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Marketing
Marketing affordance of social Intelligence &
Planning
media for product innovation: the
role of organizational structures
Linlin Liu
School of Business Administration, South China University of Technology,
Guangzhou, China, and Received 13 January 2024
Revised 26 March 2024
Jiawen Chen 17 June 2024
12 August 2024
School of Management, Guangzhou University, Guangzhou, China 13 September 2024
Accepted 16 September 2024

Abstract
Purpose – Despite substantial research attention on the business use of social media in innovation literature,
the action-based mechanisms through which social media affect firms’ product innovation remain unclear. We
address this gap by drawing on the affordance theory and examining the effects of social media applications
on product innovations.
Design/methodology/approach – The study was based on analyzing data collected through a
questionnaire survey of Chinese firms. Partial least squares structural equation modeling was applied to
test the hypotheses.
Findings – The results show that social media applications have a positive effect on marketing affordances
(including customer behavior pattern discovery, real-time market response and marketing ambidexterity), in
turn positively influencing product innovation performance. Organizational structures shape the actualization
of the marketing affordance of social media; while organizational formalization positively moderates the
relationships between social media application and marketing affordances, organizational centrality weakens
these relationships.
Practical implications – Managers will benefit from understanding how social media can be applied to help
their firms achieve product innovation. When manufacturing firms engage in social media for product
innovation, they may find it worthwhile to focus on marketing actions such as customer behavior pattern
discovery, real-time market response and marketing ambidexterity.
Originality/value – This study elucidates the action-based mechanism of marketing affordance by which
social media usage improves product innovation performance. This study also highlights the design of
organizational structure as an important approach to realizing the potential benefits of social media in product
innovation.
Keywords Product innovation, Social media, Marketing affordance, Organizational structure
Paper type Research paper

1. Introduction
Contemporary businesses allocate substantial resources to social media with the expectation of
enhancing stakeholders communication, augmenting market sales growth, and bolstering firm
competitiveness (Felix et al., 2017; Li et al., 2021). Social media platforms provide firms with
access to customer insights and viable technologies that may drive and enable them to update
their offerings and promote product innovation (Chua and Banerjee, 2013). In dynamic markets
where the ability to create innovative products and services is crucial for gaining a competitive
advantage, fostering open innovation becomes indispensable for firms to generate value
(Akgu €n et al., 2012; Ryzhkova and Pes€amaa, 2015). While many firms have applied social
media to promote innovation, the accelerating rate of social media investment often fails to
match the quality and effectiveness of new product development. Along with the practical

Marketing Intelligence & Planning

This work is supported by the National Natural Science Foundation of China (Nos. 72202071, 72202048) © Emerald Publishing Limited
0263-4503
and the Fundamental Research Funds for the Central Universities (No. QNMS202205). DOI 10.1108/MIP-01-2024-0028
MIP challenges, empirical evidence regarding the influence of social media on innovation has
yielded inconclusive findings, with some studies showing positive effect (Bhimani et al., 2019;
Ngammoh et al., 2021) while others reporting nonsignificant relationships (Marion et al., 2014).
This inconsistency in existing literature underscores the need for a more in-depth
understanding of how social media applications can enhance product innovation performance.
Studies rooted in resource-based theory elucidate the sources of market advantages that
firms can potentially attain through the application of social media (Bhimani et al., 2019;
Muninger et al., 2019). In this view, the focus often lies on potential competitiveness brought
about by social media, including: (1) access to external information and knowledge, (2) expanded
networking opportunities, or (3) improved dynamic capabilities (Bashir et al., 2017; Muninger
et al., 2019; Wang et al., 2016; Ye et al., 2022). It is widely recognized that social media can serve
as a valuable tool for firms’ marketing endeavors, enabling them to enhance their knowledge of
consumers, expedite market responsiveness, and explore additional sources of novel ideas for
product development (Akter and Wamba, 2016; Elia et al., 2021). However, the existing literature
has not yet focused on understanding marketing actions that may enhance the potential benefits
of product innovation performance facilitated by social media (Ballerini et al., 2023). Addressing
this gap is crucial because the mere presence of social media in isolation does not directly
generate value for innovation performance. It becomes imperative to implement organizational
strategic actions based on the afforded capabilities offered by advanced technologies (i.e. social
media) (Marion et al., 2014). To achieve superior product innovation performance through
leveraging social media, firms should initially ensure organizational commitment to marketing
strategies and actions involving social media (Nguyen et al., 2015). Practically, the lack of a
proper understanding of the social media-enabled actions for marketing purpose may expose
firms to inefficiency risks and hinder innovation performance. Therefore, to illuminate the value
of social media in product innovation from the perspective of marketing action is imperative, as
this can provide concrete guidance for informed decision-making and enable firms to capitalize
on the advantages provided by social media.
The present study aims to address the research gap discussed above, and seeks to answer
the following core research questions: Does a firm’s social media applications result in
enhanced product innovation performance? And more importantly, if so, through what actions
and under what organizational conditions does this occur? To provide our answers, we ground
our study theoretically on the affordance theory (Volkoff and Strong, 2017; Sun et al., 2021), and
explore how firms can utilize social media effectively for product innovation. Affordance
theory indicates that the value realization of digital technologies such as social media depends
on organizational actions and contexts (Rice et al., 2017). Affordance captures action potentials,
that is, to what extent an individual or organization with a particular purpose can do with a
technology or information system (Leonardi and Vaast, 2017). Although the affordance
induces social media that generate value for firms, the extent to which firms can capture value
from social media applications varies greatly with different goal-oriented actions. Our study
builds on the notion of marketing affordance, defined as the specific marketing actions enabled
by investment in social media (Leonardi and Vaast, 2017; De Luca et al., 2021), thereby
disentangling the mechanisms of marketing actions through which social media applications
can enhance the product innovation performance of firms. Implied by affordance theory, social
media applications intricately reconfigure the socio-technical landscape within firms, aligning
with their capacities and objectives to catalyze innovative activities (Dremel et al., 2020).
Through deliberate investments in social media, firms gain the acumen to discern the potential
actions facilitated by social media, disseminate insights garnered from these initiatives across
diverse teams and departments, embark on exploratory and exploitative marketing activities,
and incorporate these actions into their operational processes (Ciuchita et al., 2022; Ngammoh
et al., 2021). Therefore, we propose that social media applications facilitate the actualization of
marketing affordances, encompassing the discovery of customer behavior patterns discovery,
real-time market responsiveness, and marketing ambidexterity, thereby fostering product Marketing
innovation performance. Intelligence &
In addition, this study investigates the contingent conditions through which social media Planning
applications lead to better marketing affordance from the perspective of organizational
structure. The achievement of innovation necessitates firms to adapt their organizational
structure in order to effectively capture and realize market opportunities (Argouslidis and
Baltas, 2007; Lee et al., 2015). Consequently, the design of organizational structure in terms of
centralization and formalization may exert an influence on the transformation of innovation
opportunities sensed through social media into concrete innovation, thereby facilitating
collaboration with stakeholders to contribute to firm innovativeness (Joseph et al., 2016).
Therefore, we propose that organizational centralization and formalization will shape firms’
actualization of the marketing affordance of social media applications.
This study contributes to the research literature in at least two ways. First, it offers an in-
depth understanding of the mechanisms through which social media applications contribute
to firms’ product innovation. We incorporate the concept of marketing affordance to offer
insights into specific marketing actions that facilitate transforming social media investment
into product innovation performance in competitive markets. Our framework of affordance
theory extends an action-based view of the value of social media for innovation and advances
the resource-based view that treats social media as a known sources of market
competitiveness (Bhimani et al., 2019; Ye et al., 2022). Second, this study advances
existing research by identifying how the organizational structure design enables firms to
actualize the marketing affordance of social media for product innovation. This study offers
valuable insights for managers to gain a better understanding of the impact of social media
and provides strategic guidance on leveraging social media applications for the effective
implementation of product innovation.

