Toward a theory of entrepreneurial orientation and technology fit in SMEs

Whereas prior research suggests a positive relationship between information technology (IT) investment and firms’ performance, the benefits of IT remain less clear in the small and medium-sized enterprise (SME) context and arguably depend on organizational focus and technology fit. Using literature on IT business value, task technology fit, and entrepreneurial orientation (EO), we develop a model of the “entrepreneurial orientation and technology fit.” Survey (n = 400) results and registry data of young Danish SMEs provide strong support for our conceptualization. While IT intensity has a positive effect on performance in low EO SMEs, its relationship is negative when EO increases. The otherwise negative association between IT complexity and performance is mitigated by higher EO. Surprisingly, findings show that low EO firms with low IT intensity not only perform worse but also have a negative return on invested capital (ROIC). The ROIC of high EO firms with high IT intensity is near zero.