Standardization in the midst of innovation: structural implications of the Internet for SMEs

Abstract The spread of Internet technologies has heralded the emergence of a ‘new economy’ with the development of the quintessential new economy type of business, the Internet E-commerce firm. Identification of structural changes emerging from the interaction between business and technology in a society illuminates the way that small and medium enterprises (SMEs) are implicated in societal and economic change and helps us to contemplate their future within society. The authors propose a 5-S extension of the McKinsey 7-S framework (shared goals, strategy, skills, staff, systems, style, structure). The proposed new factors are standards, size, speed, state, and sales. The rationale and operation of each of these five elements is explored with respect to both new economy, Internet firms and traditional, ‘bricks-and-mortar’ companies. The likely effect that major future contingencies will have on how the 5-S elements are applied is also explored. This 5-S framework and its future contingencies appear to offer a set of descriptions of a likely future for businesses and for economies as a whole. At present the Internet economy remains largely unexplored and unexploited but it does seem clear that the owners of SMEs will play important roles in its continuing growth and value creation.