2. Theoretical background and hypotheses

2.1 Affordance theory
Affordance theory is a useful lens for studying how technologies such as social media
platforms can be used by firms to create value and achieve innovation outcomes. Rooted in
ecological psychology (Gibson, 2014), affordances are the inherent functional attributes of a
specific object generated in the relationship between participants and objects (Rice et al.,
2017). Affordance theory emphasizes that the potential value of technology is not inherent in
the technology itself, but rather depends on the symbiosis between the capabilities of the
technology and the actions that can be taken by firms (Leonardi and Vaast, 2017; Sun et al.,
2021). Therefore, different firms may perceive and use social media platforms differently,
leading to varying degrees of success in their innovation efforts. Literature from the resource-
based view theory has identified the application of social media as a source of product
innovation advantages (Muninger et al., 2019; Ye et al., 2022), but neglects the marketing
actions that can actualize such potential. By applying the affordance theory to our research,
we can gain insights into how social media can be effectively utilized for product innovation
and identify the factors that influence its effectiveness.
Affordance theory suggests that technologies offer action possibilities that emerge from
the interaction with organizational actors, structures, and goals (Leonardi and Vaast, 2017;
Rice et al., 2017). Consistent with tenets of affordance theory, marketing affordances refer to
the opportunities provided by digital tools or platforms that enable specific marketing
actions (De Luca et al., 2021). Previous research has identified three main action possibilities
of marketing affordances: customer behavior pattern discovery, real-time market response,
and marketing ambidexterity (De Luca et al., 2021; Cao et al., 2022; Ciuchita et al., 2022).
Customer behavior pattern discovery involves using social media to predict and uncover
MIP customer behavior patterns (Alfian et al., 2019). Real-time market response allows marketers
to respond to individual customer needs and preferences as they arise (Wedel and Kannan,
2016). Marketing ambidexterity refers to the ability to simultaneously exploit existing
market-based knowledge and explore new market-based knowledge (Ho and Ganesan, 2013).
These affordances empower certain firms to engage in creative and constructive marketing
behaviors through social media, overcoming the constraints of time and space (Rice et al.,
2017). Moreover, they facilitate collaboration and co-creation with customers for new product
development purposes (Ryzhkova and Pes€amaa, 2015; Dahlin et al., 2020). Therefore,
marketing affordance is defined as the actualized affordances linked to specific actions taken
to produce tangible outcomes at the organizational level, rather than the mere potential for
action (Dremel et al., 2020).
According to the affordance theory, the value of using social media depends not only on
the affordance of digital technology but also on the organizational infrastructure used to
actualize this affordance (Leonardi and Vaast, 2017; Khan et al., 2023). In dynamic and
competitive markets, it is crucial for firms to assess whether the affordances of social media
can help establish distinctive capabilities for pursuing innovative growth, and how they can
adjust their organizational structures to take advantage of these affordances (Volkoff and
Strong, 2017). Exploring the potential interaction between social media affordances and
organizational structure can shed more light on why some firms are better equipped to derive
value from social media than others. However, few studies have examined the potential
interactions between the marketing affordance of social media and the different
organizational structures employed by firms (Bhimani et al., 2019). In this study, we
employ affordance theory to uncover the moderating impact of organizational structure on
the relationship between social media and marketing affordance.

