Anna Grzecznowska Business information at smaller enterprises - and changes on the market of information services
	Instytut Wzornictwa Przemysłowego w Warszawie (The Institute of Industrial Design in Warsaw)
	This article was translated thanks to the grant received from the Open Society Institute

Introduction

Business information - facts, data and statistics pertinent to the decision-making process in a business venture^[1] - is a very important element of a professional activity and function of any entrepreneur in any industrialised country. Information obtained at the right time and place is of value to any business, in many aspects; can be applied in the search for new markets, or in overcoming difficulties stemming from increased competition, political crises, recession and other negative factors. One often meets with an opinion that access to accurate and updated information facilitates companies development, later transformed into increased production, increased number of jobs, expansion to local and foreign markets and companies increased revenue.^[2]

The new significance of business information has also been noticed in Poland, in the early 90-ties. The contributing factors are as follows:

• The privatisation of state enterprises resulting in creation of many small firms. The managers of these firms are not always well acquainted with the information market and, at the same time, are on the lookout for information regarding business partners, products, industrial design, actual tax and duty rates, legal regulations, etc.
• A significant increase in the cost of gathering and processing information related to implementation of the newest information and communication technologies.
• Reduction of budget means for information activity financing.
• A dynamic development of private commercial firms, often created with foreign financial aid and investment, specialising in the service of information.

The progress of globalisation, as well as the perspective of Poland s joining European economical structures, force entrepreneurs concerned with their firms successful development and future, to search for new tools of increasing the level of competitiveness and improved management. One of these tools is business information in connection with the implementation of new techniques of gathering, processing and sharing the information through the use of Internet. In 2001, considering the availability of new systems and information services, Institute of Industrial Design conducted research aimed at the definition of information requirements at smaller enterprises.^[3]

According to national statistics, there are 2,900,000 small and medium-sized enterprises in Poland (i.e. firms whose number of employees does not exceed 250). Of these, 1,800,000^[4] are active and contributing greatly to the neutralisation of widespread, post-reform crisis through the creation of new jobs, increased supply to the market, and increase of the export revenue. However, the economical situation of many of those firms is still precarious due to lack of financial and legal stability, increase of production costs and shortage of low-interest credits. On the other hand, these firms are in need of the injection of modern technologies, in order to effectively maintain their position on the market, and be competitive with foreign companies. Therefore, these firms are looking for information that would help them devise and develop a successful strategy.

The analysis of the information access involved small and medium enterprises (data gathered at 105 companies, each employing 21-250 people, in Mazowieckie voivodship) representative of, more or less, 1000 manufacturing companies producing furniture, electronics, chemicals and cosmetics. The list of these firms was obtained at the Central Statistical Office and registered with REGON (the manufacturing companies registry).

Line of business	The number of analysed small and medium-sized enterprises	Total percentage
clothing and leather	49	46,7
food industry	33	31,4
furniture	8	7,6
electronics	8	7,6
chemicals/cosmetics	7	6,7
Total	105	100

Table 1. Companies participating in the analysis classification according to line of business.

60% of respondents was represented by civil partnerships or ventures, 28% -by limited joint ventures, 11% - co-operatives. About 60% of analysed firms (food industry, predominantly), sell their products exclusively on national markets.

The respondents were mailed and requested to fill a questionnaire a method of direct interviews (both person-to-person and telephone) was also employed. The questionnaire was designed to answer the following queries:

• information services, the forms and posts;
• the evaluation of the level of access required by firms;
• the significance of business information in problem-solving at a given company;
• the requirements regarding information about design;
• required information content (currently unavailable on the market);
• the level of Internet usage for information purposes.

The expert analysis (opinions of representatives of small and medium-sized companies) was included in the scope of the questionnaire, as well.

Information for business. From the point of view of firms (and some non-commercial organisations), this means news whose scope and content is in effect free, but helping and serving the firm to fulfil its objectives. Business information in this form touches all that is going on "beyond" the given concern - and this has or may have an influence on its functioning. It may be data on competitors, the structure of a market, administrative law - but also on customs, people, or the political situation, etc. We can distinguish two basic spheres of applying business information in a concern: current problem-solving, and long-term strategic planning. In the first case information assists in taking everyday decisions. For example, it allows observation and solution of potential problems, taking advantage of others' achievements, estimating results, and avoidance of expensive errors and mistakes. Strategic planning, on the other hand, is the area of an office's activity where business information is crucial. Gathered information may be used, among other things, to estimate the situation in the market, track competitors' action, follow trends in domestic and foreign trade, and foresee legal and political changes that could influence the firm's activities.

The centres of business information destined for and used by small and medium-sized firms.

