Electronic Business: Concepts, Methodologies, Tools, and Applications (4-Volumes) P26 potx

184 EU SMEs and E-Business Innovation relations with citizens, businesses and other arms of government. These technologies can serve a variety of different ends: better delivery of govern- ment services to citizens, improved interactions with business and industry, citizen empowerment WKURXJKDFFHVVWRLQIRUPDWLRQRUPRUHHI¿FLHQW JRYHUQPHQWPDQDJHPHQW7KHUHVXOWLQJEHQH¿WV can be less corruption, increased transparency, greater convenience, revenue growth, and/or cost reductions (World Bank, 2002). Innovation: The process of innovation is divided into the following broad activities: • Agenda setting: general organisational problems create a perceived need for change; • Matching: an organisational problem is ¿WWHGZLWKDQLQQRYDWLRQ • 5HGH¿QLQJ5HVWUXFWXULQJ the innovation LVPRGL¿HGWR¿WWKHRUJDQLVDWLRQDQGLW alters the organisational structure(s); • Clarifying: the relationship between the organisation and the innovation is clearly GH¿QHGDQG • Routinising: the innovation loses its identity as it becomes an ongoing element in the organisation’s activities (Rogers, 1995). EU: European Union. ICT: Information and Communication Tech- nologies. IS (Information Systems): An information V \VW H P K D VE H H Q G H VF U L E H G D V ³DV\V W H P W R F RO OHF W   process, store, transmit, and display information” (Avison & Wood-Harper, 1990, p. 3). SMEs (Small- and Medium-Sized Enter- prises): In February 1996, the European Union DGRSWHGDVLQJOHGH¿QLWLRQRI60(VWREHDSSOLHG across all EU programmes and proposals dating from December 31, 1997. The communication recommended that member states, the European Investment Bank and the European Investment )X Q G D G R S W W K H G H ¿ Q L W L R Q V  +RZHYH UW KHF RP PX- Q LF D W L R Q S H U P LW V W K H X V H RIORZ H U W K U H V K ROG¿J X U H V   if desired. The European Union recommended GH¿QLWLRQIRUD³PLFUR´EXVLQHVVLVWKDWLWPXVW KDYHDPD[LPXPRIQLQHHPSOR\HHV$³VPDOO´ business must satisfy the following criteria: • A maximum number of 49 employees; • A maximum annual turnover of 7 million euros; • A maximum annual balance sheet total of 5 million euros; and • The maximum of 25% owned by one, or jointly by several, enterprise(s) not satisfy- ing the same criteria. 7KH(8UHFRPPHQGDWLRQVWDWHVWKDWD³PH- dium-sized” business must satisfy the following criteria: • A maximum number of 249 employees; • A maximum annual turnover of 40 million euros; • A maximum annual balance sheet total of 27 million euros; and • The maximum of 25% owned by one, or jointly by several, enterprise(s) not satisfy- ing the same criteria. This work was previously published in Encyclopedia of E-Commerce, E-Government, and Mobile Commerce, edited by M. Khosrow-Pour, pp. 464-471, copyright 2006 by Information Science Reference (an imprint of IGI Global). 185 Copyright © 2009, IGI Global, distributing in print or electronic forms without written permission of IGI Global is prohibited. Chapter 1.13 Environmental Drivers of E-Business Strategies Among SMEs Alessandro Arbore Bocconi University, Italy Andrea Ordanini Bocconi University, Italy ABSTRACT In front of traditional interpretations of the digital JDSEDVHGRQHQGRJHQRXVFRQGLWLRQVRIWKH¿UPV this chapter intends to emphasize the importance that some external pressures may have on the e- business strategy of small and medium enterprises (SMEs). The environmental factors analyzed here are market position, competitive intensity, and institutional pressures. SMEs have been grouped according to their level of e-business involvement, in relation to the number of e-business solutions adopted so far. Three layers are proposed: ex- cluded, tentative, and integrated e-business SMEs. A multinomial logistic regression was used to predict these strategies. A general conclusion is that different models seem to explain exclusion DQGLQYROYHPHQW6SHFL¿FDOO\WZRIDFWRUVDPRQJ those analyzed reveal to be more suitable in ex- plaining e-business exclusion. They are the size of a SME and a lack of institutional pressures to adopt. On the other hand, e-business involvement seems to be primarily prompted by a selective competitive environment and not by imitative behaviors, as in the previous case. INTRODUCTION In this chapter, our general attention is on the adoption and diffusion of e-business solutions among small and medium enterprises (SMEs). 0RUHVSHFL¿FDOO\RXULQWHUHVWLVIRFXVHGRQVRPH external factors that may affect this process, since we are persuaded that external forces are espe- cially important within small organizations, while 186 Environmental Drivers of E-Business Strategies Among SMEs largely understated by the literature. We will try to analyze whether these factors do relate to the e-business involvement of an SME. E-business is an umbrella term referring to a wide variety of Internet-based management solutions. The solutions considered here are: interactive Web sites, e-commerce platforms, e-procurement systems, customer relationship management systems, and telework. BACKGROUND: SMES AND EXTERNAL FACTORS AFFECTING E-BUSINESS Many researches explain the adoption of e- business solutions in terms of endogenous fac- tors, that is variables which are internal to the organization. Among these factors, different typologies of variables are recursive: the level of ¿QDQFLDOUHVRXUFHVDEOHWRDIIHFWDQ\LQYHVWPHQW GHFLVLRQWKHPDQDJHULDOFXOWXUHLQÀXHQFLQJWKH propensity to innovate; and the organizational readiness, which is relevant for the integration of new technologies (for a review, see Lee, Runge, %DHN&RQYHUVHO\WKHSRWHQWLDOLQÀX- ence of exogenous pressures have been largely understated. Within this handbook, a review of internal factors is out of the scope of the current chapter. Instead, our goal is to deepen our un- derstanding about the following environmental drivers: market position, competitive intensity, and institutional pressures. When focusing on SMEs, environmental elements must be considered as especially im- portant because of the high dependency of these organizations from the context: SMEs appear more sensible to external pressures, in terms of ERWKFRPSHWLWLYHDQGVRFLDO³UXOHVRIWKHJDPH´ (Fink, 1998). Therefore, important explanatory factors of adoption strategies shall be easily found by studying the environment where SMEs play, rather than focusing only on internal conditions. Above all, since e-business is basically considered DQLQVWUXPHQWWRLPSURYH¿UP¶VFRPSHWLWLYHQHVV (Amit & Zott, 2000), we could expect that the competitive features of the arena where SMEs play require special attention. Starting from the current literature, then, the environmental forces analyzed in this work are: (1) the level of perceived competition (Kuan & Chau, 2001; Riemschneider, Harrison, & Mykytn, 2003); (2) the pressure to be considered technology savvy (Iacovou, Benbasat, & Dexter, 1995; Zhu, Kremer, & Xu, 2003); and (3) the competitive position occupied in the marketplace (Daniel & Grimshaw, 2002; Lal, 1999). 