Abstract

The recent growth of social media has dramatically changed interactions between the personal, business, and legal
spheres of society. Corporations now use social networks, blogs, and even virtual worlds for marketing, recruiting,
customer service and brand management purposes. Moreover, through the establishment of corporate pages,
companies can reap increased web exposure, traffic, and popularity, while acquiring valuable insight into
consumer perceptions. Despite the multitude of tangible benefits provided by social media, organizations are now
beginning to recognize the legal and business risks that accompany these opportunities. Legal scholars and
practitioners are increasingly examining the effects of social media on organizational strategy, with particular
attention being paid to social media’s involvement in the struggle between the negligent hiring theory and
anti-discrimination laws. Although social media policies and employee training have been proposed as
methodologies to address the legal costs associated with this conflict, these legal-centric approaches largely fail to
examine the issue from a comprehensive strategy-oriented perspective. Accordingly, in this paper I will
contribute to the academic literature by outlining how organizations can manage litigation costs derived from
social media activities through the use of best practices and risk analysis.

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