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What small business executives have learned aboutmanaging information technology
Cynthia K. Riemenschneidera,*, Peter P. Mykytyn Jr.b,1
aComputer Information Systems and Quantitative Analysis Department, University of Arkansas, Fayetteville, AR 72701, USAbDepartment of Information Systems and Management Sciences, University of Texas at Arlington, Arlington, TX 76019, USA
Received 23 November 1998; received in revised form 2 May 1999; accepted 26 September 1999
Abstract
In this study, 308 small business executives were interviewed and asked to identify the single most important thing they had
learned about managing the use of information technology (IT) in their ®rms. The most common response was staying current/
keeping up with changing IT. The training/education of end users, the ability to get information quickly, and accurate data
were also given as things the executives had learned. The small business executives interviewed were from a variety of
industries including the computer industry, the health care industry, engineering, consulting, manufacturing, insurance,
accounting, and law. Ninety-two percent of the executives had acquired new hardware and 89.9% had acquired new software
for their ®rms since their ®rms had ®rst started using computers. In approximately 90% of the ®rms, the number of users of
computers had increased and the majority of the new users were classi®ed as both managerial and clerical. Again,
approximately 90% of the ®rms had increased the number of functions for which computers were used within their ®rms with
applications in accounting having the greatest increase. # 2000 Elsevier Science B.V. All rights reserved.
Keywords: Small business; Information technology management; Computer usage
1. Introduction
Information technology (IT) has formed an integral
part of the operational and competitive environment of
large organizations for many years. IT perspectives
have evolved from mainframe environments of the
1960s and 1970s, to the small, so-called minicomputer
era of the latter 1970s and early 1980s, to the PC era of
today. And even the PC phenomenon has been trans-
formed from the standalone models of the mid 1980s
to the integrated, network-based systems found today.
Indeed, the continuing evolution in hardware and
software technologies has brought about a spiraling
decline in costs for all organizations, such that even
the smallest of business organizations can afford to
purchase needed IT. Therein, however, lies part of the
problem.
The majority of IT research has been done with
large ®rms [1,14]. And although hardware and soft-
ware costs are signi®cantly lower today, thereby mak-
ing it possible for organizations of any size to purchase
IT, the research ®ndings, i.e., problems, solutions,
bene®ts, etc., that relate to the larger organization
may not necessarily apply to smaller ®rms. Small
Information & Management 37 (2000) 257±269
* Corresponding author. Tel.: �1-501-575-6120;
fax: �1-501-575-4168.
E-mail addresses: [email protected]
(C.K. Riemenschneider), [email protected] (P.P. Mykytyn Jr.)1 Tel.:�1-817-272-3537; fax: �1-817-272-5799.
0378-7206/00/$ ± see front matter # 2000 Elsevier Science B.V. All rights reserved.
PII: S 0 3 7 8 - 7 2 0 6 ( 9 9 ) 0 0 0 5 2 - X
businesses employ 54% of the private working popu-
lation, and they contribute 52% of all the sales in the
US [27]. Admittedly, small businesses play a vital role
in the economy of the US, and therefore, warrant more
study tied to IT than has been conducted previously.
Many smaller organizations contain many of the
same functions and activities as their larger counter-
parts, albeit on a lesser scale. These include sales and
marketing, manufacturing, accounting, etc. It should
be of interest to information systems (IS) researchers
and to the business executives themselves to learn
more about how these ®rms have acquired IT, or perhaps
upgraded their systems, as well as to gain a deeper
understanding of many important problems and man-
agerial issues that have evolved. It should also lead to
additional research that could provide for comparisons
with larger organizations; similarities, if any, as well
as markedly different areas could be identi®ed.
The overall purpose of this research is to assess how
IT is used in smaller organizations. This examination
includes the identi®cation of the different functional
areas of ®rms. Additionally, the results of what small
business executives say they have learned about mana-
ging IT are presented. In the next section of this paper,
we discuss some of the previous research dealing with
smaller businesses, drawing attention to the fact that it
does not provide either IS researchers or business
executives with signi®cant information about IT uses.
Following that, the research method is presented. The
paper concludes with a discussion and suggestions for
additional research.
2. Small business research
Prior to 1988, IT research relevant to small busi-
nesses fell into three primary categories: studies which
gave advice for purchasing computer hardware and
software, studies which reported on computer usage,
and studies which reported on the use of computers to
make managerial decisions. Inasmuch as the technol-
ogy has changed dramatically since then, i.e., one
study [21] examined the nature and selection of
minicomputers, and the software and applications in
use then were predominately accounting, inventory
control, and word processing, there seems to be little
to be gained by examining the research in detail.
