Information Systems Enacted Capabilities and Their Effects on SMEs' Information Systems Adoption Behavior

Studies show that information systems (IS) adoption behavior is dependent on well‐defined characteristics. However, firms must also be enabled for use and ultimately utilize IS. This study develops a model of how IS enacted capabilities of small‐ and medium‐sized enterprises (SMEs) affect IS enablement through perceived net benefits and attitude. Follow‐up interviews with chief executive officers (CEOs)/owners of SMEs indicated that IS enacted capabilities play an integral part in determining the extent to which SMEs become enabled and utilize IS. Top management IS skills and knowledge and trust in trading partners dominate the effect on perceived net benefits at the enablement stage.     

Corporate Social Responsibility That “Pays”: A Strategic Approach to CSR for SMEs

This study adopts a strategic approach to corporate social responsibility (CSR), puts forward a model of CSR activities that enhance small and medium enterprises (SMEs) growth, and argues that by aligning CSR activities with the competitive strategy of the firm, SMEs enhance firm growth. We test this model using multinomial logistic analysis and data from a survey with 211 U.K.‐based SMEs. We find that CSR activities related to the community enhance firm growth for all SMEs, but especially for firms adopting a cost leadership strategy, and that CSR activities related to the workforce are crucial to avoid sales decline, especially for SMEs adopting a differentiation or a quality‐driven strategy. We also find that environment‐related CSR activities are not beneficial for SMEs' growth and that human rights–related CSR activities slow growth for firms adopting a differentiation or a quality‐driven strategy. Finally, we put forward managerial and policy recommendations.     

SMEs’ Financing and Banks’ Profitability: A “Good Date” for Banks in Ghana?

Small and medium enterprises (SMEs) are the core of most economies and are a major source of economic growth. In recent times, banks have been actively involved in the financing of SMEs through the provision of loans to this sector. This paper investigates the impact of SMEs financing on banks’ profitability in Ghana. The study employed the fixed effect model as the main regression tool. The study result reveals that SMEs significantly contribute to banks’ profitability in Ghana. Interestingly, transaction cost in administering SME loans was insignificant in all the models. Higher inflation reduces the real value of the loan and erodes the interest returns on the total credit to the SMEs. Conversely, growth of GDP enhances the growth of the bank profit.     

The influence of age on SMEs’ growth determinants: empirical evidence

This paper seeks to investigate whether age is a fundamental characteristic of the relationships between determinants and growth. The empirical evidence obtained allows us to conclude that: (1) age and size are restrictive factors of the growth of young SMEs, but they are not important for the growth of old SMEs; (2) cash flow and debt are of greater relative importance for growth in young SMEs than for growth in old SMEs; (3) R&D intensity and labour productivity are of greater relative importance for growth in old SMEs than for growth in young SMEs; (4) interest on debt is of greater relative importance for diminished growth in young SMEs than for diminished growth in old SMEs; and (5) R&D intensity in situations of financial deficit is of greater relative importance for diminished growth in young SMEs than for diminished growth in old SMEs, but only in context of high-tech SMEs.     

Outsourcing of Information Systems Functions in Small and Medium Sized Enterprises: A Test of a Multi-Theoretical Model

In this paper determinants of information systems (IS) outsourcing are deduced from transaction cost economic theory, resource-based theory and power theory. They are summarized in a theoretical framework which is tested using a sample of small and medium sized enterprises (SMEs) in Germany. The results show that internal performance and know-how deficits vis-à-vis external service providers are key determinants that explain why different IS functions are outsourced to varying degrees in SMEs. Moreover, the determinants of IS functions were found to partially differ between IS functions. Revised reprint of an article from WIRTSCHAFTSINFORMATIK 43(4)2001:339–350.

ASPEM as the New Topographic Analysis Tool for Small and Medium-Sized Enterprises (SMEs) Performance Models Utilization

Quantifying and measuring small firm performance is vital in our understanding of how internationalization influences firm performance. That is also important when attempting to grasp the mechanisms of the internationalization processes. There are few methods used for the evaluation of performance of Small and Medium-sized Enterprise (SMEs). These methods can be either macro or micro economic in nature. Hazard Modeling, Stochastic Models, and Learning Models are examples of macro economic models while Z-Scores, ZETA-Scores, Neural Networks, and the SIV^® model are examples of micro models. Choosing the most suitable performance model is an essential step in order to maximize our knowledge in relation to firm performance. Utilizing SMEs performance measures without thinking about the category of model, will bias the outcome of the majority of SMEs studies. However, using firm performance diverse models in an efficient manner requires strategic thinking. In this paper, we are re-introducing a tool that can accommodate that aspect. Abouzeedan (2002) designated the new tool: the Arena of SMEs Performance Models or an ASPEM diagram. The horizontal axis in the diagram indicates the Information Intensity Requirements of the model. The vertical axis indicates the Coverage Intensity of the model varying from an individual firm up to a whole group of firms. By allocating each of the SMEs performance models, at the suitable region of the ASPEM Diagram, researchers can better build a sound strategy for the application of these methods.     

