Catch a Fad or Capture a Value?

Abstract

While Small and Medium Enterprises (SMEs) often face the constraints of financial and IT resources, the emergent social media could be a cost effective tool for SMEs to leverage for their competitive advantages. Yet, it remains unclear on whether and how SMEs are able to reap both tangible and intangible benefits by adopting and using social media. This study seeks to look into these questions by empirically examining the adoption and use of Facebook in SMEs. The authors' findings suggest that the adopting SMEs begin to see the positive effect on their sales revenue growth after a couple of years of persistent use and engaging activities. Also, the interactions measured by posting activities from both a firm and its customers have predictive effects on the building of an engaging online community in terms of size. These offer important implications for formulating and implementing effective social media strategies in SMEs.