Social media adoption and its impact on firm performance: the case of the UAE

Abstract

Purpose Through social media technologies, small and medium-sized enterprises (SMEs) can communicate information and respond to competitors with minimal cost. The ability to share and access information can affect SMEs’ performance, but there is little research on the link between SMEs’ social media adoption and their performance. The purpose of this paper is to present a quantitative survey to explore factors that influenced social media adoption by SMEs in the United Arab Emirates (UAE), and its impact on performance. Design/methodology/approach The study used a multi-perspective framework combining technological, organizational and environmental elements affecting SMEs. Survey questionnaires were used to collect data from a random sample of SMEs operating in the UAE. Using partial least squares and structural equation modeling techniques, 144 responses were analyzed. Findings Social media adoption had no effect on SMEs’ performance. These findings could help managers and decision makers in the SME sector to try to keep pace with research on social media innovations, and enable them to benefit from social commerce as it becomes more ubiquitous. Research limitations/implications This has implications for social media experts and anyone wishing to encourage social media use by SMEs. Originality/value The study developed a suitable multi-perspective framework covering various factors that may affect social media use. It also tested the framework empirically on a sample of SMEs from the UAE.

SME social media use: A study of predictive factors in the United Arab Emirates

“…The organizational component of top management support was found to significantly influence a firm's adoption of social media (see Exhibit ). This aligns with previous research on this important factor (Ahmad et al, ; Ramdani et al, ). It also reflects similarities in attitude and response between Middle Eastern and global managers in technology decision‐making.…”

“…It is essential in creating the right environment and providing resources, both of which are vital to encouraging the use of new technologies (Lin, ). Previous studies have confirmed that the support of top management strongly affects organizations' intention to use it (Ahmad et al, ; Maduku et al, ). These considerations lead to the following hypothesis.…”

“…To date, research on social media adoption and the barriers that prevent its use among SMEs in the Persian Gulf region has been limited (Ahmad et al, ). Nonetheless, a number of theories have been proposed to explain why businesses in the region have been relatively slow in adopting social media.…”

“…They also do not typically have sufficient resources to employ external support for marketing (Melorose, Perroy, & Careas, 2015). The effective use of social media, therefore, is particularly essential for these organizations, for it is an affordable innovation that has been proven to help businesses easily reach customers (Ahmad, Abu Bakar, & Ahmad, 2018;Baby & Joseph, 2016).…”

Contrasting Contemporary Advertising Media Strategies of Small Retail Firms:

“…Although these establishments contradict findings from other past researches (Kilian et al, 2012;Nielsen, 2009) which established no substitution of traditional media by new media, the results established posit precautionary implications towards the future in this regard. However, the study's findings are consistent with establishments in more recent studies (Ahmad, Bakar, & Ahmad, 2018;Bannor et al, 2017) which indicated a replacement of traditional media by new forms of media and a shift in the audience attention towards online channels. This substantiates assertions that have become prevalent that considerable scores of internet users are watching less television, as well as reducing their newspaper reading and listening to the radio (Palmer, & Koenig-Lewis, 2009).…”