Reference no: EM132840905

Social Media Risks and Rewards (focus chs3,7,15) You work for a large restaurant chain that is controlled tightly by the corporate headquarters. The restaurant chain started with one restaurant which focused only on high-quality hamburgers and fresh French fries. The first restaurant opened in 1948 and has expanded to 281 locations. The original owner and CEO decided not to franchise. Over the years, the company has been true to that strategy. The organization has stayed within the family and much of the management team is over 60 years old and doesn't really know much about technology.

• The chief information officer (CIO) is a family member who has focused on developing applications that provide for efficient operations and financial reporting. The opinion of the CIO has been that technology is in place to run the business and not a focus of the front office or customers. The company has a strong brand recognition for quality products, great price, and consistency from restaurant to restaurant. You are the chief audit executive (CAE) of the organization with a small audit group. The company has only a limited internet presence and uses its website only for marketing. There are no online purchasing functions available. Management decided a number of years ago that the internet was not a key part of the business. They also chose to ignore the ramp up of social media sites along with the rapid expansion of smartphones. The plan was to keep technology simple, use it as long as it works, and keep costs down.

• The company is very profitable. You and your auditors have noticed that a lot is being said at various social media sites about the company. A number of complaints have surfaced about the quality at certain restaurants and the lack of customer focus. Social media sites are blocked from access through the company's intranet site, which makes it difficult for much research to be done while at work. Since social media is rapidly expanding, applications such as Facebook, LinkedIn, Google +, Yelp, and Twitter, along with many others, are changing the speed at which information about the company gets out. You have noticed that a number of individual restaurants have taken it upon themselves to create their own Facebook accounts. All of these accounts have a different look, feel, and message. You also noticed the company's name coming up in many of the different social media applications and you are concerned about the brand reputation. The CEO decided not to have an overall corporate Facebook account and was furious to learn that individuals at individual restaurants had established their own. He immediately called you in to recommend what immediate and long-term actions to take related to the corporate stance on social media.

Problem A. Describe for the CEO what immediate steps management should take regarding social media policies and practices.

Problem B. What risks does the expansion in use of social media create for the organization?

Problem C. How would you explain to management some of the rewards that can be reaped from the use of social media for the business?