Unpacking the effect of IT capability on the performance of export‐focused SMEs: a report from China

Abstract

Export-focused small and medium-sized enterprises (SMEs) in China face a number of barriers to success, two primary ones being the liability of foreignness and resource scarcity. In order to transcend these challenges and be able to survive/prosper in the hypercompetitive international market, where players include large resourceful multinational organizations with experience in varied national contexts, these firms need to develop different organizational capabilities. In this paper, we specifically examine the role of a key organizational capability -information technology (IT) capability -and its different dimensions, in determining performance of export-focused SMEs in China. Our study reveals that IT capability has a positive impact on such firms' performance. This finding indicates the need for their owners/managers to invest in IT capability. Further, the study also highlights specific sub-dimensions of IT capability that export-focused Chinese SMEs should (or should not) develop, so as to derive maximum performance-related gains for the minimum amount spent on IT.

Information management for the internationalization of SMEs: An exploratory study based on a strategic alignment perspective

“…The number of items composing each scale is presented in Figure 2 (1999) and Zhang et al (2008). It addresses six dimensions as follows: IT business partnership, external IT linkages, business IT strategic thinking, IT business process integration, IT management, and IT infrastructure.…”

“…As a collaboration tool between employees, technology can enhance business performance (Sanders & Premus, 2005). More recently, the relationship between IT capabilities and performance in Chinese SMEs has been studied (Zhang et al, 2008),…”

IT and Fast Growth Small-to-Medium Enterprise Performance: An Empirical Study in Australia

“…In the digitally-enabled business environment, IT integration refers to the IT-based linkages between the focal firm and its business partners which facilitate inter-firm business processes along the value chain (Rai & Tang 2010). Unlike the commodity technologies, IT integration is often associated with a firm's strategic context and is woven into the organization's fabric, which is not transparent to competitors (Zhang et al 2008). Although competitors can easily mimic a firm's IT resources, the way companies effectively integrate IT within an organizational strategy so as to develop an IT capability is hard to acquire and difficult to imitate, thus providing firms with a source of competitive advantage.…”

“…For example, some studies (Bharadwaj & Soni 2007;Butler & Murphy 2008;Cragg et al 2011;Cragg et al 2013;Johnston et al 2007;Oh et al 2009;Wynn 2008;Zhang et al 2008) provide empirical support for a positive relationship between IT and SME performance through achieving business process competencies, enabling innovation, and increasing revenue and decreasing costs. Others (Cragg et al 2002;Hicks et al 2006) suggest that the impact of IT on SME performance is weak.…”

“…While IT expertise refers to IT personnel who have specialized intellectual technical skills to develop IT applications that support business processes (Lin & Lin 2008), IT infrastructure is physical IT assets including computers, communication facilities, shareable technical platforms, and databases (Zhang et al 2008). IT technical skills contain employees' knowledge of programming, system analysis and design, and competencies in emerging technologies.…”