Absorptive capacity and information technology adoption strategies in Kenyan SMEs

Although Small and Medium Enterprises (SMEs), arguably, make up a significant part of economic development in many countries, these enterprises have continued to face challenges especially in developing countries like Kenya. With Information Technology (IT) being considered a critical component of the survival of SMEs, many are striving to invest in it. However, a number of these SMEs are still far from realising the full potential of their IT investments. In today‟s challenging and dynamic business environment, SMEs need to leverage both internal and external knowledge, exploit it to help improve and maintain their competitiveness, and consequently, their survival. This study has endeavoured to address the IT adoption strategy challenges experienced by SMEs in Kenya and other developing countries, as these have been largely flawed. The study has explored on the way in which these enterprises can build strong Absorptive Capacities (AC) and exploit these to improve their IT adoption processes through a model of AC. To achieve this, a qualitative, interpretive case study research approach was employed in this study. The findings of this study suggest that although AC plays a critical role in the performance of SMEs in Kenya, many of these enterprises have low levels of AC. It also became clear that all the SMEs that participated in the study had not attained maturity in their IT adoption process. However, SMEs that exhibited strong AC employed the use of more superior IT adoption processes than did their counterparts with low levels of AC. From the results of this study an IT Adoption Strategy Improvement Model (ITASIM) has been developed to help SMEs improve their IT adoption strategies. The model focuses on improving SMEs‟ AC and injecting these alongside the elements of a good strategy in the SMEs‟ IT adoption process. Furthermore, in order to help in the effective implementation of ITASIM, implementation guidelines have been developed