dc.description.abstract | Social media has pervaded and revolutionalised how people communicate and interact; it
offers an invaluable tool to businesses to get their products out, conduct market research
and engage various stakeholders in ways not witnessed before. It acts like a local search
engine within the social network; users conduct searches such as "Pizza places in
Nairobi's CBD that my friends like" By searching through SM the experience is
completely different. Users no longer mindlessly pick on a restaurant for instance in the
hope that it will be great; they are able to see what places their friends like. Businesses
must be cognizant of these developments and align themselves to these realities. The
study hoped to profile the effect of social media activity on the financial performance of
firms listed in the Nairobi Securities Exchange. This was done by relating social media
activity such as likes, shares, comments, following, tweets, and re-tweets, to financial
performance in a model. The findings were largely inconclusive a fact attributable to the
experimental stage SM is at in most firms; a measly 5.9% of performance would be
attributed to SM.
The study found that likes, shares, tweets, retweets, favourites etc do not quite measure
social media activity and would therefore not be a robust basis for analysis. Some tools
have been advanced to this end including Klout, Kred and Peer index all of which are
largely in experimental phases; future studies may thus gain more insight by trying these
and other tools that come up every day with the increased adoption and spread of social
media. The study recommends that firms reconsider what social media will mean to their
value proposition with attention being had to customer relationship management, access
to wider markets, market research, responsiveness to customers and brand building. As
regards policy, interconnectivity comes with privacy concerns, cyber crimes, online
bullying and patent & property rights enforcement and infringement; a purely legal
approach while very necessary can't achieve much and there's need therefore for a multipronged
approach that borrows from social psychology, business and education amongst
others. | en_US |