Enterprise 2.0 & Legal Risks

With modern technologies, user-generated content (UGC) can be widely and easily done in many various methods, such as blogging, podcasting, social networking etc. By having large numbers of options in publishing the contents and freedom of expression, lots of people become less aware of what they can or cannot publish to the public, especially those who share their  information from the use of the social media (e.g. private conversation, product/service complaints). These lead to where serious threats are created and put mentioned subjects such person/organisations into risks.

Illust. by Sarun Y.

Illust. by Sarun Y.

Among organisations, Kodak (Eastman Kodak Company) is a well-known company that operates its business in imaging and photographic equipment, materials and services. During 2009, the company experienced the related risks from the social media due to the PR issue of its online photo gallery service. By basing on legal risks of social networking that stated by the DundasLawyers in 2011, I decide to choose Kodak as a sample organisation in which some legal risks can be identified from its case study and addressed with the organisational social media policy as follows:

  • Misleading and deceptive conduct – As Kodak chose to delete vast amount of old customers’ photos, the company just came up with the limited photos’ storage options for its users, such as downloading one photo at a time, paying for a photos’ CD copy or annual storage fee. This made some customers deciding to turn against Kodak, especially those who got charged for their own photos. They posted all negative complaints about the company’s customer service on Twitter. From this situation, Kodak needs to be responsible for this false and/or misleading and deceptive statements that made by its customers on what have been mentioned in its Twitter page.

  • Reputation Risk – In relating to the previous risk, the use of social media such Twitter allows those negative messages from the old Kodak’s customers to be extensively spreaded to broader ranges of audiences by resharing/retweeting the following messages. The company will have no idea about those who have already viewed these related tweets, and it can be either new Kodak’s customers or its sponsor partners. This might affect the company in terms of losing its reputation and customers’ relations.

    To prevent the above risks, Kodak has to apply several policies to its organisation, such as engaging the social media reputation monitoring services (e.g. SproutSysomos, Radian6) in order to help it keeping track on the areas where threats can be possibly occurred. Also, the company needs to train its employees to monitor and handle social networking issues under the company’s control. Apart from what have been mentioned, the social media crisis is an uncertain type of issues, so the company should be ready and prepare the backup plans for handling it.

The social media is like two sides of the same coin. It can bring both opportunities and risks to its users. For organisations, they should learn on how to use it to maximize their performances along with minimizing the risks that can possibly impact their businesses. When it comes to the social media, almost all of the generated contents are generally what to be viewed by the public. Therefore, it is important for all users to think of consequences for every single of their actions before making any online publication through the social networks.

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About Sarun Y.

A Thai student who continues his master degree in IT at Queensland University of Technology (Brisbane). Love drawing and think it as another effective way to convey the message to his audiences.

10 comments

  1. It must be due to Kodak’s inability to clearly see their future prospects after the death of the film canister camera.
    Do you think though that an individual user should be held accountable within Kodak though?

    Interesting post as well. I had completely forgotten about Kodak, so it’s interesting to hear how they’ve been going on the digital front!

    • Hi Adam,
      When it comes to the topic of the social media, I think that there is no best solution for the organisations to prevent all risks rather than minimizing them into the acceptable levels. From the following Kodak’s case, we can see that all mentioned/linked Tweets to Kodak from its customers are the generated content from the customers’ accounts. That means the permission in controlling the content is belong to them, and Kodak’s staffs are only allowed to reply back to the customers’ tweets in order to start negotiating with them for further solutions. According to this situation, I believe that the customers have their rights to claim their photos (as the intellectual property). With the appropriate use of the social media, Kodak can possibly come up with the better solution than what it just did in this case study (e.g. crowdsourcing to gather the customers’ opinions on the issues and solutions as its open-session). I think that all users have their own rights with the freedom of expression on the social media depending on the content that they try to convey to their audiences (e.g. themselves, public, specific groups). To tell you, the Kodak’s case really surprised me as well, especially its options that offered to its loyal customers. Thank you for your feedback, Adam 🙂

  2. Another interesting article, that wasn’t a very smart business decision from Kodak. I think Kodak has made a couple of these. Coming from a company that invented the digital camera to a company that filed for bankruptcy earlier this year.

    • Thank you, John 🙂
      It is indeed like what you have mentioned in your comment. By basing on the following Kodak’s case, it made me to think for whether these customers’ photos can be counted as their intellectual properties or not. I do believe that the customers have their rights to claim them, and Kodak can possibly negotiate with them through the use of social media in a better way than what it just did (e.g. gathering the customers’ opinions on the issues and solutions in the open-session of its social media spaces).

  3. I agree that Kodak really made a bad move on pissing its customers off. It would be better if the company offer other services like what facebook has been doing (photo timeline) but in a much more professional and diversifying way, rather than charging customers for the existing photos as valuable products to both sides.

    • Thank you for your feedback, Shingo 🙂
      I found that the official Kodak’s Facebook page was created within this year (2013) based on its earliest post in its timeline (http://on.fb.me/jxhXnA). For this time, I think that the company seems to step well with the use of social media (e.g. publishing its post about its products and services to engage its customers), so I believe that it has learned from its lessons and become more aware of its past. In addition to your comment on other online Kodak’s services, it currently has its own Facebook app, called “My KODAK MOMENT ” (http://bit.ly/ZM8Dxs). Based on the following application, Kodak can be able to tweak/extend its imaging and photos’ service into a new level business. Also the application allows the customers to choose their own photos directly from Facebook, so this helps the company to be less concern for its storage fee’s issues.

  4. Hi Sarun, great post again, I was just wondering if you thought if there was anything else they could do in terms of their SMP to protect themselves further? Stop by my post when you have a minute, I’ll be sure to read yours again next week 🙂

    • Based on the Kodak’s case, another important SMP can be the part in which the company trains its employees to be aware of their social media activities and think of their consequences for their company and themselves. Thank you for your visit, Wong 🙂

  5. Just a interesting thought appear while reading your post, how to manage their trainees under SMP? You know that, sometimes they don’t have any fixed contract/ finish their training, it is more likely to branch any “policies” with limited awareness. What could the organisation dealing with such conflict?

    • Good point, Chuan 🙂 I think that the organisation should inform the trainees about the SMP at the earliest stage of their working day. To create self-awareness of the social media activities, the trainees need to be taught on how the use of the social media is important to the organisation and how other related policies applied if the employees violate the rules. I have found an interesting case about the trainee and social media and wanted to share it with you (http://bit.ly/1cVB7uN).

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