2.2 Social media application, marketing affordance, and product innovation

Product innovation performance pertains to the advantages obtained from incorporating
new technologies, designs, or components into novel products or services that meet the needs
of consumers and markets (Xie et al., 2023). The literature on open innovation highlights the
burgeoning potential of social media in facilitating collaboration and idea generation among
businesses and their stakeholders (De Zubielqui et al., 2019; Saura et al., 2023). This emerging
potential offers significant opportunities for organizations to enhance their innovation
processes and outcomes (Cao et al., 2022). Embracing the perspective of open innovation,
scholars emphasize that within competitive landscapes, social media platforms act as
conduits for accelerated information dissemination and enhanced knowledge exchange
among internal and external stakeholders (Cripps et al., 2020). Consequently, firms can
capitalize on this dynamic environment to capture invaluable insights and propel innovation.
Social media platforms provide a versatile toolkit for various stages of the innovation
process, including idea generation, product development, employee collaboration, internal
communication, and supply chain management (De Zubielqui et al., 2019). Nonetheless,
scholars also emphasize the need for further exploration of specific organizational
mechanisms to optimize knowledge transfer and leverage in innovation (Patroni et al.,
2022). Building upon affordance theory (Gibson, 2014; Leonardi and Vaast, 2017), we propose
that the use of social media applications can enhance a firm’s product innovation
performance by stimulating marketing affordances, such as uncovering customer behavior
patterns, facilitating real-time marketing, and fostering marketing ambidexterity.
We suggest that a firm may achieve marketing affordance by investing in social media
applications. First, social media applications can provide companies with the ability to
discover and predict customer behavior patterns. Previous studies have implied that social
media can be a reliable indicator for predicting customer behaviors (Goel and Goldstein,
2013; Luo et al., 2013). Social media applications allow firms to socialize with customers to Marketing
learn about their preferences, attitudes, and problems. This approach diverges from Intelligence &
conventional market research methodologies, such as customer surveys and interviews Planning
(Chua and Banerjee, 2013). Social media platforms also create common ground for customers
to share a large quantity of experience independent of time and location constraints (Pan
et al., 2015). Social media applications enable firms to access rich customer-specific
knowledge and generate market insights to understand the past, current, and future
conditions regarding their target customers. They can also identify the patterns and trends of
customer latent needs and consumption.
Second, social media applications may help firms establish the ability to meet the different
and constantly changing needs and preferences of customers in a timely way. Social media
applications provide firms with marketing analytics methods for developing models to
generate diagnostic insights and support real-time decision-making for marketing actions
(Wedel and Kannan, 2016). By processing customer content on social media channels, firms
can gain an overview of customer feedback and word-of-mouth, allowing them to take
proactive actions to respond to customer needs. Interactions with customers on social media
platforms can lead to more effective mobilization and deployment of customer resource
contribution and customer co-creation, for example, knowledge sharing and skill
development, thereby speeding up firms’ identification and implementation of effective
marketing responses to expected and unexpected customer behavior (Wedel and
Kannan, 2016).
Third, social media applications can enable firms to simultaneously pursue market
exploration and exploitation. Social media applications enable firms to obtain a wide range of
information about new customer needs and market areas. Firms can learn about
technological innovations they can use to commercialize creative and novel ideas, thereby
reducing traditional barriers associated with exploratory learning. Customer feedback from
social media platforms can also help firms to better understand customers’ existing needs
and modify their offerings to fit with customer preferences, factors beneficial for exploitative
learning (Benitez et al., 2018). More importantly, social media applications enable firms to
identify synergies and linkages between current and future customer needs, product/service
delivery, and strategic market opportunities (Li et al., 2021). Firms with social media
applications will be more easily involved in product development processes, and co-creation
alleviates the resource and strategic constraints for market ambidexterity (Josephson et al.,
2016). Therefore, social media applications provide firms with the action possibilities that
lead to synergies of the exploitation and exploration needed to serve current and future
customer needs. Based on the above discussion, we propose the hypothesis:
H1. Social media applications are positively related to marketing affordance.
Marketing affordances can contribute to firm product innovation. Marketing affordances
widen the space for product innovation opportunities that firms can pursue in both the short
and long term. First, customer behavior pattern discovery may lead to product innovations
that leverage superior knowledge of customers’ consumption patterns. Digital content may
be reconfigured, customized, and/or prioritized based on customer behaviors to facilitate
effective customer-oriented designs, and thus improve the firm’s product innovation
performance (Xie et al., 2023). Second, real-time market responsiveness can lead to designing
new products that adapt and respond dynamically to the customer or market context,
thereby providing timely and valuable new offerings and new customer experiences (Wedel
and Kannan, 2016; Marinova et al., 2017). With real-time market responsiveness, firms can
reduce the risks of nonacceptance and improve market adaptive capability, enhancing the
firm’s product innovation performance (Akgu €n et al., 2012). Finally, market ambidexterity
may lead to new product concepts that leverage resource complementarities and synergies
MIP for product innovations (Andriopoulos and Lewis, 2010; Josephson et al., 2016). Firms
focusing on both market exploitation and exploration can better resolve the rigidities in
product innovation, such as integrating risk/experimentation and efficiency/production for
product innovation (Benitez et al., 2018). Therefore, we propose the following hypothesis:
H2. Marketing affordance is positively related to product innovation performance.
In accordance with affordance theory, the capability of firms to achieve product innovation
through social media applications can be realized by leveraging marketing affordances. By
utilizing social media applications, firms can identify patterns of customer behavior and
implement effective marketing actions (Felix et al., 2017), reduce market response time
latency (Rapp et al., 2013), and achieve synergies between marketing exploitation and
exploration (Ngammoh et al., 2021). Moreover, marketing affordance enables firms to
generate new ideas about product innovation and helps firms to commercialize product
innovation. Therefore, we propose that marketing affordance will mediate the effects of
social media applications on product innovation performance.
H3. Social media application is positively associated with product innovation
performance through marketing affordance.

