Electronic commerce adoption

460 Pages·2011·3.76 MB·English

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ELECTRONIC COMMERCE ADOPTION: A STUDY OF BUSINESS-TO-BUSINESS
PRACTICES IN SAUDI ARABIA

SABAH ABDULLAH AL-SOMALI
Doctor of Philosophy

ASTON UNIVERSITY
March 2011

This copy of the thesis has been supplied on condition that anyone who consults it is understood
to recognise that its copyright rests with its author and that no quotation from the thesis and no
information derived from it may be published without proper acknowledgment.

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Aston University
Electronic commerce adoption: A study of Business-to-Business practices in Saudi Arabia
Sabah Abdullah Al-Somali
Doctor of Philosophy
2011

Thesis Summary

Electronic commerce (e-commerce) has become an increasingly important initiative among
organisations. The factors affecting adoption decisions have been well-documented, but there is a
paucity of empirical studies that examine the adoption of e-commerce in developing economies
in the Arab world. The aim of this study is to provide insights into the salient e-commerce
adoption issues by focusing on Saudi Arabian businesses. Based on the Technology-
Organisational-Environmental framework, an integrated research model was developed that
explains the relative influence of 19 known determinants.
A measurement scale was developed from prior empirical studies and revised based on feedback
from the pilot study. Non-interactive adoption, interactive adoption and stabilisation of e-
commerce adoption were empirically investigated using survey data collected from Saudi
manufacturing and service companies.
Multiple discriminant function analysis (MDFA) was used to analyse the data and research
hypotheses. The analysis demonstrates that (1) regarding the non-interactive adoption of e-
commerce, IT readiness, management team support, learning orientation, strategic orientation,
pressure from business partner, regulatory and legal environment, technology consultants‘
participation and economic downturn are the most important factors, (2) when e-commerce
interactive adoption is investigated, IT readiness, management team support, regulatory
environment and technology consultants‘ participation emerge as the strongest drivers, (3)
pressure from customers may not have much effect on the non-interactive adoption of e-
commerce by companies, but does significantly influence the stabilisation of e-commerce use by
firms, and (4) Saudi Arabia has a strong ICT infrastructure for supporting e-commerce practices.
Taken together, these findings on the multi-dimensionality of e-commerce adoption show that
non-interactive adoption, interactive adoption and stabilisation of e-commerce are not only
different measures of e-commerce adoption, but also have different determinants. Findings from
this study may be valuable for both policy and practice as it can offer a substantial understanding
of the factors that enhance the widespread use of B2B e-commerce. Also, the integrated model
provides a more comprehensive explanation of e-commerce adoption in organisations and could
serve as a foundation for future research on information systems.

Keywords: e-commerce adoption, Saudi Arabia, developing Arab nations, Technology-
Organisational-Environmental framework, innovation adoption.

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Dedication

By the grace and mercy of God, I dedicate my dissertation to the memory of the departed soul of
my father, to my caring mother, to my sisters and my brothers who have been my biggest
supporters and for their love and sincere prayers. They all gave me unconditional love and
encouragement .They provided me with strength, courage, and determination to move through
my PhD study. My dream came true due to their love and sacrifices. I also dedicate this
dissertation to my many friends who have supported me through the process. I will always
appreciate their continuous support. Finally, I dedicate this work to each and every one, who had
a hand in my education, and helped in any way light a candle for me along the road to
accomplishing my objective

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Acknowledgments

First of all, my deep thanks to Almighty Allah for enabling me to complete this project. This
piece of work could not have been completed without first the help of the Almighty Allah
(SWA). Second, I would like to express my sincere gratitude and appreciation to my father, may
Allah rest his souls in peace, my mother, my sisters and my brothers for their support, without
them, this work could not have been completed.
Many thanks also go to my supervisors Dr. Roya Gholami and Dr. Ben Clegg, for their expert
guidance and for their encouragement, thoughtful comments, and support. I particularly, thank
them for their continued belief in me, their confidence in my ability to accomplish what I set my
self to accomplish, and their patience.
I wish also to extend my warmest thanks to all those of Aston business school for their support
and assistance. I am also greatly indebted to those who lent me a hand, one way or the other, in
my work on this project, and whose help did not go unnoticed, but whom I did not name, and all
relatives, friends, and colleagues, who offered their help, sympathy and/or prayers.
Last but not least, I especially wish to thank the Saudi Arabia Cultural Bureau in London for
their continuous support and assistance. Finally, I would like to express my appreciation to all
those who participated in evaluating, pre-testing, and piloting the questionnaires; all companies
and persons who have offered me their time when I collected necessary data for my research; and
indeed all who assisted and participated in my research in whatever capacity.

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Related Publications

Some of the material contained in this dissertation has been presented in the following
publications.
Refereed Journals
 Al-Somali, S.A, Gholami, R. and Clegg, B. (2011). An Investigation into the Adoption of
Electronic Commerce among Saudi Arabian SMEs. Journal of Electronic Commerce in
Organizations, 9(2), pp.41-65, April-June.

