Informe Financiero Guillermo Pulgarin S S.A

Following the terminology of Enterprise 2.0, which describes an organization that is characterized by integrating social media in their business practice, the term Decision Making 2.0 specifies the integration of social media and decision-making (Bonabeau, 2009; Elragal & El-Telbany, 2012). Comparable to Enterprise 2.0 the focus of Decision Making 2.0 is the utilization of computer mediated communication, collaboration and knowledge management in organizations following a participative approach. In other words, decision- making 2.0 aims to aggregate experience, ideas, and opinions within a collective decision-making process by utilizing social media. In order to understand how social media could be integrated in organizational decision- making available technologies, their application possibilities and limitations are reviewed.

The influence of social media on decision-making takes place on different dimensions such as social, technological and psychological aspects. Therefore, in order to understand the phenomena, it is required to investigate where in the decision-making process the impact takes place and how the decision-maker or the group of decision makers are influenced. Social media affects different stages in a decision-making process such as building opinions about a problem, collecting information and knowledge about possible solutions, facilitate deliberation and discussions and convey recommendations of a choice based on experience and preferences of the participants. In order to understand the impact of social media on decision-making one could start studying the phenomenon in the Internet and then transfer the findings into a business context. Even if the business environment is quite different from the application of social media in the Internet, the effects could provide insights relevant for the business application. However, parameters such as policies, regulations, economic objectives, hierarchies, relations, competition and structures differ from a public environment. They should be evaluated carefully during the analysis and the inferring process. This leads to the topic about social media and organizational decision-making.

If an organization already implemented social media, collective decision- making could be a by-product of the integration. For instance, if a product management team requires new features of a product for a next generation, they could utilize the corporate social network to gather ideas or invite the members of the organization to rate and vote for the proposals. Another area of application could be to invite the employees to share their opinions about a

corporate problem that has an impact on all employees, for instance proposals how to cut costs (Davenport & Manville, 2012). Each decision problem might require specific capabilities of the social media application utilized. Hence, to systematically approach collective decision-making mediated by social media the analysis should include where to integrate social media in the decision- making process and what type of social media applies for what problem and solution space.

This leads to the concept of social media integration in collective decision- making processes, the main topic of this thesis. This concept includes the findings in the previous sections of the literature review building the theoretical framework based on behavioural decision-making, organizational behaviour, social informatics and social media applied in business environments.

2.6.1 Social Media and organizational Decision-Making

According to Carlsson (2003) social media influences how human beings collaborate, build communities, exchange information, jointly create content and request advice in social expert networks. As a consequence social information technology in a business context has an impact on organizational behaviour and therefore also on the decision-making process (Elragal & El- Telbany, 2012; Tapscott & Tapscott, 2010). Social media creates and aggregates information and knowledge by integrating collective intelligence in the course of interaction, which could enhance the collective decision-making process (Elragal & El-Telbany, 2012). The following section discusses from a functional and behavioural perspective how social media could influence the collective decision-making process in organizations.

A topic to start with the investigation is the impact of social media on collaborative projects observed in user generated content applications such as wikis. These collaborative projects illustrate how loosely connected individuals in online communities are able to create an encyclopaedia such as Wikipedia (Shirky, 2008; Tapscott & Williams, 2008). An explanation of this phenomenon could provide the study of intelligent swarms in natural habitats (Miller, 2010) discussed in the section above. Studying the behaviour of swarms shows parallels to human behaviour observed in groups such as self- organization and collaborative problem solving (Miller, 2010). Hence, swarm intelligence could explain how collaborative projects such as wikis, open source and open innovation work without the need for central coordination, guidance, extrinsic motivation and control. Human beings in large groups show parallels to swarm intelligence, creating collaboratively complex software systems, and solving problems. Tapscott and Williams (2008) coined this phenomenon mass collaboration to describe how large groups jointly work together in a self-controlled network. Miller (2010) stated how individuals are motivated to participate in mass collaboration is comparable to the dance of a

honeybee or the pheromone trails of ants to convince and motivate their conspecific fellows to follow into promising areas for feeding or new habitats. He elaborates a collaborative project, such as user-generated content, starts with the first lines in an article as initial point. For instance, in Wikipedia this attracts further contributors, comparable with positive feedback cycles or network effects to add more content. In context with collective decision- making, this could be an approach how to motivate employees to participate in the process, placing starting trails in social network discussions, blogs or wikis about different tasks such as new product design, best practices handbooks, or creating case based decision support systems.

