Growth Trajectories of SMEs and the Sensemaking of IT Risks

Abstract

Our case will describe two small to medium enterprises which are located within the same region and sharing the broad industry sector but at a different ‘growth stage’ perceive the role of Information Systems differently. We describe how these two firms, at different growth stages and at different levels of maturity with respect to their information systems, perceive the usefulness of information systems differently. We extend the interpretations to discuss sub-sections within SMEs, which are at different stages of growth, and how the nature of information systems’ risks is likely to differ depending on these growth stages. We emphasize the importance of owner/manager’s “sensemaking of risks” as a key variable that influences the demarcation between entrepreneurs and small business owners, beyond the oft-discussed variables such as “achievement motivation,” “risk-taking propensity,” and “preference for innovation.” We conclude with the proposition that SMEs should not be considered as unitary entities; and suggest that there are likely to be different varieties of risks that SMEs face, and suggest the growth stage and organizational filters as key determinants of the owner/managers’ understanding of these risks.