Abstract
The objective of the chapter is to assess the role of digital transformation in small business management and specifically to evaluate the strategies suitable for small businesses, identify the underpinning theories, and highlight related empirical studies. Thus, several kinds of literature in the domains of information systems, strategic management, and small business management were extensively reviewed. It was discovered that small businesses are struggling with digital transformation. However, those that have adopted the system are benefitting immensely. It is therefore recommended that more attention be paid to those strategies that work well for small businesses; that tailor-made theories for small business digital technology adoption be developed; and more studies, specifically longitudinal studies, are required to appreciate the complexity of the problem and where interventions are required.
TopBackground
The specific definition of a small business varies by country, and industry, but incorporates annual receipts and the number of employees. During economic downturns, small businesses are excessively affected when resources are limited (Liu & Parilla, 2020), but often have the advantage of personalization to and proximity with customers. Despite the advantage inherent in small businesses, when it comes to adjusting to environmental forces like technology, they struggle to adjust because of their unique characteristics of small scale.
The gradual imposition of digital technology on small business management requires a paradigm shift from the old and reliable analog system to the new, unknown and untested digital system. The availability of these digital technologies and their inherent advantage has endeared many organizations to transform their processes, products, and/or structures. Since the aim of digital transformation is to address challenges regarding efficiency and effectiveness, it is still early days to know if organizations that do not quickly develop and implement digital transformation strategies would be able to compete in the new digital reality (Hess et al., 2016). Digital transformation provides an opportunity for businesses to leverage digital technology so that they can deliver a cutting-edge user experience to their customers and other stakeholders, and it has created opportunities for all businesses to compete equitably. However, small businesses have yet to enjoy the full benefits because of their set of unique characteristics.
Key Terms in this Chapter
Management: The process of effective and efficient acquisition and utilization of resources for the benefit of an organization.
Digital Transformation: The gradual shift from the use of analog technology for organizational operations to the use of information and communication technologies.
Management Tools: These are instruments that support the implementation of concepts and ideas at all levels of management, to support the entire organizational process.
Digital Technologies: These are electronic tools and devices that generate, store, and process data.
Digital Tools: These are online platforms or software applications used to perform quick and optimized functions, and make tasks easier.
Strategy: The deliberate long-term plan of action of managers to outwit competition under different circumstances.
Theories: The carefully thought-out explanation for observations of the natural world using the scientific method.