IT and Fast Growth Small-to-Medium Enterprise Performance: An Empirical Study in Australia

  • Rui Bi Charles Sturt University
  • Robert M Davison City University of Hong Kong
  • Kosmas X Smyrnios RMIT University
Keywords: IT Resources/Capability, IT-enabled Inter-firm Partnership Processes, Resource-based View of Firms, Source-Positional Advantage-Performance Framework, Fast Growth SMEs

Abstract

Information technology (IT) is regarded as a facilitator for both small and large firms to speed up transactions between firms and their suppliers and customers, achieve real-time communication, lower transaction costs, and enhance speed and flexibility. However, understanding whether and how IT helps small-to-medium enterprises (SMEs) to create business value still remains unclear. Drawing upon resource-based view theory, source-positional advantage-performance framework, we develop and test a theoretical model to explore the interrelationships between IT resources (IT expertise, IT infrastructure), IT capability (IT integration), IT-enabled inter-firm partnership processes (activity integration, coordination, partnership enhancement), and organizational performance in the fast growth SME context. We propose that IT business value depends on how firms employ IT resources to develop IT capability which facilitates inter-firm partnership processes along value chains. Structural equation modeling is employed to test our theoretical conceptualization of 310 Australian fast-growth SMEs across different industrial sectors. Results show that IT contributes to fast growth SME performance through the development of IT capability and enhancement of inter-firm partnership activities. This research highlights the role of IT in business value creation and the ways in which IT is used by fast growth SMEs to foster core business competencies.

Author Biographies

Rui Bi, Charles Sturt University
Rui Bi is a Lecturer in Management at Charles Sturt University, Australia. Her research interests include IT business value, e-business and supply chain management, and small-to-medium enterprises (SMEs). Her publications have appeared in such journals as Journal of Global Information Management, Pacific Asia Journal of the Association for Information Systems, and Small Enterprise Research Journal.
Robert M Davison, City University of Hong Kong
Robert M. Davison is a professor of Information Systems at the City University of Hong Kong. His current research focuses on virtual Knowledge Management and Collaboration in Chinese SMEs. He has published over 70 articles in a variety of journals such as MIS Quarterly, Information Systems Journal, Information Technology & People, Journal of Information Technology, Journal of the AIS, IEEE Transactions on Engineering Management, Decision Support Systems, Communications of the AIS, and Communications of the ACM. Robert is the editor-in-chief of Electronic Journal of Information Systems in Developing Countries, and coeditor-in-chief for both Information Systems Journal and Information Technology & People.
Kosmas X Smyrnios, RMIT University
Kosmas X. Smyrnios is a professor of Family Business Entrepreneurship at RMIT University, Australia. Kosmas is a preeminent scholar in the field of family enterprise, having been involved in a number of prominent national and international research projects. He is the recipient of a number of notable awards, his research is widely cited and has a significant impact both nationally and internally. Kosmas has over 100 articles published in journals, conference proceedings, and as book chapters. He has also published 3 books. His research appears in the Journal of Business Venturing, Entrepreneurship Theory and Practice, Family Business Review, and the Journal of Consulting and Clinical Psychology. Kosmas is Foundation Associate Editor of the Journal of Family Business Strategy and was formerly an Associate Editor of Family Business Review and Foundation Board Member of the International Family Enterprise Research Academy (IFERA). Since the awarding of his PhD, Kosmas has developed an extensive applied research record across a number of disciplines. Kosmas is a recipient of almost $2 million in research funding and has undertaken a number of consultancies for major multinational organizations including the Commonwealth Bank, Price Waterhouse Coopers, BDO, MGi, and AXA. He is also frequently called upon to provide expert media commentary on SMEs.
Published
2015-10-21
How to Cite
Bi, R., Davison, R. M., & Smyrnios, K. X. (2015). IT and Fast Growth Small-to-Medium Enterprise Performance: An Empirical Study in Australia. Australasian Journal of Information Systems, 19. https://doi.org/10.3127/ajis.v19i0.1012
Section
Research on Small and Medium Sized Enterprises