Determinants Affecting the Adoption of E-commerce and Its Impact on Organisational Performance of SMEs in Sri Lanka
Main Article Content
Keywords
Adoption of E-commerce, Influencing Factors, Determinants of e-commerce, e Business Adoption
Abstract
The Internet has become the best innovative driver in the fourth industrial revolution, transforming businesses into a technological era with speed and cost-effectiveness. E-commerce is one of the modern business strategies used by many companies to expand their market without limiting its geographical boundaries. This business strategy was initially used by companies in developed countries and eventually adopted by developing countries. Sri Lanka is a developing country and e-commerce penetration is far below other countries in the region. Perceived benefits, transformational leadership, and competitive pressure are the influencing factors of e-commerce adoption. The Technology-Organization-Environment and Diffusion of Innovations theories were used as the base of this research, and 350 samples were collected from the senior managers of SMEs. All factors significantly influenced e-commerce adoption and that positively affected the organisational performance of SMEs in Sri Lanka.
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References
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Parasuraman, A. (2000). Technology Readiness Index (TRI): a Multiple-Item Scale to Measure Readiness to Embrace New Technologies. Journal of Service Research, 2(4), 307–320. https://doi.org/10.1177/109467050024001
Rogers, E.M. (1995). Diffusion of Innovations. 4th Edition. New York: The Free Press.
Sanchez-Torres, J. A., & Juarez-Acosta, F. (2019). Modelling SME e-commerce with IMAGES. Journal of Business & Industrial Marketing, 34(1), 137–149. https://doi.org/10.1108/jbim-04-2018-0132
Sánchez-Torres, J. A., Rojas Berrío, S. P., & Ortiz Rendón, P. A. (2021). Adoption of E-commerce in SMEs: the Colombian Case. Journal of Telecommunications and the Digital Economy, 9(3), 110–135. https://doi.org/10.18080/jtde.v9n3.403
Sattayaraksa, T., & Boon-Itt, S. (2018). The Roles of CEO Transformational Leadership and Organizational Factors on Product Innovation Performance. European Journal of Innovation Management, 21(2), 227–249. https://doi.org/10.1108/ejim-06-2017-0077
Statista. E-Commerce — United States: Statista Market Forecast. (n.d.). Retrieved from https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/
Tornatzky, L., & Fleischer, M. (1990). The processes of technological innovation, The Journal of Technology Transfer, 16(1), 45–46. https://doi.org/10.1007/BF02371446
Vakulenko, Y., Shams, P., Hellström, D., & Hjort, K. (2019). Online retail experience and customer satisfaction: the mediating role of last-mile delivery. The International Review of Retail, Distribution and Consumer Research, 29(3), 306–320. https://doi.org/10.1080/09593969.2019.1598466
Wen, L. Z, & Guy, H. A., (2019). Factors and Barriers to Adoption of E-Commerce: The Case of Developing Countries. Journal of Entrepreneurship & Organization Management 8, 265. https://doi.org/10.4172/2169-026X.1000265
Xie, Y., Xue, W., Li, L., Wang, A., Chen, Y., Zheng, Q., Wang, Y., & Li, X. (2018). Leadership style and innovation atmosphere in enterprises: An empirical study. Technological Forecasting and Social Change, 135, 257–265. https://doi.org/10.1016/j.techfore.2018.05.017
Xuhua, H., Chosniel Elikem, O., & Akaba, S. (2019). Effects of Business-to-Business E-commerce Adoption on Competitive Advantage of Small and Medium-Sized Manufacturing Enterprises. Economics & Sociology, 12(1), 80–99. https://doi.org/10.14254/2071-789x.2019/12-1/4
Zainudin Awang. (2015). Structural Equation Modeling Using AMOS Graphic. Shah Alam: UiTM Press.
Alnaser, A., Saeed, M., & Alrawashedh, N. (2018). Adoption of E-Commerce by SMEs and Its Impact on Customer Satisfaction. Journal of Advanced Social Research, 8(01), 01–14. Available at https://www.researchgate.net/publication/323512473
Ammirato, S., Sofo, F., Felicetti, A. M., & Raso, C. (2019). A methodology to support the adoption of IoT innovation and its application to the Italian bank branch security context. European Journal of Innovation Management, 22(1), 146-174. https://doi.org/10.1108/ejim-03-2018-0058
Bass, B. M. (1985). Leadership and Performance beyond Expectations. New York: Free Press.
Chmielarz, W., & Parys, T. (2018). The Use of Mobile Technologies in e-Commerce. Annales Universitatis Mariae Curie-Skłodowska, sectio H, Oeconomia, 52(2), 17–30.
