MASTER'S THESIS EC Adoption and Critical Success Factors of EC in SMEs in Iran - DiVA portal

118 Pages·2007·0.92 MB·English

2008:029
M A S T E R ' S T H E S I S
EC Adoption and Critical Success
Factors of EC in SMEs in Iran
Honey Afzal
Luleå University of Technology
Master Thesis, Continuation Courses
Marketing and e-commerce
Department of Business Administration and Social Sciences
Division of Industrial marketing and e-commerce
2008:029 - ISSN: 1653-0187 - ISRN: LTU-PB-EX--08/029--SE
MASTER'S THESIS

EC adoption and critical success factors of EC
in SMEs in Iran

Supervisors:
Dr. Amin Naseri
Prof. Pete Naude

Referee: Dr. Farhang

Prepared by: Honey Afzal

Tarbiat Modares University Faculty of Engineering
Department of Industrial Engineering

Lulea University of Technology
Division of Industrial Marketing and E-Commerce

Joint MSc PROGRAM IN MARKETING AND ELECTRONIC COMMERCE

2007

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Table of Contents

Abstract..............................................................................................................................8
1. Introduction:................................................................................................................10
1. 1. SMEs, E-commerce and Adoption............................................................................11
1.2. The characteristics of SMEs.......................................................................................12
1.3. Electronic Commerce.................................................................................................16
1.4. Problem Definition.....................................................................................................18
1.4.1 Research Objective and Research Questions:...........................................................18
1.5. Thesis Structure..........................................................................................................19

2. Literature Review........................................................................................................20
2.1. Pre E-commerce immigration and Use of IT by SMEs..............................................20
2.2. Internet Uses and SMEs..............................................................................................22
2.2.1. Recognized Benefits of Internet use for SMEs........................................................22
2.2.2. Internet Barriers for Small Firms.............................................................................24
2.2.3. Reasons for not having Internet access....................................................................25
2.2.4. Internet Use and the Related Concerns....................................................................25
2.2.5. Internet Access and Website....................................................................................26
2.3. E-commerce and its Benefits......................................................................................26
2. 4. E-commerce and its Acceptance...............................................................................28
2.5. E-commerce and its Adoption....................................................................................29
2.5.1. E-commerce Adoption and its Drivers in SMEs.....................................................32
2.5.2. E-commerce Adoption and its Barriers in SMEs....................................................33
2.5.3. E-commerce Adoption and its Benefits by SMEs...................................................34
2.5.4. E-Commerce Adoption and its Disadvantages by SMEs........................................35
2.6. Known Factors affecting SMEs E-commerce Adoption............................................35
2.6.1. Entrepreneurial Factors............................................................................................37
2.6.2. Technological Factors..............................................................................................37
2.6.3. Organizational Factors.............................................................................................37
2.6.4. Environmental Factors.............................................................................................38
2.7. Use of electronic commerce by SMEs........................................................................38
2.8. E-commerce and its Success.......................................................................................39
2.9. E-Commerce Success Measurement...........................................................................41
2.10. Description of the Key Factors: Internal driver........................................................42
2.10.1. Cost leadership.......................................................................................................43
2.10.2. Reputation..............................................................................................................43
2.10.3. Market....................................................................................................................43
2.10.4. Business entry........................................................................................................43
2.11. Description of the Key Factors: Internal Obstacles..................................................44
2.11.1. Finance...................................................................................................................44
2.11.2. Risks......................................................................................................................44
2.11.3. Expertise................................................................................................................44
2.12. Description of the Key Factors: External driver.......................................................45
2.12.1. Product pricing.......................................................................................................45
2.12.2. Time spent.............................................................................................................45
2.12.3. Convenience..........................................................................................................46
2.12.4. External relationship..............................................................................................46
2.13. Description of the Key Factors: External obstacles..................................................46
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2.13.1. Customer expense..................................................................................................46
2.13.2. Delivery time.........................................................................................................47
2.13.3. Transaction risks....................................................................................................47
Defining Privacy................................................................................................................47
Aspects of Privacy Concern...............................................................................................48
2.13.4. Access....................................................................................................................48

3. Research Methodology................................................................................................50
3.1. Theoretical Perspective on Factors Affecting E-commerce Adoption in SMEs in Iran
...........................................................................................................................................50
3.2. The Dependent Variable: EC Adoption......................................................................53
Hypotheses Development..................................................................................................53
3.3. Theoretical Perspective on Factors Affecting E-commerce Success in SMEs in Iran
...........................................................................................................................................54
3.3.1 The Dependent Variable: EC Success......................................................................54
Hypotheses Development..................................................................................................55

4. Discussion:....................................................................................................................57
4.1. Data Descriptions: E-commerce Adoption................................................................57
4.2. Data Descriptions: E-commerce Success..................................................................58
4.3. Mutual Demographic and Statistic Details.................................................................59
4.4. Analysis & Results: E-commerce Adoption..............................................................61
4.4.1. Non – Adopters........................................................................................................62
Table 7: Coefficients analysis for the “Non-adopters” category.......................................63
4.4.2. Starters.....................................................................................................................64
4.4.3. Adopters...................................................................................................................66
4.5. Analysis & Results: E-commerce Success.................................................................69
4.5.1. Internal Drivers (ID)................................................................................................72
4.5.2. Internal Obstacle (IO)..............................................................................................73
4.5.3. External Driver (ED)...............................................................................................74
4.5.4. External Obstacle (EO)............................................................................................76
4.5.5 E-commerce success (ECS)......................................................................................79