Greenhow, Peppler, and Solomou (2011) investigated the social media influence on the creativity process of human beings and showed how this applies to the approach of Csikszentmihalyi (1997) system model. He defined creativity as a system composed of individuals, knowledge domains and fields of informed experts. Hence, if creativity could be defined as a collaborative process within knowledge or expert networks, social media could support joining ideas during a decision-making process into creative solutions. Another aspect of social media is the process of knowledge creation, externalization and exchange. Boateng et al. (2010) describe organizations as communities that create relationships among individuals to work towards organizational goals. They explained the knowledge creation process referring to the SECI9

model of Nonaka and Takeuchi (1995) and mapped the Web 2.0 technologies and social media to different interaction modes. Hence, Web 2.0 technologies could also be a means to enhance organizational learning and the decision- making process. An additional effect explained by Schneckenberg (2009) combines social network services (SNS) such as Xing or LinkedIn with social network theory by Granovetter (1973) about strong and weak ties. This means, individuals follow normally for problem solving and decision-making their strong ties, which means the individuals they are familiar with and trust. Individuals of weak ties belong to relations that are more distant. Social media bridges barriers of distance and connects weak ties individuals with strong ties individuals. Most SNS rely on peer-groups, which means weak ties following the definition of Granovetter (1973). They could become an important resource of knowledge exchange since they extend the circle of knowledge resources for individuals and groups. Within an organizational context, SNS could become a platform connecting geographically dispersed experts and to invite them to participate in a decision-making process adding their opinions, expertise, judgement and preference or review alternatives and ideas.

9 _{The SECI model introduced by Nonaka and Takeuchi (1995) describes the flow and}

organizational knowledge creation process of tacit and explicit knowledge in the stages of socialization, externalization, combination and internalization.

Social media affects communication in different ways such connecting individuals less formal and ad hoc and enhance the exchange of information with lower barriers to interact. As discussed, instant messaging lowers the barriers to communicate and enterprise social networks stimulate to connect individuals and share their thoughts in blogs, wikis, and communities embedded in Intranets. An important component of collective decision-making is how communication and information exchange takes place. Collective decision-making requires individuals to collaborate, interact during the problem identification, analysis, solution generation and evaluation of different alternatives. Consequently, social media considered as a means for organizational communication could influence the decision-making process at different stages. For instance, on information gathering, searching for advice, involvement of experts, collection and aggregation of opinions, stimulation of deliberation and discussions in forums and communities, evaluation and judgement about options and vote for alternatives to infer a collective choice. Hence, the integration of social media technologies could influence every phase of an organizational collective judgment and decision-making process in business environments. This thesis investigates how this influence could manifest and what changes compared to the traditional approach of collective decision-making from a collaboration, interaction and communication perspective. Traditional means in this context without social media mediated processes.

As discussed in the literature reviews above several perspectives are of relevance to integrate social media in the organizational business processes such as collective decision-making and problem solving. The concept of social media integration in decision–making processes needs to consider behavioural, social, technological, economic and managerial aspects to understand the different characteristic of effects they could cause.

2.6.2 Concepts of Social Media Integration in Decision-Making Processes

Following the approach described by Goertz (2006) to create a social science concept applied to the integration of social media in the decision-making process each step in the decision-making process should be analysed from a theoretical and an empirical perspective to understand how and to what extent social media could influence these steps. This allows understanding the phenomena by systematically analysing each step and to reflect what could be different if social media is integrated.

Starting with the first step, the problem identification, the need or the intention to change the status quo, which is the initiator of a decision processes. In business context, indicators for a decision-making process for instance could be to change the design of a product, because the sales numbers decrease

or customers asked for new features. The awareness about this need could already start within a corporate social network, because members of the support team already registered the feedback from the customers, who are not satisfied with the current design. In addition, a blog within the corporate communities or a publication on the Intranet could spread this information. In other words, social media could be a means to create the awareness about a problem within groups and therefore could stimulate and initiate the start of the decision-making process. The difference of the decision-making process compared to the process without social media could be based on the number of individuals involved, the speed of dissemination and the involvement of different groups in the organization. Hence, the discussion about this problem would not just stay in a specific department or a small group, but would involve others or the entire organization. This could stimulate participation and draw the attention of different groups in the organization. The next step of the decision-making process could be delegated to the members of a corporate community of practice, who define objectives and decision criteria on the corporate social network platform. The following step would involve the collective intelligence of the organization to analyse and provide alternatives using for instance a wiki platform to collect the ideas or a corporate blog that invites the employees to discuss the alternatives. In order to infer the collective choice in the final step, employees could participate a vote or poll.