Managing Impressions of SME Legitimacy: Valuing Information and Communications Technologies as Signals and Symbols

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Author(s): Susan J. Winter (National Science Foundation, USA), Connie Marie Gaglio (San Francisco State University, USA)and Hari K. Rajagopalan (Francis Marion University, USA)
Copyright: 2010
Pages: 28
Source title: Global Perspectives on Small and Medium Enterprises and Strategic Information Systems: International Approaches
Source Author(s)/Editor(s): Pratyush Bharati (University of Massachusetts, USA), In Lee (Western Illinois University, USA)and Abhijit Chaudhury (Bryant University, USA)
DOI: 10.4018/978-1-61520-627-8.ch005

Keywords: Business & Management / Business Science Reference / Small & Medium Enterprises / Small and Medium Enterprises

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Abstract

To succeed, SMEs must create legitimacy by mimicking the cues that signal credibility to convince potential stakeholders that something stands behind their promises. This research examines the role of information and communications technology (ICT) in legitimacy-building from the perspective of both SME founders and potential customers. Small and medium-sized enterprises (SMEs) face more serious challenges to their survival than do larger firms. To succeed, SMEs must establish and maintain credibility in the marketplace to attract the resources required for survival. Most borrow legitimacy by mimicking the cues that signal credibility to convince potential stakeholders that something stands behind their promises. This research examines the role of information and communications technology (ICT) in legitimacy creation from the perspective of both SME founders and customers. In-depth, semi-structured interviews were conducted in a variety of industries to determine whether the ICT-related legitimacy schema from the customers’ perspective differs substantially from that of firm founders. Results indicate that customers compare the ICT information provided in SME’s sales pitches to pre-existing ICT expectations about the nature of desirable sales transactions. We describe the relationship between violations of ICT expectations, legitimacy, and purchase decisions. Implications for theory and practice are discussed.

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Managing Impressions of SME Legitimacy: Valuing Information and Communications Technologies as Signals and Symbols

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