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Factors affecting the adoption of intranets and extranets by SMEs: a UK study

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  • Windrum, Paul
  • Berranger, Pascale de

    (MERIT)

Abstract

The adoption of intranets and extranets involve major organisational innovation. Intranets alter the flows and content of internal communications, while extranets alter communications between the firm and its clients and suppliers. The paper identifies a number of potential factors that may affect adoption. These include internal and external business drivers, the role of the CEO/owner, firms’ absorptive capacity, firm size amongst SMEs, and business activity. Neither the relative size nor the business activities of SMEs have been considered in previous studies. Logit regressions are run on factors influencing the adoption of intranets and client extranet for a sample of 164 UK SMEs. The findings challenge two oft-stated views. First, that ICT adoption in SMEs depends on the CEO/owner being the ICT decision-maker. The findings clearly indicate that adoption is positively related to firm size. Larger sized SMEs firms have more complex organisational structures in which a specialist manager – typically holding the title ‘IT Manager’ – is the key decision-maker on ICT investments. Adoption depends on the quality and drive of these managers, not the CEO/owner. Second, the myth that services are technological laggards is clearly exposed. Knowledge intensive service firms, not manufacturing firms, are the champions of extranet technologies in this sample. In addition, both knowledge intensive service and manufacturing SMEs are key champions of intranet adoption. Expansion of national, not global, market share is the most important strategic objective identified in the study. The ability to integrate previously separate ICT systems is another important factor for intranet adopters. The results differ with respect to external customer and competitor pressure. These are found to be important in intranet adoption but not in extranet adoption. Only very weak support can be identified for the importance of absorptive capacity. A clear problem remains with regards to identifying a clear set of instruments with which to test for absorptive capacity.

Suggested Citation

  • Windrum, Paul & Berranger, Pascale de, 2003. "Factors affecting the adoption of intranets and extranets by SMEs: a UK study," Research Memorandum 026, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:umamer:2003026
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    References listed on IDEAS

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    3. Julian Duran & Rubén Castillo, 2023. "Factors related to information and communication technologies adoption in small businesses in Colombia," Journal of Innovation and Entrepreneurship, Springer, vol. 12(1), pages 1-14, December.
    4. Nicoletta Corrocher & Roberto Fontana, 2008. "Expectations, network effects and timing of technology adoption: some empirical evidence from a sample of SMEs in Italy," Small Business Economics, Springer, vol. 31(4), pages 425-441, December.
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    6. Tommaso Ciarli & Roberta Rabellotti, 2007. "ICT in Industrial Districts: An Empirical Analysis on Adoption, Use and Impact," Industry and Innovation, Taylor & Francis Journals, vol. 14(3), pages 277-303.
    7. Hollenstein, Heinz, 2004. "Determinants of the adoption of Information and Communication Technologies (ICT): An empirical analysis based on firm-level data for the Swiss business sector," Structural Change and Economic Dynamics, Elsevier, vol. 15(3), pages 315-342, September.
    8. Adel Ben Youssef & David Castillo Merino & Walid Hadhri, 2012. "Determinants of Intra-firm Diffusion Process of ICT: Theoretical Sources and Empirical Evidence from Catalan Firms," Post-Print halshs-00937176, HAL.
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