Do Small and Medium‐Sized IT Firms Form Service Partnerships with Nonlocal IT Firms? An Assessment of Facilitators

For small and medium‐sized information technology firms (IT SMEs), the service partnerships formed with other IT firms are strategic instruments to overcome their resource constraints, increase efficiency, and offer complementary services to their customers. Although these firms have a tendency to form local partnerships due to ease of trust building, few of them are engaged in nonlocal partnerships. This research aims to explore the facilitators of this divergent firm behavior. The findings suggest that a firm's alliance capabilities and organizational proximities between distant partners can substitute the lack of geographical proximity and enable IT SMEs' engagement in nonlocal service partnerships. More importantly, the type of IT service rendered through the partnership acts as a moderator and determines the extent of the organizational capabilities and proximities.     

Exploring the relationship between the human resource management practices and growth in small service firms

This paper seeks to evaluate the relationship between the growth and the human resource management (HRM) practices of small service firms in catering to professional services and the retailing sectors in the UK. The paper reports and analyses the findings of 196 face-to-face structured interviews with small service business owners. Findings suggest that employee empowerment contributes to the sales growth of small firms in the different sectors of the service industry. The study also shows that employee training and recruitment through formal channels contribute to the sales growth of firms operating in the catering sector. This paper argues that contextual variables – the extent of the competition and the availability of the workforce – have a bearing on the HRM practices employed by small service businesses.     

Combining Information Technology and Decentralized Workplace Organization: SMEs versus Larger Firms

This paper examines whether information technology (IT) and decentralized and incentive-based workplace organization are complementary only for large firms or also for smaller firms. Previous empirical evidence suggesting complementarity between IT and decentralization is mainly based on large firms. Using data from a sample of 3,288 small and medium-sized enterprises (SMEs) and 595 larger firms from the manufacturing and service sector in Germany, it appears that SMEs with decentralized and incentive-based work practices tend to use IT more intensively. Moreover, for the sample of SMEs, IT and workplace organization are individually associated with higher productivity, but the combination of IT and decentralization does not yield a productivity premium. In contrast, the productivity of IT depends positively on decentralization for large firms. The findings suggest that combining IT and decentralized workplace organization seems only to be a successful strategy for larger firms.     

Information Technology Use and Firm's Perceived Performance in Supply Chain Management

Purpose: This article proposes a theoretical model to investigate (a) a positive direct relationship between the specific use of ITs (applied to management) and the firm's performance as perceived by retailers and (b) a positive indirect relationship through information quality and information sharing.

Design/Methodology/Approach: The theoretical model proposed in this paper is contrasted using structural equation modelling of the retail distribution channel for home appliances.

Findings: The research shows that there is no positive direct relationship between the specific use of ITs and the retailer's perceived performance in the relationship with the provider. The results do, however, provide evidence for a positive indirect relationship through both information sharing and satisfaction obtained from the relationship with the provider.

Research Limitations: The analysis has been developed from the retail perspective. We suggest that future research focus on the retailer's and the provider's perspectives.

Practical Implications: In the context of SCM, the competitive advantages achieved through IT use derive from a better network of relationships between the firms involved as a result of greater information quality and information sharing. Specific use of ITs stimulates greater information sharing between retailer and provider and thus greater satisfaction and better perceived performance of the retailer in the relationship with the provider. However, the effect of IT use on information sharing occurs only through the quality of the information shared.

Originality/Value: The study shows that information quality is an antecedent of information sharing and that both information quality and information sharing act as necessary conditions for improving the retailer's perceived performance in the relationship with the provider. This article develops a measurement scale to evaluate the intensity of IT use. Finally, the research confirms that firm performance can be modeled as a second-level latent variable composed of three different dimensions (economic benefits, marketing benefits, and adaptation benefits).     

The productivity payoff of information technology in multimarket SMEs

This paper examines the effects of information technology (IT) adoption on the productivity of multimarket small and medium-sized enterprises (SMEs). The main hypothesis is that IT usage increases efficiency to a higher degree in diversified and internationalized firms compared with single-market SMEs. This hypothesis is tested using a large sample of more than 2,000 Spanish SMEs. Overall, intensive use of IT in operations processes is found to be associated with substantial increases in productivity of firms following both related and unrelated diversification. Also, exporting firms with more intensive use of IT have higher productivity. These results are consistent with previous theoretical arguments on the relationship between IT and efficiency of firms and open future research directions related to the role played by IT in the management control systems of both diversified and exporting firms.     

The value of business managers' ‘Information Technology’ competence

This study analyses the role of general managers and their competence in information technologies (ITs) in the integration of these technologies in knowledge-intensive businesses. From a resource-based view, it assesses the effect of managers' IT knowledge and vision on information management in their organizations. It focuses on two knowledge industries: telecommunication and biotechnology, with a final sample of 122 firms. Structural equations are used to assess the data. The findings show that the role of managers goes further than supporting and championing ITs. They are direct key actors in the IT–business integration. For this reason, managers should understand IT potential and information system management in order to combine this knowledge with their unique strategic vision of the business, foreseeing opportunities and needs.     