5. Conclusion & Summary..............................................................................................81
5.1. Theoretical Significance and Implications.................................................................81
E-commerce adoption........................................................................................................81
5.2. Theoretical Significance and Implications.................................................................86
E-commerce Success..........................................................................................................86
5.3. Limitation of the Study...............................................................................................88
5.4. An Agenda for Further Research................................................................................88

References.........................................................................................................................90

Appendix...........................................................................................................................97

A) Statistics:.....................................................................................................................97
1. Reliability Test: Drivers in E-commerce Adoption.......................................................97
2. Reliability Test: Barriers in E-commerce Adoption......................................................97
3. Reliability Test: Internal Drivers in E-commerce Success............................................98
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4. Reliability Test: Internal Obstacles in E-commerce Success........................................98
5. Reliability Test: External Drivers in E-commerce Success...........................................99
6. Reliability Test: External Obstacles in E-commerce Success.......................................99
7. Normality Test: Kolmogrov-Smirnov Test - EC Success...........................................100
8. Histogram - EC Success..............................................................................................100
9. t- Values – EC success................................................................................................101

B) Questionnaire............................................................................................................104

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List of Figures

Figure 1: Technology Acceptance Model (Davis, 1986)..................................................29
Figure 2: Delone and Mclean’s Model of IS Success.......................................................42
Figure 3: An adoption framework for EC technologies in small business.......................51
Figure 4: Electronic commerce success research model...................................................55
Figure 5: Flow chart of the research process....................................................................56
Figure 6: (a) Statistical details..........................................................................................59
Figure 9: Adjusted adoption framework for EC technologies in small business..............61
Figure 10: Statistical details..............................................................................................69
Figure11: Adjusted Electronic commerce success research model..................................70
Figure 12: Standardized Internal Drivers indicators.........................................................72
Figure 13: Standardized Internal Obstacles......................................................................73
Figure 14: Standardized External Driver indicators.........................................................74
Figure 15: Standardized External Obstacle indicators......................................................76
Figure 16: Standardized External Obstacle indicators......................................................77
Figure 17: Standardized E-commerce Success indicators................................................79
Figure 18: Standardized E-commerce Success – Final Approach....................................86

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List of Tables

Table 1: Features unique to SMEs....................................................................................16
Table 2: Internet Benefits for Small Firms.......................................................................24
Table 3 : Hofstede’s National Culture Dimensions.........................................................30
Table 4: Berthon's Transaction Cost Classification..........................................................31
Table 5: E-commerce Impacts.........................................................................................40
Table 7: Coefficients analysis for the “Non-adopters” category......................................63
Table 8: Regression Analysis and Analysis of Variance (ANOVA) for the “Starters”
category.............................................................................................................................65
Table 9: Coefficients analysis for the “Starters” category................................................66
Table 10: Regression Analysis and Analysis of Variance (ANOVA) for the “Adopters”
category.............................................................................................................................67
Table 11: Coefficients analysis for the “Adopters” category...........................................68
Table 12: The portion of each EC technology in doing business.....................................70
Table 13: Construct Reliability.........................................................................................72
Table 14: The significance of the research model in line with the literature....................82

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Abstract

Electronic commerce (e-commerce) is changing the way organizations carry out their
responsibilities, cooperate with customers and running their business usually. E-
commerce in practice is not only the buying and selling of products via electronic means,
it involves all other activities to support the sale process.

To take advantage of e-commerce, during the late 1990s many companies expanded
their business activities to reach new customers and/or to offer new opportunities to their
existing customers. During the same time there has been significant growth of new
established companies implementing e-commerce technologies, commonly known as dot-
com companies (Lovelock, 2001).However, investigates show that there have been
significant breakdowns along with these companies and it is now time to look back and
learn from the mistakes of the past. Besides many researches have indicated that
significant benefits are achieved by those SMEs that adopt and use Ecommerce in their
organizations

This survey attempts to explore the importance of an adoption approach for e-
commerce technology in Small to Medium Sized Enterprises (SMEs) in Iran. This
research hypothesized ten factors as influencing e-commerce adoption significantly in
SMEs: eAdvantage, eCost, eTransformation, Size, eProduct, eSupport, ePressure,
eCompetiotion, eNnovativeness and eNvolvement. Besides, the research attempts to
identify other factor/s rather than these ten factors which are influencing the e-commerce
adoption from SMEs point of views. Further, the approach differentiates between
adopters and non adopters in terms of the adopted EC as: Non-adopters, Starters and
Adopters. The research results point to: (1) Non-adopters: the movement towards
Internet and email was dependent on the cost and financial resources for initial
investments; (2) Starters: the first stage of EC adoption was dependent on technological
support provided by vendors and innovativeness of the manager; (3) Adopters: the
adoption of more EC was dependent on e-support, ennovativeness, e-pressure, e-cost and
e-advantage. Public awareness and Public purchasing behavior were other significant
factors identified by Starters and Adopters.

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This research also attempts to develop an approach for electronic commerce success.
Key factors influencing e-commerce success were identified from literature review and
categorized as Internal Drivers/ Obstacles and External Drivers/ Obstacles. In this
respect, two studied models by other researchers are examined and the contribution of
each factor is re-studied to fit to market of Iran. However, in area of e-commerce
adoption Cultural Factors: Public Purchasing Behavior and Public Awareness are
recognized as unique factors affecting e-commerce adoption among SMEs in Iran. This
survey also found out poor EC Adopted Banking System as an external obstacle in e-
commerce success process in Iran.

Key words: E-commerce, Innovation Adoption, Small to Medium Sized Enterprises
(SMEs), Iran

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