Rather than seeing your staff wasting time messaging, poking and sending virtual cocktails to their mates across the room via Facebook, bosses should encourage social networking among employees.

According to a Demos report commissioned by Orange, using social networking sites such as Facebook and Bebo at work actually encourages staff to build relationships with colleagues.

The BBC reports that attempting to control employees' use of social-networking software could damage firms in the long run by limiting the way staff communicate.

Facebook group

While work-specific services, such as LinkedIn, are used for business matters, Facebook, Bebo and MySpace still have a place, according to the report.

"They are part of the way in which people communicate which they find intuitive," said Peter Bradwell, a Demos researcher and the report's author.

"Banning Facebook and the like goes against the grain of how people want to interact. Often people are friends with colleagues through these networks and it is how some develop their relationships."

Productivity booster

Using technology to build closer links with ex-employees and potential customers could also boost productivity, innovation and create a more democratic working environment, Mr Bradwell added.

"In today's difficult business environment, the instinctive reaction can be to batten down the hatches and return to the traditional command-and-control techniques that enable managers to closely monitor and measure productivity.

"Allowing workers to have more freedom and flexibility might seem counter-intuitive, but it appears to create businesses more capable of maintaining stability."

"Being able to see a photo of colleagues, or knowing what they are up to, can be incredibly useful for businesses, especially if a firm employs thousands of people," said Mark Turrell, chief executive of Imaginatik, which develops bespoke networking software.

"Organisations need to give their employees physical and virtual space to grow and explore their ideas. In today's new world, employees expect and require sophisticated enterprise social networking tools to shine," he added.