2.3 The moderating effect of organizational structure

Organizational structure is the persistent characteristics of an organization reflected by the
allocation and coordination of resources and power (Walton, 2005). Organizational structure
is an important background factor in predicting the marketing affordance of social media
applications, as it regulates how information and knowledge is processed internally and
determines the effectiveness of achieving market goals and objectives (Jaworski and Kohli,
1993; Troy et al., 2001; Lee et al., 2015). In this study, we pay particular attention to both
centralization and formalization because they narrowly define the structural characteristics
of a firm. The concepts behind these two structures are weakly correlated, making it possible
to clarify their individual effects (Pattikawa et al., 2006). The two structures are also
important in achieving organizational goals and objectives, especially in predicting fulfilling
market orientation in a competitive environment (Lee et al., 2015).
Centralization refers to the degree to which decision-making powers are concentrated at
the top of the hierarchy (Jaworski and Kohli, 1993). In a centralized organization, most
resources and information are concentrated at the upper bounds of firms, so important
management decisions are mostly made by top and senior management teams (Joseph et al.,
2016). Employees at the front lines are limited in interpreting and using information while
attempting to generate insights into customer behavior patterns with the application of
social media. Frontline employees require authorization from their leaders to take proactive
actions in response to customer needs. This situation creates latency of market response and
reduces the affordance of social media applications for real-time marketing (Mu, 2015). A
centralized firm may also limit the opportunity for employees to contribute ideas and
feedback about utilizing knowledge acquired via social interaction on social media platforms
(Moorman and Day, 2016), strengthening social media affordance in promoting
ambidextrous market learning. However, decentralization of information and resources
may help firms to actualize the market affordance of social media applications by
empowering frontline employees to delve into and reflect on customer needs, make timely
and effective responses to these needs, and utilize customer knowledge in explorative and
exploitive ways. Therefore, we suggest that centralization weakens the positive effects of
social media applications on marketing affordance. Based on the above, we propose the
following hypothesis:
 H4. Centralization negatively moderates the effect of social media applications on Marketing
marketing affordance. Intelligence &
Planning
Formalization refers to the degree to which regulations, procedures, and directives are
documented in an organization (Troy et al., 2001). Formalization is related to the way
communication is conducted within an organization and the extent to which the working
roles and duties of employees are guided by the firm’s rules and regulations (Nobel and
Birkinshaw, 1998; Hsiao and Wu, 2020). Institutionalizing rules, procedures, and roles may
reduce redundancy and confusion on how to communicate and utilize customer-centric
information (Auh and Menguc, 2007), which facilitates the discovery and prediction of
customer behavior patterns. Formalization tends to standardize the marketing processes and
minimize resource duplication, helping to increase marketing efficiency in serving customer
needs (Argouslidis and Baltas, 2007) and improving the real-time marketing enabled by
social media applications. Furthermore, when organization formalization is high, the task of
improving and upgrading existing offerings in line with current and future customer
preferences can be performed more efficiently, and explorative and exploitative learning
through social media can be enhanced. We expect that formalization will strengthen the
positive effect of social media applications on marketing affordance. Therefore, we propose
the following hypothesis:
H5. Formalization positively moderates the effect of social media applications on
marketing affordance.

