The adoption of eCommerce communications and applications ...

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Electronic Commerce Research and Applications 6 (2007) 462–473 www.elsevier.com/locate/ecra

The adoption of eCommerce communications and applications technologies in small businesses in New Zealand Nabeel Al-Qirim

*

College of Information Technology (CIT), United Arab Emirates University, P.O. Box 17555 Al Ain City, United Arab Emirates Received 14 March 2006; received in revised form 18 February 2007; accepted 20 February 2007 Available online 24 February 2007

Abstract This research investigates the impact of 10 factors, extended from the technological innovation literature, on the adoption of different eCommerce communications and applications technologies (EC) in small businesses (SMEs) in New Zealand (NZ). The research results showed that the CEO’s innovativeness was the only determinant of external-email adoption. CEO’s involvement was found to be the only determinant of Intranet adoption. Relative advantage and competition were found to influence Extranet/VPN adoption significantly and positively. However, support from technology vendors appeared to violate its hypothesised effect on Extranet/VPN adoption. Regression analysis found that pressure from suppliers was the only determinant of Internet-EDI adoption. The adoption of Web sites was influenced by the information intensity of products and the CEO’s innovativeness. The significant factors suggested the uniqueness of the adoption phenomenon in SMEs in NZ. However, the factors that appeared to be significant and the ones that appeared to be insignificant factors and the implications arising from these factors led to a conclusion which suggested the weakness of the EC adoption phenomenon in SMEs in NZ. The research discusses theoretical implications emerging from the research factors and portrays a path for future research. Ó 2007 Elsevier B.V. All rights reserved. Keywords: eCommerce; SMEs; Innovation adoption theories; New Zealand

1. Introduction The proliferation of inter- and intra-eCommerce (EC) technologies in the business environment of many organisations has introduced different efficiencies in operations, advantages and new business models. It is believed that EC could introduce different opportunities to Small to Medium-Sized Enterprises (SMEs) [36,45,48] and could assist this sector in addressing different technological and organisational inadequacies [6]. Small business EC is defined as, ‘‘the use of Internet technology and applications to support business activities of a small firm’’ [47]. At the outset, existing empirical research focusing on success factors of EC is anecdotal, exploratory in nature, and did not provide sufficient insights into the combina*

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tions of these factors [32]. On the one hand, some researchers found that the European firms were at the early stages of adopting EC and their web sites lack interactivity and are limited to text-based content [46]. On the other, despite the reported digital divide (EC) between European countries and the US [46] recent research highlighted that in reality few SMEs adopted EC in the US [21]. Such findings raise the importance of taking a closer look at the EC adoption phenomenon in SMEs and with great details. This is essential given the fact that only small number of studies have focused on the adoption and use of EC in SMEs [21]. For example, the few available EC studies in SMEs indicated that SMEs did not take a proactive approach in adopting IS or EC technologies and hence, opted to dwindle behind large enterprises in adopting and in using EC more strategically in their business [3,17,30,31,33,44]. Findings from New Zealand (NZ) context revealed that SMEs

N. Al-Qirim / Electronic Commerce Research and Applications 6 (2007) 462–473

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Table 1 Determinants of EC adoption and use in SMEs # 1 2 3 1 2 3 4 1 2 3 4

Factors Technological Relative advantage Compatibility Complexity Organizational Top management support Organizational readiness (size) (cost/financial and technical resources) Information intensity and product characteristics Managerial time Environmental Industry pressure (competition) Government pressure Consumer readiness Support from technology vendors

Found significant

Found insignificant

1, 2, 3, 4, 5, 7, 8, 9, 12, 14, 15, 16, 18 2, 4, 15, 16, 17, 18 3

5

4 1, 4, 5, 7, 8, 9, 10, 12, 17 12, 14, 15

1, 5, 6, 7, 8, 9, 10, 12, 16 1, 5, 6 10, 12, 16 12, 19

4 4, 18 4 4, 13, 18

(1): Kuan and Chau [27], (2) Beatty et al. [5], (3) Riemenschneider et al. [57], (4) Mirchandani and Motwani [40], (5) Grandon and Pearson [21], (6) Chang and Cheung [10], (7) Mehrtens et al. [36], (8) Iacovou et al. [23], (9) Chwelos et al. [13], (10) Zhu et al. [69], (11) Santarelli and D’Altri [59], (12) Doolin et al. [19], (13) Kula and Tatoglu, [28], (14) Poon and Swatman [50], (15) Poon and Swatman [51], (16) Poon and Swatman [52], Poon and Swatman [53], (17) Macgregor and Vrazlaic [35], (18) Teo et al. [62], (19) Abell and Lim [1].