2XUFKDSWHUZLOOEULHÀ\UHYLHZWKHWKHRUHWLFDO antecedents for each of these factors and then we will provide a set of hypotheses. Competitive Intensity According to the well known industrial organiza- tion framework (Andrews, 1971; Porter, 1985), it can be observed that an increasing competitive intensity worsens the balance between opportuni- WLHVDQGWKUHDWVUHTXLULQJ¿UPVWRDGRSWPRUHLQ- QRYDWLYHVWUDWHJLHVWRVXUYLYHDQGPDNHSUR¿WV Within this view, Gatignon and Robertson (1989) found that competitive pressure in the adopter industry has a positive impact on adoption of information and communication technologies. In the same way, Thong and Yap (1995) found that the CEO attitude towards new technologies adoption is positively correlated with the degree of competition faced in the market. Similarly, Premkumar and Roberts (1999) demonstrated that the degree of competitive rivalry in the adopter’s industry affects the rate of adoption of digital technologies. Also adopting the more recent resource-based approach (Barney, 1991; Peteraf, 1993), it could be observed that the strength of competition in the factor markets reduces the power of isolating mechanisms sustaining the competitive edge, thus requiring continuous innovation strategies. Within these contexts, innovations lead to re- 187 Environmental Drivers of E-Business Strategies Among SMEs source substitution phenomenon, acting as basic conditions for rent seeking (Malerba & Orsenigo, 1997). Especially here, e-business solutions may contribute to the development of dynamic capabili- ties sustaining long-term competitive advantages (Teece, Pisano, & Shuen, 1997). This discussion OHDGVWRIRUPXODWHRXU¿UVWK\SRWKHVLV Hp1: The degree of perceived competition increases the intensity of e-business strategy among SMEs. Institutional Pressures and Technology Legitimacy $FFRUGLQJWRWKHLQVWLWXWLRQDOWKHRULHVD¿UP¶V behavior has to be coherent with norms and social rules requested by their environment (Di Maggio & Powell, 1983; North, 1990). &RQVLVWHQWO\LQRUGHUWRJDLQDFFHVVWRVSHFL¿F resources, to collaborative networks, or to strategic DOOLDQFHVD¿UPPLJKWEHVXEMHFWWROHJLWLPDF\ assessment by other social agents (competitors, partners, and other stakeholders). The require- ments may be very selective especially for SMEs, since they are not usually perceived as legitimate players due to their lack of resources and capabili- ties (Grewal, Comer, & Metha, 2001). Although for SMEs the last decision maker is generally the owner-manager, the pressure that she feels from other stakeholders (e.g., employ- ees, customers, suppliers) remains an important determinant of technology adoption. Harrison, Mykytyn, and Riemenschneider (1997) found that similar unwritten norms, maintained by SHHUVDQGVRFLHW\VWURQJO\LQÀXHQFHWKHLQWHQ- tion to adopt information technologies in small businesses. Along the same line, Lee et al. (2001) posit that SMEs’ managers hear about the relative advantages of digital technologies largely from the trade press, their friends, business competitors, and peer-social interactions. This would create selective contexts, where it is important to be perceived as technology savvy and where e-business strategies may be driven, among the other things, by a relational need to be reputed as innovative and technology savvy. This leads to our second hypothesis: Hp2: The need for a technology legitimacy increase the intensity of e-business adoption among SMEs. Market Position Given a certain level of competitive rivalry, a lead- ing market position 1 may reveal better resources to exploit the potential of the new technologies. This, in turn, would be a further driver for e-business intensity. Moreover, early e-business adoption might be interpreted as a pre-emptive strategy of the leader. From this point of view, the leader ZRXOG IHHO DQ H[WHUQDO SUHVVXUH WR EH WKH ¿UVW mover, in order not to loose its supremacy. From a theoretical point of view, there is a general consensus on the fact that the adoption of information technologies, by itself, has a marginal GLUHFWHIIHFWRQ¿UPSHUIRUPDQFHZKLOHVLJQL¿- cant impacts