3. Methodology
3.1 Data collection and sample
In this study, we collected survey data from Chinese manufacturing firms. We designed the
survey instruments based on a comprehensive review of existing literature. Twelve firm
managers were invited to participate in a pilot study to examine whether the items
represented our constructs. These firms operate in China but are not included in the sample
used in the main analyses. The pilot program enabled us to establish the content validity of
the questionnaire and ensure that key respondents could understand the survey questions as
intended. Based on the feedback from the piloting process, we made some minor
modifications to the wording of the questions to remove ambiguity.
Simple random sampling was applied to select the samples. We approached
governmental agencies to obtain lists of firms. The list of registered firms was provided
by the Provincial Ministry of Industry and Information Technology, an administrative
agency responsible for industrial planning. The obtained list encompassed over one hundred
thousand firms with contact information, company addresses, and basic details regarding
asset and industry sectors. From the contact lists, we randomly selected 500 firms as our
sample frame. We made phone calls to the selected firms to invite them to participate in the
investigation, and 243 firms accepted our invitation. Due to the missing questionnaire data,
our final sample consisted of 215 firms, with a response rate of 43%. This sample size of 215
exceeds the recommended minimum requirement of ten observations per variable (Hair et al.,
2019; Pes€amaa et al., 2021). With 26 observations per variable in this study, meeting the
necessary criteria for our statistical analysis.
To assess the presence of non-response bias in our sample, we conducted a comparative
analysis between the profiles of respondents and non-respondents on our contact lists,
including their asset size and operating industry. Chi-square analysis showed no systematic
response bias. We also tested late response bias by comparing early (first two weeks) and late
MIP (last two weeks) responses through chi-square tests of firm size, firm age, industry, and firm
experience with social media. The results showed no statistically significant differences.
Table 1 represents the sample characteristics. The responses received came from
companies with different industry backgrounds: The electrical industry accounted for the
largest proportion (23.3%), followed by machinery (18.1%), chemicals (17.2%), materials
(16.7%), and transport (15.8%), with a significant portion from other industries (8.8%). The
distribution of the firms’ characteristics highlights the heterogeneity of the sample.
To check for the risk of common method bias in our sample, we followed the guidelines of
Podsakoff et al. (2003) and conducted a series of statistical analyses to evaluate the severity of
common method bias. First, we conducted Harmon single-factor testing on the main
variables studied: social media, marketing affordance, product innovation performance,
centralization, and formalization. The results did not produce a single-factor solution; the
maximum variance explained by any one factor was 38.1%, indicating that there were no
severe common method biases. Second, we used the marker variable technique to detect
common method variance by introducing the blue intention variable as suggested by Miller
and Simmering (2023). The result shows that the difference found in the R2 value in all
endogenous variables is less than 10% after removing the blue intention of the respondent,
reflecting no single factor bias for most covariance (Podsakoff et al., 2003).
There is a potential risk of bias in the results of our model due to endogeneity, which
arises when a predictor variable exhibits a correlation with the unexplained residual of an
outcome variable (Pes€amaa et al., 2021). Following the procedure proposed by Hult et al.
(2018), we employed the Gaussian copula approach to examine potential endogeneity in our
model. The Gaussian copula coefficient was calculated and then added to a regression model
to control for correlation between error terms and the endogenous independent variables (i.e.
social media application in our study). To assess significance, we calculated corrected p-
values based on bootstrapped standard errors with 10,000 bootstrap subsamples.
Endogeneity was considered present if there was a significant impact of the Gaussian
copula coefficient. The result shows that the copula coefficient was not significant (p 5 0.23),
suggesting that the endogeneity did not pose a critical issue in our study.

Sample characteristics Frequency Percentage (%)

Industrial sector
Electrical 50 23.3
Chemicals 37 17.2
Machinery 39 18.1
Materials 36 16.7
Transport 34 15.8
Other 19 8.8
Firm age (years)
<5 36 16.7
5–9 95 44.2
10–19 60 27.9
≥20 24 11.1
Firm size (Number of employees)
<50 51 23.7
50–100 53 24.7
100–299 80 37.2
300–499 31 14.4
Table 1. Note(s): N 5 215
Sample characteristics Source(s): Authors’ own work
3.2 Measurements Marketing
All the measures we adopted were validated in previous studies. All measures were Intelligence &
constructed using a five-point Likert scale (1 5 “strongly disagree,” 5 5 “strongly agree”). Planning
Table 2 shows a summary of the measures.
The measurement items utilized for social media applications included two constructs:
social media usage and social media maintenance. The measurement scales were adapted
from Rapp et al.’s (2013) study on social media applications. In this study, marketing
affordance was measured using three constructs: customer behavior pattern discovery, real-
time market response, and market ambidexterity. The items were adapted from De Luca
et al.’s (2021) study. Centralization and formalization were measured using items adapted
from Nobel and Birkinshaw (1998) and Jansen et al. (2006). The measure of centralization
assessed the degree to which the power of business decisions is concentrated within units or
individuals of the sampled firms, while the measure of formalization assessed the extent to
which rules, job descriptions, and procedures in a firm were specified and documented.
To account for the variations among the observed companies, we considered a range of
firm-specific characteristics. Typically, older firms are more resistant to change, resulting in
lower innovation performance compared to newer firms. We controlled for firm age using the
natural logarithm of the years since the company was established. Additionally, larger
companies often have more resources that they can dedicate to innovation, which can affect
their product innovation performance. We took this into account by measuring firm size
using the natural logarithm of the number of employees. We also accounted for R&D
intensity, which we measured by annual R&D expenditure as a percentage of total sales over
the previous three years.

4. Analysis and results

To evaluate the effectiveness and reliability of hierarchical research models, we applied
partial least squares based structural equation modeling (PLS-SEM) analysis. PLS-SEM was
considered a suitable method for this study, as it allows for the simultaneous estimation of
multiple relationships between one or more independent variables and one or more
dependent variables (Cheah et al., 2023). PLS-SEM can also analyze indirect and total effects,
not only by evaluating the relationship between multiple project structures simultaneously
but also by reducing overall errors related to the model (Becker et al., 2023; Sarstedt et al.,
2023). Table 3 presents the basic descriptive statistics and correlations for the variables
included in our models. The variance inflation factors (VIF) values were all below the
recommended threshold of 10, thereby suggesting that multicollinearity was not a serious
problem in our study.