did not differ from these findings in adopting and using EC. Further review of the literature revealed that small businesses establish Web sites primarily to advertise and promote their business, rather than to conduct EC as such [21]. Santarelli and D’Altri [60] observed that: (i) SMEs perceived EC as an important communication tool only. (ii) SMEs would not make further adoption decisions for more EC technologies unless they witness their effectiveness in the business environment. (iii) most of the SME’s EC strategies were mostly of a defensive nature. In looking for reasons for such slowness in adopting technological innovations in SMEs, researchers reported the weakness of the sector at different organisational and managerial (organic and central organisational structure and decision-making), technological, individual (central role of the CEO) and environmental (new technology, technology vendors, consultants, competition, supplier/buyer, rivals, newcomers, substitute products) levels [6,16,25,47,64]. Soh et al. [61] pointed to the lack of use of adequate hardware and software systems in SMEs, with the result that the existing systems are deficient, troubled and risky. There is not enough managerial expertise to plan, organise and gain leverage from directing the use of IS resources [6]. Recent EC research provided more insights into the factors that determine EC adoption and use in SMEs (Table 1). Thus, it is important to identify the reasons behind such slowness and laggardness in adopting technological innovations such as EC in SMEs in NZ. This is the focus of this research. Therefore, this research attempted to provide answers to the following research questions: what are the factors that could influence EC technologies adoption in SMEs and how those factors influence EC adoption in

SMEs. Thus, this research attempted to achieve the following objectives: (i) to identify critical success factors for innovation adoption and to test their significance on EC adoption in SMEs. (ii) to differentiate between adopters and non-adopters of EC in SMEs in NZ and hence, to highlight key aspects pertaining to the adoption decision of EC in SMEs in NZ. Most importantly, the research attempted to depict different EC technologies (dependent variables: Internal email1, external email2, Intranet, Extranet/VPN, InternetEDI, and Web sites) and endeavoured to identify the most important ones to the SME’s business. This objective was important from the NZ context in order to identify salient adoption features, which could be used later by any future research in order to focus on these features and more pressing issues (factors or EC technologies). Poon and Swatman [50] emphasised the importance of the selected EC technologies above as key business enablers for the business environment of SMEs. They portrayed a path where these EC technologies could be used to perform different tasks in order to establish trust and business relationships with existing and potential trading partners. In the following, this research develops the theoretical framework for EC adoption in SMEs followed by the research methodology and the analysis sections. The research then validates and discusses the research results with respect to the technological innovation literature.

1

Using the email technology as an internal communication tool. Using the email technology as an external communication tool with partners, suppliers, and other clients. 2

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2. Theoretical framework In review of the technological innovation literature, it was observed that Rogers’ [58,59]. Innovation Diffusion Theory (IDT) is recognized by different researchers to identify ‘perceived’ critical characteristics of innovations [23,41,42,55,64]. Rogers’ [58] characteristics of technological innovations (relative advantage, compatibility, complexity, observability, trialability) have been hypothesised by different researchers to influence the attitude of potential adopters in a number of studies on IS adoption or rejection [42,67]. However, the same researchers who endorsed Rogers’ [58] model argued that Rogers’ [58] model should be blended with other contexts/factors in order to provide a more holistic adoption model. In line with this argument and in review of the available technological innovation theories [29,41,42,58,67] in small businesses [55,64–66] and of EC research in SMEs (Table 1), the researcher developed a model of EC adoption that comprised the following potential determinants of EC adoption in SMEs (Fig. 1) and attempted to test its significance in SMEs in NZ: (i) Technological (innovation) factors: relative advantage, cost, and compatibility. (ii) Organisational factors: size and information intensity of product/services. (iii) Individual factors: CEO’s innovativeness and CEO’s involvement.

(iv) Environmental factors: competition, external support from technology vendors and pressure from supplier/ buyer. For example, Chang and Cheung [10] studied the impact of near and long-term consequences, complexity, affect, social factors, and facilitation conditions on Internet and WWW usage. They found complexity and long-term consequences did not significantly influence the intention to adopt the Internet/WWW. In their research, Santarelli and D’Altri [60] found that fewer than 6% of the adopting SMEs highlighted that they yielded more than 50% of their total sales from this electronic marketing channel. They found that EC does not represent a substitute for established marketing channels and their sampled SMEs highlighted the need for more visibility among potential customers as the main factor influencing the decision to create a web site. Beatty et al. [5] studied the factors influencing corporate Web site adoption and found that the factors involved in the adoption process differed depending on the time of adoption. In their empirical study of 286 medium-to-large US firms, they found that early adopters placed significantly more emphasis than late adopters did on perceived benefits for having a Web site. The early adopters viewed using the Web as being compatible with their current organizational processes and their existing technological infrastructures more than later adopters. They found external pressure of peers, industry, or government may play a role

EC Adoption (1) TECHNOLOGICAL

(2) ORGANISATIONAL H2a

Internet + Internal email

H1a a- Relative advantage

a- Size b- Information intensity of product

H2b

Internet + External email

H1b b- Cost H1c

Intranet

c- Compatibility

(3) ENVIRONMENTAL H3a a- Competition

Extranet/VPN H4a

(4) THE ENTREPRENEURIAL

H3b Internet-EDI

b- Buyer/Supplierpressure

H4b

H3c c- Support from Technology vendors

a- CEO’s innovativeness

Web site

Fig. 1. EC technologies adoption model in small businesses.

