Q11-9 How Do Businesses Manage the Risks of Social Media?

Question 1

Why is social media risky for businesses?

Answer 1

Social media exposes businesses to risks such as management challenges, employee communication issues, and user-generated content.

Question 2

What are the three significant management risks associated with social media?

Answer 2

Underestimation of labor costs.

Absence of dependable return on investment (ROI).

Customer privacy concerns.

Question 3

Why is estimating labor costs for social media difficult?

Answer 3

Social media technologies are new, and there are few established guidelines to estimate the time required for effective use.

Question 4

What is ROI, and how is it calculated?

Answer 4

ROI (Return on Investment) is the percentage of return earned on an investment. It is calculated as:
ROI = (Return / Investment) × 100%.

Question 5

Why is it challenging to measure ROI for social media ventures?

Answer 5

While social media metrics like likes and retweets are easy to track, their relationship to financial outcomes is often unclear, imprecise, or inconsistent.

Question 6

What is customer privacy, and why is it a risk in social media?

Answer 6

Customer privacy involves the proper collection and processing of personal data.

Misuse of personal data can erode trust, posing a significant risk for social media usage.

Question 7

What is one common example of employee communication risks in social media?

Answer 7

Professional athletes posting embarrassing or inappropriate tweets, which can lead to public relations issues for sports franchises.

Question 8

How can organizations limit employee communication risks on social media?

Answer 8

By developing and publicizing a social media policy that outlines employees’ rights and responsibilities.

Question 9

What is a social media policy?

Answer 9

A statement that sets out employees’ rights and responsibilities, helping businesses control and limit behavior in a medium with few inherent controls.

Question 10

What are the three key attributes of a good social media policy?

Answer 10

Disclose: Be timely, transparent, truthful, and yourself.

Protect: Don’t tell secrets, slam competitors, or overshare.

Use Common Sense: Add value, stay calm, and be quick to correct mistakes.

Question 11

What are the four guidelines under the “Disclose” attribute of a social media policy?

Answer 11

Be timely by specifying a response time goal.

Be transparent by using your real name and employer.

Be truthful and disclose any vested interests.

Be yourself and stick to your expertise.

Question 12

What are the three rules under the “Protect” attribute of a social media policy?

Answer 12

Don’t tell secrets.

Don’t slam the competition.

Don’t overshare.

Question 13

What are the three best practices under “Use Common Sense” in a social media policy?

Answer 13

Add value by making contributions worthwhile.

Keep it cool and avoid inflaming or responding to every criticism.

Be “flawsome” by being upfront and quick with corrections.

Question 14

Why is setting a target response time important in social media policies?

Answer 14

Customers expect timely responses. Over half of Twitter users expect a reply within an hour for customer service issues, and over half of Facebook users expect a response within 24 hours.

Question 15

What are user-generated content risks in social media?

Answer 15

User-generated content can be inappropriate, excessively negative, or problematic, such as troll behavior, negative reviews, or false statements.

Question 16

What are the major sources of user-generated content problems?

Answer 16

Junk and crackpot contributions.

Erroneous contributions (false statements or fake news).

Unfavorable reviews.

Mutinous movements.

Question 17

What are “junk and crackpot contributions”?

Answer 17

Content focused on unrelated or extreme topics (e.g., UFOs, conspiracy theories). Such material requires monitoring and immediate removal.

Question 18

How should businesses handle “erroneous contributions”?

Answer 18

Differentiate between innocent errors and serious false statements, using judgment and experience to address misinformation.

Question 19

Why are unfavorable reviews a significant risk for organizations?

Answer 19

They highlight disadvantages of a product or service, which customers evaluate to determine importance for their needs.

Question 20

What is a mutinous movement in social media?

Answer 20

When prosumers (producer-consumers) revolt and misuse an organization’s site in damaging ways, such as hijacking a Facebook page to build public support against the organization.

Question 21

What is the first task in managing user-generated content risks?

Answer 21

Identifying potential problem sources and monitoring sites for problematic content.

Question 22

What should organizations do once problematic content is identified?

Answer 22

Develop a clear plan to address and respond to the content appropriately.

Question 23

What are the three possible actions an organization can take when dealing with problematic content?

Answer 23

Leave it.
Respond to it.
Delete it.

Question 24

When should problematic content be left alone?

Answer 24

If it represents reasonable criticism of the organization’s products or services, leaving it alone shows the site allows legitimate user content, not just promotional material.

Question 25

What are the risks of responding to problematic content?

Answer 25

If the response is patronizing or insulting, it can enrage the user community and generate backlash.

Responding should be done carefully and only in specific cases.

Question 26

When is it appropriate to respond to problematic content?

Answer 26

When the problematic content has prompted the organization to do something positive.

Responses should be reasonable and non-defensive.

Question 27

What is the danger of continuing to respond to unreasonable content?

Answer 27

Continued responses can escalate the issue.

As the saying goes, “Never wrestle with a pig; you’ll get dirty and only the pig will enjoy it.”

Question 28

When should content be deleted?

Answer 28

Only when the content is inappropriate, contributed by trolls or crackpots, irrelevant to the site, or obscene.

Deleting legitimate negative comments should be avoided.

Question 29

Why is deleting legitimate negative comments risky?

Answer 29

It can lead to strong user backlash and make the organization appear arrogant or heavy-handed.