Effects of IT knowledge and media selection on operational
performance of small firms
Sang M. Lee Æ Jinhan Kim Æ Yeonog Choi Æ
Sang-Gun Lee
Accepted: 11 December 2007 / Published online: 8 February 2008
Ó Springer Science+Business Media, LLC. 2008
Abstract This study examines the effects of infor-
mation technology (IT) knowledge and media
selection on operational performance, measured by
balanced scorecard, in small firms. Small firms gener-
ally lag behind medium and large companies in
adopting and implementing computerization. This
study is based on a survey of 698 small firms. The
results show that: (1) individual IT knowledge and both
traditional and electronic communication methods
significantly contribute to the internal process perfor-
mance of small firms; (2) internal process performance,
organizational IT knowledge, and electronic
communication methods affect customer performance;
and (3) financial performance is affected by process
and customer performance. The findings imply that it is
imperative for small firms to adopt computerization to
achieve improvements in business performance.
Keywords Communication media Á Information
technology Á IT knowledge Á Small firms
JEL Classifications L26
1 Introduction
Competition drives change and innovation as com-
panies constantly strive to gain competitive
advantage. Globalization has led to total competition,
which in turn has induced firms to adopt digitization
to survive and beat competition in the borderless
global economy.
Technical changes, such as the information and
telecommunication evolution, have changed the
nature of business and competition. Product services
have become commoditized because of digitalization,
while service contents increased substantially. The
service content of products has increased substan-
tially. Increasingly, products are more customized
and follow-up services became an integral part of the
value-added bundle.
Information technology (IT) is no longer the domain
of only medium or large firms but also for small firms in
S. M. Lee (&)
Department of Management, University
of Nebraska-Lincoln, 209 CBA, Lincoln,
NE 68588, USA
e-mail: slee1@unl.edu
J. Kim
Division of Steel Research Center, POSCO Research
Institute, POSCO Bldg., 147, Samseong-Dong,
Gangnam-Gu, Seoul 134-878, Korea
e-mail: jhkim@posri.re.kr
Y. Choi
Department of Teaching, Learning and Teacher
Education, University of Nebraska-Lincoln, 209 118
Henzilk Hall, Lincoln, NE 68588, USA
e-mail: yeonog@bigred.unl.edu
S.-G. Lee
Division of e-business, Ajou University, 526 Dasan-Hall,
Woncheon-Dong, Youngtong-Gu, Suwon 443-749, Korea
e-mail: slee1028@ajou.ac.kr
123
Small Bus Econ (2009) 32:241–257
DOI 10.1007/s11187-007-9095-5
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