E-Commerce Adoption and Appropriation by SMEs in Sri Lanka

E-Commerce Adoption and Appropriation by SMEs in Sri Lanka

Mahesha Kapurubandara (University of Western Sydney, Australia)
Copyright: © 2009 |Pages: 26
DOI: 10.4018/978-1-60566-100-1.ch005
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Acceptance of the Internet has paved the way towards the development of virtual communities that keep increasing in the current information society making it imperative for business, especially the small and medium enterprises (SMEs) which form the backbone of any economy, to keep abreast with e-commerce and remain competitive. To stimulate and facilitate SME participation in business activities through the Internet, it is necessary, therefore, to provide clear guidance and direction with suitable models and frameworks specifically tailored for the purpose. This chapter highlights an attempt to develop a suitable framework for the e-transformation of SMEs in Sri Lanka. In the belief that new models and frameworks can help SMEs to equip themselves to better understand their current stage and identify the main barriers at each stage of the adoption process, this attempt starts with an initial exploratory study of 17 SMEs, followed by a regional survey involving 625 SMEs from various industry sectors, along with interviews with the SME intermediary organizations. The proposed model facilitates establishing the current stage of an SME with regard ICT and e-commerce sophistication using five stage variables. It also assists to determine current position with regard to barriers towards the adoption of e-commerce and helps determine the support necessary to overcome such identified barriers. The research detailed in this chapter establishes that barriers show variance when SMEs proceed to more advanced stages in the adoption process. Likewise, the necessary support required indicates a similar trend. Going further, the chapter proposes a model for adoption of e-commerce for SMEs in Sri Lanka and identifies the essential need for support while acknowledging available support. Finally, it proposes an initial framework to e-transform SMEs in developing countries
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Theoretical Framework

Barriers to E-Commerce Adoption in SMEs

This section outlines recent literature on the barriers/inhibitors for adopting e-commerce by SMEs. Many studies carried out in developed countries investigate the factors affecting the adoption of e-commerce technologies such as Internet, e-commerce, e-mail and electronic data interchange (EDI). As research on this subject in developing countries is relatively limited, the literature on developed countries can serve as a preliminary guideline to identify barriers in developing countries.

Investigations into the barriers that affect SMEs’ adoption of e-commerce have identified a variety of factors, which can be grouped into several categories. A number of authors (Lawson et al, 2003; Chau & Turner, 2001; Mehrtens et al, 2001) identify factors relating to three major categories: owner/manager characteristics; firm characteristics; and costs and return on investment.

Owner/managers play an important role in decision making in SME organizations. Hence it can be concluded that a number of factors that affect adoption of e-commerce have to do with owner/manger characteristics. The knowledge of new technologies and e-commerce does affect the degree of use of e-commerce (Rashid & Al-Qirim 2001). Iacovou Benbasat & Dexter (1995) found that the owner’s lack of awareness of the technology and perceived benefits is a major barrier to a take up of e-commerce. The lack of knowledge of how to use the technology and low computer literacy are other contributory factors for not adopting e-commerce (Lawson et al, 2003; Kirby & Turner, 1993). Julien and Raymond (1994) report that the owner’s level of assertiveness in decision-making affects the adoption of e-commerce. If the owner is subjective and refers to the opinions of experienced people who recommend adoption of e-commerce into the organization, then the owner is more likely to accept their opinions (Harrison, Mykytyn & Riemenschneider, 1997). Concern about return on investments make them reluctant to make substantial investments when short-term returns are not guaranteed. Taken together with lack of time, these two other factors affect decisions to adopt e-commerce (Akkeren & Cavaye, 1999). Related industry experience of owners is also critical to their e-commerce success (Mahajan, Siriniwasan &Wind, 2002).

Among the barriers related to the characteristics of the organization, which affect adoption of e-commerce is the current level of technology usage within the organization (Iacovou et. al,1995). As summarised by Courtney and Fintz, (2001); low use of e-commerce by customers and suppliers, concerns about security aspects, concerns about legal and liability aspects, high costs of the development of computer and networking technologies when moving towards e-commerce, limited knowledge of e-commerce models and methodologies, and the perception of the lack of any accrued benefits to the company make many SMEs remain unconvinced about adoption of e-commerce. In addition, SMEs have limited resources (financial, time, personnel). This “resource poverty” has an effect on the adoption of e-commerce. They cannot afford to experiment with these technologies and make expensive mistakes (EBPG, 2002).

