Academic journal article International Journal of Business and Information

Perceptions of Social Media by Small and Medium Enterprises (SMEs) in Turkey

Academic journal article International Journal of Business and Information

Perceptions of Social Media by Small and Medium Enterprises (SMEs) in Turkey

Article excerpt

1. INTRODUCTION

Small and medium enterprises (SMEs) are the building blocks of all national economies including that of Turkey. They not only contribute to the economy of the country in which they operate, but also play an important role in the social and cultural life and are instrumental in closing the employment gap of that country. The sustainability of SMEs inarguably depends on their ability to adapt to both technological and market developments. Among these developments is the use of social media.

Social media emerged as a result of rapid changes in information and communication technologies. With its billions of users worldwide, social media have transformed the marketing field as well as every other area of modern life. In view of this fact, it seems inconceivable for SMEs not to use this technological advance, which offers greater advantages than traditional mass media in terms of reducing cost, reaching larger masses, and providing greater interaction. For many SMEs, social media channels to which billions of individuals, corporations, and enterprises subscribe have become part of their marketing efforts to gain advantage over competitors. Many regard SMEs as potentially capable of adapting more easily to this development in technology than larger organizations because of their flexible structures, which also enable them to participate more readily in information technologies and social media. Through social media, SMEs can contribute more to the economy of the country and region in which they operate.

Within this context, the current study investigates whether the perceptions of social media by SMEs are of significance in identifying the views of SMEs with regard to innovation and their use of new marketing strategies.

2. CONCEPT OF SME

The acronym SME refers to small- and medium-sized enterprises. The term is used to describe businesses employing a limited number of persons or having a limited profit (OECD, 2005). Although the concept of SME is used in almost all countries, there is not a single definition of SME. Countries and organizations define the term differently based on their own standards, and the definition may change depending on time, present conditions, state of a given sector, and level of development. In general, a number of quantitative and qualitative criteria are taken into consideration when defining SMEs. These criteria, shown in Table 1, are used by countries to develop their own SME classifications.

In Turkey, the Small and Medium Enterprises Development and Promotion Administration (KOSGEB) uses a classification that is based on the number of employees (KOSGEB, 2005). The KOSGEB classification, which is widely used in Turkey, includes these definitions:

* Microenterprises: Businesses that employ fewer than 10 people and have an annual net sales revenue or financial balance sheet less than 1 million Turkish liras

* Small-sized enterprises: Businesses that employ fewer than 50 people and have an annual net sales revenue or financial balance sheet of less than 8 million Turkish liras

* Medium-sized enterprises: Businesses that employ fewer than 250 people and have an annual net sales revenue or financial balance sheet of less than 40 million Turkish liras

There are other examples of how SMEs are classified in the world. For example, the Organisation for Economic Co-operation and Development (OECD) takes into consideration the financial profitability of SMEs when classifying SMEs. Another example is the European Union, which adopted a new definition of the term on January 1, 2005. Under the new definition, which applies to all community acts, funding programs, and areas of state aid, SMEs can be granted a higher intensity of national and regional aid than large companies. The new definition provides for an increase in financial ceilings (OECD, 2005):

* The turnover of medium-sized enterprises (50-249 employees) should not exceed EUR 50 million. …

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