Companies should not ban staff from using social applications such as Facebook and MySpace because of concerns about how they might be used.
Instead businesses should view employee participation as part of the "social experience" and develop policies to make sure they're used responsibly.
That is according to analyst Gartner, which says businesses should be able to identify both opportunities and risks if they can understand the characteristics of social communities.
These "social applications" also include open source communities, professional networks-- such as LinkedIn--and internal employee networks.
Gartner analyst, Anthony Bradley, said companies need to understand the trust models and reasons for user participation when making the policies around social apps.
Potential areas of concern for businesses include copyright infringement, inappropriate use of brands and general misbehavior.
To counter these, Gartner advises that employees should be made aware that if their profiles identify their employer, their postings could have an impact on the company's reputation.
Gartner also suggests it is important not to focus on restrictions and controls as this would lose sight of what social networks are about.
Gartner analyst, Nikos Drakos, said an appropriate balance between freedom and control is "crucial to community growth and maintenance, and must be tuned continuously".
Drakos added that policies should be carefully vetted by the company's public relations, marketing and legal departments.
Tim Ferguson of Silicon.com reported from London.
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