There are many institutions in Poland at the moment, whose main agenda is to provide various companies (both private and state-owned) with reliable business information. With the employment of modern information technologies and variety of databases, these institutions provide complex information regarding organisation and management, production start-up, finances, legal issues, market situation (national and foreign), etc. to smaller companies. They also arrange affiliations with prospective business partners, provide marketing services and seek out manufacturers of particulars products.^[5]

The majority of polled firms (56%) named information centres/posts they used in 2002. These centres are listed as follows:

• Groups of manufacturers, chambers of commerce, commercial and industrial associations, guilds, employers' groups, business clubs and boards, professional associations and others (51% answers) the Polish Chamber of Commerce (with the aid of the National Business Information System, gathers economic watch and issues various business publications), Mazowiecka Izba Rzemiosła i Przedsiębiorczości (Mazowsze Chamber of Trade and Enterprise) organises political and social lobbying for small companies, also, - plays the role of their representative at European economic and business institutions Every year, the Chamber sponsors and organises an Economic Forum, during which small companies, successful on the market, are awarded the title of the Leader of Enterprise. Other information centres: Mazowiecka Izba Gospodarcza (Mazowsze Chamber of Commerce), Polska Izba Przemysłu Skórzanego (Polish Chamber of the Shoe and Leather Industry), Izba Przemysłowo-Handlowa Inwerstorów Zagranicznych (Foreign Investors Chamber of Commerce and Industry), Cech Rzemiosł Różnych w Grójcu (Trades Guild in Grojec), Cech Rzemiosł Spożywczych (Food Trade Guild in Radom), Business Centre Club, Konfederacja Pracodawców Polskich (Confederation of Polish Employers).
• Private-owned information centres, counselling and training centres, consulting firms, marketing firms, centres for economic watch all acting either locally or country-wide, often as national organisations with foreign capital (joint ventures, consortia, corporations). These service about 42% respondents. With the use of own or other (usually available on the Internet) databases these institutions pass information regarding addresses and other info about national, regional, foreign institutions representing various lines of business. They arrange partnerships and association (bringing together potential partners), play a role of an intermediary in drawing contracts. They also publish catalogues. Regarding catalogues the leader on the business publishing market is Polish Panorama its published material contains about 700,000 data items relating to the whole range of institutions throughout the country. Companies receive free catalogues with info about the range of their activity. At a small charge, these companies can place information about own activity, as well as place ads. 7% of polled firms used this option in the past year. Some representatives of food, garment and leather industry entered into co-operation with Polish-French venture, KOMPASS , which publishes these types of catalogues. Apart from addresses and phone (fax) numbers, some detailed data regarding economic profile of companies is offered, (size, revenue, employment, export-import, foreign investments, if any), as well as administrative information (NIK, REGON, legal and organisational structure, servicing banks and financial institutions). Also, details about products name, brand, type of product, etc. are included Some analysed companies quote names of centres and firms (both metropolitan and regional) which gather and dispense business information free of charge (on the phone), as well as phone numbers and addresses of public service institutions in cities, towns, voivodships and regions. Periodically, these centres publish bulletins and brochures advertising products or services of national or foreign institutions. Some of the mentioned organisations are: Phone Information Agency TELEADRESON, Promotional Agency JURIKOM, Polish Phone Directories. Small and medium-sized companies request information various consulting firms and centres for business information. Being usually in need of such information and data as the law, administrative issues, marketing, organisation and management, finances, they also retain consulting centres to provide accounting and marketing services (creation of business plans, new market research). Such centres are: Accounting and Tax Consulting Firm OMEGA , ALTER EGO Development Firm, KODEX Service Agency. The companies, already in partnerships with other enterprises (local or foreign), request evaluations of their (potential) partners activity and reliability. The economic watch centres perform verifications of financial, credit, market situations of potential business partners, and follow up with written reports. They also assist with the collection of debts. At the moment, there are some national and foreign centres conducting industrial and market investigations in Poland (INFOCREDIT, DUNN & BRADSTREET, Info-Net a part of the Polish Chamber of Commerce, various funds, development agencies of different kinds and business promotion centres).
• Foundations, agencies of development (of a region, enterprise, local initiatives, international co-operation, restructuring). Many respondents (17%) use the services of local and regional centres for the promotion of business some of these posts are part of the so-called National Network of Services (for small enterprises), managed by the Polish Agency for Enterprise Development The Agency not only deals with issues pertinent to the development of small enterprise in Poland, but also implements the state policies in this particular sector. It also acts in an advisory capacity to many administrative institutions, facilitates access to business information for small companies (through instructional sessions and courses) and co-ordinates the implementation of PHARE projects. National Services Network (consisting of 130 different organisations of various economical and business profiles) co-ordinates and supervises these activities.^[6] The organisations associated at NST provide a wide variety of services for smaller businesses, such as: legal and financial assistance, training, assistance in securing loans and financial resources from EU programs, search for new business partners, information about fairs and exhibitions they also organise trade missions promoting Polish firms abroad.
• The centres acting as part of research and development centres. About 20% of respondents have been getting information at centres located at, and being part of institutes, research and development centres, laboratories, design studios and libraries gathering material related to industry or agriculture. These libraries main informative activity consists of gathering material on the subject of technology, compiling databases (bibliographies and factual) regarding industrial economics, trade and commerce, management, finances, banking, commercial law. Some of the libraries collect databases of companies representing one particular line of business, also gather information about norms and patents. Respondents originating from the chemical industry sector point out that, often, they come across required information at the libraries of medical universities (i.e. Medical University of Warsaw, Industrial Chemistry Research Institute, the National Institute of Hygiene). Some leather and garment industry firms co-operate with the Institute of Industrial Design (consultations regarding new designs of specialised protective garments, choice of fabrics, preparation of design approval documentation for certification processes). These firms also collaborate with the Institute of Sport, the Institute of Leather Industry, Radom Technical University, Central Laboratory of Shoe Industry, and the Centre for Safety Techniques in Warsaw. Some food industry companies collaborate with the Agricultural University of Lublin and Research Institute of Pomology and Floriculture in Skierniewice.

