Taxonomy of information and communication technology system innovations adopted by small and ...

283 Pages·2004·8.96 MB·English

Jaakko Riihimaa
Jaakko Riihimaa
Taxonomy of information and
communication technology system
innovations adopted by small and
medium sized enterprises
ACADEMIC DISSERTATION
To be presented, with the permission of the Faculty of Information
Sciences of the University of Tampere, for public discussion in
The Auditorium of Seinäjoki Technology Centre FRAMI
on June 17th, 2004, at 12 noon.
DEPARTMENT OF COMPUTER SCIENCES
UNIVERSITY OF TAMPERE
A-2004-6
TAMPERE 2004
Supervisor: Prof. Emer. Pertti Järvinen
University of Tampere
Opponents: Prof. Karlheinz Kautz
Copenhagen Business School
Prof. Peeter Normak
Tallinn Pedagogical University
Reviewers: Prof. Hannu Jaakkola
Tampere University of Technology, Pori
Prof. Hannu Salmela
The Turku School of Economics and Business Administration
Department of Computer Sciences
FIN-33014 UNIVERSITY OF TAMPERE
Finland
ISBN 951-44-5984-9
ISSN 1459-6903
Tampereen yliopistopaino Oy
Tampere 2004
Jaakko Riihimaa
Riihimaa, Jaakko (2004), Taxonomy of information and communication technology system
innovations adopted by small and medium sized enterprises
Department of Computer Sciences, University of Tampere, Finland
Abstract
Today organizations must change their way of operating by networking with other enterprises
and open their typically encapsulated information systems to external partners - the transparency
of the information systems must be increased to achieve sustainable competitive advantage.
That is true for almost all kinds of organizations but especially for production enterprises, which
in practice organize their work in forms of supply chains and supply networks.
The change from individual entities to enterprise networks sets new requirements also for
information systems, and there is a lack of tools for analyzing various types of ICT system
innovations reflecting the new reality. It is by the means of organizational innovation that any
enterprise can and should respond to a fundamental change in its environment.
The main result of the study is a taxonomy; a classification principle of information and
communication technology system (ICTS) innovations adopted by small and medium sized
production enterprises.
Organizations are typically examined as independent units with certain internal functions or
processes. To achieve sustainable competitive advantage organizations have various kinds of
internal and external ICTSs. Also a traditional way of illustrating external issues of competitive
advantage-creating, and thus illustrating information system innovations, is the Porterian value
chain. It is based on a process view of an organization. An organization is seen as a system
which is made up of subsystems. Each of them is included in a chain with inputs, transformation
processes and outputs which involve the acquisition and consumption of resources. This kind of
organizational model produces system categories with “one-way” external communication
interface. For example, in this way of thinking production process systems are situated
independently in the middle of the production chain, within the individual enterprise. However,
if the enterprise operates within a real enterprise network, it means reciprocal, cooperative
communication between the parties, and thus communication between the systems. Not only
various acquisition or sales and marketing systems have reciprocal external interfaces, but also
production process activities and even the products of the enterprise may form their own
networked information system categories. The results of this study also point out some other
remarkable ICTS innovation roles, systems not directly creating competitive advantage.
According to a typical categorization of research purposes this study is characterized as
phenomenological, applying intensive case methods. The first of the data sets consists of 17
cases, which were collected totally from South Ostrobothnia within a regional development
project. Another set of data were collected nationwide from 40 metal and electrotechnical
enterprises in cooperation with the Federation of Finnish Metal, Engineering and Electrotechnical
Industries (MET).
Keywords: Organizational innovation, information and communication technology systems,
taxonomy, system categories, interpretive IS reserach, case-study, small and medium sized
enterprises

Jaakko Riihimaa
Acknowledgements
It was fifteen years ago today, when Professor Pertti Järvinen for the first time carried out
his new idea of a doctoral seminar in Tampere, in which also I was involved. Since then
there have been some more or less serious attempts to work up a doctoral thesis whenever
the high priority of domesticity and daily work has made it possible. About five years ago I
got an opportunity to cooperate with a local development project, which work formed the
basis for this study. In the summer of 2000 Professor Mikko Ruohonen offered me the
opportunity of planning and putting into practice with him a special research frame concerning
e-business innovations. These issues supplemented my early work, and the opportunity has
therefore come to give credit to those who have supported and encouraged me in different
ways.