On the Evaluation of Greek Industrial SME's Performance via Multicriteria Analysis of Financial Ratios

The objective of this article is to propose a methodological framework for developing evaluation models for estimating SMEs' performance, based on financial ratio analysis. The proposed framework involves the application of a multiple criteria decision aid method, namely the UTADIS method (UTilités Additives DIScriminantes), to develop a decision model that classifies the SMEs into predefined homogeneous classes according to their performance. The applicability and the efficiency of this approach are examined using financial data on Greek industrial SMEs for the period 1988–1996. A comparison with well-known multivariate and econometric techniques (i.e., discriminant, logit, probit analysis) is also undertaken for comparative purposes.     

E-marketing services and e-marketing performance: the roles of innovation,knowledge complexity and environmental turbulence in influencing the relationship

The business-to-business electronic marketplace (e-marketplace) is becoming critical for small- and medium-sized enterprises (SMEs). However, which e-marketing services determine a firm’s e-marketing performance and how innovation, knowledge complexity and environmental turbulence influence the relationship between e-marketing services and e-marketing performance are under-researched topics in the field. We first empirically tested 176 SMEs from China to evaluate which e-marketing services are significantly related to e-marketing performance and how these services collectively influence the performance. Then, we used an NK model to examine how innovation, knowledge complexity and environmental turbulence mediate/moderate the relationship. The results show that five e-marketing services (e-CRM, e-SCM, e-competitiveness, IS/IT integration and information transparency) can greatly influence e-marketing performance; innovation positively mediates the relationship between e-marketing services and performance; and knowledge complexity and environmental turbulence positively moderate the relationship.     

Internationalization stages of traditional SMEs: Increasing,decreasing and re-increasing commitment to foreign markets

SMEs attempt to accelerate and diversify their international expansion strategies. The purpose of this article is to identify the internationalization stages followed by traditional SMEs to seize global market opportunities. The authors analyze the internationalization paths of five French SMEs operating in traditional manufacturing industries. The empirical study is mainly based on 66 interviews. The findings indicate that the internationalization process of SMEs continues to follow several stages, but that their commitment to foreign markets may increase, decrease and re-increase. The identified stages, which can be triggered by internal and external factors, reflect characteristics of different internationalization models proposed in the literature.     

The internationalization process in the small and medium sized firms: A case study on the Italian clothing industry

In this research we use a data-base that reveals the propensity for contractual ventures and direct investments (1051 operations) of the clothing Italian companies during the period 1987–1991, on a national (342 operations) and international level (709 operations). The latter were analyzed with reference to the internal (412) and external growth strategies (297), cooperative (362) and non-cooperative (347) deals. Our analysis focuses on the different strategies that SMEs, on one hand, and large companies, on the other hand, show in the internationalization process. Main results of the study are:

the international growth of the SMEs takes place mainly through contractual agreements (68%), more so than with non-cooperative operation (32%), whereas in large companies the non-cooperative strategies slightly prevail (54%). Consequently, the external growth strategy is very important for the SMEs (72%) and somewhat less important for the large companies (54%);

the cooperative growth is usually seen by SMEs as an expansion both of the commercial (48% of the operations involves commercial purposes) and of the production areas (48% of the cases). This could indicate that SMEs try to organize on an international level the same network model used in Italy: SMEs decentralize their production within the country through networks of companies and industrial districts, whose horizontal connections (among SMEs themselves) and vertical connections (with large companies) provide flexibility and low costs;

large companies' expectations of the Single European Market have brought a great number of international operations in Europe (24%), notwithstanding the notable importance of Japan (23%) and U.S. (17%); on the contrary, SMEs focus on “niche and rich markets” as Japan (40%); but as far as the contractual agreements are concerned, both types of firm privilege the Japanese market: almost 50% of SMEs' international agreements are directed towards Japan (33% in the large company's case);

large companies and SMEs in the middle and high segments of the market carry out more operations than companies operating in the low quality and casual segments;

generally speaking, in Italy there is an urgent need for industrial policies promoting SMEs access to cooperative instruments (“learning by cooperating”).

