Strategic Technology Investments Research Articles

Innovation and Transformation: Keys to the Success of SMEs in the Digital Age

This article examines the strategic importance of Small and Medium Enterprises (SMEs) in the global economy, emphasizing their agility and innovation alongside the challenges they encounter in adopting new technologies. SMEs, constituting 90-95% of all global enterprises and responsible for 60% of employment, contribute to GDP, economic diversification, and community development. The study reviews a broad spectrum of literature to highlight the role of emerging technologies in enhancing operational efficiency and decision-making within SMEs while recognizing significant obstacles such as financial and human resource limitations and increased cybersecurity risks. Using a mixed-methods approach, this research assesses the impact of technological advancements on a diverse range of SMEs, ensuring generalizability and reinforcing the study’s validity and reliability. It identifies a gap in empirical knowledge on technology integration and offers insights into the dual opportunities and challenges digital tools present. The findings suggest that while SMEs greatly benefit from technological progress, adequate policy support is crucial for overcoming implementation hurdles, guiding strategic technology investments, and fostering economic sustainability and competitiveness in the digital era.

Effect of Technological Capabilities on Transient Competitive Advantage among Hospitals in Kenya

This research aimed to address a significant gap by empirically examining the link between technological capabilities and transient competitive advantage, a topic largely overlooked in the Kenyan healthcare sector. The study combined descriptive and correlational research designs. The target population comprised 476 top managers of private hospitals, with a calculated sample size of 247. Probability sampling techniques, including stratified random sampling were used in determining the sample participation per hospital. Data collection was then done using questionnaire guide. Confirmatory Factor Analysis (CFA) and Structural Equation Modelling (SEM) were used to analyse the relationship between technological capabilities and transient competitive advantages. Results indicate a 84.6% response rate, revealing variations in private hospitals’ transient competitive advantage and technological capabilities. The validity and reliability tests demonstrate a satisfactory assessment of the data collection instruments. The SEM analysis reveals a significant positive impact of technological capabilities on transient competitive advantage (path coefficient = 0.943). The study concludes that technological capabilities are pivotal in shaping transient competitive advantage in Kenyan private hospitals, emphasizing the need for strategic investments in technology, partnerships, innovation, and a market-oriented approach. The study recommends healthcare practitioners to invest in strategic technology investments, partnerships, foster innovation, and a market-oriented approach for continuous adaptation.

Wealth effects of firm's strategic technology investments: evidence from Ethereum blockchain

PurposeEthereum-based blockchain technology (EBT) affords members of the Enterprise Ethereum Alliance (EEA) a market advantage in deploying blockchain within their organizations, including cybersecurity and operational benefits, that leads firms to strategically invest in this nascent technology. However, the impact of such strategic investments in EBT has yet to be explored in the context of its relationship to firm value. Therefore, this study explores EBT-specific firm-level characteristics that result in a stock market reaction to announcements of strategic investments.Design/methodology/approachThe authors use the event study methodology, strategic investment literature and signaling theory as contextualizing frameworks for their study. Additionally, the authors explore a new method for examining technology investments as a strategic counter to cybersecurity threats.FindingsFirms that signal to the market their strong commitment to their strategic investment by developing an EBT proof of concept see significantly higher market returns. Firms that have had prior cybersecurity incidents are rewarded by the market for strategically investing in EBT, and when firms with large undistributed free cash flows utilize this cash for strategic EBT investment, the market is more likely to reward these firms, indicating the market views EBT investment positively in these circumstances.Originality/valueThe results of this study provide new evidence of the value impact of EBT for firms that suffered cybersecurity events in the past. The authors provide empirical evidence of firm-level characteristics that investors use to discern whether a strategic investment in EBT will drive organizational value. Likewise, the authors demonstrate how signaling affects investor perceptions of strategic information technology (IT) investments in EBT.

Dual Sourcing and Resilient Supply Chains: The Case of Essential Resources

The resilience of supply chains is analyzed in a model of strategic technology investments in markets with essential resources. With a monopoly supplier, dual sourcing is a strategy to reduce switching costs in the long-run. It serves as an insurance mechanism against future opportunism by providing access to competitive global markets. Investments in dual sourcing are required to limit abuse of market power by the active source provider, even though the option of dual sourcing may not be exercised in equilibrium. The analysis has implications for the European natural gas market. Liquefied natural gas terminals may serve a strategic purpose of limiting ex-post opportunism even when delivering gas by pipeline is more efficient.

Building organizational resilience with digital transformation

Purpose Uncertain times [e.g. coronavirus disease 2019 (COVID-19)] require service businesses to respond in creative, flexible and resilient ways. This paper aims to develop and test the theoretical relationship between digital transformation and organizational resilience (OR), and the consequences of OR on organizations and employees during turbulent times.Design/methodology/approach A scale development was first conducted with an expert panel. Later, 474 participants who work as employees in small and medium-sized service enterprises were recruited for structural equation modeling (SEM). Exploratory factor analysis (EFA), confirmatory factor analysis (CFA) and path analysis were conducted to test the relationship between dimensions of digital maturity, dimensions of OR and two consequential variables: organizational performance and employees’ state optimism.Findings Strategic technology investment helps organizations to develop systematic control sustain operations in crises but may not directly contribute to employees’ capabilities of accurately understanding external turmoil, actively seeking available resources and rapidly developing adaptive solutions. Transformation management intensity equips an organization with transformative vision, governance and culture, and such transformative built-in leadership enables the organization to embrace employees with talents and innovativeness and help employees grow their capabilities when facing crises. The dimensions of OR have different influences on the organization and employees.Originality/value This research develops and tests the dimensions and measurement items of OR for the services domain and empirically tested how the dimensions of digital maturity influence the dimensions of OR, and how OR influences the organization’s performance and employees’ state optimism.

