Page 115 - SUSTAINABILITY ISSUES & COVID-19

19 Social Media Governance and

Organizational Legitimacy

Titis Sari Putri Rahayu, Ancella A. Hermawan

ABSTRACT : This study aims to provide empirical evidence on the association between the application of social
media governance (SMG) and organizational legitimacy. SMG is a set of frameworks that regulate the actions of an
organization’s members within the social web. This postulate is based on legitimacy theory; an organization that
maintains its operations to comply with social norms will deem to be legitimate, including in the area of social media
communication as commonly used these days. Under this circumstance, citizen judgments on social media using
sentiment analysis are considered the best method to quantify organizational legitimacy. However, the magnitude
of association might vary in different organizational characteristics, such as types and cultures. Organizational type
distinguish organization by profit orientation, state ownership, and public ownership. Organizational culture refers
to the competing values model introduced by R. E. Quinn and Rohrbaugh (1983). These discrepancies are predicted
by institutional theory because of the social context where firms operate, and the shared value and norms between
members influence an organization’s behavior. Therefore, two additional research questions were developed to
examine the effect of internal characteristics on the first model. The population of this study is all organizations in
Indonesia. Samples were selected using purposive sampling to ensure the representation of each organizational types.
Questionnaires were distributed to employees’ whom their assessments were used to represents the organizations.
Subsequently, sentiment analysis is conducted by examining tweets related to 51 sample organizations from January
2019 to May 2020. Results show that a better SMG application is associated with better organizational legitimacy, and
clan culture and profit-oriented organization strengthens this association. These findings reveal the benefit of SMG to
help organizations achieve the goals under different organizational characteristics.

Keywords
Social Media Governance, Organizational Legitimacy, Organizational Types, Organizational Cultures

1. INTRODUCTION

At the end of 2018, AON surveys forecast what risk most likely faced by industries in 2019. The result reveals that
reputational damage was ranked as the second top risk globally and the top risk in the Asia Pacific region over the last
two consecutive surveys. Information technology was likely to increase this risk because of the growing number of
internet users (Olivér, 2017). Organizations that fail to adapt to technological development may lose their competitive
advantages. Information technology offers benefits to organizations by stimulating creativity and innovation, enabling
costless ways to promote their products and services, and collecting feedback to increase interconnectedness with
stakeholders (Aichholzer, Rhomberg, Gudowsky, Saurwein, & Weber, 2015). One specific technology that develops the
connection is social media.

Social media refer to platforms or internet-based applications (Kaplan & Haenlein, 2010), allowing the user to create
and exchange user-generated content, moving beyond documents and data exchange to influencing organizational
structures and network relation (Linke & Zerfass, 2013). The user contribution in social media might generate collective
intelligence (Argenti & Barnes, 2009) and increase the participative communication (Avery & Graham, 2013). Moreover,
organizations enjoy reputational benefits because better transparency increases stakeholders’ trust and positive brand
images. Positive images might reduce reputational risks in the event of a crisis (Woods, 2013). (Aichholzer et al., 2015).

Therefore, governing social media’s use becomes crucial because social media helps shape organizational reputation
and legitimacy (Bellucci & Manetti, 2017). An organization is deemed legitimate if it operates within a social norm
(Suchman, 1995). A legitimate organization receives the right to acquire the resources needed for its activities (Deegan,
2019). However, legitimacy status is not an inherent right because it needs to be earned (Mathews, 1997); thus, an
organization needs to monitor public perception regarding organization closely. The recommended method to
monitor public perception is using social media (Etter, Ravasi, & Colleoni, 2019).

114 International Conference on Sustainability
(5 Sustainability Practitioner Conference)
Th