Risk Perception Disparities in E-Business: Analyzing SME Roles, Experience and Legal Compliance Challenges

Abstract

This study examines how e-business experience and organizational roles impact on the perception of dependency risks including external service provider risks, legal and compliance risks, and security risks among SMEs. Thus, the first research objective is to examine how and to what extent general and specific e-business experience influence the perceived risks and their priorities. In the present research, a mixed research approach and Kruskal-Wallis test were adopted to compare the risk perception of the respondents. We dissect the findings further by applying qualitative analysis on the impressions shared by the respondents. The findings show that e-business experience has direct effects on risk perception and the firms with less e-business experience perceive dependency risks as more severe, especially in terms of website developer, hardware, and software dependencies. On the other hand, larger and more experienced SMEs consider legal and compliance risks as more important especially where the cross-border transactions and data privacy issues are involved. Moreover, IT staff showed better appreciation of the reputational and employee risk factors more than the non-IT staff showing that technical knowledge is key to risk perception. Based on these results, this study posits that as SMEs gain e-business experience, their risk perceptions change and so do their understanding of external vulnerabilities and regulations.