emerge only when such technologies are combined and integrated with other distinctive competencies (see, among the others, Clemons & Row, 1991; Mata, Fuerst, & Barney, 1995; Powell & Dent-Micallef, 1997). A possible implication is that e-business solu- tions, like other ICTs, would have greater power in consolidating leading positions rather than reduce competitive gaps: the instrumental nature of technology makes e-business strategies viable RQO\ ZKHQ WKHUH DUH VRPH ³EXVLQHVV VWUDWHJ\´ beyond them, thus suggesting that technology FDQQRW¿[DÀDZSURFHVVE\LWVHOIEXWLWLVDEOH WR LPSURYH HYHQ VLJQL¿FDQWO\ DQ HVWDEOLVKHG process (Carr, 2001). ,QRWKHUZRUGVWKHUHLVD³VWUDWHJLFQHFHVVLW\ hypothesis” supporting the adoption of ICT tech- nologies, and it is more likely that this necessity is SUHVHQWDPRQJ¿UPVZLWKDVROLGPDUNHWSRVLWLRQ (Clemons & Row, 1991). Following these considerations, SMEs feeling in a leading market position would be more likely 188 Environmental Drivers of E-Business Strategies Among SMEs WRDGRSWQHZWHFKQRORJLHVWKDQ³PDUJLQDO´FRP- petitors, which would prefer to exploit existing knowledge and capabilities rather than exploring new possibilities (Leonard-Barton, 1992). Hp3: Being in a leading market position increases the intensity of e-business among SMEs. METHODOLOGY Sampling and Collecting The analysis is based on a survey of Italian SMEs. In this case, Italy can be considered as a PHDQLQJIXO¿HOGWRLQYHVWLJDWHLVVXHVUHODWHGWR SMEs, given the high number of small organiza- W LR Q V L Q P R V W RI W K H L Q G X V W U L H V  $ U D Q G R P V W U D W L ¿ H G  sample of 1,000 SMEs was selected, respecting the breakdown of SMEs among manufacturing DQGVHUYLFHLQGXVWULHVH[FOXGLQJ¿UPVZLWKOHVV than 50 employees, considered as very small, and with more than 500 employees, considered as large organizations. Data was collected through a TXHVWLRQQDLUHDQG¿UPVZHUHFRQWDFWHGE\SKRQH using the CATI technique during the period No- vember/December, 2003. $GUDIWRIWKHTXHVWLRQQDLUHZDV¿UVWWHVWHG RQDUDQGRPVDPSOHRI60(V7KH¿QDOYHU- VLRQZDV PR GL¿HGDFF RUGLQJO\,QRUGH UWRUH GXFH potential response bias, a unique key informant was chosen: the CEO was selected as the most appropriate respondent. In answering the entire T X H V W L R Q Q D L U H   ¿ U P V E H F D P H W K H D F W X D O V D P S O H  of this study. Variables The dependent variable of our model is the inten- sity of e-business adoption among SMEs. More SUHFLVHO\ZHPHDVXUH³HEXVLQHVVLQWHQVLW\´DV a multinomial variable (EBUSINT) with three possible levels: • 0, for SMEs which do not implement any kind of e-business strategy, and thus ex- cluded from e-business trajectories (EX- CLUDED) • 1, for SMEs which tried to implement one e-business strategy among the following: in- teractive Web site, e-commerce, e-procure- ment, customer relationship management, DQGWHOHZRUN7KLVJURXSRI¿UPVZLOOEH called TENTATIVE • 2, for SMEs that integrated more than one e-business solutions in their processes, and for which e-business could be seen as a normal practice (INTEGRATED) 0 applications - EXCLUDED; 26,1% 1 application = TENTATIVE; 30,3% 2 or more applications = INTEGRATED; 43,6% Figure 1. The number of e-business solutions adopted by Italian SMEs Source: I-LAB, Bocconi University 189 Environmental Drivers of E-Business Strategies Among SMEs The intensity of competition perceived by a SME YDULDEOH ³&203(7,7,21´ KDV EHHQ PHDVXUHGWKURXJKD¿YHSRLQWVOLNHUWW\SHVFDOH (1= I completely disagree; 5 = I totally agree) for WKHIROORZLQJVHQWHQFH³,QWKHPDUNHWZKHUHZH play, competition is extremely strong.” The intensity of technology legitimacy pres- VXUH SHUFHLYHGE\D60( ³7(&+/(*,7,0´ KDVEHHQ PHDVXUHG WKURXJKD¿YHSRLQWOLNHUW type scale (1= I completely disagree; 5 = I totally DJUHHIRUWKHIROORZLQJVHQWHQFH³*LYHQWKH market where we play, it is important for us to be considered as technology savvy.” The relative market position has been measured WKURXJKDGXPP\YDULDEOH³/($'(56+,3´ DVWKHDQVZHUWRWKHIROORZLQJVHQWHQFH³:LWKLQ \RXUVSHFL¿FVHJPHQWRUQLFKHGRHV\RXU¿UP feel to be in a leading market position?” (1 = yes; 0 = no). 