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1.1         Background to the Study

Entrepreneurial development all over the world and especially in Nigeria is a must to national economic growth and development. Apart from being the best approach to further diversify the nation’s economy from her mono-economy status, it is also crucial to poverty eradication and employment generation. In fact, it has been affirmed to be the bed rock of nation’s industrialization and the beginning of new era (Ogundele, 2007; Akinbola, Ogunnaike and Tijani, 2013). Entrepreneurship itself has a long history and can be dated back as far as 17th and early 18th centuries with the popular work of Richard Cantillon and Adam Smith but was largely ignored theoretically until the late 19th and early 20th centuries and empirically until a profound resurgence in business and economics in the last 40 years (Ebbena and Johnson, 2006; Shane, 2003).

In modern society, businesses have taken different forms in terms of ownership, available resources, management and control and all these have informed the definition of a small scale business. Meanwhile, the experience of many developing economies like Nigeria has shown that small and medium scale enterprises (SMEs) can


meaningfully contribute to the attainment of the national economic objectives (Abu & Ezike, 2012). Small scale businesses in particular have the potentials to achieve development objectives such as output expansion, employment generation, income redistribution, and indigenous entrepreneurship promotion and technological advancement among others (Abu & Ezike, 2012; Ogujiuba, Ohuche, & Adenuga, 2004).

In corollary, the contemporary organizations, small or big, now operate in the external environment characterized by intense global competition, technological innovation and change. This setting has the need for businesses to take initiatives, embrace risk, stimulate innovation and cope with level of uncertainty associated with external business factors such as technological innovation and change (Emangholizadeh, Borghei & Matein, 2011). Hence, this has led to the emergence of new media of marketing communications (Kotler & Keller, 2012) beyond the expectations of average entrepreneurs including the small business owners in recent times. The current trend toward social media as a new form of marketing communications with consumers is part of the change.

It is therefore not an understatement that the idea behind social media is far from groundbreaking (Kaplan & Haenlein, 2010). In fact, it is a new form of marketing communications that have revolutionalised the modern business communications and marketing practices across the globe (Kotler, 2012). The concept of social media has indeed generated confusion among scholars and practitioners (Kaplan & Haenlein, 2010) but one can trace its evolutionary development from the origin till date to be able to appreciate its relevance to the small scale businesses. According to Kaplan & Haenlein


(2010), social media has really passed through different stages of development before the popularity accrued to it today.

In their own account, social media started in 1979 by Tom Truscott and Jim Ellis from Duke University as the ‘Usenet’ representing a worldwide discussion system that allowed Internet users to post public messages. It became popular about 37 year ago, when Bruce and Susan Abelson founded ‘Open Diary,’ an early social networking site responsible for bringing together online diary writers into one community (Kaplan & Haenlein, 2010). This led to the creation of ‘weblog’ which also truncated as ‘blog’’ a year later when one blogger jokingly transformed the noun ‘weblog’ into the sentence ‘we blog’. With the increasing high-speed Internet access, social networking sites such as MySpace (in 2003) and Facebook (in 2004) were created and consequently, the term ‘Social Media’ was coined and became popular as it is used by all today. It has witnessed the most recent addition, with the advent of the so-called ‘virtual worlds,’ a computer-based simulated environments inhabited by three dimensional avatars (Kaplan

&   Haenlein, 2010). The new dimensions have added LinkedIn and several other social platforms like Twitter, Whatsapp and the rest.

Among the observed challenges include finding alternative replacement for physical distribution of goods and contacts with consumers via virtual interactions and even intimacy through social media platforms like Facebook and LinkedIn or Whatsapp (Jones, Borgman & Ulusoy, 2015). Besides, social media has created a lot of

countless   opportunities   for   small    businesses    as   they   spend   less   on    marketing


communications and do not need to bother themselves on the required financial resources to reach out to their numerous customers using other traditional marketing communications tools (Jones, Borgman & Ulusoy, 2015). From the foregoing, it is

clear that social media has brought some challenges and opportunities to small scale businesses today (Kaplan & Haenlein, 2010). Moreover, small scale businesses must learn to use social media to their best advantage simply because of its far-reaching impact. Consequently, the concern of this study was to examine the effects of social media on different aspects of business operations of those businesses categorized as the small scale businesses, using selected small scale businesses in Ogun State, Nigeria as a case study.

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