The Role of Organizational Slack in Technology Innovation Adoption for SMEs

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Author(s): Jaume Franquesa (Kent State University, USA)and Alan Brandyberry (Kent State University, USA)
Copyright: 2010
Pages: 26
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.ch009

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

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Abstract

This study explores the relevant dimensions of organizational slack in small and medium enterprises (SMEs) and investigates their impact on adoption of different types of information technology (IT) innovations. Using recent data from a representative sample of 2,296 U.S. SMEs, the authors find that the slack-innovation relationships previously described in larger firms do not hold well for SMEs. Their results show potential slack (measured as access to external credit) to be a strong predictor of technology adoption in SMEs. By contrast, available slack appeared not to be a significant factor in SME innovation adoption. Moreover, the direction of the effects of potential slack was moderated by the capital-intensity of the innovation. In particular, e-commerce, which required lesser financial resources for SME adoption, was found to be pursued by those with lesser potential slack. The authors argue that, in some cases, innovation adoption may represent a form of “bricolage” by resource constrained SMEs.

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