6LQFHWKHUDQJHRI¿UPV¶VL]HLQRXUVDPSOHLV remarkable (from 50 to 250 employees), and since EXVLQHVVVL]HDOUHDG\SURYHGWREHDVLJQL¿FDQW discriminator between IT adopters and non-adopt- ers among SMEs (Fink, 1998), we controlled IRUVL]HHIIHFWVYDULDEOH³6,=(´7R WKDWHQG we used the natural logarithm of the number of employees, considering that the probability to adopt an innovation increases with size, but at decreasing rates. Last, we recognize that service sectors—for their intangible nature—may be more conducive of e-business strategy than manufacturing (Luck- ing-Reilly & Spulber, 2001). The dichotomous YDULDEOH ³6(59,&(´   PDQXIDFWXULQJ   service), then, is used to control for this industry VSHFL¿FLW\ The Analytical Model Multinomial logistic regression (MLR) is useful for sit uations in which you wa nt to be able to cla s- sify subjects based on values of a set of predictor variables. This type of regression is similar to logistic regression, but it is more general because it can be applied when the dependent variable is not restricted to two categories. Since we modeled our dependent variable as a multinomial variable with three levels (excluded, tentative, integrated), we applied the MLR proce- dure, which is essentially an extension of binary logistic regression to a polytomous multinomial (Agresti, 1999). The method basically proceeds by compar- ing the effect of factors and covariates on the SRVVLELOLW\RIEHLQJLQHDFKRI³n-1” categories LQRXUFDVHWKH³H[FOXGHG´DQGWKH³LQWHJUDWHG´ categories) compared with the baseline category ³n”LQRXUFDVHWKH³WHQWDWLYH´FDWHJRU\ 7KLVLVFRQFHSWXDOO\HTXLYDOHQWWR¿WWLQJ³Q´ separate binary logistic models, comparing cat- egory 1 with category n, category 2 with n, and so on. Practically, the software usually estimates a simultaneous model which is more statistically sophisticated where, for each independent vari- DEOHZH KDYH³n-1” parameter estimates, each estimating the effect of a one-unit change in this v a r i a b l e o n t h e l o g o d d s o f b e i n g i n c a t e g o r y r a t h e r than in the baseline category (Long, 1997). In few terms, for each case, there will be n-1 predicted logits, one for each category relative to the refer- ence or baseline category (Menard, 2002). It could be noted that, when multiple classes of the dependent variable can be ranked, as for our case, ordinal logistic regression is sometimes preferred to multinomial logistic regression. Our choice to adopt MLR is due to the fact that our sample does not fully satisfy the test of parallel lines, which is mandatory to adopt the ordinary logistic regression (Menard). Moreover, MLR allows comparing the effects of independent variables (i.e., the drivers of e-business) across different categories of dependent variables, which is one important feature of our model. In any cases, when the ordered logit model is run adopting a logit as a link function, outcomes are largely similar to those obtainable through the multinomial logistic regression (Pampel, 2000). 190 Environmental Drivers of E-Business Strategies Among SMEs FINDINGS 7DEOHVKRZVWKH¿UVWRXWFRPHRIWKHSUHGLFWLYH model for the adoption of e-business solutions DPRQJ60(V7KHUHIHUHQFHFDWHJRU\LV³WHQWD- WLYH´WKDWLV¿UPVWKDWDGRSWHGRQHEXWRQO\RQH e-business solution. 7KH RYHUDOO PRGHO ¿WWLQJ PHDVXUHV DUH DOO satisfactory. 