In May 2021, the Twitter account Brands Getting Owned posted images of signs that workers had taped to the windows of a Chipotle in the United States.
One large cardboard sign read, “Sorry for the inconvenience, but due to us being overworked, understaffed, and underappreciated, we are protesting until conditions are changed.” The tweet included the hashtags #freechipworkers and #fairwages in hopes of spreading the word. The tweet went viral, gaining 18,000 retweets on its original post and rippling out even further across social media.
“Our findings suggest that Twitter plays a critical role in monitoring companies. There could be severe negative consequences if Twitter were to cease operations.”
Two days later, Chipotle said it would raise employee pay by about $2 per hour, with starting wages ranging from $11 to $18, to bring average pay to $15 per hour. The company also said it would hire 20,000 workers across the US.
Similar stories of social media’s power inspired Harvard Business School professors Jonas Heese and Joseph Pacelli to research just how much social media can influence businesses. Their paper, “The Monitoring Role of Social Media,” explores how Twitter users, specifically, play a strong role in keeping corporations accountable to customers, employees, and other stakeholders.
With the decline in traditional media sources, particularly amid the closure of many local newspapers, Heese and Pacelli say their research shows that social media could partially meet the need for reporting on corporate misconduct, acting as a watchdog to help keep companies accountable for their actions. It comes at a time of upheaval in social media, with the rapid rise of TikTok, Elon Musk’s acquisition of Twitter, and Facebook parent Meta’s aspirations to build a virtual reality-based “metaverse.”
“In the current discussion about Twitter’s future, many critics of Elon Musk appear to be rooting for his failure in turning around the company,” explains Heese, the Marvin Bower Associate Professor of Business Administration. “Our findings, however, suggest that Twitter plays a critical role in monitoring companies. There could be severe negative consequences if Twitter were to cease operations.”
Can social media be used for good?
Heese and Pacelli began their study when COVID-19 was becoming a serious problem, Twitter was introducing controls to limit misinformation, and discourse about former President Donald Trump’s Twitter usage was heated.
“So, all the discussion was about the perils of social media,” says Pacelli, the Gerald Schuster Associate Professor of Business Administration. “We wanted to take a step back and understand, ‘Well, what if social media could be used for good?’”
One particular news story in 2017 caught their interest: After United Airlines forcibly removed a passenger from an overbooked plane to make room for crew members, videos passengers took of the man getting dragged down the airplane’s aisle went viral on social media and were also picked up by major news outlets, including The New York Times.
“It actually got a real response from United Airlines,” says Pacelli, noting that the CEO publicly apologized for the incident and United later agreed to settle a lawsuit the man had filed for an unknown sum. In the same year, three airlines—United, Delta, and American—changed their company policies, outlining new restrictions for removing passengers from a flight.
“It was really a motivating event for them,” Pacelli says.
Twitter’s rise correlates with a decline in corporate violations
To test the idea that citizens could use social media as a tool to expose corporate misconduct, Heese and Pacelli used data from the 3G (third generation) mobile broadband network rollout to identify increased activity on Twitter, plus they studied reports of corporate misconduct on Violation Tracker, which details facility-level violations and penalties issued by 44 regulatory agencies, during the period between 2000 and 2017.
First, they obtained digital maps of 3G network coverage, determined the year in which 3G became available for a certain ZIP code, and then incorporated data from Violation Tracker. Finally, they looked at how the number of corporate regulatory violations and resulting penalties changed over the three-year period following the introduction of 3G coverage. They found that facility-level penalties dropped by about 13 percent after neighborhoods gained 3G access, and violations dropped by 1.8 percent.
To better establish that social media exposure was driving the change, Heese and Pacelli then added a set of Twitter data. Given that Twitter provides “geotags,” the researchers were able to map Tweets directly to 3G rollouts. Again, they found a connection between ZIP codes that had above-median Twitter use and decreased reports of corporate misconduct.
The researchers also connected Twitter’s 2007 debut at the South by Southwest film festival, which dramatically increased usage on the site, to a significant reduction in misconduct from facilities in areas that saw a boost on Twitter after the event.
Does financial misconduct slip through the cracks?
Interestingly, the misconduct that was uncovered tended to involve non-financial misdeeds, including violations related to unsafe working conditions or the inappropriate treatment of employees and customers. Perhaps that’s because these are “easy to document” violations compared to more complicated financial misconduct, Heese says.
“An accounting fraud or a tax fraud, which we would classify as a financial violation, is maybe more difficult for citizens on social media to observe and share with the public,” says Heese.
“Employees often feel safer to discuss problems in their organization on social media, oftentimes under the guise of anonymity.”
Social media’s monitoring powers were especially effective for high-profile companies, including those that are consumer-facing and are often covered by traditional media outlets. As in the case of United Airlines, many viral tweets about nationally recognizable companies are picked up in media outlets like The New York Times and The Wall Street Journal. These results also highlight that social media alone cannot substitute for traditional media. Rather, these two types of media work together as a watchdog of corporate behavior, explain the researchers.
The size of the company may also be a factor in lack of corporate oversight, since business leaders may have trouble keeping tabs on larger firms operating in multiple locations at once, Heese says. “You have your headquarters somewhere, and then you have operations all over the US or maybe even worldwide,” he says. “It’s actually not that simple to understand what’s going on in all of your facilities.”
In that way, social media could be used by companies to help business leaders learn about potential problems throughout their organizations. “Employees often feel safer to discuss problems in their organization on social media, oftentimes under the guise of anonymity. Managers should consider using this information to gain a better understanding of potential issues and broader cultural problems in the organization,” Pacelli says.
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Feedback or ideas to share? Email the Working Knowledge team at hbswk@hbs.edu.
Image: iStockphoto/golubovy