     

Global value chain linkages: An integrative review of the opportunities and challenges for SMEs in developing countries

This study reviews the literature on the challenges and opportunities of the global value chain (GVC) participation of small and medium-sized enterprises (SMEs) in developing countries. A three-step approach to the literature review is used for synthesizing the relevant research works. In the end, we retain that SMEs are drivers of economic growth and despite the many challenges they face, the opportunity for developing country SMEs to benefit from their GVC linkages does exist, notably the high-quality information that they would otherwise not have access to. However there are necessary preconditions, resources and strategies that need to be put together to ensure the successful integration and growth (upgrading) of these SMEs within GVCs. The findings and proposed model contribute to enrich existing GVC research and offer a theoretical guide for possible practical measures to be adopted by SMEs and governments in developing countries.     

Sources of opportunities used by growth minded owner managers of small and medium sized enterprises

The purpose of this paper is to investigate the sources and nature of opportunities used by owner-managers of small and medium size (SMEs) firms in order to grow their businesses. In addition to the owner-manager's desire for growth, clearly there needs to be both opportunities to pursue and sufficient management activities that will discover such opportunities, so that a business can grow. These opportunities may originate through some form of environmental change such as advances in technology or by exploiting changes in the marketplace, for example, the exit of a competitor.Research was carried out within twenty SMEs whose owner-manager's aimed to grow their businesses. The focus of the research was on the sources of opportunities they encountered and how and why opportunities were recognized by these firms.The key findings of this research illustrate that the majority of sources for business opportunities for SMEs in this study lie in the market place and are not a direct consequence of environmental change. Traditional marketing analysis tools can, therefore, identify significant sources and scope for growth opportunities for SMEs.     

Testing trade-off and pecking order theories financing SMEs

This paper explores two of the most important theories behind financial policy in Small- and Medium-Sized Enterprises (SMEs), namely, the pecking order and the trade-off theories. Panel data methodology is used to test empirical hypotheses on a sample of 3,569 Spanish SMEs over a 10-year period dating from 1995 to 2004. Results suggest that both theoretical models help to explain SME capital structure. However, despite finding clear evidence that SMEs follow a funding source hierarchy (pecking order model), our results reveal that greater trust is placed in SMEs that aim to reach target or optimum leverage (trade-off model). This remains true even when SMEs take a long time to reach this level, due to the high transaction costs they have to face. Non-debt tax shields (NDTS), growth opportunities and internal resources all seem to play an important role in determining SME capital structure. Both size and age are also found to be significant factors. Moreover, the empirical evidence obtained confirms that SMEs clearly behave differently to large firms where financing is concerned.

Rigidity in SME export commencement decisions

In an increasingly globalised world, firms generally have become more internationalised utilising a range of different modes of operation. In the case of small-medium sized enterprises (SMEs), exporting is the favoured mode of international market entry, at least in the early stages of internationalisation, and many governments have supported SME exports through export promotion policies because of the importance of SMEs in employment creation. However, in spite of this policy focus, in most countries, the proportional involvement of SMEs in exporting remains low, which raises an important question as to what factors are inhibiting firms that are successful domestically from exporting. In addressing this question, much scholarly research has focused on the broad concept of ‘export barriers’. These barriers, for example, tariffs, quotas and administrative obstacles, are seen as a primary source of export reluctance. This paper takes a different approach to previous studies and proposes that a firm's resistance to exporting can be better understood through an analysis of the behavioural decision process of firms in line with the Uppsala internationalisation model. We propose ‘lateral rigidity’, first introduced in the literature in the 1970s, as an important concept in export commencement. By applying factor analysis to a survey of Australian SMEs, we provide a measurement model for lateral rigidity, revealing its important factors and thus strengthening understanding of firms' export commencement decisions. We conclude by drawing implications for internationalisation theory, practice and public policy and suggesting ways to extend this work through future research.     

Division of Labor between Innovation Intermediaries for SMEs: Productivity Effects of Interfirm Organizations in Japan

Innovation intermediaries are individuals or organizations that help others improve productivity. This study examines how small‐ and medium‐sized enterprises (SMEs) chose intermediaries and how intermediaries affected total factor productivity (TFP) growth of participants through different channels. Estimated switching regression models reveal that cooperative associations improved TFP of participants through cost sharing, such as joint logistics, while voluntary groups improved TFP of participants through knowledge sharing, such as joint R&D. Innovative SMEs appear to have exploited different intermediaries so that the benefit from each intermediary would be complementary to TFP growth. The results suggest the division of labor between intermediaries.     

