Does Size Matter? Small Firms' Use of E-Business Tools in the Supply Chain

The Internet was envisioned as a powerful tool enabling small firms to ‘level the playing field’ when competing with larger firms. Yet, the benefits of e-business are accruing to larger, rather than smaller, firms. Using the European Union’s definitions for micro, small, and medium-sized organizations (SMEs), the purpose of this study was to examine the implementation of e-business tools and technologies, particularly with respect to supply chain management. A six-page self-administered questionnaire was used to collect data from 395 US SMEs in a region of the country that is noted for its history and prominence of small business ownership. The study finds significantly different patterns in usage of e-business tools within the supply chain and performance results. While using the Internet to find information is important for all firms, micro firms (maximum of ten employees) attach greater importance to using the Internet for research purposes (e.g., find new sources of supply) and lesser for communication reasons (i.e., email with supply chain members). This pattern is reversed for small and medium-sized firms.