STAKEHOLDER INTELLIGENCE ON SOCIAL MEDIA
by
Kasper Brødbæk Christensen
Advisor: Lars Haahr
Cand. IT
IT, Kommunikation og Organisation
Aarhus School of Business
01/08-2012
Attached to the thesis is a dataset, which can be downloaded through the following link:
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Table of contents
0. Abstract
1. Introduction
1.1. Problem Statement
2. Problem Area
2.1. Discussion: Community or Influence?
3. More ideas lead to a better end-product: A Collective Intelligence perspective
3.1. Discussion: Recapitulation
4. Method and Discussion
5. Stakeholder Engagement as a Collective Intelligence system
6. Text Mining to extract information from social media
6.1. Text Mining Basics
6.2. Preparing data for Text Mining
6.3. Categorization of documents
6.4. Clustering of documents
6.5. Text Mining for stakeholder opinion
7. Enter Twitter, “Instantly connect to what’s most important to you.”
7.1. Twitter as a Collective Intelligence System
8. Stakeholder Intelligence on Twitter
9. The case of a Communications Manager at Novo Nordisk
9.1. CSR-Communication on Twitter
9.2. Establishing a business case (domain)
9.3. Selection of stakeholders (balance diversity and expertise)
9.4. Initial analysis of information quality
10. Evaluation of results and model
11. Conclusion
12. Bibliography
12.1. Articles (Order of Appearance)
12.2. Books (Order of Appearance)
12.3. Links (Order of Appearance)
12.4. Programs Used (Order of Appearance)
0. Abstract
In this thesis we have through a review of theoretical perspectives analyzed the possibilities of a model for stakeholder engagement on social media. We took our outset in stakeholder theory and brought into discussion two logics of engagement, the logic of influence and community respectively. We found further inspiration for the proposed model in collective intelligence, business intelligence and text mining theory, which we discussed in relation to the two logics of engagement.Our analysis resulted in a model, where stakeholder engagements on social media could be conceptualized as the establishment of a collective intelligence-system. With this we found support for the argument that stakeholder engagement, as a discipline which seeks to listen to and learn from stakeholders, can be taken to social media. When taking this view communications from stakeholders on social media becomes information that may aid a company in daily decision-making processes. In order to obtain this information we look to the text mining discipline and here we found, given the nature of text mining and social media respectively, that it may be necessary to narrow down the purpose before applying the model. We find that properties of Twitter as a social technology may support such information-gathering activities especially well. Our case relates to the position of a Communications Manager at Novo Nordisk and the dataset applies to his position alone. Upon applying the model on the case of his work and the data we found a collective of stakeholders communicating largely about the same issues. However, we found only indications of such activity and were not able to derive from our dataset information of a quality with which we could qualify decisions. We suggest that this is attributed to the nature of the dataset and the scope of the text mining capability in this thesis more than a failure of the proposed model.
We end the thesis with a discussion of the inherent challenges related to social media and therefore also the model. We find that when engaging in social media to find information there are challenges relating to the nature of online identities, as well as the information disseminated by those online identities. Furthermore, we discuss the consequences of gathering information in such a way in relation to stakeholder engagement. We end by concluding that there are challenges left to overcome but that the model may yet be applicable.
1.Introduction
In 1979 Michael E. Porter presented a framework for analysis of factors affecting the capabilities of a company’s strategic development. Porter’s Five Forces have become a mainstay of business theory, and are thought by Porter to arise from the inherent competitiveness in a company’s industrial environment. (Porter, 1979) The relevance of such an analysis of forces impacting a companyand its strategic development persists to this day, and is perhaps more salient than ever as we have unequivocally entered into the millennium of globalization. Whether Porter had envisioned the intensely competitive nature of the twenty-first century is difficult to assess but while the concept of analyzing the forces of your environment remains relevant today, the question is if industry competition can still suffice to describe what affects companies.
The threat of external forces impacting on a company’s activities is now more than ever a reality. Globalization has brought with it an intensified threat of new entrants and substitute products (Porter, p. 141, 1979), but perhaps the most significant change to the external influences has come about with the increased focus on the ethical and moral responsibilities of companies. Corporate Social Responsibility, while not exactly a new concept, surely within recent years has seen an increased focus in both the minds of political leaders and common people.
R. Edward Freeman (1984), the Father of stakeholder theory, included the concept as a way to describe that companies carry responsibilities beyond that of accountability to shareholders. (Freeman, p. 38-40, 1984) As mentioned, today there is a much-increased focus on the responsibilities of companies and as such especially Porters “Bargaining Power of Customers” has increased dramatically. Perhaps one might rightly suggest that today a more fitting description of this force would be the “bargaining power of stakeholders”, encompassing any and all who are affected by or take interest in the activities of a given company.