Since 1988, much of the IT-related research that
has examined small business perspectives has been
industry speci®c. A number of studies, such as those
by Raymond [22], DeLone [7], Montazemi [16],
Cronan [5], Evans [9], and Cragg and King [4] present
some interesting perspectives. Table 1 reviews each
of these studies, identifying, for the most part, the
number and type of subjects, the research focus, and
the ®ndings/observations/issues. In general, however,
the following points about post 1988 research are
noted:
� Accounting and financial activities account for a
large portion of IT usage by small businesses.
� It is important that businesses examine the nature
and content of training programs directed at man-
agers in small businesses.
� Top management support and involvement,
including that from CEOs, is crucial if IT imple-
mentations are to succeed.
� Consistent with the findings of most IT-related
research, end user involvement is crucial if user
satisfaction is to be achieved. In turn, user satis-
faction can lead to system success and, ultimately,
to successful business efforts.
As stated above, most of the prior cited research
since 1988 is industry speci®c; in addition, some of the
research is dated. Therefore, this supports our research
which includes a heterogeneous sample of businesses
from different industries and which examines IT usage
in dynamic situations and environments.
2.1. Questionnaire items
The instrument used for this research, attached as
Appendix A, contained seven questions related to IT
usage. Most of the questions were based on the
previous study of Cragg and King [4], which also
allows for certain comparisons between that research
and the current study. Questions dealt with: acquisi-
tion of new hardware/software, usage of the new
hardware/software to extend the range of applications,
number of functional areas of computer use, and the
number of users. Other researchers have also exam-
ined a number of these issues as well. Regarding the
number of functional areas using computers, Ray-
mond and Magnenat-Thalmann [25], Nickell and
Seado [18], and Farhoomand and Hrycyk [10] found
accounting to be the most common application for
small businesses (See Table 1).
258 C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257±269
Table 1
Summary of prior research
Researcher(s) Research focus Subjects Findings/observations/issues
[25] Computer usage Small and medium sized
manufacturing firms
Applications which use computers:
-accounts receivable
-payroll
-accounts payable
-sales analysis
[10] Computer usage Small businesses Highest percentage of application of
computers in small businesses: accounting
Software most or second most important
consideration in computerization
[18] Computer usage Small businesses Accounting most common application which used
computers
[22] Computer training 34 small manufacturing
facilities
Computer training did positively influence small
business managers
[7] IT effectiveness 98 small manufacturing
firms
Effectiveness linked to:
-CEO involvement in computerization
-on-site computers
-coordinated implementation of planning and
controls
[16] User satisfaction 83 small firms (47 service
industry and 36 manufacturing
industry)
Generated higher user satisfaction:
-end-user participation in systems design
-end-user literacy
-formal information requirements analysis
-decentralized organizations
-number of analysts in the firm
[5] Computer usage 71 small professional
organizations (i.e.
doctors, lawyers,
accountants)
Four variables significant in computer usage:
-net income
-number of vendors considered before acquiring
the system
-total assets
-estimated savings from the computer system
Success of the computer system was dependent on:
-a higher investment in maintenance
-employee involvement with the new system
-higher estimates of cost savings
[9] Purpose of IT
implementation
68 small firms Purpose of computer implementation:
-solve problems in accounting, data processing time,
inventory
-solve organizational problems, record keeping, and
data storage
Systems were also used to contain:
-overall operating costs
-cost associated with time
-inventory costs
-data access costs
-personnel costs
-reporting costs
Expectations of the system were improvements
in efficiency and time-savings
C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257±269 259
3. Research method
3.1. Sample selection
Using guidelines from the Small Business Admin-
istration, a `small' business was de®ned as one that
employed fewer than 500 employees. This categor-
ization is consistent with the Small Business Admin-
istration (SBA) which de®nes small businesses based
on Standard Industrial Classi®cation (SIC) codes,
most of which employ 500 as the upper boundary.
Firms were randomly selected from a database of
over 1500 organizations, which were located in a large
southwestern metropolitan area. The database repre-
sented ®rms from major industries, including manu-
facturing, defense, oil and gas, agriculture, ®nance,
and not-for-pro®t. It should also be emphasized that
the database contained ®rms of all sizes, including
some Fortune 500 companies with home of®ces
located in this metropolitan area. Appropriate query
construction enabled the researchers to identify rele-
vant ®rms based on size. Thus, the small businesses
selected were not chosen from some restricted data-
base, such as an association of family-owned busi-
nesses.