4.1 Measurement model

We conducted several steps to ensure data validity and reliability. We examined the
composite reliability and Cronbach’s alpha values and determined that their values were
above the threshold of 0.70, indicating the adequate reliability of the measure scales.
Convergent validity is evaluated by checking whether the load from the structure to the
project exceeds the threshold of 0.50 (as Table 2 shows). To further evaluate convergent
validity, we checked whether the average variance extracted (AVE) value was above the
lower limit of 0.50, with a minimum observed value of 0.54 (as Table 2 shows), which greatly
exceeded this threshold. Discriminant validity was established through two methods. First,
we investigated the AVE square root of each construct to verify whether it was greater than
its highest correlation with any other structure (Fornell and Larcker, 1981). As presented in
Table 3, these values were larger than the corresponding off-diagonal elements, providing
MIP Constructs and items Loading

Social media applicationa (Adapted from Rapp et al. (2013))

Social media use (Weight 5 0.52, p < 0.001)
(Alpha 5 0.81, CR 5 0.88, and AVE 5 0.54)
1 We use social media to enhance the relationship with our customers 0.82
2 We use social media to provide our customers with information about our products/service 0.74
3 We engage in social media co-op promotions with suppliers 0.72
4 We use social media to keep current on events and trends in our industry 0.72
5 We use social media to monitor product/service market visibility and performance 0.70
6 We use social media to monitor competitors 0.71
Social media maintenance (Weight 5 0.46, p < 0.001)
(Alpha 5 0.81, CR 5 0.87, and AVE 5 0.57)
1 We take what is posted on our customers’ social media seriously 0.71
2 We allocate a budget to social media application 0.73
3 We appoint staff (or outsource) to be responsible for the technical support of the firm’s social 0.80
media
4 We have a training scheme for social media application 0.80
5 We regularly evaluate the firm’s social media application 0.75
Marketing affordancea (Adapted from De Luca et al. (2021))
Customer behavior pattern spotting
(Alpha 5 0.82, CR 5 0.90, and AVE 5 0.70)
Social media affords our company to
1 Identify patterns of customer behavior 0.86
2 Predict undesirable customer behavior such as complaints and churn 0.82
3 Predict desirable customer behavior such as propensity to buy or word-of-mouth 0.87
4 Identify patterns of competitive actions that may affect our customers 0.78
Real-time market responsiveness
(Alpha 5 0.83, CR 5 0.89, and AVE 5 0.66)
Social media affords our company to
1 Perform real-time market analysis 0.83
2 Perform real-time decision 0.79
3 implement real-time decision rules 0.79
4 identify the best next action in customer interactions 0.83
Market ambidexterity
(Alpha 5 0.81, CR 5 0.88, and AVE 5 0.65)
Social media affords our company to
1 Explore synergies with our current offerings 0.77
2 identify new strategic opportunities 0.83
3 Identify the connection between our current offerings and future ones 0.81
4 Identify synergies between our current and future customer needs 0.82
Product innovation performance (Adapted from Chen et al. (2015))
(Alpha 5 0.81, CR 5 0.90, and AVE 5 0.68)
1 Product development in your firm has achieved market share relative to the firm’s stated 0.78
objectives
2 Product development in your firm has achieved sales relative to stated objectives 0.84
3 Product development in your firm has achieved returns on assets relative to stated objectives 0.89
4 Product development in your firm has achieved returns on investment related to stated objectives 0.82
5 Product development in your firm has achieved profitability relative to stated objectives 0.78
Centralization (Adapted from Nobel and Birkinshaw (1998), Jansen et al. (2006))
(Alpha 5 0.80, CR 5 0.89, and AVE 5 0.64)
1 There can be little action taken here until a supervisor approves a decision 0.83
2 A person who wants to make his own decisions would be quickly discouraged 0.76
3 Even small matters have to be referred to someone higher up for a final decision 0.81
4 Unit members need to ask their supervisor before they do almost anything 0.78
Table 2. 5 Most decisions people make here have to have their supervisor’s approval 0.80
Measure items and
validity assessment (continued )
 Marketing
Constructs and items Loading Intelligence &
Formalization (Adapted from Nobel and Birkinshaw (1998), Jansen et al. (2006))
Planning
(Alpha 5 0.79, CR 5 0.87, and AVE 5 0.63)
1 Whatever situation arises, written procedures are available for dealing with it 0.81
2 Rules and procedures occupy a central place in the organizational unit 0.82
3 Written records are kept of everyone’s performance 0.73
4 Written job descriptions are formulated for positions at all levels in the organizational unit 0.82
Note(s): a. Second order construct
Source(s): Authors own work Table 2.

Variables Mean SD 1 2 3 4 5 6 7 8 VIF

1. Firm age 3.44 1.33 1.86

2. Firm size 3.15 1.54 0.18* 1.56
3. R&D intensity 0.18 0.39 0.08 0.18* 1.37
4. Social media 3.76 0.42 0.11 0.13 0.14 0.73 2.05
application
5. Marketing 3.58 0.46 0.06 0.12 0.12 0.38** 0.83 2.45
affordance
*
6. Centralization 3.17 0.63 0.06 0.04 0.12 0.18 0.11 0.80 1.78
7. Formalization 3.48 0.58 0.09 0.10 0.11 0.17* 0.14 0.27** 0.79 1.95
8. Product 3.81 0.70 0.08 0.09 0.23** 0.25** 0.41** 0.13 0.17* 0.82 –
innovation
performance
Note(s): The diagonal elements in italic are the square roots of AVE for constructs measured with
multiple items
*
p < 0.05 (two-tailed) Table 3.
**
p < 0.01 (two-tailed) Descriptive statistics
Source(s): Authors’ own work and correlations

