Business process digitization, strategy, and the impact of firm age and size: the case of the magazine publishing industry
Publication Year: 2003
Journal: Journal of Business Venturing
Categories: Digital Transformation
Companies in the publishing industry need to change their strategy and business-model in order to adapt to the new reality of the digital world. Survival depends on successful digitization of business processes driving innovation and cost saving. This paper investigates how larger and older firms deal with this challenge compared to younger and smaller firms. The research is based on surveys conducted with managers from 150 firms in the magazine publishing industry. The paper poses four hypothesis related the ability of these different types of firms to cope with digitization challenges. The first hypothesis states that established (larger) firms are less likely to digitize their successfully business processes. The research results contradicted this hypothesis, large firms actually make better use of digital processes compared to smaller and newer firms. The second hypothesis states that the extent of process digitization will be positively related to the firms innovation orientation. This hypothesis was strongly supported by the research, pursuing digital opportunities has a strong impact on innovation. The third hypothesis that states that digitization will have a positive impact on efficiency is also clearly proven by the research. The fourth hypothesis poses that strategic benefits of digitization will be stronger for new and smaller firms. This hypothesis was somewhat confirmed mainly relating to the effect of marketing and communication. The general conclusion of the paper is that size and age of a firm does make a difference for the degree and manner in which firms digitize business processes. Digitization does improve efficiency and the strategy - digitization is stronger for new and smaller firms that for established and larger firms.