Environmental Drivers of E-Business Strategies Among SMEs

Environmental Drivers of E-Business Strategies Among SMEs

Alessandro Arbore (Bocconi University, Italy) and Andrea Ordanini (Bocconi University, Italy)
DOI: 10.4018/978-1-59904-851-2.ch031
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Abstract

In front of traditional interpretations of the digital gap based on endogenous conditions of the firms, this chapter intends to emphasize the importance that some external pressures may have on the e-business strategy of small and medium enterprises (SMEs). The environmental factors analyzed here are market position, competitive intensity, and institutional pressures. SMEs have been grouped according to their level of e-business involvement, in relation to the number of e-business solutions adopted so far. Three layers are proposed: excluded, tentative, and integrated e-business SMEs. A multinomial logistic regression was used to predict these strategies. A general conclusion is that different models seem to explain exclusion and involvement. Specifically, two factors among those analyzed reveal to be more suitable in explaining e-business exclusion. They are the size of a SME and a lack of institutional pressures to adopt. On the other hand, e-business involvement seems to be primarily prompted by a selective competitive environment and not by imitative behaviors, as in the previous case.

Key Terms in this Chapter

Customer Relationship Management (CRM) System: a system combining database and computer technology with customer service to manage at best the relationships with clients. Automated CRM processes are often used to generate automatic personalized marketing actions based on the customer information stored in the system.

E-Commerce: According to the American Marketing Association (AMA), an e-commerce strategy incorporates various elements of the marketing mix to drive users to a Web site for the purpose of purchasing a product or service.

Institutional Pressures: According to the Institutional Theory, institutions work as forces upon individuals and organizations by creating social pressures and restrictions, setting boundaries for what is accepted and what is not. Such an influence can be in the form of normative, coercive, and mimetic pressures (Davidsson, Hunter, & Klofsten, 2006). Normative pressures consist of social pressures on organizations and its members to conform to certain norms. Coercive pressures are often thought of as formal institutions of regulations or laws but can also be informal expectations on organizations (e.g., technical standards imposed by someone exerting power over another actor, as in a parent-subsidiary relationship). Mimetic pressures represent demands towards imitation of other organizations to cope with uncertainty.

E-procurement: A structured information system adopted by some organizations for making business-to-business purchases over the Internet. Such a system can connect companies and their business processes directly with suppliers while managing all interactions between them. E-procurement is also referred to as supplier exchange.

Telework: According to the European Commission, telework occurs when information and communications technologies (ICTs) are applied to enable work to be done at a distance from the place where the work results are needed or where the work would conventionally have been done.

Web Site: An organization’s presence or an individual’s presence on the World Wide Web. It is a structured collection of multimedia pages linked to each other and very often to pages on other Web sites (hyperlinks). A Web site is hosted on a server computer and, to qualify as a Web site, the server must be available on the Internet 24 hours a day.

E-Business: An umbrella term referring to a wide variety of Internet-based management solutions, like a Web site, an e-commerce platform, or a customer relationship management system.

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