evidence of adequate discriminant validity. Second, Henseler et al. (2015) suggested that a
new standard, the heterotrait-monotrait ratio (HTMT), is a better indicator for evaluating
discriminant validity. A value below 0.85 indicates sufficient discriminant validity, and the
obtained results of our study confirm discriminant validity (as shown in the Appendix).
To validate the reflective-formative construct of social media applications, we follow the
procedure outlined by Sarstedt et al. (2017). The VIF values for social media use and social
media maintenance are 2.54 and 2.65, which fall below the threshold of 3. As shown in
Table 2, the weights of social media use and social media maintenance are both significant.
These results offer clear support for the validity of the reflective-formative higher-order
construct of social media applications. In addition, we established marketing affordance as a
reflective-reflective higher-order construct before discovering the hypothesized path
between first-order latent variables. The coefficient and endogenous explanatory power of
each path exceeded 0.9, indicating that marketing affordance can play as a reflective-
reflective second-order latent variable (Becker et al., 2012). In configuring social media
applications and marketing affordance as second-order latent variables, we employed the
repeated indicator approach by incorporating all first-order latent variables (Sarstedt
et al., 2019).
MIP 4.2 Structural model
We applied PLS-SEM analysis to assess our hypothesized research model. The structural
model is summarized in Figure 1, where the path coefficients, the explained variance of the
endogenous variables (R2) and the Stone-Geisser (Q2) are presented. In Figure 1a, a firm’s
social media application is found to have a positive impact on marketing affordance
(β 5 0.39, p < 0.001), supporting Hypothesis 1. Marketing affordance has also been found to
have a positive impact on product innovation performance (β 5 0.46, p < 0.001), supporting
Hypothesis 2. In contrast, no direct significant effect was found between social media
application and product innovation performance. Figure 1b shows a negative and significant
interaction effect between social media application and centralization on marketing
affordance (β 5 �0.14, p < 0.05). This indicates that centralization negatively moderates the
relationship between social media applications and marketing affordance, supporting
Hypothesis 4. We also found a positive and significant interaction effect between social
media application and formalization on marketing affordance (β 5 0.19, p < 0.01). This
indicates that formalization positively moderates the relationship between social media
applications and marketing affordance, supporting Hypothesis 5.

0.09 (t = 0.50; f2 = 0.01)

R2 = 0.36;
R 2 = 0.39;
Q2 = 0.25
Q2 = 0.29
0.46*** (t = 9.38;
0.39*** (t = 4.47; f2 = 0.10) f 2 = 0.12)
Social media Marketing Product innovation
application affordance performance

Social media Social media Customer behavior Real-time market Market Control variables:
use maintenance pattern spotting responsiveness ambidexterity Firm age
Firm size
R&D intensity

SRMR = 0.051; NFI = 0.912

(a)
0.09 (t = 0.60; f 2 = 0.10)

R 2 = 0.45; R 2 = 0.37;
Q2 = 0.32 Q2 = 0.26
0.41 *** 2
(t = 5.70; f = 0.10) 0.46*** (t = 9.40; f 2 = 0.12)
Social media Marketing Product innovation
application affordance performance

–0.14* (t = 2.02; f 2 = 0.03) 0.19** (t = 2.68); f 2 = 0.04

Figure 1.
Estimated relationship Control variables:
of structural model Centralization Firm age
Formalization
(a) Structural model Firm size
with hypothesized R&D intensity
relationships
(b) Structural model SRMR = 0.048; NFI = 0.919
with additional (b)
interactions
Source(s): Authors’ own work
4.3 Test for mediation Marketing
To examine whether the impact of social media application on product innovation Intelligence &
performance is mediated by marketing affordance, we employed a bootstrapping approach Planning
and followed the guidelines of Hair et al. (2016). We used the parameter estimates from the
bootstrapping procedure in PLS, based on resampling of 5,000 subsamples, and calculated
the standard error of the mediation effect. Table 4 shows the results of the mediation
analysis. We first confirm that the mediated path (Social media application → Marketing
affordance → Product innovation performance) is significant. Then, by inducing the direct
path (Social media application → Product innovation performance) in the model, we find that
the direct path is nonsignificant, an indication of full mediation. In sum, the results show that
marketing affordance fully mediates the effect of social media applications on product
innovation performance, supporting Hypothesis 3.

5. Discussion
5.1 Theoretical contributions
Our study makes contributions to the literature. First, we contribute to the innovation
literature by providing a more nuanced understanding of the mechanisms through which
social media applications affect firms’ product innovation. Our study responds to the calls for
research on the theoretical understanding of mechanisms through which social media can
lead to enhanced firms’ product innovation (Bhimani et al., 2019). The literature rooted in
resource-based view theory offers valuable insights by recognizing social media as a
significant resource for enhancing open innovation performance (Wang et al., 2016;
Muninger et al., 2019; Dahlin et al., 2020). However, there is a lack of ongoing empirical
investigation on the realization of the value of social media. Based on the affordance theory
(Leonardi and Vaast, 2017; Volkoff and Strong, 2017), we explore the role of marketing
affordance, which we argue to be the action possibility that firms must actualize to derive any
substantial outcomes from their investment in social media applications. In particular, we
specify that social media applications support the actualization of marketing affordance,
including customer behavior pattern discovery, real-time market response, and marketing
ambidexterity, which in turn promote product innovation performance. Our framework of
affordance theory promotes an action-based view of the value of social media for innovation
and extends previous explanations based on the resource-based view that treats social media
as a known sources of market competitiveness (Bhimani et al., 2019; Ye et al., 2022).
Therefore, this study provides a more complete and fine-grained understanding of the role of
social media in product innovation and helps reconcile the underlying mechanisms through
which firms can reap the benefits of social media.
Second, we examine the moderating roles of organizational structure, enriching the
contextual understanding of social media’s role in innovation. Previous research suggests

