Public Relations Theory COMM 518-01 Yvonne Najera Case Study Research Proposal

A look at Social Capital and its Relationship to ROI in Media Relations within a Corporate Setting

Abstract This proposed study is to look at the quality of Social Capital created by social media and how important it may or may not be to the corporate structure. Although social capital is a relatively new theory, and refers to a sociological and economic concept that has been around since before the boom of the Internet, social capital is now being used more and more in reference to social media. It has been studied to ascertain whether it has economic or non-economic benefits to a company when it comes to Return on Investment (ROI) through building relationships. Introduction Social capital refers to social relationships that have the capacity to enhance the achievement of one's goals. Social relationships are viewed as investments, whether the investment is conscious or unconscious. The fundamental insight of the idea of social capital is that the social resources available through social networks influence life chances (Glanville, 2009). The theoretical roots of social capital can be traced to the work of sociologists Pierre Bourdieu (1930-2002), and James Coleman (1926-1995) during the late 1980s. Bourdieu (1986) introduced social capital as a part of his larger project aimed at understanding the social reproduction of inequality, or how social class is passed from one generation to the next. He defined social capital as the aggregate of the actual or potential resources which are linked to the possession of a durable network of more or less institutionalized relationships of mutual acquaintance and recognition (1986, p. 248). The amount of social capital to which an individual has access depends on both the quantity of his or her connections and the amount of 2

capital (e.g., financial, human, or cultural) that each network member possesses. Hence, membership in various social groups (such as gender, race, and social class) provides differential access to social capital. Bourdieu portrayed the accumulation of social capital as the result of conscious and unconscious long-term investment strategies designed to establish or maintain relationships of perceived obligations that can be accessed on some future occasion. The solidarity and resources provided by the social capital of the dominant class enable it to maintain its position. Pierre Bourdieu (1930-2002) was the first to conceptualize social capital in an explicitly sociological manner. For Bourdieu, capital consists of accumulated human labor that either assumes a distinct material form or an integrated form as part of an objective or subjective structure, the latter being the predispositions of mind and body (Bourdieu 2001, p. 98). Bourdieu also understands capital in the sense of power and resources (Bourdieu and Wacquant 1992). Bourdieu defined social capital as the: Aggregate of the actual or potential resources which are linked to the possession of a durable network of more or less institutionalized relationships of mutual acquaintance and recognition (Bourdieu, 1986, p.248) Social capital is formed, more or less consciously, via integration into networks. Unlike economic capital, social capital has no specific material form. It is also characterized by certain indeterminacy, so that there can be, for example, a residual sense of unspecified obligation (Darity, p.565). Social capital, according to Bourdieu, is the sum of active or potential resources that are connected through the possession of a network of permanent relations of mutual acquaintance and recognition, which are more or less institutionalized or, in other words, with the inclusion into a group (Bourdieu 1994, p. 90). Participation in a group provides each member with the backing of the collectivity-owned capital, a credential that entitles them to credit in the various senses of the word (Bourdieu, (2001).

Bourdieu is concerned with three forms of capital: economic, cultural, and social, each operating in a different field. Among them, social capital, which neither derives from nor is independent of the other forms, comprises social responsibilities, connections, or linkages, and under certain circumstances is convertible into economic capital (Darity, 2008). Political scientist Robert Putnam, for example, has developed his ideas in relation to social capital. He points out that social capital is formed by features of [social organizations, or] social lifenetworks, norms, and trustthat enable participants to act together more effectively to pursue shared objectives (Putnam 1995, pp. 664-665, emphasis added; Putnam 1993, p. 67). RQ1: Does social capital make for better business relationships? Social capital is important in society. It has been linked to a variety of positive social outcomes, such as better public health, lower crime rates, and more efficient financial markets (Adler & Kwon, 2002). Social capital can be defined as the sum of resources, actual or virtual, that accrue to an individual or a group by virtue of possessing a durable network of more or less institutionalized relationships of mutual acquaintance an recognition (Bourdieu & Wacquant, 1992, p.14). Putnam (2000) distinguishes between two types of social capital: bridging and bonding (Anthenunis &Valkenburg, 2012). Bridging social capital is the benefit from weak ties, found between individuals with loose connections who may provide useful information, but typically not emotional support (Putnam, 2000; Grannovetter, 1983). Bonding social capital is the benefit from strong ties, found between individuals in emotionally close and high quality relationships, such as family and close friends (Putnam, 2000). Sales trainer Paul Castain, of Castain Training Systems, advises all of his clients to build an army before you need it. In other words, youd better have spent some 4