The database contained the ®rm name, the address,
the name of at least one senior executive, the ®rm size,
and the telephone number. Firms that were branch
of®ces or where it was not possible to contact a senior
executive were excluded. This was deemed appropri-
ate because, during preliminary discussions with other
small business executives, it was noted that branch
of®ces of smaller businesses usually did not engage in
IT purchase and use activities; such decisions were
made by the main of®ce. In addition, it was also
ascertained that, for the most part, senior-level indi-
viduals in smaller organizations usually were respon-
sible for IT decisions.
3.2. Procedures
During a 30-day period, 309 randomly selected
®rms were contacted by telephone. As was stated
previously, the commercial database used for this
research contained the names of at least one senior
executive in each ®rm. We contacted senior executives
(i.e. CEOs, presidents, managers, vice presidents) to
ensure that we would be getting information from
someone in the organization who had the authority to
make decisions regarding IT. The individual contacted
was told that the researchers were from a large south-
western university (the subjects were provided with
the name of the institution) and the purpose of the
project. The researchers ensured the subjects that
con®dentiality and anonymity would be maintained
and that individual responses would be aggregated
and compared with those from other smaller busi-
nesses. Neither ®rm names nor identi®cation of indi-
viduals would be used by anyone other than the
researchers.
The development of the survey instrument (see
Appendix A) was discussed previously. The questions
asked by the researchers were designed to provide for
open-ended responses by the subjects; this can lead to
a much richer treatment of the issues. This type of
research has been used effectively by a number of IS
researchers [8,11,19]. If the individual was unavail-
able at the time he/she was called, note of this was
taken, and the individual was contacted at a later time.
In several instances, messages were left by the
researchers to have the individual contact us back;
this too proved to be effective.
Table 1 (Continued )
Researcher(s) Research focus Subjects Findings/observations/issues
[4] Applications growth Six small manufacturing firms Motivators of growth of systems:
-relative advantage
-competitive pressure
-consultant support
-managerial enthusiasm
Inhibitors of growth:
-inadequate financial resources
-inadequate managerial time
-lack of internal expertise
260 C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257±269
The researchers found the executives to be gener-
ally cooperative and responsive. Thus, very few ®rms/
individuals refused to participate in the project once
the researchers explained the project and its impor-
tance. In fact, only 35 ®rms refused to participate.
4. Results
Of the 309 ®rms originally contacted, one was
dropped since the ®rm employed more than 500
employees. The ®rms ranged in size from 7 to 400
employees with an average size of 92.3 employees and
a standard deviation of 73.9. The titles of the 308
participants are shown in Table 2. Only those titles,
which appeared 3 times or more, are shown. Thirty-
®ve percent of the respondents were either presidents,
vice presidents, or a chief of®cer while 24% of the
respondents were managers and 15% were MIS direc-
tors. Overall the respondents were senior executives
who were responsible for IT decisions within their
organization.
Table 3 illustrates the types of businesses in which
the respondents were employed. Only those business
types, which occurred 3 times or more, are delineated.
The two industries with the most respondents were
health care and computer software/hardware sales. As
illustrated in Table 3, this study included small busi-
ness executives from a wide variety of industries and
was not limited to a particular industry as other studies
have done [3,4,7,15±17,20,22±25]. However, since the
®rms that participated in this study were not selected
from all regions of the US, it is not possible to say with
certainty that all small businesses are similar to those
we studied. But, since our ®rms were of varying size
and represented a number of diverse industries that are
found throughout the US, there is no apparent reason
to doubt the representativeness of our sample.
The respondents were also asked if they had
acquired new computer hardware or software since
their ®rm started using computers. Ninety-two and
one-half percent of those responding had acquired new
hardware, and 89.9% had acquired new software. Of
those acquiring new hardware, 30.8% had acquired it
to extend the ®rm's range of applications/uses, 24.7%
had acquired it to replace old hardware and 44.5% had
done both. Of those acquiring new software, 15.3%
had acquired it to replace existing software, 35.2% had
acquired it to extend software applications/uses, and
49.5% had done both. In Cragg and King's [4] study of
six ®rms, four had acquired new hardware primarily to
extend their range of applications. Three of the six
Table 2
Titles of executives participating in the study
Title Number
President/Owner/CEO 56
Vice President 49
COO/CFO 3
Director of MIS 47
Controller 10
Manager 73
Administrator 13
LAN Administrator 7
Other 50
Total 308
Table 3
Participating businesses or firms
Industry Number
of firms
Median
size
Range
of size
Accounting 12 26 10±80
Advertising 7 46 20±220
Architecture 8 23 7±120
Automotive 4 85 25±225
Banking 5 168 50±200
Civil engineering 3 30 12±30
Computer Software/hardware/sales 22 48 15±400
Construction 12 90 40±180
Consulting 15 30 8±400
Distribution 5 95 78±130
Education 10 100 35±200
Engineering 17 43 20±200
Environmental services 5 45 25±90
General/electrical contractor 9 65 12±205
Health care 22 95 25±390
Insurance 14 150 24±400
Land surveying 3 25 16±30
Law 12 85 28±400
Manufacturing 18 77 23±210
Non profit 6 55 32±250
Oil & Gas 4 94 35±200
Publishing 3 75 70±250
Real estate 7 90 15±300
Sales/marketing 6 75 40±150
Telecommunication 4 140 31±175
Transportation 3 140 80±200
Wholesale distribution 4 105 95±300
Other 68 80 10±340
Total 308
C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257±269 261
®rms had acquired new software to totally replace
what they had previously. The other three had acquired
little or no software.
