Why do organizations leverage social media to create business value? An external factor-centric empirical investigation

Abstract : Why do organizations develop and execute social media initiatives to create business value? This study addresses this prominent and critical research question for IS research on the business value of social media. Drawing on the institutional theory, we argue that mimetic, coercive, and normative pressure persuade organizations to use social media to improve marketing performance. We test our core proposition and theory-driven research model using data collected from a sample of leading Chinese agribusinesses. We find that coercive and mimetic pressure play pivotal roles in motivating organizations to use social media. We also discover that social media usage improves marketing performance and that the agribusiness market uncertainty plays a positive reinforcing role in the positive effect of social media usage on marketing performance. Thus, this paper contributes to IS research with an eloquent theoretical explanation and strong empirical evidence on why organizations deploy social media initiatives to improve their marketing activities and performance and the higher business value of social media under greater agribusiness market uncertainty.