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Research Scholar's Abstracts 2002 - Nancy Levenburg, Simha Magal

A Framework for Evaluating E-Business Applications for Family-Owned Businesses
Nancy Levenburg, Simha Magal
2002

According to some reports, family owned businesses (FOBs) are going online at a rapid pace.This should come as no surprise since we have witnessed a phenomenal growth in e-business activities within all types of organizations over the past few years.One study conducted by Davis and Harveston (2000) found that technology does influence growth and internationalization within family owned businesses. Indeed, in this new, high-tech world, it is increasingly acknowledged that businesses can ignore this phenomenon only at their peril. FOBs (and all firms) should understand how to effectively utilize Internet technologies to survive and thrive.Proactive firms recognize that using the Internet to engage in e-business represents an opportunity to be more efficient and effective, and to accomplish things not possible before.Indeed, for many organizations, investment in e-business technologies is no longer an option; it is the only rational choice. What remains is to determine how to leverage e-business technologies to achieve strategic goals.

Why do family owned businesses decide to engage in e-business?The literature suggests a wide range of possibilities.Key drivers include the desire to enhance the company image/brand, to distribute product/company information, to identify new markets or customers, to improve communications, to improve marketing intelligence, to find information about new sources of supply, or to provide or improve customer service, to name a few.

Determining the appropriate use of e-business technology, however, is not a trivial task. Organizations have often ventured into this world blindly or with only limited guidance.Some have developed a web presence to be merely "fashionable" while others invested heavily on the promise of fantastic rewards.Investment in e-business is just that; an investment that must be thoroughly evaluated to determine the costs, risks, and value. Organizations are recognizing the need for proper planning and the integration of this technology into their overall strategy.

Family-owned businesses are not immune to this phenomenon. Their preference for stable and time-tested tools and techniques may not be immediately conducive to the rapidly evolving e-business environment.According to the literature, compared to non-family firms, FOBs tend to have a longer-term outlook, limited experience and training in e-business, are more conservative and risk averse, and are inflexible and slow to adapt to change.For many family firms, investment in e-business represents a greater risk than they are accustomed to taking. Consequently, FOBs may be slower to adopt these technologies and may be vulnerable to their technologically savvy competitors.