Another question asked if the number of users of
computers in the ®rm had increased since the ®rm ®rst
started using computers. Of those responding, 89.6%
said yes, there were more computer users within their
organization. The new users were then classi®ed as
clerical, managerial, or both. Thirty-nine percent of
the new users were classi®ed as clerical, 20.8% of the
new users were classi®ed as managerial, and 40.2% of
the new users were classi®ed as both. Cragg and King
[4] found the three largest ®rms in their study had
more computer users, which were mostly managers or
professionals.
The respondents were also asked if the number of
functional areas in their business using computers
since the initial use had increased; 89.6% responded
positively. They were then asked to state the number of
new functions and the area of the new function. The
mean number of new functions was 3.6 with a median
of 3 and a mode of 2. Table 4 shows the most common
responses for the number of additional functions for
which the company was using IT. Of those executives
that stated 1, 2 or 4 additional functions, the areas of
usage were the same. There was one difference for
those stating three additional functions, as shown in
Table 4. Three of the six ®rms in the Cragg and King
[4] study were using computers in at least one new
functional area, while two ®rms were using computers
in two new functional areas. Only one ®rm was using
computers in three new functional areas.
Overall, the most commonly stated area for use of
the function was by far accounting, then marketing
and sales, shipping, personnel, production and inven-
tory, administration, and ®nally, ®nance.
Lastly, the respondents were asked, `What is the
single most important thing you've learned about
managing the use of information technology in your
®rm?' Even though the respondents were asked to
state the single most important thing, some gave more
than one response. Responses were given by 257
different individuals resulting in 329 different units
being coded. Content analysis was used in order to
code the responses. Content analysis has been used in
IS research previously. In 1995, Todd et al. [28]
analyzed job advertisements to determine the state
of the job market for systems analysts, programmers,
and IS managers. Jarvenpaa and Ives [13] used content
analysis to analyze letters, which CEOs had written, to
determine the tendency toward IT as a competitive
advantage. One of the premises for their study was that
if IT plays a signi®cant role to the strategy of the
corporation, that signi®cance should be re¯ected in the
letter to the shareholders. By analyzing the IT related
phrases in the letter written by the chairman in the
annual report, they found support for using this data to
give information about IT in the organization. In a
similar fashion, we are analyzing the comments made
by senior executives to summarize collectively what
they have learned about managing IT.
Initially, two raters coded the 329 units creating
their own categories for the responses. Then the raters
came together to compare their coding and reach a
consensus on the placement of each response into a
category. A third rater was then asked to code the
responses using the categories supplied by the pre-
vious raters. This was done in order to insure accuracy
of the categories. The three raters were in 90% agree-
ment. Table 5 shows the different categories as well as
the percentage of responses, which fell into each
category. Additionally, a speci®c example of a
response, which fell into each category, is provided.
The 10 categories (excluding non response) from
Table 5 with the largest percentage responses were
analyzed further to see if the response was different
based on the size of the ®rm. The responses which fell
into the top 10 categories account for 193 of the total
329 units coded (59% of the responses). Table 6 shows
the breakdown for the 10 `important thing' categories,
which occurred the most often and the size of the ®rm.
