Research Paper: Relationships Between SMES Management in the GCC and Social Media

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SOCIAL MEDIA REFORMS: THE SMEs Management IN THE GCC

Social Media Reforms the SMEs Management in the GCC

Growing consensus among academic and business communities reveals that forming, managing and nurturing social media are very critical to the success of SMEs (small medium enterprises) (Ngugi et al., 2010; Jones and Holt, 2008). Social media is a technology system used to connect, collaborate and create business and personal profiles. In a business community, social media assist SMEs to share opinions, information, and activities. Using this strategy, businesses are able to expose their business activities to consumers thereby gaining market advantages. (Peltier, & Naidu, 2012). In other word, social media represents the interactive method that formal organizations employ to get in contact and collaborate with distributors, consumers, suppliers, and consultants. Through interactive social networks platform, SMEs are in a better position to develop effective strategies to gain market advantages in an ever-changing competitive global market landscape. Typically, social media platform has revolutionized a method business community communicates among one another. With a social media network, information dissemination is no more solely in the hand of businesses; consumer can now respond to the environmental demand and speak freely to the global community. Essentially, social media now become a source of information networking opportunities to access new markets. Moreover, social media assists SMEs to reduce transactional costs, access new market and improve communication platforms. (Abid, Rahim & Scheepers, 2011).

In a business competitive environment, the success of small businesses is a good customer relation, however, trust is very critical to build good customer relations, and consumers place a greater trust on information from per group friends and other consumers. Social media has become an avenue where consumer, friends and peer group share information about values that businesses deliver to consumers. The Facebook, Twitter, and YouTube are the examples of social media and SMEs globally are taking the advantages delivered by the social media to compete effectively with larger global corporations. Despite the benefits that social media deliver to SMEs in the United States, the UK and other western countries, the questions are raised whether SMEs in the GCC (Gulf Cooperation Council) countries are taking the advantages of social media network.

The study generates the research problems and collect data from different academic literatures to address the problems and answer the research questions.

Problems of Study

GCC states are the oil rich countries that include Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, and the United Arab Emirates. (Indrupati, & Henari, 2012). Presently, the GCC supplies one third of the U.S. crude oil that worth approximately $500 billon. (GICWED, 2013). In the GCC region, the presence of social media have greatly altered the corporate brand landscape because many of the top SMEs in the region have signifies their presence on the top three social media sites such as Facebook, Twitter and YouTube.(Al Jenaibi, 2013). Within the GCC regions, the Facebook is the most popular choice with approximately 72% usage, followed by Twitter, 27% usage and Youtube 1%. Researchers have provided extensive literatures on the relationship between social media and the SMEs management in the western countries (Ngugi, Johnsen, and Erde'lyi, 2010); however, little is known about the relationships between social media and SME's management in the GCC countries. Moreover, there is no comprehensive data available on the relationships between social media and SMEs in the GCC states. Peltier et al. (2012) provide a comprehensive research on the relationships between social media and SMEs; however, their research mainly focuses on the SMEs in advances countries. Razak, & Marimuthu, (2012) explores the extent SMEs have been using the Facebook to generate value, however, the authors only focus on the western and Asian countries and there is no mention of Arab countries. Scarcity of the research between social media and SMEs management in the GCC countries generate research problems, which this study attempt to address. This study formulates research objective to enhance a greater understanding between social media and SME in the GCC countries.

Objectives

To investigate the relationships between Social Media and the SMEs Management in the GCC countries.

Important of Study (Value / Originality)

This study provides several contributions. First, the study will enhance a greater understanding of academic communities on the importance of social media to the market advantages of SMEs in the GCC region. Many SMEs in the United States, the UK and other western countries are taken the advantages of social media platform to compete effectively with large corporations to achieve market advantages. However, SMEs in the GCC states are still ignorant of the importance of social media to business advantages. The findings of the study will make the SMEs globally to understand the importance of SMEs for their businesses.

Moreover, the paper will enhance a greater understanding of the academic community on the significant relationship between Facebook, Twitter, Youtube and the SMEs Management in the GCC. Previous studies generally focus their researches on the relationships between social media and SMEs in advanced country. This study fills the gap created with paucity of research on the significant relationship between Facebook, Twitter, Youtube and the SMEs Management in the GCC region. Moreover, the study will build the knowledge of the general community and prospective business people on the relationships between social media and SMEs management in the GCC states.

Research Questions

The gap in the literatures on the relationships between social media and SMEs in GCC states emerges the following research questions:

1. How do social media such as Facebook, Twitter and Youtube enhance business advantages of the SMEs in the GCC states?

2. Does the SMEs in the GCCs are taking the advantages of social media opportunities to build their market advantages?

3. Is there a significant relationship between SMEs in GCC states and social media such as facebook, Twitter and Youtube?

Literature Review

The growth of social media reflects age-old social needs of human where men are required to connect and communicate with one another. However, men have taken the advantages of the recent development of information technology by using social media to reach large number of customers. Typically, SMEs globally are taking the advantages of the growth of social networking channel such as Facebook, Twitter and Youtube to reach their customers. Indrupati, & Henari, (2012) argue that if SMEs are to effectively reach their customers, they must do so by going through social media. Thus, the growth of online social media has assisted businesses to effectively reach their customers. Formerly, businesses use the traditional media vehicles such as newspapers, television and radio to reach customers. Presently, businesses use online social media to reach customer, and businesses cannot ignore the highly interactive nature of social media if they intend to reach potential customers. At presently Facebook top the social media vehicle with approximately 585.9 Million users at the end of 2010. However, Facebook has 7 Million users from GCC states.

(Ramady, 2010, Indrupati, & Henari, 2012)

Peltier et al. (2012) provide the theoretical framework to reveal the relationship between social media networks and business organizations. The authors claim that social media is built on the principle of creating assets for business organizations. The social network theory argues that social capital assists organizations to access knowledge, information, resources as well as financing. Casson and Della Giusta, (2007) point out that social media is communication network that assist organizations and individual to receive support in form of knowledge and business contacts. Essentially, social media assist organizations to have access to resources not possessed internally in order to achieve economic exchange. Anderson and Jack (2002) point out that social media assist organizations to achieve economic performances because large pool of people engaging in social interaction. Typically, social media facilitate interactions among people, organizations and institutions. Scot (2007) identifies social media as a social platform that allows transformation of electronic information. The social media allows organizations to manage information according to their requirements and preferences. The definition of social media reveals that they are human-machine platform having power to assist information transfer.

While the SMEs in the advanced countries have extensively used social media vehicle to build market advantages, however, the current usage of SMEs is still at low level in the GCC states. Al Jenaib, (2013) argues that corporate organizations in the GCCs states are registering their presence in the top social media sites such Facebook, Twitter and YouTube. However, Al Jenaib, (2013) point out that social media usage is impressive in the GCC region between 2009 and 2010; 5.5 million users are subscribing to twitter revealing 135.6% annual growth. Within the GCC states, the presence of social media has altered the information landscape and despite the rapid usage of social media in the region, the governments continue to introduce regulations to censor popular sites such as Facebook. Typically, online privacy is an important and sensitive issue in the Arab world, and Facebook and Youtube allow people to display anything including women exposing their body. In the GCC states, the Sharia law forbids people watching these types… [END OF PREVIEW]

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