Social Media Reforms the SMES Management in the GCC Research Paper

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Razak, (2012) point out that internet has assisted SMEs to integrate social media in SMEs marketing strategies globally. Typically, internet has become accessible to billion of people globally, and the phenomenon has revolutionized the use of social media for business advantages. Razak, (2012) point out that 75% of internet users use social media to carry out various activities such as linking to shopping site, and since 2007, social network has increased tremendously. Essentially, Facebook proves very useful in term of business communication and socialization created by Facebook continues to expand with over 800 million users subscribes to Facebook. The study reviews the literatures on the GCC states to enhance a greater understanding on the extent the GCC states have taken the advantages of the social media.

GCC ( Gulf Cooperation Council)

GCC (Gulf Cooperation Council) states comprise of United Arab Emirate, Saudi Arabia, Kuwait, Qatar, Bahrain and Oman, In the GCC states; the SMEs (small medium enterprises) are very critical for the development of national economies. Typically, the SMEs are very essential for the economic growth, apart from generating employment opportunities for the residents, the SMEs provides source of income for the government. In the GCC countries, SMEs consist of over 95% of the active business in the countries, and contribute significantly to the economic growth of the GCC states. SMEs generate employment opportunities for people and assist in the innovation and international competitiveness. The SMEs are therefore the main drivers for development and economic diversifications. Typically, SMEs are the backbone of sustainable economies of the GCCs, and assist in successful economic diversification. Thus, it is generally agreed that job creation opportunities and economic diversification of GCC rely on the SMEs management. (Ashoor, 2013). Since the SMEs in the GCC countries consist of largest bulk of the business in the financial sector, non-financial sector, and manufacturing sector SMEs are to take the advantages of new and innovative technologies of social media platform. SMEs assist in job creation, innovation, growth and development in the GCC region. Essentially, SMEs are the main drivers for economic diversification in the region. Apart from creating local jobs, SMEs exploit opportunities created by the new technology and globalization.

In the GCC states, SMEs have not developed up to their potentials because of the general believe that growth is not essential at all cost. In the GCCs, the SMEs are defined as follows: SMEs are the organization having between 50 and 150 employee. According to this definition, small enterprises should have up to 50 employees while medium enterprises should have up to 150 employees. However, an exception is considered for textiles sector with up to 300 employees and still being considered as medium enterprises because they are generally labor-intensive. (Ministry of Commerce and Industry, 2013).

Jones, (2013) provides the findings of the recent survey conducted to establish the relationships between social media and 1,800 SME in United Arabia Emirates and Saudi Arabia. The results reveal that only 18% of the SMEs in the UAE have established online presence while 15% of SMEs in Saudi Arabia have established online presence compared to the 60% in France and 70% in the United States. Jones, (2013) further reveals 75% of SMEs in the UAE have not considered building websites to promote their product and services. However, in Saudi Arabia, only 35% of the SMEs have websites while 65% do not have websites. The major reason is that over 90% of SMEs are not sure of the benefits their organizations could derive from the internet.

However, the Emirate News Agency (2011) reveals that only 5% of the UAE are taking the advantages of the social media as marketing tools. (Emirates News Agency, 2011). Starting from 2011, many SMEs in the UAE have just started considering using social media to educate, communicate and share information to their prospective customers. Alansari, (2012) point out that many SMES in the GCC states are facing challenges to use social media, and some of the challenges include shortage of professionals capable of handling social media tools for the companies. Essentially, SMEs will need professionals to handle the social media functions because some SMEs believe they will need to integrate the automated tools to handle the social media effectively. Many SMEs in the GCC are also facing administrative challenges from the governments. Sometimes, governments impose regulations to restrict the use of social media in the GCC states.

Methodology

The study reviews selected literatures as a method of data collection, and the study will search secondary data from various electronic database such as Science Direct, and EBSCOS database. These databases have high quality research articles, electronic journal, e-books and data on small and medium enterprises. Apart from searching electronic database to search for relevant literatures, the study also searches for GCC SMEs data from Government investment Corporation. Moreover, the study collects data of all SMEs in GCC subscribing to Facebook, Twitter and Youtube from the SocialBakers. Typically, the SocialBakers contains a comprehensive data on the number of SMEs of all countries subscribed to social media such as Facebook, Twitter and Youtube. The study uses the statistical quantitative technique to demonstrate relationships between social media and SMEs in the GCC countries.

