Social Media as a Complementary Resource for Organizations

Abstract

Some assets exist entirely outside the organization's boundaries and as such are not considered resources of the organization in the narrow sense. We argue that to the extent they can be brought within partial control of the organization, these assets can function as resources or resource complements for the organization. One such resource is the community that develops around an organization or its products on social media. We test the value of social media communities to organizations using follower communities of television shows on Twitter and percent household viewership as a performance measure. Controlling for general interest in a show and possible bandwagon effects, we show that larger social media communities are associated with better performance. The effect is stronger for niche products. Among niche products, the relationship is stronger at lower levels of initial followers, whereas for non-niche products the effect is stronger at higher levels.

Keywords: social media, platform complementors, resource based view, strategic openness, digital platforms