Analysis of decision-making processes for strategic technology investments in Swedish large-scale forestry

Technological development gives forest companies opportunities to maintain competitiveness in the highly cost-sensitive market for forest products. However, no previous studies have examined the technological development decisions made by forest companies or the support tools used when making them. We therefore aimed to describe and analyze 1) the processes used when making such decisions, 2) the associated decision situations, and 3) the use of and need for decision support tools in these processes, with a harwarder concept as case. Semi-structured interviews were conducted with respondents from six forestry organizations. Two theoretical frameworks were used to analyze the interviews, one for unstructured decision processes and one for decision situations. The respondents’ descriptions of their decision processes were consistent with those observed in other industries, and it was shown that decision-making could potentially be improved by investing more resources into diagnosing the problem at hand. The main objective in decision-making was to maximize economic criteria while satisfying threshold requirements relating to criteria such as operator well-being, soil rutting, and wood value. When facing large uncertainties, interviewees preferred to gather data through operational trials and/or scientific studies. If confronted with large uncertainties that could not be reduced, they proceeded with development only if the potential gains exceeded the estimated uncertainties, and implemented innovations in a stepwise manner. These results indicate a need for greater use of existing decision-support tools such as problem-structuring methods to enable more precise diagnoses, simulations to better understand new innovations, and optimization to better evaluate their theoretical large-scale potential.

Strategic Technology Investments in Open Economies

We study a general equilibrium model of international trade with heterogeneous firms, where countries can strategically invest in technology. The countries’ motive is to improve firms’ productivity, leading to a competitive advantage in international trade. We are interested in how trade liberalization affects this governmental incentive to invest in technology. In the closed economy countries invest if consumers have a sufficiently high preference for varieties. In the open economy we analyze the Nash-equilibrium policy and the cooperative policy. If there are no cross-country investment spillovers, countries strategically compete in their investment levels and increase their investments with higher trade openness. From a social perspective we have an overinvestment problem. If there are cross-country investment spillovers, we differentiate between weak and strong spillovers. In both cases the cooperative solution predicts a positive relationship between investments and trade openness. If there are weak (strong) spillovers, we find a positive (hump-shaped) relationship between technology investments and trade openness in the Nash-equilibrium. From a social perspective we obtain an over (under)-investment problem if spillovers are weak (strong).

Business Technology Strategy for a Major Real Estate and Mortgage Brokerage Company

RealProp1 is a large real estate and mortgage brokerage that’s at the forefront of the emerging digital real estate industry. For many years, the company maintained an in-house technology staff, but more recently it sought new leadership to accelerate its digital investments and to explore alternative sourcing models. In this regard, the company plans to respond to new challenges that the industry is presenting as it evolves from a relatively predictable transaction model to one increasingly defined by the Internet. A phased strategy was developed that first stabilized the existing technology environment and then more strategic technology investments were made.

Strategic technology investment under uncertainty

In this paper the technology investment decision of a firm is analyzed, while competition on the output market is explicitly taken into account. Technology choice is irreversible and the firms face a stochastic innovation process with uncertainty about the speed of arrival of new technologies. The innovation process is exogenous to the firms. For reasons of market saturation and the fact that more modern technologies are invented as time passes, the demand for a given technology decreases over time. This implies that also the sunk cost investment of each technology decreases over time.

An empirical study of capital budgeting practices for strategic investments in CIM technologies

In recent years, an increasing number of companies have been struggling to justify strategic technology investments using traditional capital budgeting systems. The existing accounting-based decision models (such as discounted cashflow) are said to be no longer adequate to help evaluate investments in technological innovation, mainly because of the strategic, intangible nature of the benefits involved. As a result, traditional capital budgeting methods have been heavily criticized of discouraging the adoption of advanced manufacturing technologies and thus undermining the competitiveness of western firms. Some authors would argue that the only alternative is to exempt these strategic investments from the control of accounting systems. Others have developed sophisticated methods for performing an integrated strategic and financial investment analysis. At this point, however, it is still unclear which approach is prevalent in practice and which factors contribute to effective investment decisions. This empirical study attempts to shed some light on the problem by examining the capital budgeting practices of firms with regard to strategic investments in Computer-Integrated Manufacturing (CIM) technologies. Questionnaire data are used to provide a better insight into the ways in which manufacturing firms go about controlling major investments in new process technologies. In addition, tentative findings are presented about hypothesized relationships between characteristics of the investment decision making process and the perceived ex post financial performance of CIM investments.