The influence of organizational factors on e-business use: analysis of firm size

Purpose ‐ There are two purposes of this paper: first, to analyze the effect of size and other organizational factors (IT knowledge, IT external support and the level of employees' education) on the use of e-business; and second, to identify similarities and differences among these factors in micro, small, medium-sized and large enterprises. Design/methodology/approach ‐ The proposed model is empirically tested using data from the Sectorial e-Business W@tch survey. A logit estimation for the whole sample and for each type of firm size has been implemented on the use of e-business. Findings ‐ The study finds positive and significant effects of all the organizational factors on the intensity of e-business use. When analyzing the effect of size, it was found that medium-sized and large firms are more likely to use e-business more intensively. Although medium-sized and large firms are similar, some differences have been found between small and medium-sized firms. Only small firms use IT outsourcing as a key factor to use e-business. Research limitations/implications ‐ This study is based on a cross-sectional data set. Longitudinal research would be needed for comparing results over time. Future studies could focus on the use of each type of e-business technology, instead of a global measure of e-business use. Future research could also analyze the differences of e-business adoption rates among countries. Practical implications ‐ The paper concludes that small and micro firms are less likely to conduct e-business than medium-sized and large firms. An important influence on the use of e-business is workforce education, implying that training could substitute hiring IT employees. Outsourcing IT activities is a suitable strategy only for small firms. Originality/value ‐ The paper contributes to the literature on e-business with new evidence of the importance of size and human capital. Additionally, an analysis for each firm size has been done, which allows comparison of results.