Almost 25% of respondents quoted other centres and information posts. These are:

• State information centres supervised and managed by central government agencies, i.e. Agency for Foreign Co-operation, at Radom City Hall, the offices of trade consultants at Polish embassies (these promote Polish business abroad, provide reliable information about foreign partners and rules, laws and conditions of foreign market. investments).
• Publications regarding business. The information about laws and regulations regarding business activity is also provided through various publications. These publications are as follows: Knowledge and its Applications, INFOR, legal publications LEX and LEX POLONIA.
• Local press publishes notices about business co-operation proposals, provides current information about initiatives in business enterprise, fairs, exhibitions, etc.

The enterprises level of expertise regarding centres of business information. A short evaluation of access.

Presumably, the majority of companies operating throughout Mazowsze voivodship are well-acquainted with business information centres, however, this assumption seems to be inaccurate. About 86% of respondents know where to obtain information regarding addresses of local companies, while only 42% know where they can get offers and addresses of foreign firms. Significantly smaller number of enterprises (28%) are familiar with centres dealing with economic watch. Many smaller companies are not familiar with procedures (or places) regarding acquiring low-interest credit or alternative sources of financing. Only 40% of respondents know where to direct their inquiries regarding new technologies pertinent to their respective lines of business. Although these enterprises are familiar with Polish legal and business regulations, the European Union's legislation is known to only 23% of respondents, which seems astonishing, especially considering the fact that 40% of respondents export their products to European markets.

In general, about 40% of respondents expressed their positive opinion about access to business information 15% considered it very good, 26% expressed hope that it should only improve, while 27% have not noticed any significant changes in this field. Only 3% are of the opinion that the business access information have deteriorated.

The forms of information services used by analysed enterprises.

The company owners and managers use a whole range of information services offering access to the following:

• potential suppliers of raw materials or clients;
• business partners;
• new technologies;
• development sponsors;
• information about market trends;
• commercial law regulations;
• a variety of information about the market pertinent to business operation.

Most enterprises, (65%), point to company catalogues and other printed materials as main source of information about national and foreign firms. Another reliable sources of information are fairs, commercial exhibitions and auctions about 45% of respondents quote participation in these events and functions.

42% of respondents use the option of placing information about own business operation on CD-ROM databases or on the Internet, with the help of business information centres. It is a fact that almost 40% of smaller enterprises use these databases in order to find partners. 69% firms use information services available on the Internet, of which 25% on a permanent basis, and 44% sporadically.

Another important form of information services are instructional (bookkeeping, accounting, Internet use, marketing) courses and seminars close to 40% of respondents expressed interest in participation.

Here are some more examples of information services:

• legal-administrative-commercial counselling (24% users);
• acquisition of databases containing commercial and administrative regulations;
• assistance in drawing contracts (11%);
• technical expertise (10%);
• drawing of commercial reports (8%).

Many respondents express their doubts as to the cost of dispensing business information, however, very few of them are aware that it would be possible for them to obtain financing via Polish Agency for the Enterprise Development. This type of financial assistance can be applied to instruction, management counselling, the use of information technologies, instruction necessary for the smaller companies to enter capital market scene. Some companies admit that they have not been able to afford the purchase of licensed information referring to reliability of potential partners, new production technologies, preparation of business plans. The use of services provided by business information centres is determined by the (recently unstable) economical and financial situation of companies.

The evaluation of the significance of business information in enterprises function and development.

