Aligning IT Capabilities with the Information Requirements of International SMEs: Information Processing Theory Revisited

The ability to internationalize has become a competitive necessity for many SMEs, enabling their survival and growth under globalization. From an IS research perspective, one important issue in this regard is the strategic role played by the firm´s IT capabilities in responding to greater environmental uncertainty and correspondingly greater information requirements, and in enabling the firm´s internationalization performance. Given that such a major aspect of the influence of IT on the performance of SMEs has so far been ignored, the following research question is posed: To what extent does the match between the IT capabilities and information requirements of SMEs contribute to their internationalization performance? Our research model and hypotheses are based on Tushman and Nadler´s information processing model. In revisiting this model, the aim was to show its continued relevancy and extend its domain of applicability. In order to answer the research question, we conduct a survey-based empirical study of 174 Canadian SMEs that have internationalized their activities in one form or another. Our results show that a better match between IT capabilities and information requirements does indeed exert a positive influence on internationalization performance. We also find that the SMEs´ IT capabilities are influenced externally by the environmental uncertainty and internally by their internationalization mode.