First of all, I want to express my deepest gratitude to my supervisor, Professor Emeritus
Pertti Järvinen, for his excellent guidance and constant encouragement throughout these
years. Without his patient and persistent work this study would scarcely have ever been
finished. I wish also to acknowledge Professor Mikko Ruohonen, for continuous multiform,
generative cooperation.
I sincerely thank my place of work, the Seinäjoki Polytechnic, and especially President
Tapio Varmola and Research and Development Director Asko Peltola, for a perpetual
attitude of support and encouragement towards postgraduate studies and for giving me such
advantageous possibilities to study.
I express my sincere gratitude to Ms. Marjatta Jokisuu, the Tampere University Institute for
Extension Studies (TYT), Seinäjoki, and Mr. Juhani Kangasniemi, the Technology Industries
of Finland, as well as Tekes, the National Technology Agency of Finland, for enabling the
data gathering phase of this study.
My sincere thanks go also to the official referees Professor Hannu Jaakkola and Professor
Hannu Salmela, for their interest, constructive criticism and valuable advice during the
final preparation of the manuscript.
I owe thanks to Ms. Anniina Wallius, who skillfully and manageably revised the language
of this thesis. I also wish to thank Ms. Jaana Huhtala for a proficient layout and Ms. Anne
Vuorenmaa for some practical help with the literature. Administrative Director Marja Liisa
Nurmi from the Faculty of Information Sciences and Administrative Assistant Minna
Parviainen from the Department of Computer Sciences also deserve my sincere thanks for
their help in many practical matters concerning the dissertation.
This work was supported financially with grants and other ways by the Seinäjoki Polytechnic,
Liikesivistysrahasto – the Foundation for Economic Education, Kunnallisalan
Kehittämissäätiö, Suomen Kulttuurirahasto - the Finnish Cultural Foundation, the Information
Technology Postgraduate Education Program INFWEST.IT, and Etelä-Pohjanmaan
Kehittämisrahasto – the Development Fund of South Ostrobothnia, all of which are gratefully
acknowledged.
Acknowledgements
Finally and most importantly, I wish to thank the people closest to me. I want to express all
my gratitude to my parents Pirkko and Heikki, my sisters and brother and their families and
my parents-in-law for their support and love. My deepest gratitude goes to my beloved wife
Päivi, who has played a chief role in supporting me, and our children Petri, Pekka and
Jaana, to whom I want to dedicate this study - I cannot thank you enough.
Seinäjoki, May 2004
Jaakko Riihimaa
Jaakko Riihimaa
“Therefore we ought to attend to the undemonstrated
sayings and opinions of experienced and older
people or of people of practical wisdom not less
than to demonstrations; for because experience
has given them an eye they see aright”
Aristotle 350 BC

Jaakko Riihimaa
Contents
1. INTRODUCTION.........................................................................................................1
1.1 Description of the topic and its importance.........................................................1
1.2 Description of the problem domain and its importance.......................................2
1.3 Short presentation of the results and findings achieved so far...........................3
1.4 Presentation of the approach of this study..........................................................5
1.5 Definition of the problem under study.................................................................7
1.6 Results of the study.............................................................................................8
1.7 Other chapters...................................................................................................10
2. INTRODUCING THE PROBLEM AREA...................................................................12
2.1 Positioning the research setting into the information systems..........................13
2.2 The external environment of the organization – the Information society
context...............................................................................................................15
2.2.1 Emergence of the concept of Information society...................................15
2.2.2 New division of labor...............................................................................17
2.2.3 Various views on the Information society................................................18
2.3 The organizational environment of the organization – networking theories......19
2.3.1 Networking overview...............................................................................20
2.3.2 Networking theories emphasizing the management perspective...........22
2.3.3 Networking theories emphasizing financial perspective.........................23
2.3.4 Networking theories emphasizing human perspective...........................27
2.3.5 Networking theories emphasizing physical perspective.........................28
2.3.6 Networking theories emphasizing informative perspective.....................30
2.3.7 Concluding the organizational environment of the production SMEs....35
2.4 Organizations in the middle of change – production SMEs..............................35
2.4.1 SMEs as a part of an economy...............................................................36
2.4.2 The South Ostrobothnia region as a laboratory of SMEs.......................37
2.4.3 SMEs as an entity ....................................................................................39
2.4.4 A brief personal history ...........................................................................42
2.5 Summary of the problem area...........................................................................43
3. INTRODUCING INFORMATION AND COMMUNICATION TECHNOLOGY
SYSTEM AS AN INNOVATION.................................................................................45
3.1 Information and communication technology systems, ICTS.............................46
