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Michael J Matthews

Samuel H Matthews

Dawei (David) Wang

Thomas K Kelemen

January 23rd, 2023

The benefits and pitfalls of using social media when you’re a business leader

0 comments | 12 shares

Estimated reading time: 3 minutes

Michael J Matthews

Samuel H Matthews

Dawei (David) Wang

Thomas K Kelemen

January 23rd, 2023

The benefits and pitfalls of using social media when you’re a business leader

0 comments | 12 shares

Estimated reading time: 3 minutes

How to approach the social media environment is a vexing issue for leaders and managers. Having a social media presence can bring as many benefits as pitfalls. A big question remains of how personally leaders should act on these platforms. Michael Matthews, Samuel Matthews, Dawei (David) Wang, and Thomas Kelemen conducted a literature review and encourage leaders to reflect on how their use of social media compares with research findings, so as to make necessary course corrections and use the tool for their gain. 


 

The emergence of social media has ushered in a new way to connect with families and friends. At first, platforms such as Facebook, Twitter, Instagram, and others appeared innocent. But they quickly morphed into the tech giants we know today. In fact, if Facebook was a country, it would be the largest in the world at 2.5+ billion monthly active members. Today, social media is far more than just a tool to stay in touch. It is an online arena for election fundraising and political propaganda. It is a place for people around the world to play games, get the news, and follow their favourite pets. However, sites are constantly getting into mischief with headlines ranging from blackouts and whistleblowing to blocked accounts and content restrictions.

Given that 69% of people report using Facebook and 40% report using Instagram, it is vital to understand how leaders and followers interact on social media. As such, we systematically reviewed 161 academic articles on this topic. This research examined a broad range of leaders—from political to religious, frontline managers to corporate CEOs, across a variety of national and ethnic groups. Interestingly, over two-thirds of the articles in our review focused on how leaders use Twitter even though more than 3 times as many people use Facebook than Twitter. With these observations as a backdrop, we highlight three key themes that leaders and managers should keep in mind as they consider their use of social media based on our analysis of this literature.

Leaders who use social media are seen more favourably

Although companies often have dedicated corporate accounts on social media platforms (e.g., Wendy’s), many leaders also have their own personal presence, including Elon Musk (Tesla), Doug McMillion (Walmart), and Lynn Good (Duke Energy). How are these, and similar leaders, viewed? Our study shows that leaders who use social media are perceived more positively, and research suggests that CEOs who use social media are seen as more responsive by employees. Indeed, interacting with a leader on social media helps individuals view the executive as more authentic and approachable.

Further, research indicates that a social media presence can help “personalise” leaders, which can help them garner support from employees, board members, and investors. For example, if the executive has a Twitter account, this increases a firm’s M&A announcement returns by 8.3%. Further, in a randomised experiment (Elliot, Grant, and Hodge, 2018), participants were 17-30% more willing to invest in firms whose CEO announced negative earnings news on a personal Twitter account than in firms whose leaders announced the same news on a corporate account. This same research indicated a higher percentage of participants exposed to negative news via the CEO’s Twitter account were more likely to discount the bad news as a one-time event (46%) than if the news came from a website or a corporate account (~10%). Given that 48% of S&P 500 and FTSE 350 CEOs have social media accounts, but only one in four have posted within the last year, leaders should consider the potential advantages of increasing their engagement.

Social media can also help corporate leaders address issues quickly when widespread apologies are needed. These apologies can help minimise negative sentiment due to company or employee misconduct. For instance, after the CEO of Domino’s apologised on social media for inappropriate behaviour displayed by two of his employees, the level of negative sentiment regarding the company dropped from 80% to 52% on Twitter.

Observation: Adopting a personalised presence on social media platforms can benefit leaders and their organisations.

The implications of message content are nuanced

As described, it can be beneficial for executives to actively engage on social media. It often fuels career success—executives who engage more in personal branding on social media are 94% more likely to be hired, compared to an equally qualified candidate. But what type of leader do followers like on social media? For one, it pays to be charismatic. Leaders who express charisma that is a standard deviation higher than their counterparts are about 65% more likely to have their message retweeted. Another study found that leaders are viewed more favourably when they often interact with followers but still come across in a professional manner. Also, research has found that leaders who display responsiveness and assertiveness on social media are seen by their followers as friends and role models, which makes those followers more trusting of and satisfied with the company.

But what about displaying narcissism? Prior findings on this particular trait have been mixed. One study (Gruda, McCleskey, Karanatsiou, and Vakalic, 2017) found that when leaders display narcissism on Twitter, it can lead to an increased chance of corporate fundraising success. However, another study (Grant, Hodge, and Sinha, 2018) found that investors are less willing to invest in a company when the CEO engages in bragging on Twitter, and the reactions to humblebragging were even worse.

However, it is notable that male leaders and CEOs have largely been the focus of this research. The use of social media might present a conundrum for female leaders. Should they exude confidence and potentially be penalised for violating gender norms? Or should they demonstrate humility and be penalised for not being seen as a “strong” leader? To date, limited research suggests that female entrepreneurs produce idealised feminine identities on social media, suggesting that societal norms complicate the media landscape for women in leadership roles. Also, experimental research (see Eun-Ju Lee, Soo Youn Oh, Jihye Lee, and Hyun Suk Kim, 2018) on political leaders found that individuals were more likely to vote for a male candidate when he made Facebook or Twitter posts about his personal life but less likely to vote for a female candidate when she made Facebook or Twitter posts about her personal life. This observation parallels other research regarding humble leadership and gender effects.

Observation: The reception of social media content is nuanced, and leaders should be aware of the situational context in which they are communicating.  

Setting boundaries in using social media to connect with employees

Even though stakeholders generally appreciate leaders with a social media presence, the question remains of how “personal” the social media relationship should become. For example, should leaders interact more distantly via their Twitter feeds, or should they use social media to connect with employees via personalised connections, such as becoming “friends” and direct messaging? The research here suggests that employees want some space from their leaders, and most people view a friend request from a supervisor as a breach of boundaries. For instance, in an analysis of online advice about this topic, nearly 50% of bloggers recommended ignoring friend requests from a supervisor.

Observation: Aside from interactions on LinkedIn, leaders should be mindful that trying to connect with employees through social media can be seen by employees as too intrusive.

How to approach the social media environment is a vexing issue for leaders and managers, many of whom feel ill-equipped for the challenge. As social media tools continue to permeate the workplace, many organisations and employees have been forced to re-evaluate their use of these applications. Besides avoiding insensitive comments, using personal information on social media for hiring, or inappropriately disclosing financial plans, specific strategies for social media use are not always clear. But what we have learned is that there are benefits that accrue to leaders who use social media as long as they are mindful of how they use it. We encourage leaders to reflect on how their use of social media compares with the research findings and to make necessary course corrections that may better enable them to use this tool for their gain.

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Notes:

  • This blog post represents the views of its author(s), not the position of LSE Business Review or the London School of Economics.
  • Featured image by Marten Bjork on Unsplash
  • When you leave a comment, you’re agreeing to our Comment Policy.

About the author

Michael J Matthews

Michael Matthews is a PhD student at the University of Oklahoma.

Samuel H Matthews

Samuel H Matthews is an Assistant Professor of Management at Gonzaga University.

Dawei (David) Wang

Dawei (David) Wang is an assistant professor at Missouri University of Science and Technology.

Thomas K Kelemen

Thomas K Kelemen is an Assistant Professor at Kansas State University's College of Business Administration.

Posted In: Leadership | Management

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