“Corporate social responsibility is often looked at as an "add on" to "business as usual," and the phrase often heard from executives is "corporate social responsibility is fine, if you can afford it…Given the turbulence that business organizations are currently facing and the very nature of the external environment, as consisting of economic and socio-political forces, there is a need for conceptual schemata which analyze these forces in an integrative fashion."(Freeman, p. 40, 1984)
It should be no surprise that a company’s activity generally tends to lean towards making a profit, and by that logic it seems somewhat rational to narrow our attention one.g. opinions of shareholders. This concept of broadening the spectrum of a company’s responsibilities go back decades but today the attention and perceived importance of such dealings have no doubt increased dramatically. So what changed?The contention of many authors (Li & Bernoff, 2008; Benett, 2003; Castelló et al., Forthcoming; Scherer & Palazzo, 2011) is that the modern era of digitalization has brought about changes in the power relations between stakeholders and companies. The proliferation of digital communication and information enabled especially by the coming of Web 2.0 technologies has been seen as a threat to companies across the globe. This is not the prediction of some fortune cookie; it is the reality that surrounds us. Stakeholders today are able to gather information, analyze it, form an opinion (sometimes well-founded, sometimes not) and disseminate it in a digital space, where potentially millions of stakeholders sit in wait to consume it. Some present such opinions in the form of an opinionated blog, some as a status update on either Twitter or Facebook and some as an informative video.Facebook now has over 900 million users, Twitter over 500 million users and this is exactly what has changed, the proliferation of social media use. In 2012communication about anything and everything is running rampant, and where companies in the past may have had a say in what the newspaper printed, management of such content is todayat best an illusory concept.
Perhaps this serves as an explanation of why companies slowly but surely have adopted the use of social media. In November 2011 the McKinsey Global Institute carried out a survey asking 4.261 global executives about their adoption of social technologies and the perceived benefits gained from the adoption. They showed that of the corporations involved 72% have adopted at least one social technology into their efforts. However, only 1.949 of the respondents reported at least one measurable benefit, which may speak to the fact that obtaining benefits from efforts on social media is a difficult task. (Bughin, Byers & Chui, 2011)
The motives for companies engaging in social media are no doubt many. Some might be engaging to manage the threat of having no presence, and thereby no chance of exerting any control whatsoever, while others may be engaging to exploit the opportunities presented by the technology. In this thesis we treat the developments within the last ten years partially as a threat and partially as an opportunity. Part threat because the brand nature of companies is sensitive to information that give them a bad name and as we have outlined this is now difficult to control. Part opportunity because we believe that the correct approach to engaging in social media provides unprecedented potential for connecting with stakeholders in a way that may strengthen relationships. This is the crux of the discussions and perspectives presented in this thesis. Engaging in social media with the express purpose of connectingwithwhat stakeholders, listening to what they have to say, and from that derive which areasa company may focus on to increase value.
We take our starting point in contemporary discussions within the field of stakeholder engagement, highlighting two competing logics, the logic of influence and the logic of community. From this we derive the concepts we believe may fit when the prospect is to take stakeholder engagement to social media. We analyze the practical applicability of these perspectives and find that social media is of such nature that another supporting perspective is needed. This takes us into the field of theory related to collective intelligence, which might aid us in deriving value from social media by conceptualizing it as a place where ideas and solutions are generated each and every day. We couple these perspectives with those of stakeholder theory in order to find support for a model that in practice may leverage the use of social media as a source for information. To harvest such information we include methodology from the increasingly recognized area of text mining. In order to make an attempt at applying the model we derive we focus in on a single social technology, namely Twitter, and case material provided to us by a Communications Manager at the department for Corporate Sustainability at Novo Nordisk. In the case we analyze the capability of our model in relation to the position of this manager by applying text mining methods on 7763 tweets from 58 accounts on Twitter. We conclude the thesis by evaluation of our results and our model in order to assess whether the unified perspectives from theory may be brought into business practice. We summarize the project in our thesis in the following statement.
1.1.Problem Statement
This thesis should be seen as an attempt to unify theoretical aspirations and capabilities of stakeholder theory and collective intelligence respectively in order to conceptualize a model for bringing stakeholder engagement to social media.
2.Problem Area
While we touch on and allow inspiration to flow from many fields of study throughout the thesis (e.g. collective intelligence, social media, business intelligence, text mining and stakeholder theory), relations between people and corporations seem inseparable from the field of stakeholder engagement. As such moving toward the betterment of corporate efforts within this business discipline becomes our primary focus and the locus of our analysis.
The rising attendance on social media seems a self-perpetuating effect as people tell their friends, they tell their friends and so on. As demonstrated in a five-wave study published in 2011 the last wave where 37.600 people globally were polled showed considerable attendance on social media. 61% answered that within six months they managed a profile on a social media site, while 64% read blogs and perhaps just as exciting 75% answered that they visited company/brand websites. In sharp contrast to this, the first wave of the study four years earlier only 27% of respondents had created a profile on a social media site. (Hutton & Fosdick, 2011) This is interesting because provides some proof of the proliferation of social media use among stakeholders, while at the same time establishing that companies are within the realm of stakeholder interests online.
