Training, Competence, and Business Performance: Evidence from E-Business in European Small and Medium-Sized Enterprises

Training, Competence, and Business Performance: Evidence from E-Business in European Small and Medium-Sized Enterprises

Dag H. Olsen (University of Agder, Norway) and Tom R. Eikebrokk (University of Agder, Norway)
DOI: 10.4018/978-1-60960-132-4.ch005

Abstract

This article examines the relationship between training, competence and performance of small and medium-sized enterprises (SMEs) in the context of e-business. Literature review combined with a triangulation of qualitative and quantitative methods were used to investigate these relationships. Data about e-business competences and performance in 339 SMEs in three European countries was combined with data about training supply from 116 providers of e-business related training. The empirical findings document a positive relationship between training, competence and performance and show that training explains variances in e-business competences and performance in terms of efficiency, complementarities, lock-in and novelty. The research has both theoretical and practical implications. It contributes to theoretical development by lending support to the idea that methodological issues are an important reason behind the lack of empirical support frequently reported in the literature. The study has practical implications for public policy makers, training suppliers and SME managers.
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Theory

E-Business and SMEs

We have adopted a relatively broad definition of e-business as the conduct of business generally with the assistance of telecommunication and telecommunications-based tools (Clarke, 2003). E-business and the internet have opened new arenas for competing and collaborating for SMEs, but most of them are in an early stage of their e-business. There is not a common definition of Small and Medium sized organizations. The term Small Business is commonly used in the United States where measures as number of employees, total turnover, and industry are used to define a Small Business. The European Union (EU) uses a uniform definition of SMEs as independent companies with fewer than 250 employees, with either a turnover of less than 40 million € or total assets of less than 27 million € (European Commission, 2004). Independent companies are those that are not owned as to 25% or more of the capital or the voting rights by one enterprise, or jointly by several enterprises. We have adopted the EU definition.

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