An action research approach to develop a framework for the development of dot-com ventures for SMEs

Abstract

Internet adoption and e-business has been of particular interest amongst researchers and practitioners, however, most of the studies focus on large organisations and only recently there has been a shift of interest to e-commerce/business adoption by Small and Medium Enterprises (SMEs) with little or no reference to dot-com initiatives. It is well documented that SMEs have significant and different challenges in comparison to large organisations in the brick and mortar domain. Therefore, investments in the e-business domain (such as dot-com start-ups) present even more challenges to SMEs. Consequently, this research offers an in-depth study of the start-up process of a dot-com company by examining the stages, phases, and components that are key for this process. The empirical contexts of this research are three projects with three different SMEs that have actively participated in the creation of a new dot-com venture. These were analysed using an action research approach with interpretative and qualitative analysis. The main component of the action research approach covers a longitudinal study (2 years) divided in four cycles, followed by two case studies used for the evaluation of the findings of this research. These results of all research cycles, which in turn, can be considered the contributions to theory and practice of this research, can be seen in two ways: the development of a start-up framework for SMEs, and a Business Information Database (BID) that supports the implementation of the framework. The framework is designed to visualise, from a strategic perspective, the stages that an organisation have to go through in order to initiate a new dot-com venture. Is proved that organisations have, directly or indirectly, followed specific steps related to the phases described in the framework. Hence new entrepreneurs can use the phases of the framework to facilitate and ease their start-up process looking at the main features of each phase. The BID was constructed under two premises: a) to structure the main documents and corresponding building blocks used in industry and in the proposed framework, such as the Strategic Plan, Business Model, Business Plan, and Business Case, and b) to identify the relationships among the building blocks of all the aforementioned documents. The BID and related documents can be used to identify how a particular piece of information (e.g. building block) affects other aspects of the dot-com initiative. The BID can be also be used as an independent artefact to assist organisations through the structure of the business documents in the start-up process, even if the organisation is not following a specific framework. Hence the BID itself can assist entrepreneurs to start-up firm without the need to have an overarching framework. Last but not least, practical recommendations are offered to practitioners and stakeholders interested in developing new ventures within the dot-com domain.