Scanning practices and information sources: an empirical study of firm size

Abstract

Abstract: Purpose . - The purpose of this paper is to analyse the environmental scanning practices and information sources used by large companies as well as by small and medium-sized enterprises (SMEs), the latter being relatively absent from scientific scrutiny. In doing so, it endeavours to contribute to a better understanding of the scanning and information-gathering behaviour of SMEs, in order to develop measures to overcome their potential disadvantages in this respect. Design/methodology/approach – Data were obtained from 165 Portuguese firms. Respondents were required to evaluate their use of 11 different environmental scanning practices and 12 information sources. For data analysis, the variables were classified using principal component analysis. Subsequently, the retained components and variables underwent a one-way variance analysis. Findings – Results indicate that smaller firms do not scan as broadly and as frequently as their larger counterparts. Although external information sources are used equally by larger and smaller enterprises, in general there is also a positive relationship between the exploitation of information sources and firm size. Research limitations/implications – Findings are taken from the Portuguese context, with its own idiosyncratic economic structure and climate. Generalisations should therefore be made with caution. Practical implications – As the “size effect” influences the propensity for environmental scanning, SMEs are urged to adopt inter-firm strategies in order to achieve a critical mass. The importance of building scanning and information networks among SMEs must be highlighted. Originality/value – Research on environmental scanning in SMEs and comparative studies of the firm size effect have been relatively scarce. The findings reveal that firm size matters, insofar as the use of different scanning practices and information sources mostly augments with increasing firm size.