b- CEO’s involvement


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Table 2 Research hypotheses Hypothesis

Endorsing research and Measure development

1. Technological factors. Hypothesis 1: The greater the perceived relative advantage (H1a) of EC, the more likely EC technologies will be adopted by NZ SMEs. However, cost (H1b) and compatibility (H1c) would influence the adoption decision of EC negatively

Abell and Black [2]; Abell and Lim [1]; Burgess, [7]; Deloitte [18]; Mehrtens et al. [36]; MOED [39]; Moore and Benbasat [41]; Poon and Swatman [50]; Poon and Swatman [52]; Poon and Swatman [53]; Premkumar and Roberts [55]; PWHC [56]; Table 1

2. Organisational factors. Hypothesis 2: The greater the (H2a) organisation size (number of employees) of the SMEs and the (H2b) informationintensity of their products and services, the more likely EC technologies will be adopted by SMEs in NZ

Alpar and Reeves [4]; Choi et al. [12]; Mehrtens et al. [36]; Poon [48]; Poon and Swatman [50]; Premkumar and Roberts [55]; Table 1; Teo et al. [62]

3. Environmental factors. Hypothesis 3: The greater the (H3a) competition amongst the SMEs in NZ, the (H3b) pressure from suppliers/buyers to use EC, and the (H3c) availability of external support from technology vendors for EC, the more likely EC-technologies will be adopted by NZ SMEs

Mcdonagh and Prothero [33]; MOED [39]; Poon [48]; Poon and Swatman [51]; Poon and Swatman [52]; Premkumar and Roberts [55]; Table 1; Teo et al. [62]

4. Entrepreneurial (individual) factors. Hypothesis 4: The greater the (H4a) CEO’s innovativeness and his/her involvement in EC (H4b), the more likely EC will be adopted by NZ SMEs

Cragg and King [16]; Kirton [26]; Poon and Swatman [51]; Poon and Swatman [50]; Poon and Swatman [52]; Poon and Swatman [53]; Premkumar and Roberts [55]; Table 1; Thong [63]; Thong and Yap [64,65]

in the adoption of information technology for later adopters. Mirchandani and Motwani [40] investigated factors that differentiate adopters from non-adopters of EC in small businesses. The relevant factors included enthusiasm of top management, compatibility of EC with the work of the company, relative advantage perceived from EC, and knowledge of the company’s employees about computers. The degree of dependence of the company on information, managerial time required to plan and implement the EC application, the nature of the company’s competition, and the financial cost of implementing and operating the EC application did not influence adoption. Grandon and Pearson [21] found that obtaining organizational support value from EC does not discriminate between adopters and non-adopters. Both managerial productivity and decision-aid of EC were found to differentiate between adopters from non-adopters. Organizational readiness (availability of financial and technical resources) appeared as the best discriminator between adopters and non-adopters of EC. Compatibility of the firm with EC is a strong discriminating factor between adopters and non-adopters of EC in SMEs where unlike non-adopters; adopters viewed EC as compatible with them. External pressure to adopt EC (direct or indirect forces exerted by competitors, social referents, other firms, the government, or industry) was a factor that discriminated between adopters and non-adopters of EC. Perceived ease of use turned out to be a non-significant determinant of EC adoption among adopters and nonadopters. Perceived usefulness turned out to be a significant factor that differentiates between adopters and non-adopters of EC. Accordingly, Table 2 shows the development of the different hypotheses shown in Fig. 1 and of the items in the survey questionnaires.

3. Research methodology and findings NZ SMEs are defined as enterprises employing 19 or fewer employees (FTEs). For comparison purposes with SMEs in other countries in the world, including SMEs employing up to 100 FTEs was acceptable in this research [38]. From a random sample of 324 SMEs covering the North Shore City (North of Auckland), the researcher received 129 usable questionnaires (response rate: 40.5%) (Fig. 2). Non-response bias was tested by comparing early participants with late participants in terms of the basic data of participants (business size (FTEs), age, type, and turnover) using T-test statistics at the five percent significance level (p < 0.05). Non-response bias was not a problem in this research as the two-tail test was found to be insignificant (p > 0.05). Testing for reliability could be achieved by calculating the Cronbach alpha. All the constructs were found to have adequate alpha value (>0.6) [55] (Table 3). Validity will be assessed through content (during questionnaire design/testing), convergent and discriminant validity. Convergent and discriminant validity will be evaluated using factor analysis. Nine factors were identified as explaining the phenomena (the size factor was not included in factor analysis) under consideration by the current research (having eigenvalues greater than 1) and hence, convergent and discriminant validity were confirmed and validated (Table 4). The size factor was not examined in the reliability/validity tests as it was a categorical variable (not multidimensional). The Pearson correlation matrix for the different independent variables was examined for the Multicollinearity problem. The highest squared correlation among the different independent variables was well below 0.8 [22]. This research examined EC adoption by looking for differences between adopters and non-adopters of each of the