Complete Chapter List

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List of Reviewers
Table of Contents
Omar A. El Sawy
Chapter 1
Richard Boateng, Alemayehu Molla, Richard Heeks
This chapter undertakes a meta-analysis of the published literature on e-commerce in developing economies (DEs). The aim is to take stock of the... Sample PDF
E-Commerce in Developing Economies: A Review of Theoretical Frameworks and Approaches
Chapter 2
Reinhold Decker
This chapter outlines and discusses current empirical findings and conceptual ideas concerning the status quo and future prospects of e-commerce in... Sample PDF
Significance and Success Factors of E-Commerce in China and Russia: An Empirical View
Chapter 3
Sushil K. Sharma, Jatinder N.D. Gupta
The past few years have seen a rise in the number of companies’ embracing e-commerce technologies in developing countries and the volume of... Sample PDF
Identifying Factors for Lack of E-Commerce in Developing Countries
Chapter 4
Antonis C. Stylianou, Stephanie S. Robbins, Pamela Jackson
It is widely recognized that e-commerce represents a critical resource for most business organizations. With over 1.3 billion people and... Sample PDF
E-Commerce Development in China: An Exploration of Perceptions and Attitudes
Chapter 5
Mahesha Kapurubandara
Acceptance of the Internet has paved the way towards the development of virtual communities that keep increasing in the current information society... Sample PDF
E-Commerce Adoption and Appropriation by SMEs in Sri Lanka
Chapter 6
Alev M. Efendioglu
The number of Internet users around the world has been steadily growing and this growth has provided the impetus and the opportunities for global... Sample PDF
E-Commerce in Developing Countries: Impediments and Opportunities
Chapter 7
Victor van Reijswoud, Arjan de Jager
E-governance is a powerful tool for bringing about change to government processes in the developing world. It operates at the crossroads between... Sample PDF
E-Governance in Uganda: Experiences and Lessons Learned from the DistrictNet Programme
Chapter 8
Abdelbaset Rabaiah
This chapter illustrates the impact of electronic government (e-government) on electronic commerce (e-commerce) development and implementation in... Sample PDF
E-Government and Its Impact on E-Commerce in LDCs
Chapter 9
Zakariya Belkhamza
Global deployment in information and communication technology requires understandings of the cultural constraints in technology acceptance and usage... Sample PDF
Cultural Interpretation of E-Commerce Acceptance in Developing Countries: Empirical Evidence from Malaysia and Algeria
Chapter 10
Ahu Genis-Gruber
E-commerce has been a widely used mean to purchase goods and services all over the world. This study investigates the role of cultural differences... Sample PDF
Cultural Differences, Information Technology Infrastructure, and E-Commerce Behavior: Implications for Developing Countries
Chapter 11
Kamel Rouibah
With the widespread use of mobile phones in the Arab world, companies, including banks, are offering different communication channels for their... Sample PDF
Mobile-Commerce Intention to Use via SMS: The Case of Kuwait
Chapter 12
Ayoub Yousefi
This study presents a theoretically-based model for economic analysis of electronic commerce in developing countries. The Porter diamond model is... Sample PDF
An Economic Framework for the Assessment of E-Commerce in Developing Countries
Chapter 13
Lena Aggestam
B2B development has been faster in the developed world comparing to developing countries. This chapter proposes a “tool” for managing CSF in B2B... Sample PDF
Guidelines for Preparing Organizations in Developing Countries for Standards-Based B2B
Chapter 14
Dimitrios Xanthidis, David Nicholas, Paris Argyrides
This chapter is the result of a two years effort to design a template aiming at standardizing, as much as such a task is feasible, the evaluation of... Sample PDF
A Proposed Template for the Evaluation of Web Design Strategies
Chapter 15
Jameleddine Ziadi, Abderrazzak Ben Salah
This chapter has as an aim the identification of the present reality of the e-commerce activity in Tunisia and the challenges its faces. After... Sample PDF
Electronic Commerce Reality in Tunisia
Chapter 16
Hongxiu Li
This chapter introduces the four sets of prerequisites for successful electronic commerce (e-commerce) development, including national factors... Sample PDF
Electronic Commerce in China: Can We Wake Up the Giant?
Chapter 17
Sherif Kamel
Emerging information and communication technology is driving transformation and change in the cyberspace. Speed, competition and globalization are... Sample PDF
Evolution of Electronic Procurement in Egypt: Case of Speedsend.com
Chapter 18
Borislav Jošanov, Marijana Vidas-Bubanja, Emilija Vuksanovic, Ejub Kajan, Bob Travica
The authors of this chapter constructed and published multidimensional model for the evaluation of e-commerce diffusion in any country. According to... Sample PDF
The State and Development of E-Commerce in Serbia
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