Although small and medium-sized enterprises (SMEs) adopt different organisational models and strategy types, previous research has studied information technology (IT) adoption dynamics in these two firm types in a similar manner. This paper investigates how the influence of organisational and environmental preconditions on IT adoption varies in SMEs. Survey data from a sample of 316 Italian SMEs are used for this purpose. The study shows that industry growth and turbulence have distinct influences on the pace with which these firms develop or improve their organisational capabilities through IT use, depending on the SME’s size. In particular, medium firms are more likely to use IT to improve their product development capabilities and to scale up their business under periods of turbulence and considerable industry growth. On the other hand, small firms may benefit from pressures by strategic customers demanding more supply chain integration, which results in positive consequences for their ability to use IT to improve their product development processes.
Keywords: innovation assimilation, firm size, environmental factors, IT-based capabilities, organisational factors, technology, IT adoption