The respondents cite a number of determining factors responsible for the slow-down of the process of development and general function of Polish enterprises. These are:

• lack of financial solvency and inability of acquiring low-interest bank credits and loans;
• major cash flow interruptions caused by unsettled payments;
• rapid increase of operational costs caused by higher taxes, increased employee labour and insurance rates;
• legal barriers stemming from frequent and confusing;
• legal and administrative changes;
• unfair competition on Polish markets, often created by cheap imports from Far East;
• increased number of subsidised supermarkets;
• the breakdown of Polish export to the East;
• excessive bureaucracy at central and regional offices.

The above-mentioned problems according to business owners are highly detrimental to the function and development of Polish enterprise. Bankruptcies are plentiful, especially among smaller-sized companies, and that is why many respondents do not think that availability of business information helps the situation. However, the majority, (60%), of respondents acknowledge the importance of business information and state that it positively influences the following aspects of their activity:

• production enhancement (increase) through the introduction of new technologies and designs;
• increase of sales market area;
• the search for new financial tools in order to assist smaller companies;
• aid programs, credit guarantees;
• fixing of tax and fee caps (information regarding legal regulations).

When compared with the research results of 1994-1995 (Warsaw voivodship), one notes the increase in significance of business information for the purposes of export or obtaining financial info.^[7]

Despite the fact that there is a number of business information posts located in the region of Warsaw voivodship, (not to mention easy availability of access to the Internet), the respondents point out to the lack of adequate information regarding the following issues:

• trade contacts in various lines of business and, especially, lack of firms performing the role of intermediary in export activities and granting export guarantees;
• the reliability of business partners;
• limited possibilities of purchasing raw materials, spare parts, specialised equipment;
• shortage of financial institutions offering convenient credits, tax relief and aid programs;
• lack of comprehensive information regarding commerce-related legal regulations applied throughout the European Union;
• lack of information on development trends in industrial design (as a tool helpful in enhancing competitiveness);
• difficulties in getting information facilitating complex analysis of particular markets, defining client profiles and valuation of their preferences.

Summary

Smaller enterprises in Poland have slowly been warming up to the idea and value of business information and its application in complex problem-solving. Not all of them, however, are ready to name the sources they have been using, so as not to inadvertently help outside economic watch take advantage of Polish inside market. This refers to firms with foreign investments and export companies.

The methods and quality of dispensing information, world-wide and in Poland, have significantly improved in the recent years. Initially, the business information and legal issues connected to the trade, commercial, economic sector was distributed through publications: catalogues, computer print-outs or brochures. At the moment, accessing the Internet is the most common way. However, smaller, not so successful firms use this option rather sporadically, due to financial constraints. According to the research conducted by DEMOSKOP in 2000, only 20% of small and 56% medium firms have access to the Internet.^[8]

Sadly, the level and quality of services do not always follow new technologies and the information provided is often inaccurate, outdated and incomplete. It seems that only 15% of the respondents (smaller companies) are satisfied with access to business information, and 26% is of the opinion that these services have recently improved. In order to avoid confusion and lack-of-information-about-information type of situation one needs to follow the right initiatives with actual improvements.

The expertise about firms dealing with economic watch and business information is still quite limited. For example the respondents of the garment and leather sector are not familiar with offers and services of the Institute of Industrial Design. At the same time, the shaky state of many smaller enterprises causes the lack of interest towards gathering information about company development, the implementation of technological progress and increasing exports.

Footnotes

[1] Business information option. Introduction to Business Information. Course Information Dills. Loughborought University of Technology 1993.

[2] K. Kalseth: Introduction. [In:] Information Management for Business. Hague 1993, FID Occasional Papers 6 (FID 706), s. III-V.

[3] A. Grzecznowska, E. Mostowicz: Małe i średnie polskie przedsiębiorstwa przemysłowe jako użytkownicy informacji w warunkach zmieniającego się rynku usług informacyjnych. Warsaw 2001.

[4] Raport o stanie sektora małych i średnich przedsiębiorstw w Polsce w latach 2000-2001. Warsaw 2002.

[5] A. Grzecznowska, E. Mostowicz: Placówki informacji biznesowej w Polsce. Warsaw 1997.

[6] Ogólnopolski Informator Krajowego Systemu Usług dla Małych i średnich Przedsiębiorstw. Warszawa 2002.

[7] A. Grzecznowska, E. Mostowicz: Małe i średnie przedsiębiorstwa przemysłowe jako użytkownicy informacji. Praktyka i Teoria Informacji Naukowej i Technicznej 1996 no 1 (13), p.16-22.

[8] Wykorzystanie Internetu w małych firmach. Warsaw 2001.

Translated by Dorota Jaglarz