The Co-Evolution of IT, Knowledge, and Agility in Micro and Small Enterprises

Abstract

Small firms facing today’s turbulent business environment often fail early in their life if they do not develop the necessary capabilities to survive. The main goal of this study is to investigate how IT and knowledge co-evolve, influencing a firm’s agility, within the context of micro and small enterprises (MSEs). Applying the resource-based view of the firm and dynamic capabilities, a multiple case study of eight firms was used to explore links among business, IT and knowledge strategies, resources, and capabilities. Links among IT and knowledge capabilities and firm agility were also explored. The results demonstrate that an MSE’s business strategy shapes, and is also shaped by, the firm’s IT and knowledge strategies; and that both IT and knowledge capabilities shape, and are shaped by, the firm’s agility, coevolving with it. By highlighting the important antecedents of small firm agility and presenting crucial links among agility, IT capabilities, and knowledge capabilities in MSEs, we encourage practitioners to think carefully about their IT and knowledge strategies and to rethink their use of firm resources and capabilities to develop agility in the face of environmental uncertainty and change.