2 We can focus, then, to parameter estimates and discuss our previous hypotheses. 7KH¿QGLQJVDUHUHSRUWHGEHORZ   7 K H V L ] H R I D 6 0 ( D S S H D U V W R E H D VLJ Q L ¿ F D Q W  variable in explaining the leap from being ³H[FOXGHG´ WR EHFRPH ³WHQWDWLYH´ EXW LW GRHVQRWDSSHDUDVVLJQL¿FDQWLQH[SODLQLQJ DIXUWKHUOHDSWKHRQHIURPEHLQJ³WHQWDWLYH´ WREHFRPHDQ³LQWHJUDWHG´HEXVLQHVV¿UP More precisely, a one unit increase in the natural logarithm of the number of employee of a SME (that is, an increase of about 170% in its size), reduces the odds ratio of being an ³H[FOXGHG´¿UP²LQVWHDGRIEHLQJDWOHDVW D³WHQWDWLYH´RQH²E\ Excluded SME (no ebusiness solutions) Tentative SME (just 1 ebus iness solution) Involved S ME (2 or more ebusiness solutions) SIZE** SIZE 2. The lack of competition would not prove to EHDVLJQL¿FDQWIDFWRULQH[SODLQLQJHEXVL- ness exclusion for a SME; on the contrary, the level of perceived competition appears VLJ Q L ¿FDQWLQH[SODLQLQJWKHOHD SIURP³ WHQ - WDWLYH´HEXVLQHVVWR³LQWHJUDWHG´HEXVLQHVV 7KLVUHVXOWZRXOGFRQ¿UPRXU¿UVWK\SRWK- esis: the degree of perceived competition does affect the involvement in e-business strategies, even if it does not explain e-busi- ness exclusion tout court. More precisely, DRQHSRLQWLQFUHDVHLQWKH¿YHSRLQWVFDOH measuring the level of perceived competi- tion increases the odds ratio of being an ³LQWHJUDWHG´ HEXVLQHVV 60(²LQVWHDG RI EHLQJMXVW³WHQWDWLYH´²E\ Excluded SME (no ebusiness solutions) Tentative SME (just 1 ebus iness solution) Involved S ME (2 or more ebusiness solutions) Competition** Competition 3. Low environmental pressures for being WHFKQRORJ\VDYY\SURYHWREHDVLJQL¿FDQW factor in explaining part of the e-business H[FOXVLRQRID60(EXWQRWDVLJQL¿FDQWIDF- WRULQH[SODLQLQJWKHOHDSIURPEHLQJ³WHQWD- WLYH´WREHFRPHDQ³LQWHJUDWHG´HEXVLQHVV ¿UP $FFRUGLQJO\WKH VHFRQG K\SRWKHVLV ZRXOGEHFRQ¿UPHGE\RXUHYLGHQFHEXW only in explaining e-business exclusion vs. DGRSWLRQ7KLVVDPSOHGLGQRWFRQ¿UPDQ\ role of technology legitimacy requirements in explaining different level of e-business adoption. More precisely, a one point in- FUHDVHLQWKH¿YHSRLQWVFDOHPHDVXULQJWKH intensity of this pressure reduces the odds UDWLRRIEHLQJDQ³H[FOXGHG´¿UPLQVWHDGRI EHLQJDWOHDVW³WHQWDWLYH´E\ Excluded SME (no ebusiness solutions) Tentative SME (just 1 ebus ines s solution) Involved S ME (2 or more ebusiness solutions) Need for tech. legitimacy*** Need for tech. legitimacy 4. A (self-stated) leading market position is KLJKO\ VLJQL¿FDQW RQO\ LQ H[SODLQLQJ WKH OHDS IURP EHLQJ MXVW ³WHQWDWLYH´ WR EH DQ ³LQWHJUDWHG´ HEXVLQHVV ¿UP 60(V LQ a leading market position (or feeling so) more than double the odds ratio of being ³LQYROYHG´LQHEXVLQHVV ,QFRQ¿UPDWLRQRI our third hypothesis, then, it seems possible to conclude that a strong market position is positively related to higher levels of e-busi- ness involvement. More precisely, when an SME feels to be in a leading market posi- WLRQWKHRGGVUDWLRRIEHLQJDQ³LQWHJUDWHG´ 191 Environmental Drivers of E-Business Strategies Among SMEs Model -2 Log Likelihood Chi-Square df Sig. Intercept Only 762,955 Final 717,061 45,895 10 0,000 Cox and Snell 0,115 Nagelkerke 0,130 McFadden 0,057 Effect -2 Log Likelihood of Reduced Model Chi-Square df Sig. Intercept 717,061 0,000 0 . SIZE 723,692 6,631 2 0,036 TECHLEGITIM 725,818 8,758 2 0,013 COMPETITION 721,911 4,851 2 0,088 SERVICES 724,123 7,063 2 0,029 LEADERSHIP 730,237 13,176 2 0,001 The chi-square statistic is the difference in -2 log-likelihoods between the final model and a reduced model. The reduced model is formed by omitting an effect from the final model. The null hypothesis is that all parameters of that effect are 0. This reduced model is equivalent to the final model because omitting the effect does not