466


a

b

"Others" 5.00 / 3.9%

Missing

IT/Communications

3.00 / 2.3%

22.00 / 17.1%

Manufacturing

Internet services

25.00 / 19.4%

Intranet Browse

Finance/Insurance

47.00 / 6.3%

Personal services

9.00 / 7.0%

3.00 / 2.3%

Primary 2.00 / 1.6%

Business services 17.00 / 13.2%

Wholesale

Retail

29.00 / 22.5%

15.00 / 2.0%

38.00 / 5.1% FTP

Construction

Extranet

Telnet

3.00 / 2.3%

4.00 / 3.1%

28.00 / 3.8%

112.00 / 15.1%

EDI 22.00 / 3.0% Web Site

Bulletin Boards

84.00 / 11.3%

18.00 / 2.4%

VideoC

email lists

9.00 / 1.2%

39.00 / 5.2%

Internet

External email

126.00 / 16.9%

120.00 / 16.1%

Internal email

7.00 / 5.4%

86.00 / 11.6%

Fig. 2. (a) Statistical details about the industries in the sample; (b) the adopted EC.

Table 3 Reliability tests using Cronbach’s alpha Item

Variable

No. of items

Mean

Standard deviation

Cronbach’s alpha

1 2 3 4 5 6 7 8 9

Compatibility CEO’s involvement Information intensity CEO’s innovativeness Relative advantage Competition Cost Pressure from suppliers and buyers Support from technology vendors

7 3 3 4 11 2 3 2 2

2.1700 3.7603 3.3123 3.7703 3.5383 3.2992 3.2152 3.1147 3.2874

0.7824 0.9586 1.0086 0.7525 0.7304 1.1096 0.8561 0.9031 0.7573

0.8845 0.9115 0.8796 0.8761 0.8900 0.8386 0.8268 0.7765 0.6721

different EC technologies in the research model. As a result of the different logistic-regression tests of the dichotomous measures (adopt or not), the factors influencing EC adoption are shown in Table 5. Table 5 shows the factors that appeared as significant only in the tests. The estimated coefficients along with their effect (negative, positive) on the adoption of the different EC technologies are also highlighted in Table 5. This research examined the EC adoption phenomenon for differences alongside the different research factors (Fig. 1, Table 5). The factors that did not appear as significant in Table 5 meant that such factors did not play any important role in the adoption of EC. The literature justified such insignificance on the basis that the views of both adopters and non-adopters (in the sample) of the specific EC technology did not vary significantly [55,64–66]. Table 5 showed that no factors appeared to be significant in the case of internal email adoption. CEO’s innovativeness appeared to be the only significant factor in the adoption of external email. In the case of Intranet adoption, CEO’s involvement appeared to be the only factor to have a significant relationship with adoption. In the case of Extranet/VPN adoption, the only significant factors

affecting adoption appeared to be relative advantage, competition and support from technology vendors. The support from technology vendors appeared to influence adoption negatively, which violated its hypothesised effect on EC adoption. In the case of Internet-EDI adoption, size, support from technology vendors and pressure from suppliers or buyers appeared in the final regression analysis, but were not significant as such. For Web site adoption, information intensity and CEO’s innovativeness appeared to be the only significant factors. The null hypothesis (H0) could be rejected for these factors only. These results are discussed next with respect to the research model, hypotheses and literature. 4. Discussion, implications and future research 4.1. Determinants of EC technologies adoption 4.1.1. External email vs. internal email The introduction of external email in SMEs was found to depend on the CEO’s innovativeness only. This finding revealed the importance of the innovative CEO in adopting external email for, e.g. business communications with


467

Table 4 Rotated factor matrix along with item loadingsa Sl./No.

Label

1

1

Relative advantage RA1 RA11 RA3 RA10 RA 6 RA8 RA9 RA5 RA7 RA4 RA2

0.699 0.690 0.677 0.639 0.631 0.620 0.617 0.586 0.583 0.556 0.500

2

Compatibility Cbt3 Cbt5 Cbt6 Cbt7 Cbt4 Cbt2 Cbt1

3

2

CEO’s involvement Miv12 Miv13 Miv11

5

Information intensity IT2 IT3 IT1

6

Cost factor Cost1 Cost 2 Cost 3

7

Pressure from suppliers or buyers Sup1 Buy2

8

Support from technology vendors Exs11 Exs2

9

4

5

6

7

8

0.808 0.793 0.711 0.673 0.800 0.781 0.733 0.819 0.654 0.614 0.849 0.755 0.749 0.888 0.638 0.718 0.645

Competition Riv2 Riv1 a

9

0.745 0.738 0.713 0.705 0.670 0.652 0.537

CEO’s innovativeness Miss3 Miss2 Miss4 Miss1

4

3

0.624 0.535

Rotation using Varimax method: A widely used orthogonal rotational approach that seems to give a clearer separation of factors [22].

