Profiting from the Accumulation and the Assimilation of IT-based resources and capabilities: An Empirical Study in Small and Medium Enterprises

The capability of using Information Technologies (IT) based resources for improving business processes and enhancing the firm economic performance has long been investigated in large firms. Nevertheless, with the decreasing costs of IT solutions, also Small and Medium Enterprises (SMEs) may be able to accumulate and assimilate IT-based resources in order to increase their economic performance. This study applies two conceptual approaches (resource-based view and contingency-based view) to assess the strategic value of IT-based resources in SMEs. Fourteen hypotheses related to these approaches are developed and tested based on survey data collection from the CIOs of 373 SMEs to understand more clearly the entire process from the adoption of IT-based resources to the achievement of higher economic performance, through the development of IT-based capabilities. The influence of internal and environmental factors, and the features of the business environment where SMEs operate are investigated. Results indicate that the resource-based view and the contingency-based approaches provide complementary understanding of the strategic value of IT in SMEs, making five main contributions. First, SMEs that operate under particular environmental (low turbulence and high complexity) and internal conditions (where the IT managerial capabilities are developed) are more likely to adopt earlier IT solutions. Second, SMEs are more likely to develop IT-based capabilities that are internally oriented, rather than the externally oriented. Third, internally oriented IT-based capabilities are developed independently by the environmental conditions where the SME operates, while the externally oriented are developed not uniformly among industry types. Fourth, the features of the business environment in which SMEs operate influence the IT-based resources adopted and the IT-based capabilities developed. Finally, given industry-level differences in competitive environments, the value appropriation of capabilities that firms developed using IT depends on industry type, with SMEs operate in turbulent environments exhibiting lower profit returns, while in munificent environments exhibiting lower or higher profit returns according to the IT-based capability considered