How Data Intergration Systems Affect Strategic Decision Making in Small Firms

  • Benjamin Smith Oakland University
  • Mark Simon Oakland University

Abstract

Small companies increasingly use computer information systems to gather data to improve decision correctness. Therefore, it is important to determine if a type of information system is effective. We focused on systems which integrate data from multiple sources. Although unquestionably aiding large firm managers, integrated data systems may not help smaller firms. The managers may have better knowledge across functional areas. We, therefore, explore, in a small company context, the relationship among data integration systems, information availability and strategic decision correctness. We collected data from the managing partners of 97 small accounting firms, and found that data integration systems increased information availability, which, in turn, increased the correctness of decisions. The control variables, aligning systems with strategy and technological strength enhanced information availability, but surprisingly, greater investment in systems actually decreased it. Collectively, these findings suggest the type of system is more important than the amount invested.

Downloads

Download data is not yet available.

References

Amrani, Redouane El., Rowe, Frantz and Geffroy-Maronnat, Bénédicte. (2006). The effects of enterprise resource planning implementation strategy on cross-functionality. Information Systems Journal, 16(1), 79.

Bergkvist, L. and Rossiter, J. (2007). The predictive validity of multiple-item versus single-item measures of the same constructs. Journal of Marketing Research, 44(2), 17.

Blau, P.M., and Schoenherr, R. (1971). The Structure of Organizations. New York, NY: Basic Books.

Bostrom, R. P., and Olfman, L., and Sein, M. (1990). The importance of learning style in end-user training, MIS Quarterly (14:1), 101.

Chandler, G., and Hanks, S. (1993). Measuring the performance of emerging businesses: A validation study. Journal of Business Venturing, 8(5): 391-408.

Chang, Hsin Hsin. (2006). Technical and management perceptions of enterprise information system importance, implementation and benefits. Information Systems Journal. 16(3), 263.

Chau, Patrick Y K. (1995). Factors used in the selection of packaged software in small businesses: Views of owners and managers. Information & Management. 29(2), 71.

Compeau, D., Olfman, L., Sein, M., and Webster, J. (1995). "End-user training and learning," Communications of the ACM (38:7), 25.

Cooper, A.C., and Artz, K.W. (1995). Determinants of satisfaction for entrepreneurs. Journal of Business Venturing, 10(6): 439-457.

Cragg, Paul B., and King, Malcom. (1993). Small-firm computing: Motivators and inhibitors. MIS Quarterly. 17(1), 41.

Cragg, Paul B., and Zinatelli, Nancy. (1995). The evolution of information systems in small firms. Information & Management. 29(1), 1.

Delvecchio, Susan., and Anselmi, Kenneth. Sales force automation tools for small business. Journal of Small Business Strategy. 16(2), 15.

Ein-Dor, P., and Segev, E. (1982). Organizational context and MIS structure: Some empirical evidence. MIS Quarterly. 6(Sep), 55.

Eisenhardt, Kathleen M. (1989). Making fast strategic decisions in highvelocity environments. Academy of Management Journal. 32(3), 543.

Forbes, Daniel P. (2005). Are some entrepreneurs more overconfident than others? Journal of Business Venturing. 20(5), 623.

Foong, S.-Y. (1999). Effect of end user personal and systems attributes on computer based information systems success in Malaysian small companies. Journal of Small Business Management. July, 37(3), 81.

Galbraith, J.R. (1977). Organization Design. Reading, MA: Addison-Wesley Publishing Co.

Harrison, David A., Mykytyn, Peter P. Jr., and Riemenschneider, Cynthia K. (1997). Executive decisions about adoption of information technology in small business: Theory and empirical tests. Information Systems Research. 8(2), 171.

Hendricks, Kevin B., and Singhal, Vinod R., and Stratman, Jeff K. (2007). The impact of enterprise systems on corporate performance: a study of ERP, SCM, and CRM system implementations. Journal of Operations Management. 25(1), 65.

Hofer, Charles and Schendel, Daniel. (1978). Strategy formulation: analytical concepts, St. Paul, MN, West Pub. Co.

Igbaria, M., Zinatelli, N. and Cavaye, A. (1998). Analysis of information technology success in small firms in New Zealand. International Journal of Information Management, 18(2), 103.

Karagozoglu & Lindell. (2004). Electronic commerce strategy, operations and performance in small and medium-sized enterprises. Journal of Small Business and Enterprise Development. 11(3), 290-301.