time building relationships with people before you reach out and ask them for something. Old school sales training once recommended the ABC sales method: Always Be Closing. Today, in the social media age of transparency, a more effective version of the ABC sales method might be: Always Be Conversing. Castain concludes, businesses that are new to social media often make the mistake of using this unique platform as nothing more than a broadcast advertising medium. This approach doesnt work. On the other hand, if youve been using social media effectively, building a genuine trust with your audience, then its completely acceptable to allow the sales function to filter into the discussion from time to time. Never spend your social media capital without earning it, but dont waste it by failing to capitalize on appropriate sales opportunities (Power, 2012). Connecting Social Capital to Social Media Social media have been powerful in connecting likeminded individuals, providing an infrastructure for communities and supporting their coordination (Wilson and Peterson, 2002). Earlier studies in the field of social capital and the Internet focused on the question of whether the Internet is decreasing or increasing social capital. Wellman et al. (2001) noted that the Internet might lead to the creation of larger social networks with a larger number of weak ties. They also emphasized that activities on the web can be divided into social (such as email) and non-social activities (such as surfing or reading). With the emergence of participative social media, the ways in which stakeholders may interact with companies are changing. Social media and Web 2.0 technologies change gatekeeping mechanisms and the distribution of information. In consequence, organizations must realize that they are structurally embedded in online networks of interconnected and equitable actors.

The work of Kavanaugh and Patterson (2001) indicated that the Internet facilitates capitalization on existing social networks, while also introducing new participants to the dialog. Kavanaugh et al. (2005), subsequently illustrated the importance of said weak relations on the Internet, which act as bridges between individuals (Fleseler & Fleck, 2013). Social Return on Investment Social Return on Investment (SROI) is a framework for measuring and accounting for this much broader concept of value; it seeks to reduce inequality and environmental degradation and improve wellbeing by incorporating social, environmental, and economic costs & benefits. SROI measures change in ways that are relevant to the people or organizations that experience or contribute to it. It tells the story of how change is being created by measuring social, environmental, and economic outcomes by using monetary values to represent them. This enables a ratio of benefits to costs to be calculated. In the same way that a business plan contains much more information than the financial projections, SROI is much more than just a number. It is a story about change, on which to base decisions. That includes case studies, qualitative, quantitative, and financial information. An SROI analysis can take many different forms. It can encompass the social value generated by an entire organization, or focus on just one specific aspect of the organizations work. There are also a number of ways to organize the doing of an SROI. It can be carried out largely as an in-house exercise or, alternatively, can be led by an external researcher.

There are two types of SROI:

1. Evaluative, which is conducted retrospectively and based on actual outcomes that have already taken place. 2. Forecast, which predicts how much social value will be created if the activities meet their intended outcomes Forecast SROIs are especially useful in the planning stages of an activity. They can help show how investment can maximize impact and are also useful for identifying what should be measured once the project is up and running (TCOTS, 2009). RQ2: Can the use of social media create a better return on investment for an organization?

Methodology Sample and Procedure: Conduct an online survey through structural embeddedness to be analyzed at the individual level of each blog (by means of network centrality), and network structure will be measured (by means of network densitythe number of relations existing among actors in relation to the maximum number of relations possible in a network). Information on density allows conclusions to be drawn regarding the similarity of actors. The more relations these actors share, the more likely it is that these actors share ideas, beliefs, and norms (Burt, 2005). In this way, we can reveal each actors level of activity and potential access to information. This approach is the empirical equivalent of Chens (2009) general proposal to discuss networked properties and their effect on corporate responsibility at the individual, network, and group levels. Building on this analysis, the discussion of the implications of these network structures will be organized using an adaptation of Lins (1999) conceptualization of social capital, which will explore how social software alters the subsequent access, use and mobilization of social networks and the effects of social