trading partners and other businesses. Due to the central role of the CEOs in SMEs and to their innovativeness, it seemed that they were responsible for the introduction of this technology into their organisations. On the other hand, non-adopters of external email perceived their CEOs to be less innovative when it came to external email adoption. It is worth noting that some of the respondents in the nonadopters category commented the following in their responses in the survey questionnaire, ‘‘the CEO is a bit

old fashioned and fearful of new IT issues – we are still using DOS-based applications’’. Another wholesale SME commented ‘‘we like to try the new technology but the CEO is resistant to ‘‘hooking’’ to the Internet’’. Internal email was not significant in this research and recent EC research in SMEs suggested the same finding [69]. The insignificance of the remaining factors could be justified on the basis that both adopters and non-adopters of email perceived having equal views about the impact

468


Table 5 Predictors of EC technologies adoption in NZ SMEs Variables

1. External email only a. CEO’s innovativeness 2. Intranet a. CEO’s involvement 3. Extranet/VPN a. Relative advantage b. Competition c. Support from technology vendors 4. Internet-EDI a. Size b. Support from technology vendors c. Pressure from suppliers or buyers 5. Web sites a. Information intensity b. CEO’s innovativeness * **

B

SE

0.261

0.114

Wald

5.265

df

Sig.

Exp(b)

95% C.I. for EXP(B) Lower

Upper

Model accuracy (%)

NGKR (%)

12

Chisquare

Df

Sig

5.671

1

0.01

1

0.022*

1.298

1.039

3.10

93.3

*

78.2

7.4

5.841

1

0.01

89.1

27.7

18.326

3

0.00

82.4

11.9

8.735

3

0.03

70.6

16.4

15.040

2

0.00

0.214

0.093

5.264

1

0.022

1.239

1.032

1.48

0.109 0.472 0.619

0.056 0.218 0.212

3.808 4.680 8.477

1 1 1

0.051* 0.031* 0.004**

1.115 1.604 0.539

1.000 1.045 0.355

1.24 2.46 0.81

0.397 0.284

0.234 0.164

2.875 3.000

1 1

0.090 0.083

1.487 0.753

0.940 0.546

2.35 1.03

0.273

0.148

3.424

1

0.064

1.314

0.984

1.75

0.211 0.162

0.088 0.065

5.791 6.251

1 1

0.016* 0.012**

1.235 1.176

1.040 1.036

1.46 1.33

p < 0.05. p < 0.01.

these factors on their adoption decisions of email [55,64]. For example, Teo et al. [63] found no significant differences between adopters and non-adopters of the Internet with respect to the relative advantage factor, which suggested that adopters were not witnessing significant advantages from the Internet. 4.1.2. Intranet In a review of prior Intranet research, Tang [62] observed that without a thorough analysis of the impact caused by adopting the Intranet, some organisations failed in introducing effective Intranet solutions or improvement to the organisation. They concluded that the changes introduced by Intranet in organisations were complex. In this research, CEO’s involvement appeared to be the only significant factor in Intranet adoption. Hence, CEO’s involvement was perceived as a necessary determinant to guarantee the adoption of Intranet. Eder and Igbaria, [20] investigated the impact of the following factors on Intranet diffusion (spread of use of a technological innovation) and infusion (succession of incremental technological configurations): earliness of adoption, top management support, organisational structure, organisational size, IT infrastructure and IS structure. They found that earliness of adoption, top management support and organisational size were positively associated with Intranet diffusion. Top management support entails providing essential involvement and motivational aspect for the successful introduction of the innovation. As for the earliness of adoption and organisational size, they are discussed next.

Intranet was adopted by 22% of the SMEs in the sample. The ratio of rejection to adoption concerning Intranet decreased with the increase in the SME’s size. For example, the highest rejection rate for Intranet was in the microsized (up to five FTEs) (50.5%), medium-sized (6–19 FTEs) (40.4%), and 20–50 FTEs (9.1%) enterprises respectively. Further, the SMEs in the last size category (51 to up to 100 FTEs) were all adopters. These findings suggested that the size factor might have played a role in influencing Intranet adoption in this research but was not that conclusive. The largest adoption rate for Intranet was in the IT and communications sector (35.7%), with a marked difference in comparison with the other adopting industries in the sample. It seemed that Intranets required the presence of an established IT infrastructure (hardware, experts, etc.) or excess resources (the size factor above) to adopt Intranets. This readiness and earliness of adoption seemed important to the adoption decision but was not significant as such in this research and future studies could further confirm or refute these assertions. 4.1.3. Extranet/VPN The relative advantage, competition and support from technology vendors influenced Extranet/VPN adoption significantly. Adopters perceived that Extranet and VPN offered different advantages, e.g. extend their Intranets to outside partners, remote connectivity to their Web sites (drag and drill down) and secure connection to their internal systems and databases. Competition seemed a logical driver for Extranet and VPN adoption in SMEs, as fast and secure access to remote databases seemed to be of a