3.1.1 General systems theory and systems logic............................................46
3.1.2 Determination and definition of ICTS......................................................47
3.2 The model of an enterprise...............................................................................48
3.3 IS research and innovations..............................................................................52
3.3.1 Innovation overview ................................................................................53
3.3.2 Innovation adoption and important early phases....................................55
3.3.3 Re-invention of the innovation ................................................................56
3.3.4 IS research field and innovations............................................................58
3.4 Management and resources as prerequisites of ICTS innovations..................68
3.4.1 Overall management...............................................................................69
3.4.2 Financial viewpoint..................................................................................71
3.4.3 Human viewpoint.....................................................................................71
3.4.4 Information technology (physical) viewpoint...........................................73
3.4.5 Informative viewpoint ..............................................................................75
3.4.6 Summary of the management function and the four supporting
resources ................................................................................................77
3.5 Synthesis – a tool for analyzing research data.................................................77
3.6 Summary of information and communication technology systems
as innovations ...................................................................................................79
4. PHILOSOPHICAL AND METHODOLOGICAL ASSUMPTIONS..............................81
4.1 Research goals.................................................................................................81
4.2 Research philosophies......................................................................................82
4.2.1 The background for the philosophy of this study....................................82
4.2.2 Two research paradigm models..............................................................83
4.2.3 Applying the phenomenological research view.......................................85
4.3 Philosophical assumptions................................................................................88
4.3.1 Ontological assumptions.........................................................................89
4.3.2 Epistemological assumptions .................................................................90
4.3.3 Methodological assumptions...................................................................91
4.4 Research methods..............................................................................................93
4.4.1 Theory creating approach.......................................................................93
4.4.2 Qualitative research................................................................................94
4.4.3 Case Study..............................................................................................95
4.5 Model of Eisenhardt ..........................................................................................98
4.5.1 Getting started.........................................................................................99
4.5.2 Selecting cases.....................................................................................100
4.5.3 Crafting instruments and protocol.........................................................102
4.5.4 Entering the field...................................................................................102
4.5.5 Analyzing data.......................................................................................103
4.5.6 Shaping hypotheses .............................................................................104
4.5.7 Enfolding literature................................................................................105
4.5.8 Reaching closure..................................................................................105
4.6 Summary of research methods and philosophical assumptions ....................108
5 THE FIRST EMPIRICAL PART OF THE STUDY: THE ITEP INTERVIEWS..........109
5.1 The background of the ITEP data ...................................................................109
5.1.1 Specified population..............................................................................109
5.1.2 Selecting enterprises for the ITEP interviews....................................... 111
5.1.3 ITEP data gathering techniques............................................................113
5.1.4 Entering the ITEP field..........................................................................114
5.1.5 The preliminary analyses of the ITEP data...........................................115
5.1.6 Classifying the ITEP cases ...................................................................116
5.1.7 Forming the core category....................................................................117
5.1.8 Description of the case analyses method.............................................119
5.2 The three selected ITEP cases.......................................................................120
5.3 The “inside” perspective of the production enterprise (the first ITEP case)....120
5.3.1 Preliminary analyses of the case ITEP_D1 ..........................................121
5.3.2 Supplementing Internal systems category............................................123
5.3.3 Supplementing External systems category...........................................124
5.3.4 Synthesis after the first case ITEP_D1.................................................126