It is interesting to note that those ®rms which
Table 4
Number of functions and their usage
Number of functions stated Most common usage area Next common usage area Third common usage area
1, 2, or 4 Accounting Marketing Sales
3 Accounting Marketing Shipping
262 C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257±269
Table 5
Responses to `Most Important Thing' question
Category Percentage of responses Example response from a small business manager
Other 0.120 aE-mail allows efficient use of timeaInitial installment of systemaGoing from proprietary system to open system
Staying current/changing IT 0.112 IT is constantly changing
Training/Education of end users 0.097 Training is key to effective IT use
Get information quickly 0.076 Able to get information more quickly with computers
Accurate data 0.070 Accuracy of data helps reduce mistakes
Non response 0.070 Can't think of anything
Purchasing current systems 0.040 Buy biggest and fastest IT you can afford
Productivity 0.040 Increased productivity
Costs 0.036 Cost effectiveness is most important element
Customer/end user support 0.033 Supply the user's needs
Maintenance/running of system 0.030 Must have full time maintenance and support
Efficiency 0.021 Efficiency for faster feedback
Backups & disaster recovery planning 0.018 Back up your work
Software compatibility/consistency 0.018 Integrated software uses
Ease of use 0.015 Ease of use
IT necessity/importance to firm 0.015 IT is the most important aspect for successful growing companies
Manage people 0.015 Ability to manage people is important
Computers are tools 0.012 The computer is just a tool
Decision making 0.012 Better decisions
Management of IT 0.012 Managing technology correctly
Matching business requirements 0.012 Technology expertise and functional business blend
Networks/networking 0.012 Need for reliable networks
Speed 0.012 Speed is essential
Time 0.012 Time consuming
Communication 0.009 Good communications between functional areas
Competition 0.009 Keeping a step ahead of our competition
Data versus information 0.009 Difference between data and information
Did not use IT 0.009 Did not use IT
Documentation 0.009 Keep good documentation
Knowledge of market/business 0.009 Stay on top of the market
Overcome fear/intimidation 0.009 Don't be intimidated by new hardware or software
Security 0.009 Security of data
Keep information simple 0.006 Keep IT simple
Limited capacity 0.006 Too small, capacity is limited
Organization of records/computers 0.006 Keeping records well organized in the computer
aThree different comments are given as explanation for the other category.
Table 6
Size by `Important Thing'a
1 3 4 8 9 16 17 22 34 35 Total
<101 16 5 24 9 6 17 8 8 19 21 133
101±200 5 6 9 1 0 3 2 1 9 8 44
201±300 1 2 2 0 2 1 1 0 2 1 12
301±400 1 0 1 0 0 0 0 1 1 0 4
Total 23 13 36 10 8 21 11 10 31 30 193
aLegend: 1 � Accurate data; 3 � Purchasing current systems; 4 � Staying current/changing IT; 8 � Costs; 9 � Customer/end user
support; 16 � Get information quickly; 17 � Productivity; 22 �Maintenance/running of system; 34 � Training/education of end user;
35 � Other.
C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257±269 263
Table 7
Position by `Important Thing'a
Title 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Total
President/Owner/CEO 5 1 1 4 0 1 1 6 4 2 1 1 0 2 2 5 2 1 0 0 0 0 0 1 1 0 3 1 0 0 0 1 0 4 8 58
Vice President 5 0 0 7 0 1 1 1 2 0 1 0 0 1 1 6 2 1 1 1 0 1 2 0 0 2 4 0 1 0 1 0 1 3 6 52
COO/CFO 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 1 1 3
Director of MIS 3 2 2 9 0 0 0 1 4 1 0 0 0 1 0 3 0 0 0 0 0 3 0 0 0 0 1 0 0 1 0 1 1 6 2 41
Controller 1 1 0 1 1 0 0 0 0 0 1 0 0 0 0 0 1 0 0 0 0 1 0 2 0 0 0 0 0 1 0 0 0 0 3 13
Manager 4 1 3 8 1 1 2 1 0 0 1 0 2 1 3 3 4 1 1 0 2 1 1 0 2 2 7 0 1 1 3 1 0 9 8 75
Administrator 2 0 1 1 0 0 0 1 0 0 0 0 0 0 0 3 1 2 0 0 0 0 0 0 0 0 3 0 0 0 0 2 1 3 0 20
LAN Administrator 0 1 2 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 1 0 1 1 0 0 0 0 0 0 0 0 0 1 1 1 11
Other 3 0 4 7 1 0 0 2 1 0 0 2 1 0 1 4 2 0 0 1 0 3 1 0 1 0 5 1 1 0 0 1 0 5 9 56
Total 23 6 13 37 3 3 4 12 11 3 4 3 3 5 7 25 13 5 2 3 2 10 5 4 4 4 23 2 3 3 4 6 4 32 38 329
aLegend: 1 � Accurate data; ; 2 � Backups & disaster recovery planning; 3 � Purchasing current systems; 4 � Staying current/changing IT; 5 � Communication; 6 � Competition;
7 � Computers are tools; 8 � Costs; 9 � Customer/end user support; 10 � Data vs. information; 11 � Decision making; 12 � Did not use IT; 13 � Documentation; 14 � Ease of use;
15 � Efficiency; 16 � Get information quickly; 17 � Productivity; 18 � IT necessity/importance to firm; 19 � Keep information simple; 20 � Knowledge of market/business;
21 � Limited capacity; 22 �Maintenance/running of system; 23 �Manage people; 24 �Management of IT; 25 �Matching business requirements; 26 � Networks/networking;
27 � Non response; 28 � Organization of records/computers; 29 � Overcome fear/intimidation; 30 � Security; 31 � Speed; 32 � Software compatibility/consistency; 33 � Time;
34 � Training/education of end user; 35 � Other.
