Abstract
This study investigates the competitive factors of software firms that participated in the Korea Software Firm Competitiveness Awards, a nationwide project supported by the Ministry of Knowledge Economy that studies the performance of software firms in Korea. The study applies concepts from hierarchical multiple regression analysis to develop a model to assess the relationship between the competitive factors of software firms and firm performance. The developed model was validated through a field survey of 79 software firms in Korea. The survey results show a significant relationship between competitive factors and firm performance, as well as the relative influence of significant variables. The findings provide two important implications: first, from a management perspective, software firms in Korea focus on human resources based on technology development in the domestic market, and second, from a policy perspective, the government supports the establishment of external capabilities (internationalization and partnerships) for software firms. These findings are available to researchers, policy makers, software developers, and other market players, and contribute to the literature on the importance of competitive factors.
Highlights
The origins of the software industry can be tracked down to the decision by IBM to unbundle some secondary parts of its computer development to independent software companies [9]
While industry-level analyses reveal generalities and trends, and software innovation in large organizations such as Microsoft [49] and IBM [38] have been the subject of study, very little is known about the IT capabilities of smallto-medium-sized software enterprises (SMSEs), which are arguably the wellsprings of innovation [6]
This study explores the relationship between competitive factors and the performance of software firms
Summary
The origins of the software industry can be tracked down to the decision by IBM to unbundle some secondary parts of its computer development to independent software companies [9]. While industry-level analyses reveal generalities and trends, and software innovation in large organizations such as Microsoft [49] and IBM [38] have been the subject of study, very little is known about the IT capabilities of smallto-medium-sized software enterprises (SMSEs), which are arguably the wellsprings of innovation [6]. It is imperative, to explore and understand capability development in such firms, and the influence of social, institutional, and organizational factors on their development [36]. Among the various competitive factors, this paper deals with the performance implications of strategies for internal resources (human resources and market resources) and capabilities (technology capability and internationalization capability) and for customer satisfaction (product satisfaction and service satisfaction)
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