[8] 2002 e-business-strategies-for-virtual-organizations

Globalization and e-business strategies for SMEs
� They provide an ever converging and rich environment for
effective business networking and interorganizational process
management.
� They provide SMEs with access to a huge mass of consumers
through e-business.
This means that e-business is an extremely attractive option for
most SMEs, especially given the huge publicity and support
provided by governments to push growth in the sector. Also, the
unique features of small firms, namely flexibility of operations,
relatively simple organizational structures, entrepreneurial culture
and high propensity to engage in business networks, can be
advantageous in the electronic marketplace.
However, along with these opportunities come threats. Most
SMEs have little experience of operating in a global marketplace
and rarely have formal procedures for strategic planning and
management. This coupled with limited exposure to online
markets and a slow take-up of IT makes e-business a daunting
option for the majority of SMEs. e-business implies that SMEs
can extend their environments without acquiring the traditional
measures of large size, namely large employee base, vast capital
resources, and extensive investment in proprietary networking
technology. They do need, however, to understand how to
exploit the virtual values associated with online information
infrastructures in the most effective and appropriate manner for
their business.
While there appears to be a lot of enthusiasm about the Internet
and electronic business, current studies show that it is the
minority of SMEs (OECD 2000) who are reaping significant
benefits from the Internet. The majority of SMEs employ the
Internet as a basic communications facility using it as a costeffective
alternative to the more traditional means (e.g. fax and
telephone) of communication with partners or customers. The
reasons for the relative low level of use include: uncertainty
about benefits, low level of technological expertise, low commitment
of owner/manager, poor understanding of the dynamics
of the electronic marketplace and their inability to devise
strategies to leverage online infrastructure for profit.
These challenges are not helped by the general lack of clearly
defined frameworks for analysis of the entire process of strategy
building, implementation and management with respect to this
emerging global information economy. This chapter attempts to
address the problem by providing a holistic framework for the
study and design of global information infrastructure within the
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