Antecedents of Early Adoption and Use of Social Media Networks for Stakeholder Communications: Evidence from Franchising*

The motivation for this paper arises from the importance of stakeholder communications for firms and the rapid emergence of social media networks as a means of such communications. Our purpose is to understand the early adoption and use of social media networks for such communications by firms at a point in time when such networks were relatively new. Specifically, we examine the adoption and use of Facebook (the most popular social networking site) by franchisors and focus on two questions: (1) antecedents of early adoption of Facebook by franchisors, mainly in terms of system age, size, organizational form, advertising royalty rates, industry, and internationalization; and (2) variations in use of Facebook (in terms of content) by these franchisors and the way these variations relate to the characteristics of the franchisors and their systems. Our empirical study covers 408 franchisors doing business in the French market. The analysis approach is quantitative, with the use of t-tests, Pearson chi-square tests, and a logistic regression model as well as a content analysis of the franchisors' Facebook pages. At the time we collected data, we found that only 21.3 percent of the franchisors had a presence on Facebook. Several characteristics of the system (e.g., percentage of company-owned outlets, advertising royalty rates, and industry) influence whether a franchisor has a presence on Facebook as well as the nature of content on the relevant Facebook page. We draw on organizational theories and institutional economic theories to offer potential explanations for our preliminary investigation. These research findings can help the franchisors better understand the role of social media networks for stakeholder communications. In particular, our results offer insights for smaller franchisors, in terms of when and how they adopt communication innovations to compete against larger firms.