employed 100 or fewer employees gave the majority
of the responses except for the category of `purchase
current systems'. Due to major violation of assump-
tions, a w2 test for independence could not be per-
formed. However, Reynolds [26] suggests that
proportional-reduction-in-error (PRE) logic may be
employed `to avoid the weaknesses based on chi
square' (p. 32). One of the PRE measures is Goodman
and Kruskal's lambda, which indicates how much the
classi®cation error of the important thing would be
reduced by knowing the size of the ®rm. The value of
the lambda was 0.0, which indicates that the classi-
®cation error is not improved by knowing the size of
the ®rm. Therefore, knowing a ®rm's size does not
indicate what important thing learned would apply to
that ®rm.
To be sure that a respondent's position was not
biasing his/her response, we conducted some addi-
tional analyses. Table 7 shows the categorization of all
35 of the important things and the position of the
respondent. Again, Goodman and Kruskal's lambda,
which indicates how much the classi®cation error of
the important thing would be reduced by knowing the
respondent's position, was analyzed. The value of the
lambda was 0.045 with a 95% con®dence interval of
0±0.09. Therefore, the classi®cation error is only
minimally improved by knowing the respondent's
position. This shows strong support for the fact that
all subjects regardless of their position had something
signi®cant to say.
Additionally, the responses of the top 10 `important
things' are shown by industry in Table 8. The indus-
Table 8
Industry by `Important Thing'a
1 3 4 8 9 16 17 22 34 35 Total
Accounting 2 1 2 1 0 0 0 0 2 0 8
Advertising 0 0 4 0 1 1 0 0 0 0 6
Architecture 0 0 2 0 0 1 1 0 3 0 7
Automotive 1 0 1 0 0 0 0 0 0 0 2
Banking 0 0 1 0 0 0 0 0 1 0 2
Civil engineering 0 0 0 0 0 0 0 0 0 1 1
Computer software/hardware/sales 5 1 0 3 1 1 0 2 1 2 16
Construction 0 1 2 0 0 1 0 0 1 0 5
Consulting 1 0 1 1 1 2 0 1 2 0 9
Distribution 0 0 0 1 0 0 2 0 0 0 3
Education 0 0 3 0 0 0 0 1 2 2 8
Engineering 1 1 4 1 0 0 0 0 1 2 10
Environmental services 1 0 0 0 0 0 0 0 1 0 2
General/electrical contractor 0 1 0 1 0 0 1 1 0 2 6
Health Care 1 1 2 0 0 2 1 2 5 1 15
Insurance 1 1 2 0 2 2 1 0 0 1 10
Land surveying 0 0 0 0 0 1 0 0 0 0 1
Law 0 0 3 0 1 1 0 0 0 1 6
Manufacturing 1 1 1 0 1 2 1 0 3 3 13
Non profit 1 1 2 0 0 0 0 1 1 0 6
Oil & gas 0 0 0 0 0 0 0 0 0 2 2
Other 6 3 5 2 1 5 3 2 3 7 37
Publishing 0 0 0 0 0 0 0 0 0 2 2
Real estate 0 0 1 0 0 1 1 0 1 0 4
Sales/marketing 1 0 0 0 0 0 0 0 1 3 5
Telecommunication 0 0 0 0 0 1 0 0 0 1 2
Transportation 0 1 0 0 0 0 0 0 1 0 2
Wholesale distribution 1 0 0 0 0 0 0 0 2 0 3
Total 23 13 36 10 8 21 11 10 31 30 193
a Legend: 1 � Accurate data; 3 � Purchasing current systems; 4 � Staying current/changing IT; 8 � Costs; 9 � Customer/end user
support; 16 � Get information quickly; 17 � Productivity; 22 �Maintenance/running of system; 34 � Training/education of end user;
35 � Other.
C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257±269 265
tries which had the majority of the respondents stating
one of the top 10 categories of most important thing
were computer software/hardware/sales, health care,
manufacturing, insurance, and engineering. The
Goodman and Kruskal lambda value was 0.204 with
a 95% con®dence interval of 0.12±0.288. This indi-
cates that the classi®cation error is improved by
knowing the respondent's industry.