As such it might even seem a natural development that stakeholder engagement is moving toward initiatives on social media. However, as with any initiative the road toward implementation is paved with challenges. As presented by Castelló, Etter and Morsing (Forthcoming) in a study of a company’s assessment of the possibilities of taking stakeholder engagement to social media, two competing logics of engagement are highlighted. In this they focus heavily on the managerial and institutional challenges of communication on social media as a part of stakeholder engagement. (Castelló et al., p. 1, Fortcoming) In the context of this thesis we derive from this article perspectives in these two logics and treat them as a foundation for analysis and discussions, which may aid us in highlighting the difficulty as well as the perceived value in moving from a traditional view of engagements to one where engagements happen on social media. This will help us assess what the challenges arefrom a corporate perspective,and the discussion has served as great inspiration for our perspective. The following descriptions of the logics as they present them are a derivation of their study of a single company and we will seek to further qualify that these fit the contemporary perceptions within the field.
The logic of influence (Castelló et al., p. 15-17, Forthcoming)
-Influence: The company seeks to influence stakeholder opinion through their engagements with the purpose of preventing conflict, reducing risks and gaining knowledge from key stakeholders. E.g. a company wanting to erect a wind turbine to decrease their energy consumption costs may meet resistance from locals in the area where the turbine is to be. They may then attempt at engaging in dialogue with the locals with the purpose of reaching a compromise or solution agreeable to both parties.
-Firm centered:The company decides what is and what is not a good topic for engagement, and the selection of who to include. Not that stakeholders have no say in this but different topics are analyzed and prioritized in accordance with internal perceptions of importance.
-Contract based: The engagements are organized around hierarchical processes and rules. What this means is that the engagements are subject to internal regulation of employees, and while this is somewhat of a broad description, it stands to reason that some companies regulate at least part of what their employees can and cannot discuss in public.
-Face-to-face: The ideal and largely preferred method for engagement is described as face-to-face. The reasoning behind this is not explicitly defined but a reasonable suggestion seems to be as Ikujiro Nonaka describes it, that tacit knowledge may only be made explicit through a process of externalization.[1]
We include into our considerations the best practice descriptions delivered by the organization AccountAbility, “Since 1995, AccountAbility has been focused on “mainstreaming” sustainability into business thinking and practice. Our widely-used AA1000 standards, leading-edge research, and strategic advisory services help organisations become more accountable, responsible, and sustainable.”[2]. What is interesting about these standards is that many of the descriptions correlate directly to the concepts of the logic of influence, while at the same time presenting descriptions that seem to support arguments for the logic of community. (AccountAbility, 2011) We start by correlating AccountAbility standards to the logic of influence and then do the same when we have presented the concepts of the logic of community.
“Stakeholder engagement then is the process used by an organisation to engage relevant stakeholders for a clear purpose to achieve accepted outcomes.” (AccountAbility, p. 6, 2011)
The above citation alone may lead one to think that they argue for the logic of influence. It is about including relevant stakeholders with a clear purpose in mind to achieve only accepted outcomes. It seems plausible to suggest that this reiterates the statement that engagements are firm-centered as well as contract-based. While it is stressed that the owners of the engagement must include stakeholders in the definition of the purposethey go on to describe the importance of carefully considering who needs to be involved. (AccountAbility, p. 22-24, 2011) Describing this as a paradox may be over the top but it seems easily imaginable that if the company decides on whom to include, they are at least in part also in control of the purpose and the outcome.
The problem in relation to integrating social media into the engagements may, with these descriptions in mind, be as Dellacoras (2003) describes it that the volatility and unpredictability of the communication makes it very difficult to assess the outcome of the engagement. This seems a given due to the sheer volume of communication happening daily.A company might then have a very clear purpose when engaging on social media but how would one predict the outcome when anyone can join the conversation?We return to this discussion in section 2.1.
The logic of community
(Castelló et al., p. 17-18, Forthcoming)
-Collective interest:The company seeks to engage in dialogue on social media, encouraging a broader spectrum of stakeholders to participate in conversations and thereby enhancing inclusivity.
-Topic centered: As inclusivity and dialogue increases and more stakeholders join the conversation controlling the topic of each engagement becomes an arduous task. As such the logic of community represents an engagement logic, which allows the topic for discussion to be spawned by stakeholder interest and not company prioritization.
-Participation:Not only does it encourage increased participation among stakeholders but also among employees. They argue that means should be established for each member of a company to participate to increase visibility.
-Network:When including more and more stakeholders into engagement efforts recognizing that this enables multiple conversations across space and time boundaries.
Most interesting to us here will be that it seems the perception of an engagement now focuses on including as many stakeholders as possible, and letting them decide what is an interesting topic of discussion. Li and Bernoff (2008) speak to the same issues and although the angle is different the message is seemingly the same and quite clear: