Technology Adoption in Smes: A Strategic Posture Matrix and a Research Agenda

By Badrinarayanan, Vishag; West, Vicki L. | Journal of Business and Entrepreneurship, March 2010 | Go to article overview

Technology Adoption in Smes: A Strategic Posture Matrix and a Research Agenda


Badrinarayanan, Vishag, West, Vicki L., Journal of Business and Entrepreneurship


ABSTRACT

In small and medium sized enterprises (SMEs), technological advancements create opportunities and decision-making challenges. As a result, there is considerable difference in technology adoption decisions implemented by SMEs, and their rate of adoption remains low. Although past studies have identified various factors influencing technology adoption by SMEs, there is some consensus that the motivation for adoption decisions stems from a combination of internal and external factors. The purpose of this paper is twofold. First, expanding on the internal versus external motivational forces paradigm, this paper delineates four distinct strategic postures (proactive, preemptive, reactive, and passive) that demonstrate how SMEs differ on technology adoption decisions. Second, using the strategic posture matrix, this paper offers a research agenda that identifies relevant areas for further investigation. Integration of the internal and external forces paradigm and the proposed matrix can aid decision makers in understanding how strategic postures influence technology adoption and other strategic decisions by SMEs.

INTRODUCTION

Technological advancements have the potential to remake entire industries as they create opportunities for new firms to emerge and for established firms to reinvent themselves (Day & Schoemaker, 2000; Loftus, 1997). The last decade or so has witnessed the proliferation of technologies such as e-commerce, advanced information technologies, Internet-enabled solutions, customer relationship management platforms, and communication interfaces, among others that have changed the dynamics of competition. From a strategic perspective, the adoption of and response to emerging technologies can reconfigure firms' relative positions in competitive landscapes (Bowman & Gatignon, 1995). That is, while some firms can potentially leverage leadership and leapfrogging advantages from appropriate technology adoption decisions, others become marginalized or lose competitive advantages due to poorly selected decisions pertaining to adoption or timing of adoption. For small and medium-sized enterprises (SMEs) technology adoption decisions represent opportunities as well as critical decision-making challenges due to their impact on survival, growth, competitiveness, and innovativeness (Bruque & Moyano, 2007; Nguyen, 2009). However, across industries, there are pronounced behavioral differences in how SMEs respond to emerging technologies (Grandon & Pearson, 2004; Julien & Raymond, 1994; Nguyen, 2009).

Emerging technology product markets are typically characterized by rapid change and development, with high levels of risk and uncertainty surrounding technological development and market opportunities (Bruce, 1988). Consequently, within industries, firms differ on technologyrelated decisions across two broad domains: the intent to adopt emerging technology and the timing of adoption (e.g., Bowman & Gatignon, 1995; Porter, 1980; Robertson & Gatignon, 1986). In other words, while some firms eagerly embrace new technologies, others are more reticent. Further, even among firms that adopt new technology, there are marked differences in the diffusion of many new technologies, with some firms being innovators and early adopters and the rest being relatively restrained followers. In this context, the question of whether there are strategic reasons for behavioral differences in technology adoption among SMEs needs to be explored.

For SMEs, technology adoption could serve as a strategic weapon that enables them to compete better with larger businesses, leverage operational and communication efficiencies, and overcome locational and temporal barriers (Grandon & Pearson, 2004). Nonetheless, in general, the rate of technology adoption by SMEs remains low compared to other businesses (Nguyen, 2009; Southern & Tilley, 2000). Espousing wide-ranging support for the potential benefits of management and information technology adoption by SMEs, past researchers have identified various factors that support or impede technology adoption decisions. …

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