5. Discussion
This study is one of the ®rst projects, if not the ®rst,
which has examined extensively the expanding uses of
IT in a wide range of industry types within the small
business community. It is strengthened by the fact that
only senior executives in each ®rm, e.g., CEO, Pre-
sident, Manager, and Director of IS, provided infor-
mation about their organizations. That too is important
because it is generally regarded that these are the same
individuals who decide on IT investment decisions, or
at least are the ones who participate in this decision
process.
One of the purposes for conducting this research
was to investigate possible differences between smal-
ler and larger organizations related to acquiring and
using IT. It is apparent that even smaller ®rms experi-
ence similar pressures related to IT investment deci-
sions, as reported above. In itself, this is enlightening
for both IT researchers and small business executives
because it has not been examined extensively before,
nor has it dealt with the topic from the directions
addressed in this research.
The issue related to the growth in the number of
computer users is probably not too surprising. It is,
however, revealing that, compared with the study by
Cragg and King [4], the extent of growth of users
involved with clerical activities has increased in just a
few short years. Executives and IS researchers must
not exclude any groups of users today as they inves-
tigate the many factors that impact ®rms today, such as
system success, competitive advantage, and globali-
zation. In part, this has no doubt occurred because
hardware and software costs have declined dramati-
cally since the so-called PC revolution began in the
mid 1980s. In addition, the expanding range of appli-
cations, their ease of use, and the increased general IT
knowledge by many individuals today would tend to
give rise to large numbers of new users. However,
what is perhaps more important are the reasons for
this growth and the possible implications of it to
the ®rms. Are smaller ®rms experiencing operational
pressures to increase the number of computers and
computer users? Perhaps like their larger counterparts,
competitive pressures, such as the need to increase
or at least maintain customer satisfaction, could be
a driving force behind this growth. The implications
to the smaller ®rm could be dramatic. In general,
smaller ®rms may lack the extensive IT infrastructure
and support structure that larger organizations
have, and they may experience pressures for extensive
training and retraining of older employees. Training
issues could also extend to the population of potential
new hires as well who, because of a lack of a strong
IT support infrastructure in some smaller ®rms,
might be expected to acquire speci®c new skills on
their own prior to entering the job market. It is
probable that the term `computer literate' has esca-
lated to the point that, to be considered literate, a new
hire must have extensive knowledge in products such
as Microsoft Of®ce, ®nancial modeling tools extend-
ing beyond today's spreadsheets, and web page
authoring and development tools to support the fast
increasing pace of electronic commerce. Support for
this may be found in the fact that nearly 45% of the
responding ®rms both replaced older hardware as well
as purchased new hardware to add to the ®rm's
portfolio of uses. At the same time, nearly 50% of
the respondents had replaced and enhanced software
as well, and more than 40% of the organizations
experienced growth in both clerical and managerial
users.
Correspondingly, smaller ®rms could also investi-
gate the newer forms of IT training, such as general
types of computer-based training (CBT) or even CBT
that is more intelligent, such as products that contain
expert-like capabilities, to guide the trainee. The
attention to additional training provided by smaller
®rms could also act as a marketing mechanism to help
them to attract new hires as well. The ®ndings of this
study relate to the training of end users and the
importance of the end users being able to use systems
successfully. Montazemi [16] too found that end user
literacy generated higher user satisfaction, and the
training of end users de®nitely plays an important
role in improving end user literacy.
266 C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257±269
The other major question addressed in this research
dealt with the `. . . single most important thing you've
learned about managing the use of information tech-
nology in your ®rm.' The category with the highest
percentage of responses was `staying current/chan-
ging IT,' with more than 11% of the respondents citing
it. This is an issue that confronts large businesses
daily, and it is apparent that even executives in smaller
®rms are experiencing the same dif®culties. Perhaps,
however, the problem as it pertains to small businesses
is exacerbated by the fact that many of these organiza-
tions lack much of the IT infrastructure, such as
emerging technologies groups or so-called technolo-
gical strategists who can identify new and forthcoming
technologies and suggest ways for their implementa-
tion. Such limitations obviously can impact senior
executives who must contend with competitive pres-
sures, improving or expanding customer service, as
well as with internally expressed needs and wants.
The category that tied for third place in the `most
important thing I've learned' rankings is, perhaps, just
as signi®cant as the one which ®nished in ®rst place.