increase the degrees of freedom. EXCLUDED TENTATIVE INTEGRATED Percent Correct EXCLUDED 36 14 48 36,7% TENTATIVE 17 26 71 22,8% INTEGRATED 22 18 124 75,6% Overall Percentage 19,9% 15,4% 64,6% 49,5% Model Fitting Information Pseudo R-Square Likelihood Ratio Tests Classification Observed Predicted Lower Bound Upper Bound Intercept 2,947 1,012 8,476 1 0,004 . . . SIZE -0,418 0,170 5,999 1 0,014 0,659 0,472 0,920 TECHLEGITIM -0,324 0,121 7,141 1 0,008 0,723 0,570 0,917 COMPETITION 0,029 0,135 0,045 1 0,831 1,029 0,791 1,339 SERVICES -0,417 0,335 1,551 1 0,213 0,659 0,342 1,270 LEADERSHIP 0,057 0,301 0,035 1 0,851 1,058 0,587 1,907 Intercept -0,478 0,903 0,280 1 0,596 . . . SIZE -0,093 0,143 0,423 1 0,515 0,911 0,689 1,205 TECHLEGITIM -0,043 0,112 0,146 1 0,702 0,958 0,770 1,193 COMPETITION 0,250 0,125 3,983 1 0,046 1,284 1,004 1,642 SERVICES 0,381 0,276 1,901 1 0,168 1,463 0,852 2,513 LEADERSHIP 0,818 0,258 10,078 1 0,002 2,266 1,367 3,754 Wald df EXCLUDED INTEGRATED Si g .Exp ( B ) 95% Confidence B Std. Error Parameter Estimates 7DEOH0XOWLQRPLDOORJLVWLFUHJUHVVLRQPRGHO¿WWLQJ Table 2. Multinomial logistic regression: parameter estimates* * TENTATIVE is the reference category 192 Environmental Drivers of E-Business Strategies Among SMEs e-business SME—instead of being just ³WHQWDWLYH´²LQFUHDVHVE\ Excluded SME (no ebusiness solutions) Tentative SME (just 1 ebus ines s solution) Involved S ME (2 or more ebusiness solutions) Market leader Market leader*** Finally, the role of the industry (namely, ser- vices vs. manufacturing) was controlled by the GLFKRWRPRXVYDULDEOH³VHUYLFHV´(YHQLIWKHOLW- erature already proved the relevance of this factor, our sample produced a Wald statistics below the OHYHORIVLJQL¿FDQFHIRUERWKWKHFRQWUDVWV ³WHQWDWLYH´YV³H[FOXGHG´DQG³WHQWDWLYH´YV³LQ- tegrated”). Considering the two contrasts together, however, the F 2 test on the difference between the full model deviance and the baseline model GHYLDQFHVKRZVDQRYHUDOOVLJQL¿FDQFHDWWKH level. The estimates indicate that belonging to a service sector, instead of a manufacturing one, ZRXOGUHGXFHWKHRGGVUDWLRRIEHLQJ³H[FOXGHG´ by 34%. Similarly, belonging to a service sector ZRXOG LQFUHDVH WKH SUREDELOLW\ RI EHLQJ ³LQWH- JUDWHG´LQVWHDGRIMXVW³WHQWDWLYH´E\ IMPLICATIONS AND CONCLUSIONS 7KHYHU\¿UVWFRQFOXVLRQWKDWLVSRVVLEOHWRGUDZ out is that different factors seem to explain the nonadoption of e-business solutions and different levels of e-business involvement. The analysis, in RW K H U ZRUG V  F R Q ¿ U P V W KHRSS R U W X Q L W \ W R NH H S W K H  two issues as separated: e-business exclusion and e-business involvement appear, at least partially, to be different phenomena that require different theoretical reasoning and modeling. :LWKVSHFL¿FUHJDUGWRRXUVWXG\WZRIDFWRUV among those analyzed reveal to be more suitable in explaining e-business exclusion of some SMEs (but not to explain different levels of e-business adoption). They are the size of a SME and a lack of institutional pressures/inputs to adopt the in- novations in point (see hypothesis two). Excluded SME (no ebusiness solutions) Size Lack of institutional pres sures to a dopt e bus ines s This means that: 1. When the adoption of e-business is just sporadic, almost casual (tentative, as said), this is generally because such an adoption roots mainly in imitating behaviors or ex- ternal pressures, and less in the culture of innovation or in the search of competitive advantages.  ,WLVDOVRFRQ¿UPHGWKDWWKHODFNRIDGHTXDWH resources (tangibles and intangibles, as approximated by the variable size), may completely impair the adoption of any e- business solution, something well-known to the literature of innovations. SMEs in similar conditions need the special attention of e-business supporting policies, keeping in mind that pushing adoption, by itself, is QRWHQRXJKWROHWD¿UPHQMR\WKHEHQH¿WV of e-business. The study, then, provides insights on e-busi- ness involvement, that is, on a further step to EHFRPH¿UPVGHYHORSLQJPRUHHEXVLQHVVLQWH- grated opportunities. Leading market p osition Selec tive competitive environment Involved SME (more ebusiness solutions)  ,QWHUHVWLQJO\DQGVLJQL¿FDQWO\WKLVOHDSLV prompted by a selective competitive envi- ronment, and not by imitative or induced behaviors, as for the previous, tentative step 193 Environmental Drivers of E-Business Strategies Among SMEs 2. An integrated e-business involvement, here, seems to be a requirement and an opportu- nity to remain competitive. Not by chance, LQIDFWWKHVH¿UPVDUHWKHOHDGLQJRQHV feeling the necessity to stay on the edge. Competition, then, would create the right conditions for driving the adoption of integrated e-business solutions among SMEs. Procompeti- tive policies, accordingly, would result in effective DQGHI¿FLHQWSURGLJLWDOL]DWLRQSROLFLHVDVZHOO The results also lead to a related consideration: W R G D \ ¿ U P V I D F L Q J O R Z O H YHO V RI F R P S H W LW L R Q R U O RZ  environmental pressures can still afford a low (or nought) e-business involvement and innovation. But how many arenas will have the fortune of maintaining a similar structure in the next future? The evidence tells us that these happy gardens are rarer and rarer, also because of technologi- cal changes. The management, here, should ask whether they are getting ready for the upcoming challenges or whether, instead, they are exposing WKHLU¿UPVWRVRPHULVN\HEXVLQHVVUXQXS Among the limitations of this study, it must be noted that a possible response bias exists. In fact, ¿UPVZLWKDKLJKHUHEXVLQHVVLQYROYHPHQWPLJKW be more inclined to answer the questionnaire. However, while this would bias the percentage of e-business adopters (statistical frequencies in Table 1), it should not bias the relationships that we discussed in this chapter. Finally, as a suggestion for future research, the implications emerged in this study might be integrated by the analysis of further factors, both endogenous and exogenous, separately for e-busi- ness adoption and e-business involvement. REFERENCES Amit, R., & Zott, C. (2001). Value creation in e-business. Strategic Management Journal, 22, 493-520. Andrews, K. (1971). The concepts of corporate strategy. Homewood, IL: Dow-Jones Irwin. Barney, J. (1991). Firm resources and competi- tive advantage. Journal of Management, 17(1), 99-120. Clemons, E., & Row, M. (1991). Sustaining IT advantage: The role of structural differences. MIS Quarterly, 3, 275-292. Cohen, W.M., & Levin R.C. (1989). Empirical studies of innovation and market structure. In R. Schmalensee & R. 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Information & Man- agement, 42, 197-216. Grewal, R., Comer, J.M., & Metha, R. (2001). An investigation into the antecedents of organiza- tional participations in the business-to-business electronic markets. Journal of Marketing, 65(7), 17-33. . or electronic forms without written permission of IGI Global is prohibited. Chapter 1.13 Environmental Drivers of E-Business Strategies Among SMEs Alessandro Arbore Bocconi University, Italy Andrea. size of a SME and a lack of institutional pressures to adopt. On the other hand, e-business involvement seems to be primarily prompted by a selective competitive environment and not by imitative. Gatignon and Robertson (1989) found that competitive pressure in the adopter industry has a positive impact on adoption of information and communication technologies. In the same way, Thong and