Process and intensity of internationalization of IT firms – Evidence from India

This paper provides insights and evidence related to the process and intensity of internationalization of firms in the Information Technology (IT) sector, which is the driving force of high economic growth in the Indian sub-continent during the last two decades. Research objectives were set as (i) to examine the existence of born global firms in the IT sector, (ii) to identify the process of internationalization adopted by firms in the IT industry, (iii) to measure the intensity of internationalization of IT firms. The paper is based on data collected from annual financial reports of firms listed in the CNX IT Index of National Stock Exchange of India. Two clusters were extracted using hierarchical clustering method followed by k-means clustering to analyze the characteristics of the variables. We find that the firms in both clusters are true global firms with 66 and 85% of their income from foreign markets with a very high level of international intensity. Though the findings provide some evidence for the gradual internationalization of Indian IT firms; the empirical results indicate that firm age has no impact on internationalization. The results from our study also show that firms, especially in certain industries such as IT, do have access to information that reduces the risk aversion.     

The war for talent: human capital challenges for professional service firms

Abstract

Professional service firms face particular human capital challenges. This study reflects on the distinctive characteristics of professional service firms through the concepts of knowledge intensity, low capital intensity and professionalized workforce. Based on in-depth interviews with 21 partners of Australian law firms, we provide empirical evidence on the war for talent challenges faced by professional service firms and in particular, law firms. The findings point to talent management challenges including reputation building and maintenance, employee autonomy, knowledge acquisition, revenue and profitability through internationalization, managing knowledge across borders, managing employee mobility, talent acquisition and retention, talent engagement, performance management and developing leadership capability. These challenges are important issues to be considered by professional service firms as they attempt to compete more effectively in global business contexts.     

Information Technology and Establishment Size in America: Rybczynski Redivivus☆

The Rybczynski Theorem is one of the staples of international trade theory. In their article in this issue of the journal, J.J. Rosa and J. Hanoteau apply the theorem to a two-by-two world in which the two “industries” are small firms and large firms, and the two inputs are information and all other. The assumption that small firms are more information intensive, coupled with the fact that information has become pervasive in recent decades, allows them to derive the prediction that small firms will account for increasingly larger proportions of total output and employment in the economy. We highlight a couple of issues that we find problematic in the Rosa–Hanoteau study, and then develop two different empirical strategies to probe the connections between IT and the size distribution of establishments. First, we combine County Business Patterns with input–output data to explore whether the share of small plants has grown at a faster pace among industries that demand IT more heavily. Second, we explore, on an industry-by-industry basis and taking into account the potential endogeneity of IT location, whether clustering of IT firms in specific US counties is associated with a relatively large share of small establishments, on average, in those counties.     

Information Technology and the Performance of Japanese SMEs

This paper examines the impact of investment in information technology (IT) on the performance of Japanese firms. My findings imply that there is a positive and statistically significant relationship between IT and firm profitability and innovation, but only for small firms. These results underscore the importance of investment in IT for small companies. The acceptance of IT by this sector is fundamental to the success of structural adjustment in the Japanese economy.     

Small and Medium-Sized Enterprises and IT Diffusion Policies in Europe

The main argument to justify an information technology (IT) diffusion policy for small and medium-sized enterprises (SMEs) is that IT could act as a catalyzer to the SMEs' growth, which is important because of the role played by these firms in innovation and regional development. However, due to the heterogeneity of SMEs, present IT diffusion policies in Europe are reaching only a limited number of these firms. The aim of this paper is to discuss the obstacles to the implementation of an IT diffusion policy for SMEs. The main arguments that justify a policy for IT diffusion in SMEs, and the main initiatives taken for IT diffusion in these firms in European countries are summarized. The shortcomings of present policies will be discussed, together with possibilities to increase IT diffusion in SMEs.     

Knowledge,innovation and firm performance in high- and low-technology regimes

Industries with greater aggregate levels of research and development (R&D) intensity are home to higher rates of firm-level innovation, according to survey data from 845 Canadian manufacturing firms. And, though innovation is more common when industry dynamism is high, innovative firms are likely to enjoy revenue growth, irrespective of the industry in which they operate. The research also shows that firm knowledge, industry dynamism and innovation interact in the way they influence firm performance. A highly skilled workforce is most beneficial to firm performance in dynamic environments, while firms in stable manufacturing industries benefit more from investments in training.     

Creative workforce density, organizational slack, and innovation performance

This study examines the effects of creative workforce density and organizational slack on innovation performance. This article suggests an inverse U-shaped relationship between creative workforce density and innovation performance and proposes two governing forces relating to this relationship. Moreover, this study suggests that different slacks vary in affecting innovation. When adding absorbed and unabsorbed slacks as moderators, the relationship between creative workforce density and innovation performance becomes strengthened or attenuated respectively. Comprehensive secondary data on 305 Taiwanese firms in IT sector support the prediction. This article also discusses the managerial implications and highlights future research directions.     