Ratio to total Bias corrected 95%

Structural path Effect t value effect (%) confidence interval

Social media application → Product innovation 0.09 0.50 33.50 [�0.00, 0.15]
performance
***
Social media application → Product innovation 0.18 4.47 66.50 [0.10, 0.32]
performance via Marketing affordance
Total indirect effect 0.27 100 Table 4.
Note(s): ***p < 0.001 Summary of indirect
Source(s): Authors’ own work effects
MIP that the value of social media depends not only on the affordance of digital technology, but
also on the organizational infrastructure required to actualize this affordance (Leonardi and
Vaast, 2017; Khan et al., 2023). Substantial research has emphasized the significance of
appropriate organizational design in marketing management (Argouslidis and Baltas, 2007;
Lee et al., 2015; Hsiao and Wu, 2020). However, there is limited knowledge regarding how to
effectively utilize social media for marketing through organizational design. In this study, we
identify crucial contextual factors in terms of organizational structures that can affect a
firm’s capability to seize market opportunities through social media. We extend existing
literature and demonstrate that organizational centralization may impede a firm’s capability
to harness the market affordance of social media in customer behavior pattern discovery,
real-time market response, and marketing ambidexterity due to its impact on shaping firms’
behaviors. Additionally, this study implies that organizational formalization can enhance
strategy implementation efficiency, thereby facilitating the actualization of social media
affordances for marketing. These findings extend the structural marketing literature by
highlighting the importance of aligning organizational structure with social media strategies
to achieve marketing objectives.
Third, our study complements the existing literature by investigating social media
applications in businesses operating within emerging economies, with a specific focus on China.
Previous research has concentrated on developed economies characterized by well-established
market regulations and transaction rules (Marion et al., 2014; Bashir et al., 2017). However, in
emerging markets like China where market regulations and transaction rules are still evolving
and social power is centralized, comprehending social media strategies necessitates an
extension beyond the confines of resource-based theory. Consequently, our investigation of
Chinese firms not only extends the current existing theory but also provides enhanced insights
into the relationship between social media and innovation within emerging markets.

5.2 Practical implications

Our study provides practical implications for firm decision-makers. First, beyond
reaffirming the significance of social media as a facilitator for product innovation, our
findings indicate that the actions of marketing affordance mediate the positive relationship
between social media application and innovation. It is imperative for managers to
acknowledge that the value of social media in fostering innovation stems not merely from its
investment and applications but also from the organizational ability to effectively actualize
the action potential offered by social media. Our discussion on marketing affordance may
offer guidance for extracting valuable insights from social media applications and
implementing corresponding actions. The discovery of customer behavior patterns, such
as the identification and prediction of both desirable or undesirable customer behaviors,
enables firms to enhance the effectiveness and efficiency of marketing campaigns via social
media; real-time market response in social media platforms such as the implementation of
real-time decision rules and analyses, empowers firms to respond to market events promptly;
and market ambidexterity, such as the exploration of synergies between current offerings
and future ones, enhances firms’ capacity to discern novel market opportunities within their
existing product portfolio. Therefore, managers pursuing product innovation through social
media investment must identify the key actors within firms who possess the highest
potential to fulfill the marketing function and empower them with the authority to take
action.
Second, our emphasis on the moderating effect of organizational centralization and
formalization offers a potential alternative for businesses to restructure their firms in
alignment with social media strategies. The effectiveness of successful marketing actions via
social media investment can be facilitated by implementing an efficient organizational Marketing
design. Our findings demonstrate that the relationship between social media applications Intelligence &
and marketing affordances is strengthened when there is low centralization and high Planning
formalization. The findings imply to Chinese firms that to fully leverage social media they
should consider decentralizing organizational decisions to promote employee autonomy and
participation. Additionally, managers should strive to establish high levels of formalization
prior to or during the adoption of social media applications. Therefore, our study may offer
valuable insights for firms seeking to pursue innovation when they develop strategies to
effectively leverage social media with appropriate organizational design within the dynamic
environment of emerging economies, such as China.

6. Limitations and future research directions

Several limitations of this study can be considered and addressed in future research. First,
our empirical study collected self-reported and cross-sectional data to examine the influence
of social media applications on product innovation. Future research could expand on our
findings by collecting longitudinal data at more time points to track social media
applications and better understand the dynamic relationship between social media
applications and firm product innovation performance. Second, in line with the literature
on affordance theory, our study only considers the three recognized actions regarding
marketing affordance. Future research could explore alternative types of marketing
affordance, such as citizenship, to encompass stakeholder participation in marketing
activities in capturing the benefits of social media. Finally, while our findings apply to firms
in one major emerging economy (China), readers should exercise caution when extrapolating
these findings to other developing or developed economies. We encourage future research to
test our theory in various institutional contexts.

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Further reading
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MIP Appendix

(1) (2) (3) (4) (5) (6) (7) (8)

(1) Social media use

(2) Social media maintenance 0.53
(3) Customer behavior pattern spotting 0.35 0.53
(4) Real-time market responsiveness 0.43 0.45 0.53
(5) Market ambidexterity 0.29 0.22 0.54 0.48
Table A1. (6) Product innovation performance 0.21 0.31 0.31 0.42 0.43
Heterotrait–monotrait (7) Centralization 0.33 0.40 0.35 0.36 0.43 0.40
ratio of (8) Formalization 0.26 0.24 0.39 0.42 0.38 0.27 0.41
correlations (HTMT) Source(s): Authors’ own work

Corresponding author
Jiawen Chen can be contacted at: [email protected]

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