strategic necessity to the surveyed SMEs so they could compete in the market place. Payne and Lawrence, (1999) found that organisations are encouraged to enhance their competitive position by revamping their EC infrastructure and forming EC alliances through Extranets. They contended that Extranets in general and secured Extranets specifically (VPN) facilitated more cooperation and collaboration between trading partners and offer different advantages to share information and resources more efficiently and effectively and indeed, could lead to the envisaged virtual corporation. However, the availability of support from technology vendors seemed to influence Extranet and VPN adoption negatively (negative B-coefficient in Table 5). SMEs perceived that technology vendors in NZ did not assist in the adoption of Extranet, e.g. they lacked the competence to provide good technical advice for the adoption of these technologies and to promote their EC solutions actively. This finding has interesting practical and theoretical implications. The professional implications are discussed in (Section 4.3.3) below. At the theoretical level, due to the recent nature of EC this research hypothesised this factor to influence the adoption decision of EC positively. This is in part driven by the fact that part of the literature suggested that organisations are more willing to risk trying new technologies if they feel there is adequate vendor or third-party support for the technology [55]. Rogers [58] highlighted the important role played by technology vendors, consultants and change agents in persuading potential adopters about new innovations. Poon and Swatman [49] found that SMEs rely on external support for their eCommerce initiatives. Consultants and technology vendors can add significant value to business planning by SMEs [33]. On the other hand, the other part of the literature showed this factor either insignificant or impeding the adoption decision. For example, Premkumar and Roberts [55] hypothesized external support from technology vendors to positively influence IT adoption but found no conclusive evidence that external support from technology vendors and local communities influences adoption of IT. Interestingly, Walczuch et al. [69] found that most of the SMEs they studied adopted a number of approaches in developing their Web initiatives, including: developing their own (46.4%), development by professional agencies (32.1%) and development by ’amateurs’ (acquaintance or student on internship) (21.4%). Anecdotally, they reported that professional vendors were not more capable than non-professional vendors in providing more functionality to the developed Web initiatives. This perspective seemed worrying from the professional agency’s viewpoint in that it implied that it was questionable whether they were able to provide more applications and more professional (strategic) Web initiatives than the SMEs themselves or the hired amateurs can achieve. Finally, Chau and Turner [11] found that ISP experience and level of service are often inadequate, thus identifying them as hindering EC adoption and success in SMEs. In NZ such confusion

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may be further aggravated by SMEs’ lack of knowledge about eCommerce and its business models [18,56]. Thus, it seems that this research seemed to support the later part of the literature in pointing to the negative effect of technology vendors on EC adoption in NZ SMEs. In the sample there was an adoption rate of 11.8% for Extranet, 17.3% for EDI, and 64.6% for Web sites. It is worth noting here that the adoption and rejection patterns for Extranets and Internet-EDI across the different size categories followed the same patterns as those for Intranet adoption above. However, there were more adopters of Extranets in the micro-sized category (53.3%). The adoption of Extranets was concentrated in the IT and communications sector (40%) and in the Internet services and the wholesale sectors (each 20%). All the SMEs working in the Internet services sector were adopters of Extranet. Business services, retail, primary and construction sectors were all non-adopters. It seems that working in certain industry entails more readiness for Extranet/VPN adoption than other industries. More work is needed to examine industry specifics pertaining to Extranet/VPN adoption in SMEs. 4.1.4. Internet-EDI There were 22 Internet-EDI adopters in the sample. Although none of the factors appeared highly significant in influencing EDI adoption in the sample, the regression model showed the following factors in the regression equation: size, support from technology vendors and pressure from suppliers/buyers. If the size factor had appeared significant in EDI adoption, this would imply having large quantities of transactions with buyers/suppliers. The insignificance of size and support from technology vendors factors could be related to Mingot and Quon [37] research where they found no difference between smaller and larger companies in adopting EDI and that in-house staff rather than external consultants were used predominantly in the design and implementation of EDI systems. The largest number of EDI adopters was in the medium-sized enterprises category (50%) followed by the micro-enterprises category (36.4%). The ‘‘20–50’’ and ‘‘51–100’’ size categories adopted EDI minimally (one SME in the 20–50 size-category and two SMEs in the 51–100 size-category). A greater representation of Internet-EDI adopters in different size-categories in any future research could further endorse or refute the significance of the size factor in EDI adoption. Support from technology vendors appears to have influenced EDI adoption negatively, as shown by the negative coefficients in Table 5. Although it was not significant but according to its earlier results in the above EC technologies, it may be argued here that the adopting SMEs might not have been satisfied with technology vendor’s performance or their level of support in adopting EDI. As indicated earlier, greater survey representation of EDI adopters would be needed to further confirm this assertion. According to previous research [8,23,24,34,54,55] pressure from trading partners (suppliers and buyers) seemed

