Small Business Internet Use and Strategic Flexibility

Research on SME Internet use has focused almost exclusively on factors leading to the adoption of Internet technologies. In this study, we focus on the potentially valuable connection between Internet use and strategic flexibility. Specifically, we propose that Internet use for communications will promote greater strategic flexibility for the small firm, but only in a dynamic environment. The results, based on a sample of 160 small Midwest companies, largely support this hypothesis. Environmental dynamism was found to moderate the relationship between Internet use for communications and strategic flexibility. Use of the Internet for communications was found to be positively and significantly related to strategic flexibility in a dynamic environment. As expected, dynamism did not moderate the relationship between Internet use for transactions and strategic flexibility. These findings hold implications for future research and for managers of small firms attempting to effectively leverage the Internet for competitive advantage