Refereed Journal Papers: Under Review
 Al-Somali, S.A, Gholami, R. and Clegg, B. (2011). Determinants of B2B e-commerce
adoption in Saudi Arabian firms. Under review for the International Journal for Digital
Society (IJDS).

Refereed Book Chapters
 Al-Somali S., Clegg, B.T. and Gholami R. (2010). An Investigation into the Adoption
and Implementation of Electronic Commerce in Saudi Arabian Small and Medium
Enterprises. In Alkhalifa, E.M., (Ed.), E-Strategies for Resource Management Systems:
Planning and Implementation. Advances in Information Resources Management (AIRM)
Book Series, IGI Global. ISBN13: 9781616920166. EISBN13: 9781616920173.
 Al-Somali S., Clegg, B.T and Gholami R. (2010). E-Business Adoption and its Impact on
Performance. In Lee, I., (Ed.), Encyclopedia of E-Business Development and
Management in the Global Economy. IGI Global. ISBN13: 9781615206117.
 Al-Somali, S., Gholami, R. and Clegg, B.T. (2009). Theories and Factors Affecting
Electronic Commerce Adoption in Small and Medium Enterprises (SMEs): A Review. In
Xu, J. and Quaddus, M. (Eds.), E-business in 21st Century: Realities, Challenges and
Outlook. World Scientific Publishing: Mountain View, CA, USA.

Refereed Conference Papers
 Al-Somali, S., Gholami, R. and Clegg, B. (2011, April). Business-to-business e-
commerce adoption in Saudi Arabia: the moderating effect of technology consultants'
orientation. The 20th International Conference on Management of Technology, Miami
Beach, Florida, USA.
 Al-Somali, S., Gholami, R. and Clegg, B. (2010, June). E-business Adoption in Saudi
Arabian Private Sector. The international conference on information society (i-Society),
London, UK
 Al-Somali, S., Gholami, R. and Clegg, B. (2010, March). An investigation into the
adoption of electronic business in Saudi Arabia using the technology-organisation-
environment framework. UKAIS Conference. Oriel College, University of Oxford, UK.
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 Al-Somali, S., Clegg, B.and Gholami, R. (2009). Exploring the Adoption of Electronic
Commerce in Saudi Arabia: The Case of Small and Medium Enterprises. The
International Conference on Technology and Business Management. March 29-April 1,
2009, Dubai (UAE).

PhD Consortium Paper
 Al-Somali, S., Gholami, R. and Clegg, B. (2010, June). Contextual antecedents of
electronic commerce adoption among organisation in developing Arab high-income
economies: Evidence from the private sector in Saudi Arabian. The West Midlands
Regional Doctoral Colloquium. Aston University, Birmingham.
 Al-Somali, S., Gholami, R. and Clegg, B.(2008, June). E-commerce Adoption in Small
and Medium Enterprises (SMEs) in Saudi Arabia. The West Midlands Regional Doctoral
Colloquium (Aston, Birmingham and Warwick Business Schools). Aston University,
Birmingham.

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Table of contents

Subject Page
Thesis Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Dedication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Related Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
List of Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
List of abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Chapter 1: Introduction and Background of Research 24
1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
1.2 Background of e-commerce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
1.2.1 Definition and concepts of e-commerce. . . . . . . . . . . . . . . . . . . . . . . 25
1.2.2 The relationship between e-commerce and e-business. . . . . . . . . . . . 28

1.2.3 E-commerce and the new economy . . . . . . . . . . . . . . . . . . . . . . . . . . 29
1.3 E-commerce as a complex organisational innovation. . . . . . . . . . . . . . . . . . . 32
1.4 Motivation and rationale of research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
1.5 Research objectives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
1.6 Research questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
1.7 Research methodology and sample description. . . . . . . . . . . . . . . . . . . . . . . . 39
1.8 Contribution of the present research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
1.9 Structure of the thesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
1.10 Chapter summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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Chapter 2: The e-commerce phenomenon and the digital divide 45
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2.2 Country profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2.2.1 46
Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.2.2 47
Population and demography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.2.3 Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
2.2.4 Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
2.2.5 ICT and Internet in Saudi Arabia . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
2.2.6 Saudi Arabian business organisations in the private sector . . . . . . . 52
2.3 The digital divide and technology transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
2.4 The e-commerce phenomenon in developing economies: General overview 59
2.5 E-commerce in the Arab world and the Arab Gulf countries . . . . . . . . . . . . . 65
2.6 The e-commerce situation in Saudi Arabia . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
2.7 Chapter summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Chapter 3: Theoretical Background 78
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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3.2 Innovation adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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3.3 Theories and models of information system innovation adoption . . . . . . . . . 81
3.3.1 Technology acceptance model (TAM) . . . . . . . . . . . . . . . . . . . . . . . 83

3.3.2 Theory of planned behaviour (TPB) . . . . . . . . . . . . . . . . . . . . . . . . 84

3.3.3 Theory on Diffusion of Innovation (DOI) . . . . . . . . . . . . . . . . . . . . 85

3.3.4 Resource-based theory (RBT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

3.3.5 Technology-organization-environment (TOE) framework . . . . . . . 89

3.3.6 Institutional theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

3.3.7 Structuration theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

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