by Eric K. Clemons, Cutter Fellow, Professor of Operations and Information Management, The Wharton School

Where people go, corporations inevitably follow, and corporations are developing enthusiastic interest in online social networks. This interest remains somewhat unfocused, and some corporate community websites are more obviously commercial and monetized than others:

• Amazon has long benefited from its internal, embedded community of raters for products ranging from books and CDs to expensive electronics and home appliances.
• The owner of discount hotel site hotels.com was simultaneously the (invisible) owner of tripadvisor.com. Tripadvisor's independent user-generated content added necessary legitimacy to recommendations from hotels.com and, significantly, users' posted recommendations were never altered in order to sell hotel rooms, which would have destroyed the strong synergies between the two sites. Similarly synergies can be observed between the restaurant rating website Zagat.com and the restaurant booking site OpenTable.com.
• Kraft has augmented its first community website, largely a message board buried within the Kraft website (http://kraft.liveworld.com/category/Message-Boards/3), with a far more glitz and more easily found multi-media website "hosted" by Mandy Moore and a team of celebrities and domain experts (http://www.kraftbrands.com/upumpitup/). Neither the posts on the message board nor the expert content on the newer website seem explicitly targeted at promoting Kraft.
• First Wives World (http://www.firstwivesworld.com/) is a community based on supporting women and their friends and family through a difficult life-stage transition. The site has information, original entertainment, text and video blogs, but at present its revenue model includes no advertising.

As the emerging world of corporate social networks takes shape, we see sites as classified along two dimensions. The first dimension is focus. Some social networks are internally focused and designed for use by employees, while others have external focus and are designed for the firm's customers or potential new consumers. The second dimension is control. Some sites are actively managed by a corporation host, with rules, oversight, and enforcement of policies, while others are controlled by their users, largely without regulation.

Internally focused sites serve as employee meeting places for numerous purposes:

• training and orientation
• discussion of HR or of general workplace issues and concerns
• collaboration, productivity, and leveraging information and sharing expertise or best practices within the firm
• mutual support, discussion of workplace problems, abusive employers, or things that the corporation does not yet know how to deal with or perhaps even does not yet know that it needs to deal with them

Likewise, externally focused sites serve as customer or consumer meeting places for numerous purposes:

• enthusiastic sharing of recipes, uses, and tips
• product ratings and comparisons, some favorable, some not
• recommendations for plot lines and characters for TV series, changes to management policies or even changes to individual members of the management team, firing players or coaches for professional teams, etc.

We offer the following guidelines, common to both internal and external sites:

• Users gravitate to the best technology and may abandon corporate sites for general purpose sites with better technology
• Users will resent interference, snooping, or the perception of unwarranted control, and likewise will gravitate towards open sites ("keep your hands off my forum!")
• Editing, censoring, sock puppeting, and pseudononymous postings will be outed, and, again, will drive users to sites that are free of corporate control and interference.

The following observations are specific to corporate websites for employees. First, as a profession we really don't understand this yet. Nobody does. Despite the hype, the enthusiasm, and the promises, there are at least five critical uncertainties that will determine if corporate social networking enhances or weakens employee satisfaction and corporate performance.

• Uncertainty about perception: When Hal Rosenbluth of Rosenbluth Travel wanted to forge a winning service organization, his philosophy was "the customer comes second;" every new hire had an introductory tea with Hal. What message would an online virtual tea in Second Life have sent, had it been possible? (1) You're important and we are so cool high tech as a service organization or (2) You're not quite important enough for Hal to meet with you?
• Uncertain impact on organizational performance: As early as 1967, in a classic piece titled "Management Mis-Information Systems," Russ Ackoff noted that when organizational units have different objectives and different incentives, sharing information can lead, predictably and even inevitably, to worse financial performance. Do we know how virtually unlimited and unsupervised information sharing will affect our organizations?
• Uncertain impact on organizational structure: Existing organizational structures allow the current leaders to maintain their positions through relationships, information flow, and control. What happens when the younger hot shots have better information flow, more numerous relationships, and tighter control over their cohorts than even before? Does the organization become more cohesive and more efficient, as many managers hope? Or do younger employees shift their allegiance more strongly from the firm and its leaders to their own groups? Does productivity surge? Or do employees become unmanageable?
• Uncertainty about rewards: Do we know how to recognize and reward employees who participate in and share through social networks? Over a decade ago we learned that the dream of reusable shared code modules would improve productivity only if there were rewards offered to internal developers every time a segment of their code was picked up and used by another employee. Clearly, we need to provide incentives for sharing on social networks, or employees will quite rationally limit the time they "waste" being exploited by others, and focus on doing their "real" jobs.
• Uncertainty about use and abuse: Do we know how to discipline employees for unacceptable online behavior? There are already services helping individuals get their lives back after a thoroughly public reputational trashing on Facebook. Can we ensure that won't happen with a corporate social network? Do we know what the corporate legal liability might be if we cannot or do not prevent it?

While we may not yet understand the world of corporate social networks, we do know what we need to know to learn, and we are actively working, both with clients and with our fellow researchers, to learn more. No one has the answers, but we at least have the questions and the team in place. We are working with a virtual reality pioneers, anthropologists and ethnographic observers, a psychotherapist, a theater professor and acting coach, even a successful 19-year old online social network pioneer, and we will know first.