Enabling the business strategy of SMEs through e‐business capabilities. A strategic alignment perspective
| DOI | https://doi.org/10.1108/02635570810876723 |
| Date | 23 May 2008 |
| Published date | 23 May 2008 |
| Pages | 577-595 |
| Author | Louis Raymond,François Bergeron |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Enabling the business strategy
of SMEs through e-business
capabilities
A strategic alignment perspective
Louis Raymond
De
´partement des sciences de la gestion, Universite
´du Que
´bec a
`Trois-Rivie
`res,
Trois-Rivie
`res, Canada, and
Franc¸ois Bergeron
De
´partement Travail, E
´conomie et Gestion, Universite
´du Que
´bec a
`Montre
´al,
Que
´bec, Canada
Abstract
Purpose – The present study aims at a deeper understanding of the performance outcomes of the
alignment between the e-business capabilities of manufacturing small- and medium-sized enterprises
(SMEs) and their business strategy in terms of Miles and Snow’s recognised strategic typology that
includes prospectors, analyzers, and defenders.
Design/methodology/approach – From a contingency theory perspective, a survey of 107
Canadian manufacturers was used to collect data that were analyzed through correlation analysis.
Findings – Results indicate that the ideal e-business profiles vary in the relation to the firms’
strategic orientation, whether it is of the defender, analyzer or prospector type. E-business alignment
has positive performance outcomes for manufacturing SMEs in terms of growth, productivity and
financial performance.
Research limitations/implications – The nature of the sample impose care in generalizing the
results of the study. These results also allow us to emphasise the nature rather than the investment
value of the SMEs’ information technology investment, given that certain forms of e-business would be
more appropriate for certain firms, depending upon their strategic orientation.
Practical implications – For SME owner-managers that require greater manufacturing flexibility,
increased systems integration, products and services of better quality, and higher levels of product and
process innovation, the results of this study allow us to prone an examination of their firm’s level of
e-business assimilation, this being done in conjunction with their strategic intent.
Originality/value – This is one of the first studies to have used a rigorous conceptualisation and
measure of alignment to confirm the theoretical validity and empirical usefulness of this notion and of
the strategic contingency approach for research on e-business, and to compare this approach with the
universalistic approach founded upon “best practices”.
Keywords Electronic commerce,Small to medium-sized enterprises, Business performance, Canada
Paper type Research paper
1. Introduction
E-business is now a standard in industry. In Canada for instance, more than 45 per cent
of firms possessan e-business capabilityin one form or the other (StatisticsCanada, 2007).
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0263-5577.htm
The authors would like to thank the Canada Research Chairs Program and the Canada
Foundation for Innovation for their financial support of this research.
Enabling
the business
strategy of SMEs
577
Received 6 December 2007
Revised 14 February 2008
Accepted 28 February 2008
Industrial Management & Data
Systems
Vol. 108 No. 5, 2008
pp. 577-595
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/02635570810876723
A number of business activities such as communicating, transacting, environmental
scanning and collaborating with other organisations are now done through the internet
and the world-wide-web. However, the choice of e-business capabilities that firms must
develop could be critical to their success. The complexity of technological choices,
implementation difficulties, personnel training costs and the continuous updating
of systems demand that organisations target their e-business activities upon their
business strategy. The issue of information technology’s (IT) alignment with the firm’s
businessstrategy constitutes oneof the five main problems faced by ITmanagers in large
enterprises (Luftman et al., 2006).
But what about small- and medium-sized enterprises (SMEs), and especially in the
manufacturing sector given these organisations’ specificities at the strategic and
operational levels, including their dependency upon certain business partners such as
large prime contracting firms (Dangayach and Deshmukh, 2001)? Is the strategic
alignment of their e-business activities as critical? Does this alignment allow
manufacturing SMEs to perform better in terms of growth, productivity, and
profitability? Since IT alignm ent with business strategy has be en shown to
significantly contribute to the business performance of SMEs (Chan and Horner Reich,
2007a), the alignment of e-business activities on business strategy should also be of the
utmost importance for these organizations.
Based on survey data obtained from 107 Canadian SMEs, the present stu dy aims at a
deeper understanding of the alignment between e-business and business strategy in
terms of Miles and Snow’s (1978) recognised strategic typology that includes
prospectors, analyzers, and defenders. The first of the three objectives of this research is
to identify the consequences of e-business alignment for the organisational performance
of manufacturing SMEs. The second objective is to verify if these consequences are valid
for all types of business strategies or only for some of these. And finally, this research
aims at determining what e-business capabilities would be most appropriate for each
type of business strategy. The research question is then formulated as follow:
RQ. Can SMEs enhance their performance by aligning their e-business activities
with their business strategy?
2. Theoretical and empirical context
The study’stheoretical and empirical contextis constituted by IT alignment researchthat
is founded upon contingency theory. The notion of strategic alignment emanates from
strategic management and organisation theory researchwhose fundamental proposition
is that organisational performanceis a consequence of the coherenceor “fit” between two
or more factors such as strategy, structure, and technology (Burnsand Stalker, 1961). In
thisperspective, coherenceis a dynamic search that seeksto align the organizationwith its
environment andto organize resources internally in supportof this alignment (Miles and
Snow, 1984, p. 11). Given that strategy is the mediating force between the firm and its
environment, it constitutes in concrete fashion the basic alignment mechanism, and the
organization’s technology, internet and web-based technology here, must be compatible
with this strategy if a significant competitiveadvantage is to be created.
2.1 Strategic alignment of e-business
Two research perspectives can be taken to examine how e-business alignment creates
value for the firm (Amit and Zott, 2001). The first perspective reflects a market power
IMDS
108,5
578
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