Scanning practices and information sources: an empirical study of firm size

Abstract

PurposeThe purpose of this paper is to analyse the environmental scanning practices and information sources used by large companies as well as by small and medium‐sized enterprises (SMEs), the latter being relatively absent from scientific scrutiny. In doing so, it endeavours to contribute to a better understanding of the scanning and information‐gathering behaviour of SMEs, in order to develop measures to overcome their potential disadvantages in this respect.Design/methodology/approachData were obtained from 165 Portuguese firms. Respondents were required to evaluate their use of 11 different environmental scanning practices and 12 information sources. For data analysis, the variables were classified using principal component analysis. Subsequently, the retained components and variables underwent a one‐way variance analysis.FindingsResults indicate that smaller firms do not scan as broadly and as frequently as their larger counterparts. Although external information sources are used equally by larger and smaller enterprises, in general there is also a positive relationship between the exploitation of information sources and firm size.Research limitations/implicationsFindings are taken from the Portuguese context, with its own idiosyncratic economic structure and climate. Generalisations should therefore be made with caution.Practical implicationsAs the “size effect” influences the propensity for environmental scanning, SMEs are urged to adopt inter‐firm strategies in order to achieve a critical mass. The importance of building scanning and information networks among SMEs must be highlighted.Originality/valueResearch on environmental scanning in SMEs and comparative studies of the firm size effect have been relatively scarce. The findings reveal that firm size matters, insofar as the use of different scanning practices and information sources mostly augments with increasing firm size.

Competitive Intelligence and Information Technology Adoption of SMEs in Turkey: Diagnosing Current Performance and Identifying Barriers

“…Expert execution of CI requires dedicated software and hardware in order to obtain the right information in response to intelligence needs, the production of accurate analysis and its timely dissemination to the right person to take the right decision (Bisson, 2010;Gordon et al, 2008;Wright, 2011). Therefore, SMEs need to build their Information System (IS) for strategic purpose (Franco et al, 2011a;Garg et al, 2010;Rouibah & Ould-Ali, 2002;Zhang et al, 2010) as opposed to a purely operational purpose (Bhagwat & Sharma, 2007;Litan & Rivlin, 2001). As a consequence, a Strategic Information System (SIS) needs to be built which becomes a vital influence on a firm's success as it shapes strategy and contributes to the implementation of that strategy (Dhaliwal et al, 2011;Galliers, 1991;2004;Ma et al, 2008;Petrini & Pozzebon, 2009;Rishi & Goyal, 2011).…”

Cash-Flow Model for Efficiency Evaluation in Multinational Trade Enterprises Applying E-Commerce

“…In general, transactionbased costs' view has been highlighted towards enterprises' setup and promotion of gains which could be achieved by setting up a company as a unique way of coordinating single or multiple economic activities. The presence of transaction costs may involve internal economies of scale and the size aspect of companies, which is a prerequisite for technology implementation (Franco et al, 2011).…”

Environmental scanning in business organisations

“…Although empirical studies have investigated environmental scanning in different parts of the world and in different kinds of industry, e.g. Portugal (Costa and Teare, 2000;Franco et al, 2011), Hong Kong (Ebrahimi, 2000;Jogaratnam and Law, 2006); the USA and India (Stewart et al, 2008); Bulgaria (Elenkov, 1997); Nigeria (Sawyerr et al, 2000); Greece (Kourteli, 2005); the UK (Analoui and Karami, 2002); Botswana (Jorosi, 2008); Russia (May et al, 2000); the USA and Korea (Ghoshal, 1988); and the UK, France and Sweden (Barron et al, 2014), there is no evidence about environmental scanning in the Middle East context in general and Jordan in particular.…”

“…The business environment has become more and more complex, turbulent and uncertain (Albright, 2004;Jorosi, 2008;Haase and Franco, 2011). An organisation's ability to survive partly depends on its ability to anticipate external change and take this into account when defining its strategy (Choo, 2001;Ngamkroeckjoti and Speece, 2008;Franco et al, 2011;Zhang et al, 2011). The need to identify and respond to external changes in the business environment lies behind the increased interest in "environmental scanning", which is an approach to gathering relevant information and turning it into knowledge that can be used in managing a business (Okumus, 2004;Jogaratnam and Law, 2006;Karami and Chen, 2010).…”

“…The reporting of environmental scanning in this context has generally been part of a wider study of strategic planning processes (Elbanna, 2007;Aldehayyat et al, 2011;Analoui, and Samour, 2012). Also, little research has been conducted to analyse variances across firm size and industry type (Franco et al, 2011;Haase and Franco, 2011;Karami, 2012). Moreover, there is no information about the value of environmental scanning for the organisations in this region.…”