networks and the possible returns given the existing network structure (Wellman, Haase, Witte, & Hampton, 2001). Discussion Two decades of research on social capital have produced significant and important findings, but there is still more to learn. As example, there is more to learn about the relative advantages of bonding versus bridging social capital. Bonding social capital is characterized by networks rich in strong and densely connected ties, usually of socially similar persons, whereas bridging social capital is characterized by dispersed networks that access disparate social worlds (Glanville, 2009). Over the years, Social Media experts attempted to redefine SROI for a new era of influence. While some introduced alternative philosophies for measuring the nuances tied to social media, others wondered aloud whether ROI simply wasnt necessary as the tools and methodologies for analyzing yields didnt yet exist. A variety of social media tools are available to bridge the gap between the consumer and the company they wish to support. This can build the trust upon which social media is based on through interaction with the consumers (ROI, 2010). The measured components: Return on engagement the duration of time spent either in conversation or interacting with social objects, and in turn, what transpired thats worthy of measurement. Return on participation the metric tied to measuring and valuing the time spent participating in social media through conversations or the creation of social objects. Return on involvement similar to participation, marketers explored touchpoints for documenting states of interaction and tying metrics and potential return of each.

Return on attention in the attention economy, we assess the means to seize attention, hold it, and as such, measure the response activities that we engender. Return on trust A variant on measuring customer loyalty and the likelihood for referrals, a trust barometer establishes the state of trust earned in social media engagement and the prospect of generating advocacy and how it impacts future business (ROI, 2010). Finally, the social capital that social media creates can measure whether your communications have an organizational impact. Over time, the company can then explore what may or may not work for them, whats working for others, what tactics to use, and whats working really well already. The benefits of social media expand the possibilities of measuring beyond just marketing to include: Human Resources, Sales, and Internal Communications. Shortfalls However, the consensus in the corporate community is that there is much difficulty in truly being able to effectively measure a ROI when it comes to social media. Possibly, as the tools for measurement are refined, the more conclusive the data may be.

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Fieseler, C., & Fleck, M. (2013). The Pursuit of Empowerment through Social Media: Structural Social Capital Dynamics in CSR-Blogging. Journal Of Business Ethics, 118(4), 759-775. Glanville, J. L. (2009). Social Capital. In D. Carr (Ed.), Encyclopedia of the Life Course and Human Development (Vol. 1, pp. 442-446). Detroit: Macmillan Reference USA. Grannovetter, M. S. (1983). The strength of weak ties: A network theory revisited. Sociological Theory, 1, 201-233. Kavanaugh, A. L., & Patterson, S. J. (2001). The impact of community computer networks on social capital and community involvement. American Behavioral Scientist, 45 (3), 496509. Kavanaugh, A., Carroll, J. M., Rosson, M. B., Zin, T. T., & Reese, D. D. (2005). Community networks: Where offline communities meet online. Journal of Computer-Mediated Communication, 10(4), 442464. Lin, N. (1999). Building a network theory of social capital. Connections, 22 (1), 28, 51. Putnam, R. (2000). Bowling alone: The collapse and revival of American community. New York: Simon & Schuster. Power, D. (2013, December). Social Media Capital: Earn it First, Then Spend It. Sprout Social. Retrieved from http://sproutsocial.com/insights/social-mediacapital/ ROI: How to Measure Return on Investment in Social Media. (2010). Retrieved December 16, 2013 from http://www.briansolis.com/2010/02/roi-how-tomeasure-return-on-investment-in-social-media/ 11

The Cabinet Office of the Third Sector. (2009) A Guide to Social return of Investment. Retrieved December 13, 2013 from http://www.socialevaluator.eu/ip/uploads/tblDownload/SROI%20Guide.pdf Wellman, B., Haase, A. Q., Witte, J., & Hampton, K. (2001). Does the Internet increase, decrease, or supplement social capital?: Social networks, participation, and community commitment. American Behavioral Scientist, 45 (3), 436455.

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