recommended for use in investigations of the early development of a theory (Chin, 1998; Chin et al., 2003).
Seventy-two (46.5%) of the 155 responders are male, while 85 (51.5%) are female (53.5 percent). There are a total of 84 responses, with the largest proportion (36%) falling between the ages of 31 and 40. (54.2 percent). With 140 responses, it is safe to assume that the majority of those who participated are of Malay (90.3 percent). For marital status, 126 respondents (81.3%) are married, while 29 respondents (18.7%) are single. Next is the question regarding the respondent's education level. The highest number of respondents are with a bachelor's degree, with a total of 65 respondents (41.9%). Questions regarding company type and age are also asked, where most of the respondents are from private companies (112 respondents), with a company age of more than ten years (87 respondents).
Findings
Model reliability and validity
The findings of the reliability and validity analyses, as well as the factor loadings, for each construct in the study, are summarised in Table 1. Every composite reliability was greater than 0.7, and every AVE was above than the 0.5 threshold over which results can be considered reliable (Fornell & Larcker, 1981; Gefen et al., 2000), hence the data met the requirements for scholarly research (Fornell & Larcker, 1981; Gefen et al., 2000; Nunnally & Bernstein, 1994). The convergent validity and reliability of the measurement model were therefore confirmed to be satisfactory. Both convergent and discriminant validity analyses were performed in this study. Factor loadings > 0.5, AVE > 0.5, and dependability > 0.7 are required by Fornell and Larcker (1981). All of the constructs in Table 1 have convergent validity. The next technique we use to assess the level of dissimilarity between variables is called discriminant validity. The multitrait-multimethod matrix is related to the heterotrait-monotrait ratio (HTMT), as demonstrated by Henseler et al. (2015). Once the HTMT score drops below 0.90, it can be said to have excellent discriminant validity (Gold et al., 2001). The HTMT value in Table 2 is below 0.90 for all constructs, discriminant validity has been established.
Hypothesis testing
The t-statistics and assumptions were calculated using a bootstrapping technique using 1000 simulated data points (Hair et al., 2019). Each and every testable hypothesis is shown to have strong support in Table 3 below. We analysed the variance inflation factor to look for signs of multicollinearity (VIF). All the VIFs in the regression models came in at less than 2.3, which is below the crucial threshold suggested by (Hair et al., 2019). Thereby, multicollinearity was not serious (O’brien, 2007). multicollinearity was not a major problem. A number of methods, including the coefficient of determination, were used to analyse the structural model (R2). Values of 0.25%, 0.50%, and 0.70% are commonly used to represent low, moderate, and high levels of explanatory power. If the value is 0.418, then the model accounts for 41.8% of the variance in organisational performance. Therefore, the explanatory power is relatively modest. Table 3 shows that the required minimum R2 value was met by all of the structures there.
Discussion and Conclusions
This article aims to bridge the digital barrier between enterprises to help SMEs succeed in today's information-driven economy. Since the COVID-19 pandemic hit, digitalisation has moved at a breakneck pace, but SMEs are at risk of being left behind. To a large extent, the government and its policies will determine how rapidly Malaysia's digital economy expands. All of the above assumptions are supported by the data shown above. Through bootstrapping analysis, there is a statistically significant relationship between social media marketing and the efficiency of an organisation (t = 1.766, p 0.05). Marketing through social media is beneficial for us since it allows our staff to interact with consumers, even if they are in a different time zone or country. With the use of social media, businesses may have more immediate and personal connections with their end consumers than was before possible, at a low cost and with much greater efficiency than with traditional forms of communication.
Hypothesis two is supported by the data (t = 2.076, p 0.01): social media considerably impacts customer relations and organisational performance. This shows that in order to connect with the customer, organisations need to make sure that they can reach the customers on their preferred platforms. As more and more consumers choose to use social media for their communication needs, businesses of all stripes will need to increase their social customer care efforts to meet rising demand. When issues arise in customer service, using social media to communicate with customers and find solutions may improve efficiency. Organisations that are responsive to client concerns made on social media platforms timely may benefit from this kind of connection and grow their customer base.
To conclude, the results support the third hypothesis, which states that there is a positive relationship between the dissemination of information via social media and the success of businesses (t-value=4.494, p=0.01). The results demonstrate that expanding different ITs brings numerous data advantages to businesses. This is because social media greatly influences the availability of information, allowing businesses to learn more about their potential clients by participating in online discussions. Also, via social media, they may learn more about their rivals and the industry as a whole with less effort.
It is clear that companies are making substantial investments in these tools, but ultimately what matters most is how they utilise social media. If social media is to be used effectively in businesses, several factors should influence and encourage its adoption. Therefore, this research aims to explore the variables that affect the extent to which businesses utilise social media for purposes such as advertising, customer service, and information dissemination.
The work has certain caveats that suggest promising new directions for investigation. This restriction does not invalidate the study's findings but may provide a direction for more investigation. The study's usage of variables is a possible weakness. Organisational performance may also be affected by factors such as technology context, organisational context, and environmental context, none of which have been taken into account in this investigation. Potentially useful in the future for gauging organisational success, the factors need further study.
Organisations just beginning to utilise social media for promotional or marketing objectives might benefit from the study's results by learning how to expand their use of the medium, just as future social media adopters can use the findings to inform their own strategies.
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Toolib, S. N., Wan Hanafi, W. N., Mohamad, M., & Mohd Dzurkarnain, N. L. N. (2023). Impact of Social Media Usage on Organisation Performance: Lesson From Covid-19 Pandemic. In A. H. Jaaffar, S. Buniamin, N. R. A. Rahman, N. S. Othman, N. Mohammad, S. Kasavan, N. E. A. B. Mohamad, Z. M. Saad, F. A. Ghani, & N. I. N. Redzuan (Eds.), Accelerating Transformation towards Sustainable and Resilient Business: Lessons Learned from the COVID-19 Crisis, vol 1. European Proceedings of Finance and Economics (pp. 638-647). European Publisher. https://doi.org/10.15405/epfe.23081.57