Study on E-Commerce Adoption in SMEs Under the Institutional Perspective: The Case of Saudi Arabia

Study on E-Commerce Adoption in SMEs Under the Institutional Perspective: The Case of Saudi Arabia

Almaaf Bader Ali A (Nanjing University of Aeronautics and Astronautics, Nanjing, China), Jian-Jun Miao (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing, China) and Quang Dung Tran (National University of Civil Engineering, Hanoi, Vietnam)
Copyright: © 2018 |Pages: 20
DOI: 10.4018/IJEA.2018010104
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Abstract

This article investigates and discusses the institutional factors influencing decisions of e-commerce adoption in Saudi small and medium enterprises (SMEs) from the temporal view. This article has been conducted in two phases: a full survey in 2013 and the follow-up targeted interviews in 2016. The analysis results demonstrated that there is a clear difference between initial e-commerce adoption and institutionalization in SMEs in terms of institutional predictors. When e-commerce was at its infant stage, governmental support and well-defined legal and regulations system were instrumental and served as mainly institutional forces to encourage firms to adopt e-commerce. As time went on and e-commerce became more business-driven, these effects become less important, even insignificant; instead of these, perceived market forces and perceived social awareness of e-commerce emerges as critical contributions to push SMEs to engage in e-commerce more sophisticatedly.
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The Theoretical Background

The conceptual research framework was developed based on the institutional theory (Figure 1). The institutional theory provides a rich, complex view of organizations; organizations are open systems and the institutional context is a major source of influence on organizational behavior. Accordingly, in order to understand individual and organizational behavior, it must be located in a social and institutional context, and this context both regularizes behaviors and provides opportunity for agency and change. Institutional theory posits that pressures from industrial, political, legal and cultural systems, and expectations from society define what is socially acceptable and expected organizational behavior, which pressures organizations to look and act the same. In viewing institutions more widely as varied social constructs, including cultural beliefs, new institutionalism has moved away from its formal legal historical roots and become a more explanatory discipline in economics and social sciences. Contemporary institutional theory focuses on developing a sociological view of institutions -the way they interact and the way they affect society (Scott, 2005).

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