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Will Social Media Change Company’s Organizational Structure?

I am taking a MBA class on designing high performance organizations this fall. I can tell from the case studies that a company’s organizational structure can make significant impact on its bottom line. Accordingly, I have found it extremely interesting when reading this month’s cover story on Forbes about how social media may cause a new wave of corporate revolution. I wonder what transformational changes social media will make to Corporate America’s organizational structure.

The “new world” demands companies and leaders show “authenticity, fairness, transparency, and good faith,” according to the report. Through social media, people can tell whether a company or a leader cares about employees or customers. The era of dictating CEOs has gone. A successful CEO needs to be exposed and open to share his/her problems. The more s/he shares, the more trustful s/he becomes among customers and employees. Those who are still reluctant to share fail to show transparency and thus, will very likely be eliminated by the system.

Companies can no longer ignore those most powerful social media tools. Facebook is the most influential and can form the “viral consensus.” LinkedIn pushes companies to treat their employees “right” because every employee is “seachable” and "reachable" by recruiters on LinkedIn. Valuable employees will be “hunted” if they are not treated “right.” YouTube and Twitter can also be very powerful in damaging a company’s reputation for a “tiny” mistake the company made.

If a company bans social media within the organization, the company is going to make a common mistake. Instead, companies should empower their employees as well as customers on social media. Engaging is important but not enough. People also want their voices to be heard and their suggestions to be acknowledged. They want to make meaningful contributions to the company. “If you ignore these forces, you will probably fail.”

After reading this article, I feel that companies today are facing two options: to make changes or to fail. Companies must design an organizational structure that allows leaders to build authentic leadership, business units to effectively and efficiently communicate with other business partners and customers, and the company to show its commitments to communities and good faith. I can see why many organizations created new positions of social media officers.

What do you think? Must a company adjust its organizational structure when facing the growing power of social media? Why or why not?

References:
Kirkpatrick, D. (2011, September 26). Social power and the coming corporate revolution: Why employees and customers will be calling the shots. Forbes, 72-81. Also available online.
The picture was downloaded from the Presentation Advisors dot com.

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