Impact of owner's knowledge of information technology (IT) on strategic alignment and IT adoption in US small firms

Abstract

PurposeThis study seeks to examine the impact of owner's knowledge of information technology (IT) on business and IT strategic alignment, as well as on IT use in the small firm context, using the resource‐based view as a theoretical foundation.Design/methodology/approachA random sample of 217 small manufacturers and financial services firms in the USA answered a two‐page survey containing questions pertaining to the company's business strategies, the extent IT supported each business strategy, types of IT used, and the level of owner's IT knowledge.FindingsOwner's knowledge of IT was found to be a significant predictor of IT strategic alignment, as well as adoption of traditional IT and internet technologies, while controlling for differences in firm attributes (size, age, industry affiliation, and strategic focus).Practical implicationsSmall firm owners are well advised to seek ways of improving their knowledge of IT, integrating IT use in firm‐level business planning, as well as reexamining their business strategy and IT use to detect and correct misalignments, if any.Originality/valueFrom the resource‐based view, the owner's IT knowledge is a critical resource that cannot be easily codified, hence less susceptible to competitive erosion, since it is embedded in the owner's tacit knowledge and expressed in the unique but complementary use of IT in support of the firm's strategic goals. This study confirmed small firm owner's knowledge of IT as an important, knowledge‐based capability and a vital component of business‐IT strategic alignment.