This category is the `non response' category; it is
characterized by the common response provided by
the respondents: `I can't think of anything.' On the one
hand, it is evident that smaller organizations are
experiencing many IT pressures, such as staying
current, the need for accuracy in their data, obtaining
information quickly, and even having to deal with
being more productive. These responses are quite
similar to those discussed in the literature dealing
with large organizations. However, if a small business
executive responds that he/she can't think of anything
related to issues or problems regarding managing its
IT investments, it should be a cause for alarm.
Are these executives just following the crowd,
purchasing what their employees say they want or
need? Do small business executives experience the so-
called `airline magazine syndrome' that is often asso-
ciated with larger organizations? Or perhaps some
smaller ®rms have entered into various forms of out-
sourcing arrangements or have engaged consultants to
help them in their IT efforts, with the result that they
simply `can't think of anything' related to managing
IT?
The additional analyses that examined the relation-
ships between ®rm sizes, industries, and the top 10
most important things learned are interesting. As
stated previously, knowing a ®rm's size does not
indicate what important things learned would be
applicable to that ®rm; knowing the ®rm's industry,
however, does tell us what lessons learned might be
important for a ®rm. Regarding size, consultants
working with smaller businesses, as well as IS
researchers, might ®nd it more dif®cult to focus their
attention on speci®c issues for given ®rms. Said
differently, regardless of size, small businesses are
confronted with a diversity of issues today. In addition,
this ®nding might also indicate some maturation
perspective regarding IT lessons learned among small
businesses of the sizes examined in this study. Regard-
ing a ®rm's industry, business executives, consultants,
and IS researchers might ®nd it easier, for example, to
develop IS plans more closely integrated with a ®rm's
business plan, knowing lessons learned ahead of time.
Further research into these lessons learned and indus-
tries is warranted.
This research has focused on a heterogeneous sam-
ple of small businesses and identi®ed the expanding
and changing role the IT serves in these ®rms. Our
concluding remarks have led to a number of questions
as well, many listed above. These questions should
serve as an invitation to IT researchers to delve more
deeply into the smaller business community. Inter
disciplinary studies, such as those involving small
business centers and entrepreneurial institutes found
in some colleges and universities could be included.
More theoretically based research should be applied to
the small business community. For example, attitudi-
nal research may help provide answers to some of our
questions, with Ajzen's [2] Theory of Planned Beha-
vior and Davis' Technology Acceptance Model [6]
serving as appropriate theories. Harrison et al. [12]
research pertaining to competitive advantage was a
positive step in this regard.
Appendix
IT Questions from Survey Instrument
1. Do you make decisions about obtaining and
using computers and information technology in
your business?
2. What computer-based system or use of compu-
terized information that you do not currently have
C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257±269 267
would you like to have to help you compete better?
3a. Since your firm first started using computers,
has it acquired new computer hardware?
3b. If yes, has this acquisition typically been to
extend your firm's range of applications/uses, or
has it been to replace old hardware?
4a. Since your firm first started using computers,
has it acquired new computer software?
4b. If yes, has this acquisition typically been to
replace old software, or has it been to expand the
range of applications in use?
5a. Since your firm first started using computers,
have the number of functional areas using
computers since the initial use increased?
5b. If yes, how many new areas?
5c. Which functions?
6a. Since your firm first started using computers,
have the number of users of computers increased?
6b. If yes, are the new users more oriented toward
clerical or managerial?
7. What's the single most important thing you've
learned about managing the use of information
technology in your firm?
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268 C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257±269
Cynthia K. Riemenschneider is an
Assistant Professor in the Computer
Information Systems and Quantitative
Analysis Department at the University of
Arkansas. She received her Ph.D. in
Management Information Systems from
the University of Texas at Arlington.
Her research publications have appeared
in Information Systems Research, Jour-
nal of Computer Information Systems,
and Electronic Markets: The International Journal of Electronic
Commerce & Business Media. Dr. Riemenschneider's research
interests include the use of information technology in small
businesses and the adoption of innovative technology.
Peter P. Mykytyn Jr. is a Professor in
the Department of Information Systems
and Management Sciences at the Uni-
versity of Texas at Arlington. He ob-
ta in ed h i s Ph .D. in Compute r
Information Systems from Arizona State
University. His current research interests
include strategic aspects of information
technology, and legal issues impacting
information systems and organizations,
with special emphasis involving intellectual property. He has
participated actively in national and regional conferences, and in
June 1978 he concluded a visiting professorship position at Agder
College in Kristiansand, Norway. He is currently Associate Dean
for Research and Graduate Studies in the College of Business
Administration at the University of Texas at Arlington.
C.K. Riemenschneider, P.P. Mykytyn Jr. / Information & Management 37 (2000) 257±269 269
