Academic journal article Journal of Small Business Management

The Use and Deployment of Soft Process Technologies within UK Manufacturing SMEs: An Empirical Assessment Using Logit Models

Academic journal article Journal of Small Business Management

The Use and Deployment of Soft Process Technologies within UK Manufacturing SMEs: An Empirical Assessment Using Logit Models

Article excerpt

This study assesses the adoption of different soft process technologies from a survey of 218 British engineering and electronics small and medium-sized firms (SMEs). The new process (soft) technologies that were modeled included total quality management, Kaizan, and statistical process control. Logit models demonstrate that the determinants of soft process technology adoption vary significantly from technology to technology. The study questions a blanket approach to technology adoption. Firm-specific factors make a larger difference to the adoption of process technologies than competitive factors. While on the whole small firms are slow to adopt new techniques, this does not hold for all technologies, and future research might investigate what technologies SMEs adopt and why. Benchmarking, suggestions schemes, problem-solving techniques and ISO 9000 adoption was unrelated to firm size, which holds out the prospect of soft process technologies as an alternative technological path for small firm productivity growth.

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Introduction

This paper concerns productivity and management practices in small enterprises. Small and medium-sized enterprises (SMEs) (1) are significant players within the economy. However, studies both in the United States and United Kingdom find that, overall, SMEs are less productive than large firms (Acs, Morck, and Yeung 1999; Selden 1999); Acs, Morck, and Yeung (1999) call for more debate and research into the contribution of small firms to productivity growth within the economy.

Productivity differs widely between different firms and plants, in both manufacturing and services and is correlated with the firm's technology (Bartelsman and Doms 2000). Moreover, firms can increase their productivity appreciably when they adopt new process technologies (Ettlie and Reza 1992). In a survey of U.K. SMEs, Cosh and Wood (1998) found that larger and faster-growing firms were more likely to introduce process innovations. These links between technology and productivity shift the research focus toward the reasons that firms choose particular technologies (Oulton 2001; Bartelsman and Doms 2000).

Previous studies note the very strong relationship between firm characteristics, particularly size, and the adoption of technology (Dong and Saha 1998; Kapur 1995). However, many research studies have concentrated on a single technology, but some (firm) characteristics may lend themselves to one type of soft process technology, while other (environmental) characteristics may suggest another. Therefore, this research investigated the adoption of various soft process technologies within electronic and engineering SMEs.

The research sought to explore the factors that predisposed a small to medium sized engineering and electronics firm to adopt soft process technologies. The study compares firm characteristics, capabilities and competition with the techniques adopted. The research concurs with the importance of firm size and characteristics in technology adoption (Dong and Saha 1998; Kapur 1995). We find that large firms adopt more process technologies than smaller firms, but other firm-specific factors, such as the formality of their processes, significantly influences the type of technology adopted. The stability of the competitive environment increases the adoption of other soft process technologies. This suggests that the characteristics of the firm will determine the type of technology adopted.

While this paper focuses on the United Kingdom, the output of any economy depends on the productivity of those working within it; hence, this discussion is relevant to other economies. The next section sets out the literature underpinning the study. First, what we mean by soft process technologies is explained, the attributes of innovations and their adoption are considered, and the industry and firm specific influences on technology adoption are given focus. …

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