Open innovation and growth in IT sector

IT services are overrepresented among high-growth innovative enterprises. The nature of innovation in IT requires knowledge search and collaboration, which together constitute the inbound open innovation (IOI) strategy. This study analyses whether the IOI strategies in IT service firms lead to different performance effects in comparison to other service and manufacturing firms. A quantile regression on multi-country data from the Community Innovation Survey indicates that innovative IT service companies share the same benefits from increased cooperation as other innovators, while displaying a strong growth dynamic compared to others. Therefore, IT service firms’ growth differential may not be related to external cooperation and knowledge sourcing.     

Technology strategy and performance: a study of information technology service providers from selected Asian countries

The provision of information technology (IT) services to support a wide range of information and communication technology (ICT) products has experienced rapid growth in recent years, particularly in less developed countries in Asia. This paper develops a conceptual model to test the impacts of the technology strategy of IT service providers on two measures of performance based on the experience of a sample of 98 IT firms from Korea, China, Thailand and the Philippines. It is found that technology strategy related to the adoption and diffusion of technology contributes positively to both performance measures. While the technology capabilities of firms, both internal and external, are important for financial performance, internal technological capabilities are more effective for the firm’s response to market changes. The technology competence of employees reflected by their education levels and the availability of in-house training are also found to be crucial for financial performance. The overall results suggest that technology strategy contributes significantly towards the performance of IT service providers but the impacts of different strategies on the financial and strategic performance of firms vary markedly.

Core employee based human capital and revenue productivity in small firms: An empirical investigation

The human capital of a firm, as manifested by the experience and education of its workforce, represents a key resource that improves firm productivity. The current study proposes that task-specific experience is a significant organizational resource for small firms seeking productivity. Utilizing objective data from 1572 core-employees representing 100 small firms in two different industries, this study examines how two types of experience (task-specific and firm-specific) interact with education to influence firm productivity. Results show that the relationship between task-specific experience and productivity is stronger in firms with higher levels of core employee education than in firms with lower levels of core employee education.     

Workforce age and technology adoption in small and medium-sized service firms

This paper provides empirical evidence on the relationship between the age structure of the workforce and the adoption of new or significantly improved technologies. Moreover, it attempts to identify the role of teamwork in this relationship. The econometric analysis is based on data of 356 small and medium-sized German firms from the knowledge-intensive services and ICT services sectors. The results show that, compared to employees younger than 30 years, an older workforce is negatively related to the probability of technology adoption. On the contrary, the dispersion of the employees’ age within the workforce seems not to be connected with the probability of technology adoption. However, in firms with intensive use of teamwork a homogenous workforce in terms of age is positively related to the probability of technology adoption.     

Practical Skills in International Business: Training Needs for Workforce Competence by Minnesota Companies

Companies doing business internationally face the competitive challenges of a constantly changing operational environment. Employees need to update their international knowledge, skills, and abilities (KSA) frequently by attending training programs. A survey of Minnesota firms indicate that almost all companies are willing to cover the time and cost of employees attending such programs, apparently believing that workforce development benefits both day‐to‐day operations and improves employee morale. The current specialization in educational (K) and training (SA) programs by academic and nonacademic providers largely meets the needs of students and of corporate workforce development, but company competitiveness overseas could be enhanced if international K and SA providers cooperated more closely in complementary programming.     

Human capital and exports: A micro-level analysis of transition countries

ABSTRACT

This paper investigates the impact of human capital endowments on export intensity employing firm-level data for 29 transition economies. A particular focus is placed on comparing and contrasting Central and Eastern Europe countries (CEECs) with those from the former Soviet Union, the Commonwealth of Independent States (CIS). The impact of the share of employees with higher education, provision of on-the-job training, years of experience of the top manager and labour cost on export intensity is assessed. To test these relationships, Tobit and Fractional Logit approaches are adopted. The estimation results suggest that, overall, having a more educated workforce exerts a positive impact on the export intensity of firms in transition economies, the magnitude being larger for CEECs. Average labour cost, as an alternative measure, also turns out to exert a positive but stronger impact. Insufficient evidence is found of a role for training programmes and years of experience of the top manager.     

异质性服务企业、风险承担与开放经济下二元市场结构演变

本文将服务企业特性和风险承担因素引入异质性企业贸易理论的分析框架中,考察了发展中国家不同风险承担的服务企业在国内与国外二元市场结构上的演变机制及效应。结果表明:风险承担较高的服务企业呈现出由国内转向国外的二元市场结构演变效应,而风险承担较低的服务企业呈现出相反效应;演变机制是生产环节资本性支出的增加和营销环节贸易成本及风险的有效克服;与制造业企业的比较显示,由于外资型加工贸易企业和小型外贸企业的存在,使得不同风险承担的制造业企业在二元市场结构上的演变效应与服务企业截然相反,但演变机制与服务企业是一致的。本文研究为发展中国家促进服务业发展和扩大服务出口提供了企业风险承担视角下的政策启示。