Armenia Case Study Presented at EURAM 2022 Conference

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YEREVAN, Armenia — American University of Armenia (AUA) MBA Program Chair Dr. Mane Beglaryan and AUA alumna (MBA ‘18) and lecturer Parandzem Sargsyan presented a research paper at the EURAM 2022 Leading Digital Transformation Conference at the Zhaw School of Management and Law in Winterthur, Switzerland. The presentation was titled “Does Digitalization Promote Business Model Innovation among SMEs?: A Case Study of Armenia.” 

The European Academy of Management is a learned society founded in 2001 to advance the academic field of management in Europe. With members from 60 countries in Europe and beyond, EURAM provides its members with opportunities for rich debates on a variety of research management themes and traditions.

In the present technological era, digitalization is viewed as an important tool for  dealing with crises such as  COVID-19, which further intensified the need for digitalization and accelerated the process of adoption of digital tools by SMEs according to the 2021 data of the Organisation for Economic Co-operation and Development (OECD). Complementary to improved performance, innovation enablement, enhanced productivity, and cost reductions, digitalization also helps companies maintain business continuity by enabling remote working practices and shift to e-commerce. The study claims that agile organizations were able to respond to threats brought by the crisis, and also  successfully transition to e-business. Considering the major role of SMEs in the economy and the challenges they faced during the pandemic and the Artsakh war, the researchers have explored the use of digitalization by Armenian SMEs in overcoming the crisis situation and initiating innovative solutions in that process. 

The study has shown that the economic sector plays a significant role in influencing firms’  expectations of the favorable impact of digitalization, whereas company size does not. Dr. Beglaryan and Sargsyan found that the provision of online services before the pandemic did not mitigate the impact of the crisis on Armenian SMEs. Furthermore, the perception that digitalization facilitated innovative processes, products, and services was not dependent on the extent of COVID-19 effects. These findings are explained by certain specificities of the Armenian economy, such as the limited use of the internet in economic activity, and low levels of digital literacy and awareness among individuals and enterprises. The findings also indicate that the more agile companies that converted to e-business were less affected by the crisis. 

“In the rise of this technological expansion, organizations are transforming in fundamental ways across a broad spectrum of industries – from manufacturing, education, and retail to finance and health care,” noted Dr. Beglaryan. The ongoing shift towards information technology, along with big data, algorithms, and smart analytics, is affecting all sectors and changing how organizations create value. Besides the blurring of industry boundaries, modular business architectures and new definitions of business performance are just some of the consequences of this transformation. As leaders of digital transformation, managers must find new sources of competitive advantage in these data-driven markets, which implies reassessing core competencies and business strategies, changing management policies to attract people possessing those competencies, and redefining how the company will engage with stakeholders. 

“Being able to use real data to analyze Armenian SMEs’ perceptions of digitalization and its role as an important factor in overcoming the hardships caused by COVID-19 and the Artsakh war, as well as having the opportunity to present our findings at an international conference, was a uniquely fulfilling experience,” remarked Sargsyan. “The practical implications of this research can feed some insights for policymakers who can take more proactive measures to not only handle the  consequences of COVID-conditioned turbulence, but also implement crisis management tools for similar exogenous shocks that put SMEs at risk of survival.”

Dr. Anush Drampyan, former Postdoctoral Researcher at the Università degli Studi di Padova and fellow co-author, concurs. “It is hard to overestimate the role of digitalization in fostering innovation and acting as a tool for companies to cope with the repercussions of COVID-19,” she remarks. “Our research has demonstrated that its effectiveness largely depends on the country’s context. The low popularity of online services among the Armenian population and reluctance of Armenian SMEs to shift to e-business diminished the positive effects that digitalization could bring. Our study has both theoretical and practical contributions emphasizing the role of government policies that are aimed at increasing digital literacy among the population and raising digital awareness of SMEs.” 

Founded in 1991, the American University of Armenia (AUA) is a private, independent university located in Yerevan, Armenia, affiliated with the University of California, and accredited by the WASC Senior College and University Commission in the United States. AUA provides local and international students with Western-style education through top-quality undergraduate, graduate, and certificate programs, promotes research and innovation, encourages civic engagement and community service, and fosters democratic values.