Understanding the Effect of Social Networks on Organisational Success

Social networking (SN) is widely believed to offer business and organisations a powerful means to improve communication with customers, internal processes and overall performance. Unfortunately, there is only limited and anecdotal evidence about the way SN can durably influence various components and functions within an organisation. Thus, this paper aims to develop a conceptual model of influence based on a comprehensive literature review. Our model states that organisational success strongly depends upon socialisation and collaboration amongst individuals within an organisation while individual successes combine to form a permanent adaptation capability within the organisation. The adaptation capability itself proceeds to organisational success through knowledge transfer and sharing of a wide range of competencies that can respond to the changing environment. Based on these premises, a recursive impact model (without feedback effect) is proposed. Then, this model is extended to a non-recursive impact model to understand feedback effects of key variables on SN and organisational performance. The recursive and non-recursive models contribute to a better understanding of the effect of SN on organisational success. This understanding may give decision-makers new insights into an effective use of SN as part of a customer-centric service strategy. Therefore, the contribution of this paper is two-fold: (i) it demonstrates a better understanding of SN from the perspective of organisational performance; and (ii) it models an impact relationship between SN and organisational performance through knowledge management and organisational learning considered with and without feedback effect.