Organizational Factors Affecting E-commerce Adoption in Small and Medium-sized Enterprises

Rpir Senarathna,Hva Wickramasuriya

doi:10.4038/tar.v22i2.2829

Abstract

The use of e-commerce in SMEs has become an important topic in information systems research. Despite the enormous attention given to encourage SMEs to adopt e-commerce by governments, research undertaken to identify strategies of e-commerce adoption for SMEs in developing countries, especially in Sri Lanka is minimal. The primary objective of this study was to examine the relationship between organizational factors and ecommerce adoption to understand the factors that contribute to e-commerce adoption. Quantitative approaches were considered in this research. The study draws on the data obtained from a sample of 200 SMEs in Colombo District using a postal survey. The sample was chosen using a stratified random sampling technique based on business type of the SMEs. Based on correlation, regression and cluster analysis, the findings of this research were revealing and facilitated the understanding of certain organizational factors that influence the level of e-commerce adoption. The main factor identified was organizational culture. The results of this study show empirical evidence that there is a positive correlation between the adhocracy cultural characteristics among the SMEs and the level of e-commerce adoption. Also, hierarchy cultural characteristic showed a negative correlation with the level of e-commerce adoption in SMEs. An argument can be made out that a culture promoting innovation and risk acceptance would provide the needed support for higher levels of adoption of new technologies. Top managers’ opinion towards innovation also influences the way of doing business by the firm. Key words: e-commerce; e-commerce adoption; internet; organizational culture; Small and Medium-sized Enterprises (SMEs) DOI: 10.4038/tar.v22i2.2829 Tropical Agricultural Research Vol. 22 (2): 204-210 (2011)

Highlights

Electronic commerce is one of the most discussed topics in business today
The findings suggest that the four clusters identified represent a set of sequential stages through which Small and Medium-sized Enterprises (SMEs) pass when adopting e-commerce
The importance of organizational culture has been implied in many studies of ecommerce adoption, no studies identifying the characteristics of organizational culture that would best support e-commerce adoption were found in the literature review for this study

Summary

Introduction

Electronic commerce is one of the most discussed topics in business today. It is already leading to the reshaping of customer and supplier relationships, the streamlining of business processes and, in some cases, even the restructuring of whole industries. Small and Medium-sized Enterprises (SMEs), vital to the economy in any country, are very often recognized as an economy growth engine. They often occupy strategic positions in the economy. The SME sector plays a significant role in its contribution to the national economy in terms of the wealth created and the number of people employed in Sri Lanka. Even though there is an interesting and growing number of studies addressing e-commerce adoption within the specific context of SMEs (for example Chen et al, 2008; Kapurubandara et al, 2008 and Scupola, 2009), not much research has been conducted in developing countries, especially Sri Lanka, in relation to ICT and e-commerce adoption. A model of ecommerce adoption in Small and Medium-sized Enterprises can be conceptualized as given in Figure: Senarathna and Wickramasuriya

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