From time immemorial, since the period of ancient commerce, people have wondered how entrepreneurial efforts can succeed. This question is just as relevant in today’s day and age. The conventional way to understand the key ingredients of success in the entrepreneurial and business world is taking up an educational degree in Business Management, where knowledge about business sectors, equity and debt, scalable management operations, regulatory and compliance issues are mastered theoretically. While knowledge in these areas is important, one wonders if it is enough. Especially, given the dynamic times we live in.

In recent years, the emergence of “social networking” has turned on its head the use of IT in the social world; it has changed traditional modes of communication and continues to evolve.

Interestingly, what makes this change important is the sheer scale of it; that, it has affected not just you or me, or a certain demographic or a part of the world, but almost the whole world itself. social networking has transformed virtual and real relationships.

Social networking sites like Facebook and Twitter have played a crucial role in transforming our understanding of communities and society, in subtle, yet interesting ways. Social connections on the web now take unprecedented shapes and yield interesting outcomes. Specialized sites like LinkedIn that encourage professional connections and allow professionals to form peer communities on the web register millions of users too.

For those who were cynical about the prospect of these sites or what they could achieve in terms of user figures and dollars, the numbers speak for themselves. With many of them lining up for their IPO, valuations have been widely reported in the media. For instance, Twitter was valued at 7 billion US dollars – almost 50 times it 2010 revenue. This year LinkedIn stocks started trading on NYSE and the company was valued at 3 billion dollars, a whopping 200 times its revenue last year. Many research agencies have a positive outlook about the growth of social networking. IDC, for instance, projects the rise of the social networking market from 630 million US dollars in 2011 to 1.86 billion US dollars in 2014.

In a new social world where the sector dominates, businesses will have to stake their place in the future by planning and executing appropriate strategies. Thus, a mix of social networking tools with business related software is an evolving trend in today’s corporate world. Although, small levels of usage, of business social networking, have been reported in the past. For instance, Spark, a basic chat system, was used by many organizations. However, the level at which social tools will be used by businesses is set to sky rocket in the next few years, with far more capabilities thrown into the mix.

Among the many uses of social networking functionalities in the business world is its potential to flatten corporate hierarchical structures. Over the last decade or so, despite much talk about flattening of structures, hierarchy has played a crucial role in the business world. While leadership-oriented business structures will continue to exist, usage of social tools may shift these hierarchical structures to more flat styles of functioning. This happens, because social networking sites are seen as foras where people interact with each other as equals and this behavior may continue to thrive in virtual corporate networking spaces. Usually, most top managers do not know what the majority of their employees are actually feeling or talented employees at lower levels may not always get a chance to share their ideas with the senior management. Such scenarios may change on corporate social networking sites, as feedback on management decisions or reviews of performances maybe more openly discussed.

One of the other benefits of social networking within organizations is a sense of intimacy, as interactions become more regular and open on these virtual fora. A culture of conversation, even if it is online, breeds trust. However, it could also be possible, that this new openness could lead to distrust in the long run, as company honchos are faced with too much information about their employees and negative opinion that may exist within sections of the organization, as it often tends to. Being aware of every little negative perception could not be good either.

In a paper that talks about the benefits of social networking in organizational structures, Kendall Whitehouse, director or new media at Wharton, says, “(social networking) … can serve to break down the dreaded siloed organization by weakening barriers between departments and creating a venue for employees to trade insights and offer feedback. When companies grow, information and knowledge is more difficult to surface because “people are too busy and are focused on their own outcomes. The revolutionary platforms like Facebook and Twitter began as consumer products focused on individuals. That kind of information interchange would be hugely valuable for businesses. How can we bring some of the energy and information exchange found in the personal sphere to the enterprise?”

However, there are causes for concern with the growing deployment of social networking within organizations. For instance, privacy and security is a real issue even in personal social networking sites. This is even more so in corporate environments, especially security issues.

What’s more, in excessively open structures, confidentiality could be hurt too. Confidential areas like time-sensitive launches, pricing, competitor information and so on, have skeptics raising concerns. Especially, when rigorous confidentiality standards are followed; for instance, International Standards Organization (ISO) 27001 series of standards on information security, which applies to some sectors.

So far, we’ve seen how people operate Facebook and Twitter outside of their professional capacities. It’ll be interesting to see how specialized, organizational social networking sites will function and how it’ll affect corporate structures, confidentiality policies and so on. Experts are wondering if existing online networking sites will create specialized services and products or traditional business IT providers like Microsoft or Oracle will step up, since they already offer a whole gamut of professional and corporate software solutions, and are aware of organizational security needs and other functionalities.

One thing’s for certain though, the way business work, the way people within organizations function and other key aspects of corporate structures are in for a sea change.

Source: DailyMedia

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