利用需求分析三阶段实施中小型企业电子商务项目运作管理

目前,中小型企业对电子商务的需求越来越迫切,但由于种种原因,电子商务在实际中却未充分利用,究其原因主要是对电子商务项目管理的需求分析不足,从中小企业生命周期入手,以不同生命周期阶段对电子商务项目需求不同,提供一些可操作性的理论基础———掌握电子商务项目需求分析三阶段方法,正确实施中小企业电子商务项目管理。     

Barriers to internationalization: A study of small and medium enterprises in India

Small and medium enterprises (SMEs) play a significant role in the growth of the economy. Many SMEs have set up activities beyond their home markets, and their role is more important in contributing to future growth. They are confronted with international competition and forced to compete in international markets. In this study, authors have categorized obstacles to firm internalization as internal and external barriers. The three dimensions of external barriers include governmental and economic political/legal barriers, procedural, and currency barriers, and task and socio-cultural barriers. The internal barriers considered for the purpose of the study were informational barrier, managerial barriers, financial barriers, and marketing barriers. Authors have used adapted scale from previous researches in these domains. Database accumulated the SMEs that were involved in manufacturing activities in the state of Rajasthan, India. The measurement model is a confirmatory factor analysis. The measures used within this study were within the acceptable levels supporting the reliability of the constructs. The analysis of the data revealed that there was moderate correlation between the external and internal factors. Within the external factors, procedural and currency barriers showed the highest obstacle for SMEs in their pursuit for internationalization followed by task and socio-cultural factors. Results specified that the entrepreneurs were not able to handle and manage foreign exchange fluctuations due to their lack of knowledge in this field.     

Congenital learning in the Spanish telecommunication industry

Knowledge provided by a firm's founder(s) is one of the most important success factors for SMEs. This paper aims to identify the impact of the founder's knowledge on business performance in today's organization. It is with this in mind that we propose a specialized organizational learning process, which we refer to as the congenital learning process, by which the firm transforms the tacit and explicit knowledge of the founder into knowledge which is available to the firm and its members. The research model and hypothesized relationships are empirically tested using the structural equation modeling (SEM) approach, validated by factor analysis of 130 SMEs in the Spanish telecommunications sector. Two structural equation models, derived from the literature, have been used, resulting in the conclusion that organizational performance is positively affected by the transfer and transformation of knowledge as long as the organization has implemented processes that lead to the creation of what we refer to as an open organizational context.     

A 'business opportunity' model of corporate social responsibility for small- and medium-sized enterprises

In their book 'Corporate Social Opportunity', Grayson and Hodges maintain that 'the driver for business success is entrepreneurialism, a competitive instinct and a willingness to look for innovation from non-traditional areas such as those increasingly found within the corporate social responsibility (CSR) agenda'. Such opportunities are described as 'commercially viable activities which also advance environmental and social sustainability'. There are three dimensions to corporate social opportunity (CSO) – innovation in products and services, serving unserved markets and building new business models. While small- and medium-sized enterprises (SMEs) have traditionally been presented as non-entrepreneurial in this area, this paper demonstrates how SMEs can take advantage of the opportunities presented by CSR. Using data from 24 detailed case studies of UK SMEs from a range of sectors, the paper explores the numerous CSR opportunities that present themselves to SMEs, such as developing innovative products and services and exploiting niche markets. There are inevitable challenges for SMEs undertaking CSR, but by their very nature they have many characteristics that can aid the adoption of CSR; the paper explores these characteristics and how the utilisation of positive qualities will help SMEs make the most of CSOs. Integrating CSR into the core of a company is crucial to its success. Using the case studies to illustrate key points, the paper suggests how CSR can be built into a company's systems and become 'just the way we do things'. There are a number of factors that characterise the CSO 'mentality' in an organisation, and Grayson and Hodges's book describes seven steps that will move a company in the direction of a 'want to do' CSO mentality. This paper adapts these steps for SMEs, and by transferring and building on knowledge from the 24 detailed case studies, it develops a 'business opportunity' model of CSR for SMEs.     

E-Business Adoption by SMEs--Prerequisites and Attitudes of SMEs in a Swedish Network

The context for this research is the transformation process of small and medium-sized enterprises (SMEs) from traditional (t-) businesses toward e-businesses and the accompanying development of the knowledge and competence among employees. SMEs constitute a great part of the Swedish industry and economy. This and the fact that they have special prerequisites concerning human and technology resources makes SMEs an interesting research focus when looking at the transformation process toward e-business. The aim of this research is to investigate SMEs with the purpose of designing, implementing, and evaluating information technology-supported activities that will allow SMEs to approach e-business. This article presents results from parts of an ongoing study, that involves seven SMEs. This study will be conducted in two main phases: first, informative and preparatory activities and second, business transformation and competence development activities. This article focuses on the first phase of the study, but an insight in its current status and further research is given. The underlying prerequisites for SMEs as well as the research approach are described. A working model is presented that illustrates stages of maturity for taking an enterprise toward e-business. The last sections present the research design, that is, planning, actions, observations, and reflections of the study up until now. New actions to take are discussed at the end of this article.