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to be the logical reason for adopting EDI. However, this factor did not appear highly significant in the regression analysis of this study. By running the regression analysis again with the effect of the suppliers on Internet-EDI adoption departed from the effect of the buyers, this researcher found that only the suppliers had a significant effect on EDI adoption (p = 0.023 < 0.05). This supported the earlier literature, which highlighted the significance of the supplier’s pressure only on EC adoption. Examining those industries that have adopted EDI revealed that the highest adopters were the wholesale industries (36.4%) followed by the IT and communications sector (27.3%) and by the business services and manufacturing industries (9.1% each). Each of these industries, in particular the wholesale and the manufacturing industries, would be inter-connected with a supplier (e.g. raw material, finished goods, etc.) on a continuous basis, using the Internet-EDI technology to enhance the efficiency of supply chain interactions. 4.1.5. Web sites The factors of information intensity and CEO’s innovativeness influence Web site adoption significantly and positively (Table 5). Teo et el. [63] found technology policy, top management support, compatibility and relative advantage influence Web site adoption positively. The CEO represents the top management in SMEs and hence, his/her characteristics play a major role in Web site adoption. However, they found the information intensity not supported in their research. These findings mark a difference between NZ and Singapore SMEs in that both adopters and non-adopters in the former SMEs had equal views about the effect of the compatibility factor on Web site adoption. However, there was a marked difference between those adopters and non-adopters concerning the information intensity and the suitability of their products to the Web site technology. The majority of the Web site adopters were concentrated in the manufacturing (22.2%), IT and communications (21%), wholesale (17.3%) and business services sectors (12.3%). Most of these enterprises belonged to the micro- and medium-sized enterprises categories. The Internet services SMEs surveyed were all adopters of Web sites. Surprisingly, the preceding four business sectors were high non-adopters as well. The concentration of both adopters and non-adopters amongst these industries suggested that adopting SMEs within the same sector might have viewed their product as more suited to the Internet (Web sites) than non-adopters. Features pertaining to SMEs’ products and services, in particular, seemed to encourage Web site adoption. 4.2. Intra- vs. inter-organisational determinants In adopting intra-organisational EC technologies (internal email and Intranet), Intranet seemed to be the only significant EC technology for SMEs. CEO’s involvement

appeared as the only determinants of Intranet adoption. In adopting inter-organisational EC technologies (external email, Extranet/VPN, Internet-EDI and Web sites), the research results seemed to produce more significant determinants such as CEO’s innovativeness (twice), relative advantage, competition, support from technology vendors, pressure from suppliers (Internet-EDI) and information intensity with more emphasis put on environmental factors specifically. Thus, SMEs in NZ would be motivated to adopt externally oriented EC technologies more than internal technologies in order to increase their business efficiencies, communications with outside parties and competitiveness in the marketplace. 4.3. Implications pertaining to significant and insignificant factors 4.3.1. EC-specifics CEO’s innovativeness and involvement, relative advantage, size, information intensity of products, competition, support from technology vendors and pressure from buyers and suppliers seemed to influence the adoption decision of certain EC technologies more than others (Table 5). The implications arising from this finding are twofold. Firstly, these significant factors across the different EC technologies suggested the uniqueness of the adoption phenomenon of EC in SMEs in NZ in that adopters signified the importance of specific factors to their adoption decision of different EC technologies (Table 5). Secondly, the significant impact of certain factors on certain EC technologies suggested that those factors were more important to these EC technologies. For example, the information intensity of products was more important to the adoption decision of web sites only. Although it could be argued here that these implications point to a limitation in this research, It should be emphasised here that this research had an exploratory objective in mind, in generating a broad picture about the adoption of different EC technologies in SMEs in NZ. Future research could benefit from the current research results and focus its attention on certain EC technologies in greater detail and further expand on the factors that may influence the adoption of this EC technology to further confirm/refute the current research results and implications. 4.3.2. Insignificant factors The implications arising from the insignificant factors in this research are twofold. Firstly, cost and compatibility did not play any significant role in EC adoption in this research. Recent technological innovation literature and EC research suggested the same alongside the cost factor [51,69] and the compatibility factor [55,64]. This insignificance suggested that both adopters and non-adopters of EC had equal views about the impact of these two factors on their adoption decision of EC technologies. Thus, these insignificant factors had a marginal effect on the adoption decision of EC in SMEs in NZ. In addition, these factors