Law, Chuck C. H., and Ngai, Eric W. T. (2007). ERP systems adoption: An exploratory study of the organizational factors and impacts of ERP success. Information & Management. 44(4), 418.

Levy, Marge., Powell, Philip., and Yetton, Philip. (2001). Small companies: aligning IS and the strategic context. Journal of Information Technology. 16(3), 133.

Levenburg, Nancy M., Schwarz, Thomas V., and Motwani, Jaideep. (2005). Understanding adoption of internet technologies among SMEs. Journal of Small Business Strategy, 16(1), 51-69.

Loo, R. (2002). A caveat on using singleitem versus multiple-item scales. Journal of Managerial Psychology, 17(1/2), 68.

Lussier, R., Sonfield, M., Corman, J., and McKinney, M. (2001). Strategies used by small business entrepreneurs. American Journal of Business. 16(1), 29.

March, S. and Hevner, Alan R. (2007). Integrated decision support systems: A data warehousing perspective. Decision Support Systems. 43(3), 1031.

McDougall, P. and Oviatt, B. (1996). New venture internationalization, strategic change, and performance: A follow-up study. Journal of Business Venturing, 11(1), 23.

McDougall, P.P. and Robinson Jr., R.B., (1990). New venture strategies: An empirical identification of eight "archetypes" of competitive strategies for entry. Strategic Management Journal.11(6), 447.

McNamara, G., and Bromiley, P. (1999). Risk and return in organization decision-making. Academy of Management Journal, 42(3): 330.

Montazemi, Ali Reza. (2006). How they manage IT; small companies in Canada and the U.S. Association for Computing Machinery. Communications of the ACM. 49(12), 109.

Nadel, R. B. (1988). Computer consulting for the smaller firm: Opportunity or trap? CPA Journal. 58(4), 18.

Nwachukwv, S., Vitell, S., Gilbert, F. and Barnes. J. (1997). Ethics and social responsibility in marketing: An examination of the ethical evaluation of advertising strategies. Journal of Business Research. 39(2), 107.

Olsen, Kai A. and Saetre, Per. (2007). IT for niche companies: Is an ERP system the solution? Info Systems J.17, 37-58.

Park, Jong-Hun., Suh, Hyun-Ju., and Yang, Hee-Dong. (2007). Perceived absorptive capacity of individual users in performance of Enterprise Resource Planning (ERP) usage: The case for Korean firms. Information & Management. 44, 300-312.

Premkumar, G. and Robers, M. (1999). Adoption of new information technologies in rural small businesses. Omega International Journal of Management Science, 27, 467.

Ranganathan, C., and Brown, Carol V., (2006). ERP investments and the market value of firms: Toward an understanding of influential ERP project variables. Information Systems Research. 17(2), 145.

Robey, D. and Sales, C.A. (1994). Designing Organizations. Burr Ridge: IL: Irwin.

Scarpello, V. and Campbell, J. (1983). Job satisfaction: Are all the parts there? Personnel Psychology, 36(3), 577.

Sharma, Rajeev and Yetton, Phillip. (2007). The contingent effects of training, technical complexity, and task interdependence on successful information systems implementation. MIS Quarterly. 31(2), 219.

Shrader, R. and Simon, M.. (1997). Corporate versus independent new ventures: Resource, strategy, and performance differences. Journal of Business Venturing, 12(1), 47.

Simon, M., and Houghton. S. (2003). The relationship between overconfidence and the introduction of risky products: Evidence from a field study. Academy of Management Journal, 46(2), 139-149.

Simon, M., Miree, C., Setzkorn, K., & Figon, A. (2003). Managerial errors in product introduction decisions: What were they thinking? Journal of Small Business Strategy. 14(1) 30-52.

Street, Christopher T., and Meister, Darren B. (2004). Small business growth and internal transparency: The role of information systems. MIS Quarterly. 28(3), 473.

Todd, Peter M. (2007). How much information do we need?. European Journal of Operational Research. 177(3), 1317.
Published
2009-01-21
How to Cite
SMITH, Benjamin; SIMON, Mark. How Data Intergration Systems Affect Strategic Decision Making in Small Firms. Journal of Small Business Strategy, [S.l.], v. 20, n. 1, p. 35-52, jan. 2009. ISSN 2380-1751. Available at: <https://libjournals.mtsu.edu/index.php/jsbs/article/view/119>. Date accessed: 21 july 2019.
Section
Articles