ICT-Supported Strategic Management Practices and Their Impact on the Performance of Jordanian SMEs

Abstract

The small and medium enterprises (SMEs) are a key component of Jordan’s social and economic development, providing opportunities for employment, poverty reduction, innovation and increasing economic activity in regions. Nevertheless, the SMEs’ success will depend on the quality of their strategic management practices in a rapidly digitalizing environment. This paper aims to analyze the impact of the ICT-based strategic management processes on the SMEs’ performance in Jordan. Although the theoretical base of this paper lies in the traditional elements of strategic management (strategic planning, strategic implementation, and strategic evaluation), the empirical model has transformed these elements into measurable constructs that reflect the process of digital transformation. More specifically, the ICT adoption is considered a factor that enables the flexibility and operational efficiency of SMEs, which are the two factors that represent how strategic processes can affect the financial performance. A quantitative, post-positivist method was used to collect data from 354 SME owners and managers through a structured questionnaire, while the analysis was done with the Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that ICT significantly increases the ability of SMEs to be flexible in terms of their strategy, which leads to increased operational efficiency and ultimately increased financial performance. Therefore, this study demonstrates how ICT can support the formulation, execution and evaluation of strategies of SMEs by enhancing their organizational flexibility, efficiency of their internal processes and improving the quality of their decision-making. Finally, this study adds to the little empirical evidence about the digital transformation in emerging economies and provides practical information to managers and policy makers who want to improve the competitive position of SMEs through ICT-enabled strategic management. Further studies are recommended to examine the long-term effects of the digital transformation, the comparative effects of the digital transformation among countries, and the changing role of digital capabilities in the performance of SMEs.