The Risks of Social Media in an Enterprise Business

Posted: August 29, 2012 in INB346 Enterprise 2.0

This blog is concerned with the potential legal risks an organization can encounter when deploying an enterprise 2.0 structure into their business. Although these enterprise 2.0 systems are very useful and beneficial to organizations, there can be downfalls if the organization doesn’t introduce a structured policy to control these social media and web 2.0 services. As discussed in my previous blog, web services in a business can be very beneficial to increase productivity and efficiency, knowledge sharing, reputation and staff engagement but without a proper structure to control and manage these services, the company is at risk of negative exploitation.

Because of the openness and freedom of social media, it is hard to see how it can fit into a professional organization and many may ask that question. But web 2.0 has allowed organizations to move away from strict structure to a more free working environment where employees can share valuable information. There is substantial legal risk as you can imagine and without a proper policy in place a company can be staring down the barrel of many legal complications. In reviewing many sources, I found this the most helpful The Risks of Social Media… And How They Can Be Managed,while cross referencing with other sources, the trending 6 risks I believe are most relevant are:

  1. Discriminatory or Derogatory Postings
  2. Threats of Violence
  3. Disclosure of Confidential Information and/or Trade Secrets/False advertising
  4. Defamation
  5. Terms and conditions of social media sites
  6. Ownership

There is a lot of useful information regarding these risks and how they can damage an organization due to misuse or misunderstanding by employees. The risks stated above can be easily done either intentionally or accidently by employees when a seemingly harmless tweet, Facebook post or photo is made that can damage the company’s reputation, or worse aim to damage a competitor’s reputation.

In relevance to how these risks can occur in an organisation, Novell will be used as an example. Novell was used in a case study in my previous blog and I think it is a good example of how enterprise 2.0 is employed successfully into a business.

Novell is a software development company that aims at enhancing workplaces making them more productive through Local Area Connections (LANS). Novell creates framework for businesses to centralize, manage and secure services over a local area network through its software services. It mainly uses wikis in the organisation to enhance productivity and knowledge sharing.

The following is an overview of how Novell can be exploited by misconduct of the above legal risks:

  1. Discriminatory or Derogatory Postings may be made by an employee to purposely hurt other employees or derogate from either the company’s reputation or others or even fellow employees. Through Novells use of wikis, pages with posts may be made that can be unprofessional and potentially damage an employee’s reputation.
  2. Threats of violence, serious or not, may be made and how people choose to read it varies from person to person, although it is social media, if the account is made under the intention of being used in a work place, it is considered unacceptable and can once again damage reputation.
  3. Once information is on the web, it’s out there forever and can be found by anyone. The risk of company information being exposed is of a high risk. Employees could face extreme legal action and sacking if for example a new product is on the way and someone shares confidential information on a social media site, damaging the marketing of a product. An employee may obtain information from the business’ internal wiki taking another person’s works credit, or posting it online either intentionally or by accident.
  4. Using social media, it can be easy to be unprofessional and let your personal interests take control, defamation is the result where the truth is eluded about products or services either internally or externally. While using the company’s social media services, an employee falsely misleading readers or followers about a product and its superiority to others can lead to many legal risks.
  5. As well as the terms and conditions a company may have in its policy on social media for business purposes, of course the services themselves have terms and conditions.  There is substantial risk when companies use social media to advertise products and services, as web services have strict terms and conditions surrounding this are. Novell would have to ensure a policy is in place for its internal wiki, ensuring it maintains professional content and is managed by higher authority.
  6. Finally the ownership of the service accounts. Although an employee uses his or her own information signing up to the web service, they are bound to a company policy. Who has the right to access the social media account? Should the management have access to passwords when an employee leaves? What will happen when an employee leaves, will they take vital information with them and do they own or have rights to it? Although content is posted on the wiki and could be an employee’s work of designs, codes etc, the company may have full rights and access to it.

The business should ensure a social media policy addresses the above risks and many more that are associated with the use of web services for business purposes. Ensuring social media maintains a professional approach I believe is extremely important to make sure the above risks are avoided.

  1. duydoan0411 says:

    Good point about how if the the organisation doesn’t implement structural use of social media the business can end up regretting it. I’ve seen on the news many times over where employees have ranted on about their manager / supervisor and have been fired for it. I really think it comes down to the way employees are using the social media services and how smart the organisation can be by implementing regulations.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s