The study also uses different technique for the search strategy. First, the study searchers for the peer-reviewed literatures relevant to the study. The research also uses standard keywords such as SMEs, small and medium enterprises, social media GCC, Gulf Cooperation Council, Facebook, Twitter, Youtube and SME management to search for secondary data from the electronic database. The study also handpicks some important research papers to establish the significant relationships between social media and SMEs in the GCC countries. The data collected assists the study to test the hypotheses cited in the next section.

Hypothesis:

Ho1: There is no significant statistical relationship between Social Media and the SMEs Management in the GCC.

Ho1a: There is no significant statistical relationship between Facebook and the SMEs Management in the GCC.

Ho1b: There is no significant statistical relationship between Twitter and the SMEs Management in the GCC.

Ho1c: There is no significant statistical relationship between YouTube and the SMEs Management in the GCC.

Qualitative or/and Quantitative Methods

The study uses the quantitative technique to test the hypothesis and answers the research questions. The quantitative technique analyzes numbers using a statistical tool and the robust benefits of quantitative technique is that it presents results with graphs, chart and table, which assist in comparing the results. Moreover, the quantitative method saves time, costs, and is appropriate for a researcher with limited budget and time. However, the shortcoming of quantitative method is that it does not allow a research to immense in the phenomenon, which is the benefit of qualitative research; however, qualitative research will involve a lot of costs and time. Based on the shortcomings identified in the qualitative research, the study uses quantitative technique to presents results.

Sample GCC (Gulf Cooperation Council)

The sample GCC consist of:

Bahrain

Kuwait

Oman

Qatar

Saudi Arabia and United Arab Emirates.

Typically, all GCC countries heavily rely on export of crude oil.

Results (Findings)

Facebook seems to be the top social media that the SMEs in the GCC states are using to communicate with their customers. Social Bakers (2010) presents data of all SMEs in GCC subscribing to Facebook, Twitter, and Youtube. The data reveal that only 314 SMEs in Saudi Arabia subscribed to the Facebook in 2012.

"In 2008, a total of 785,000 establishments were registered in Saudi Arabia, of which 764,000 were sole proprietorships. This means that there are more than 700,000 SMEs active in the kingdom or about one SME per 25 Saudi nationals." (Hertog, 2013 p15).

Out of the of 700,000 SMEs in Saudi Arabia, only 314 SMEs subscribed to the Facebook in 2012 showing that majority of the SMEs in Saudi Arabia are not taking the advantages of social medial network. (Ramady, 2010). The table 1 reveals the number of SMEs in the GCC subscribing to the social media vs. The total number of the SMEs in the region. The table 2 reveals the percentages of the SMEs not subscribing to the social media. Moreover, the Appendices 1, 2,3, 4, 5 and 6 presents the illustrations of the number SMEs in the GCC subscribing to the social media.

Table 1: Number of SMEs in GCC subscribing to Social Media

Facebook

Twitter

Youtube

SMEs

Saudi Arabia

93

700,000

Kuwait

88

15

33,000

United Arab Emirate

97

82,526

Bahrain

26

4

40,000

Oman

67

16

4

29,234

Oatar

72

39

15

13,466

Source: Social Bakers (2010)

Table 2: Percentages of SMEs in GCC not taking advantages of the Social Media

Facebook

Twitter

Youtube

Saudi Arabia

99.95%

99.97%

99.98%

Kuwait

99.47%

99.73%

99.95%

United Arab Emirate

99.32%

99.78%

99.88%

Bahrain

99.73%

99.93%

99.99%

Oman

99.77%

99.94%

99.98%

Oatar

99.46%

99.71

99.88%

The results reveal that SMEs management of the GCC is not taking the advantages of the social media. Thus, the results show that there are no significant statistical relationships between…[continue]

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