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The literature on e-commerce reveals that e-commerce adoption brings potentially significant benefits to SMEs (Santarelli & D' Altri, 2003; Johnston & Wright, 2004; Gunasekaran, et al., 2009; Renna & Argoneto, 2010). The evolution of the strategic role of e-commerce is closely linked to the sophisticated extent of the technology in terms of technology, information, management and usage. Literature consistently demonstrates that the sophistication of a technology innovation significantly and directly affects the operational performance, the business performance, and the service performance of enterprises (Búrca, et al., 2006; Rai, et al., 2006; L. Raymond & St-Pierre, 2005; Salleh, et al., 2010). In other words, in order to gain full benefits and maximize potential advantages from e-commerce technologies, businesses must firstly accept, adopt, use and then sophisticate fully the technology. However, in both developing and developed countries, the diffusion and adoption of e-commerce in SMEs has fallen far below expectations. Most SMEs adopt the technology only at the simple but not integrated level (I. Raymond, et al., 2008; AlGhamdi, et al., 2012). In light of this, studies on the factors that speed up enterprises move from an entry-level adoption to sophistication of e-commerce is an important consideration for an understanding of the adoption and success of e-commerce.
Most of previous studies focused generally on the general e-commerce adoption, but not adequately addressed on the nature of the adoption process when investigating determinants of the adoption. These studies underestimated the essential difference between the initial adoption and its more sophisticated extent. Recent literature suggests that adoption of e-commerce in developing countries’ context can be better understood by breaking it down into two levels: entry-level adoption and sophistication (i.e. institutionalization). Some evidence indicates that determinants of initial adoption of e-commerce are very different from that of institutionalization in developing countries’ context (Molla & Licker, 2005b; Tabor, 2000).
Moreover, it is worth noting that the literature is lacking of a robust model and instrument to study the determinant of e-ecommerce institutionalization in less developed countries and firm-level empirical evidence to explicate these factors (Molla, et al., 2005b).
Therefore, this present study is pursued to: (1) suggest an underlying model of e-commerce adoption to identify the factors that could affect decisions of initial adoption and institutionalization of e-commerce in SMEs in less developed countries; and (2) develop a sufficiently validated measurement instrument to show the utility of the proposed model.