marked a difference between the adoption context of NZ SMEs and other SMEs in the world that found these factors important to the adoption decision of innovations, with respect to the cost factor (USA [55]) and to the compatibility factor (Singapore [63,64]; Holland [69]). These differences suggested that both adopting and non-adopting SMEs in NZ viewed EC as compatible with their business environment, employees, IT infrastructure and as inexpensive technology to adopt. Secondly, the insignificance of certain factors in the adoption of certain EC technologies represented a challenge in this research. For example, it was expected that NZ SMEs would perceive achieving significant advantages from adopting the different EC technologies in this research. However, it appeared significant in Extranet/ VPN adoption only. In line with the research hypothesis concerning EC adoption, the equal perception about relative advantage among adopters and non-adopters of EC represent a good foundation for the large-scale adoption of EC amongst non-adopters. On the other hand, this equal perspective among adopters and non-adopters about EC advantages seemed to be a concern from the adopter’s side and hence, it was suspected that adopters were witnessing many advantages from adopting EC. In providing plausible interpretation for such a challenge, it is worth pointing out here that most of Poon’s and Swatman’s research (below) focused on whether SMEs were realising any real advantage from having EC. They found that most of the SMEs were not witnessing tangible advantages from EC and the advantages sought from having EC were perceptions only [47,48,50,52]. Except for the importance of the CEO’s innovativeness in this research, which appeared significant in external email and Web site adoption, the preceding observation was consistent across the remaining significant factors in Table 5. The justification for such an implication could lead to the above interpretations about the specifics pertaining to each of the different EC technologies. Due to the cross-sectional nature of this research (survey), direction of causality can only be inferred and hence, cross-sectional studies may not fully capture the complexity or periodicity of the adoption process. Justifying such insignificance across each of the EC technologies in the research model is beyond the scope of this research and indeed, any future research could focus on few EC technologies in greater detail in order to address the above implications. 4.3.3. The uniqueness of the EC phenomenon in SMEs in NZ As suggested above, there was some evidence to suggest the uniqueness of the adoption phenomenon of EC in NZ SMEs, alongside the research’s significant (in certain EC technologies, Intra- vs. Inter-EC) and insignificant factors (cost, compatibility and insignificant factors in certain EC technologies). Therefore, the significant factors in general and the insignificant factors specifically and the research implications suggested the weakness of the EC adoption phenomenon in SMEs in NZ. Earlier EC research in NZ

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further supports this conclusion [9,14,18,56,68]. However, this research highlighted this weakness by investigating the significance of different factors on the adoption decision of different EC technologies. Looking at the economical environment in NZ further supports this end result, which suggests the uniqueness of the NZ perspective. This uniqueness is attributed to the fact that 84% of the NZ sector is dominated by micro-enterprises employing up to five employees only [38] and to the country’s geographical isolation and time differences which separate NZ from the rest of the world. The population in NZ is relatively small (3.82 million) and dominated by low-income families [43]. Such economical constraints exert great pressure on the market scope of businesses in NZ (mostly SMEs 96%) and could indeed, hamper their EC initiatives. For example, the current sharp fluctuations in the exchange rate of the NZ dollar with respect to the US dollar (influenced the interest rates as well) have a devastating effect on the exporting industry, which witnessed the closure of many exporting businesses such as manufacturers. Finally, given the negative perceptions about the performance of technology vendors amongst the NZ SMEs in this research, this issue needs to be addressed by the proper authorities in NZ. According to the literature review above and due to the small size and nature of SME’s sector, it was expected that SMEs would maintain no IT experts/expertise in-house. Hence, they would opt to outsource most of their IT requirements to outside technology vendors (ASP, CSP). Indeed, this is why the literature expected the SMEs to be locked in a position where they will always be susceptible to technological changes and technology vendors [6]. 5. Concluding remarks This research introduced important determinants of innovation adoption and attempted to investigate their impact on EC adoption in SMEs in NZ. The research results represent an important extension to the technological innovation literature. Researchers could benefit from the research results and hence, they could further introduce more influences and investigate their impact on EC adoption or focus their attention on certain determinants in this research. Researchers could replicate this study from the context of their own countries. Their results could be compared with findings in this research and hence, draw more commonalities and differences with the NZ context. This approach could further assist in validating the research results and the developed instrument. The extensive testing of the research model could lead to more generalizations across the different countries. Electronic commerce possesses many facets and this research has introduced three categories of adoption to capture the different aspects involved in the criteria for EC adoption in SMEs in NZ. Professionals could focus and prioritise their strategies in marketing/selling their EC products and solutions to SMEs by focusing on certain EC technology or by capitalising on

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certain motivators and avoiding certain hindrances. This is important, as technology vendors were perceived negatively by NZ SMEs in this research. Policymakers could use the research results to develop more focused policies which could motivate the SME’s sector in adopting and in using EC more strategically. In discussing the limitations of this research, it was not possible to measure directly the perception of the SMEs at the time of EC adoption in the survey research. This is a limitation in survey research [64]. This has been improved by asking the SMEs for their perceptions prior to EC adoption. However, it is expected that the experiences of the SMEs with EC adoption will still influence their responses. Further, due to the cross-sectional nature of the research, direction of causality can only be inferred, which makes it difficult to examine the adoption process. This research was limited to a representative sample of the SMEs operating in the North Shore City part of the Auckland region. Such a regional approach has been suggested by prior research in small business in NZ [15]. Further research could allocate more financial resources to target a larger sample representing the whole of the SME community in NZ. This could be utilised to endorse or discuss this research findings in relation to all SMEs in NZ.

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