Adoption of Electronic Commerce by Small Businesses

Adoption of Electronic Commerce by Small Businesses

Serena Cubico, Giuseppe Favretto
DOI: 10.4018/978-1-60566-026-4.ch009
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The role played by small business in economic growth and development in the world is officially recognized, in both the economic literature and in official documents (e.g., Organization for Economic Cooperation and Development, European Commission, U.S. Department of State). Information and communication technology connectivity are widespread in all sized businesses, but small businesses seem slower than larger ones to adopt and use ICT and electronic commerce. SMEs (small- to medium-sized enterprises) are independent firms that employ less than 10 (micro), 50 (small), and 250 (medium) employees (European Commission, 2003); the United States includes firms with fewer than 500 employees in the definition of an SME (OECD, 2000a). In Europe, SMEs contribute up to 80% of employment in some industrial sectors (e.g., textiles, construction, furniture), and they are defined as “a major source of entrepreneurial skills, innovation and contribute to economic and social cohesion” (European Commission, 2005, p. 3); in the U.S. economy, small businesses represent 99.7% of all employers and “broaden a base of participation in society, create jobs, decentralize economic power and give people a stake in the future” (U.S. Department of State, 2006, p. 2). To synthesize: more than 95% of OECD enterprises are SMEs, accounting for 60-70% of employment in most countries (OECD, 2000a). The same proportion is indicated by the United Nations Conference on Trade and Development; in fact, SMEs account for 60-70% of all employment in developing countries (UNCTAD, 2002).
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Research interests in e-commerce utilization in SMEs have been driven by a basic hypothesis that this type of technology can offer new opportunities to counterbalance disadvantages of size, resources, geographic isolation, and market reach (Wymer & Regan, 2005).

Several different disciplines (management, organizational behavior, communications, computer science, information systems, marketing, work, and social psychology) are involved in research on incentives and technology adoption barriers. In this regard, different theoretical and applied models already exist:

  • The Theory of Reasoned Action (TRA), and its extension, the Theory of Planned Behavior (TPB) (Ajzen & Fishbein, 1980; Chau & Hu, 2001; Harrison, Mykytyn, & Riemenschneider, 1997) are based on assumptions that a person’s intentions are the best guide to behavior, and that there is a link between attitudes and behavior.

  • The Technology Acceptance Model (TAM) (Straub, Limayem, & Karahannaevaristo, 1995), defines models as to how users come to accept and make use of technology.

  • The Adoption, Innovation and Diffusion Theory (Rogers, 1995) defines adopter (of any new innovation or idea) categories as innovators, early adopters, early majority groups, late majority groups, and laggards.

  • Social Cognitive Theory (Bandura, 1996) defines human behavior as a triadic, dynamic, and reciprocal interaction of personal factors, behavior, and the environment.

  • The Unified Theory of Acceptance and Use of Technology (UTAUT) (Venkatesh, Morris, Davis, & Davis, 2003) uses performance expectancy, effort expectancy, social influence, and facilitating conditions as direct determinants of usage intention.

Table 1 presents a synthesis of the numerous factors influencing adoption of e-commerce adoption from the literature.

Key Terms in this Chapter

Electronic Commerce (E-Commerce): Transactions conducted over Internet protocol-based networks and over other computer-mediated networks. Goods and services are ordered over those networks, but payment and final delivery of goods or services may be conducted on or off-line. Orders received via telephone, facsimile, or manually typed e-mails are not counted as electronic commerce (Eurostat, 2006 AU10: The in-text citation "Eurostat, 2006" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).

European Union (EU): Family of democratic European countries. The six founders (on March 25, 1957, with the Treaty of Rome) are Belgium, France, Germany, Italy, Luxembourg, and The Netherlands. The European Union acts in a wide range of policy areas—economic, social, regulatory, and financial—through solidarity policies (also known as cohesion policies), regional, agricultural, social affairs and innovation policies, which provide state-of-the-art technologies to fields such as environmental protection, research and development, and energy. Currently, the EU embraces 27 countries and 490 million people ( ). EU countries include: Austria-A, Belgium-BE, Bulgaria-BG, Cyprus-CY, the Czech Republic-CZ, Denmark-DK, Estonia-EE, Finland-FI, France-F, Germany-DE, Greece-EL, Hungary-HU, Ireland-IE, Italy-I, Latvia-LV, Lithuania-LT, Luxembourg-LU, Malta-MT, The Netherlands-NL, Poland-PL, Portugal-PT, Romania-RO, Slovakia-SK, Slovenia-SL, Spain-ES, Sweden-SE, and the United Kingdom-UK.

Organizational Culture: A pattern of basic assumptions invented, discovered, or developed by a given group as it learns to cope with problems of external adaptation and internal integration, which has worked well enough to be considered valid and therefore is to be taught to new members as the correct way to perceive, think, and feel in relation to those problems ( Schein, 1990 ).

OECD (Organization for Economic Cooperation and Development): Established in 1961, one of the world’s largest and most reliable sources of comparable statistics, and economic and social data. The OECD monitors trends, analyzes and forecasts economic developments, and researches social changes or evolving patterns in trade, environment, agriculture, technology, taxation, and more ( ). OECD countries include: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, The Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States.

Small- to Medium-Sized Enterprises (SMEs): Independent firms that employ less than 10 (micro), 50 (small), and 250 (medium) employees (U.S. SMEs include firms up to 500 employees).

Family Business: Organizations where two or more extended family members influence the direction of the business (through kinship ties, management roles, ownership rights) ( Tagiuri & Davis, 1982 ).

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