COVID-19 and E-commerce: a global review. (n.d.). United Nations Conference on Trade and Development, 2021. Retrieved 31 July 2021 from https://unctad.org/webflyer/covid-19-and-e-commerce-global-review
Dahbi, S., & Benmoussa, C. (2019). What Hinder SMEs from Adopting E-commerce? A Multiple Case Analysis. Procedia Computer Science, 158, 811–818. https://doi.org/10.1016/j.procs.2019.09.118
Department of Census and Statistics. (n.d.). Economic Statistics of Sri Lanka, Ministry of Finance, Sri Lanka. http://www.statistics.gov.lk/Publication/Economic-Statistic-2020
Durst, S., Hinteregger, C., & Zieba, M. (2019). The linkage between knowledge risk management and organisational performance. Journal of Business Research, 105, 1–10. https://doi.org/10.1016/j.jbusres.2019.08.002
Ezzaouia, I., & Bulchand-Gidumal, J. (2020). Factors influencing the adoption of information technology in the hotel industry. An analysis in a developing country. Tourism Management Perspectives, 34, 100675. https://doi.org/10.1016/j.tmp.2020.100675
Fonseka, K., Raman, M., Jaharadak, A. A., & Dharmaratne, I. R. (2020). Literature Review of Technology Adoption Models at Firm Level; Special Reference to E-Commerce Adoption. Global Journal of Management and Business Research, 20(6-B), 3136. https://doi.org/10.34257/gjmbrbvol20is6pg1
Govinnage, D., & Sachitra, K. (2019). Factors Affecting E-commerce Adoption of Small and Medium Enterprises in Sri Lanka: Evidence from Retail Sector. Asian Journal of Advanced Research and Reports, 6(2), 1-10. https://doi.org/10.9734/ajarr/2019/v6i230147
Gunawardana, K. D. (2018). E-Commerce in Small and Medium Enterprises in Sri Lanka. International Journal of Socio technology and Knowledge Development, 10(2), 54–68. https://doi.org/10.4018/ijskd.2018040104
Hadi Putra, P. O., & Santoso, H. B. (2020). Contextual factors and performance impact of e-business use in Indonesian small and medium enterprises (SMEs). Heliyon, 6(3), e03568. https://doi.org/10.1016/j.heliyon.2020.e03568
Hickman, L., & Akdere, M. (2018). Effective leadership development in information technology: Building transformational and emergent leaders. Industrial and Commercial Training, 50(1), 1-9. https://doi.org/10.1108/ict-06-2017-0039
Hidayati, R., Permatasari, R. K., & Fajry, A. N. (2019). Impact of Organizational Support and Technology Competence in E-Commerce Adoption on SMEs Performance in Jabodetabek Region. Cendekia Niaga, 3(1), 31–37. https://doi.org/10.52391/jcn.v3i1.460
Howard, M. C. (2015). A Review of Exploratory Factor Analysis Decisions and Overview of Current Practices: What We Are Doing and How Can We Improve? International Journal of Human-Computer Interaction, 32(1), 51–62. https://doi.org/10.1080/10447318.2015.1087664
Ibrahim, W., Turyakira, P., & Katumba, P. M. (2018). E-Commerce Adoption and Growth of SMEs in Uganda. International Journal of Business and Management, 14(1), 46. https://doi.org/10.5539/ijbm.v14n1p46
Išoraitė, M., & Miniotienė, N. (2018). Electronic Commerce: Theory and Practice. Integrated Journal of Business and Economics, 2(2), 194–200. https://doi.org/10.33019/ijbe.v2i2.78
Kuruwitaarachchi, N., Yajid, M. S. A., Khatibi, A., & Azam, S. M. F. (2020). Information Technology Factors Influence the Adoption to Ecommerce in Small and Medium Scale Organizations in Sri Lanka: A Research Agenda. International Journal of E-Education, E-Business, E-Management and E-Learning, 10(1), 95–103. https://doi.org/10.17706/ijeeee.2020.10.1.95-103
Lee, S. (2021). E-commerce adoption and effects on South Korean SMEs during the COVID-19 pandemic. International Journal of Applied Sociology, 11(1), 11–20. Retrieved 28 August 2021 from https://article.sapub.org/10.5923.j.ijas.20211101.02.html
Mahliza, F. (2019). The Influence of E-commerce Adoption Using Social-Media Towards Business Performance of Micro Enterprises. International Journal of Business, Economics and Law, 18(5). Available at https://www.ijbel.com/wp-content/uploads/2019/07/ijbel5-VOL18_306.pdf
Okundaye, K., Fan, S. K., & Dwyer, R. J. (2019). Impact of information and communication technology in Nigerian small-to medium-sized enterprises. Journal of Economics, Finance and Administrative Science, 24(47), 29–46. https://doi.org/10.1108/jefas-08-2018-0086
Parasuraman, A. (2000). Technology Readiness Index (TRI): a Multiple-Item Scale to Measure Readiness to Embrace New Technologies. Journal of Service Research, 2(4), 307–320. https://doi.org/10.1177/109467050024001
Rogers, E.M. (1995). Diffusion of Innovations. 4th Edition. New York: The Free Press.
Sanchez-Torres, J. A., & Juarez-Acosta, F. (2019). Modelling SME e-commerce with IMAGES. Journal of Business & Industrial Marketing, 34(1), 137–149. https://doi.org/10.1108/jbim-04-2018-0132
Sánchez-Torres, J. A., Rojas Berrío, S. P., & Ortiz Rendón, P. A. (2021). Adoption of E-commerce in SMEs: the Colombian Case. Journal of Telecommunications and the Digital Economy, 9(3), 110–135. https://doi.org/10.18080/jtde.v9n3.403
Sattayaraksa, T., & Boon-Itt, S. (2018). The Roles of CEO Transformational Leadership and Organizational Factors on Product Innovation Performance. European Journal of Innovation Management, 21(2), 227–249. https://doi.org/10.1108/ejim-06-2017-0077
Statista. E-Commerce — United States: Statista Market Forecast. (n.d.). Retrieved from https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/
Tornatzky, L., & Fleischer, M. (1990). The processes of technological innovation, The Journal of Technology Transfer, 16(1), 45–46. https://doi.org/10.1007/BF02371446
Vakulenko, Y., Shams, P., Hellström, D., & Hjort, K. (2019). Online retail experience and customer satisfaction: the mediating role of last-mile delivery. The International Review of Retail, Distribution and Consumer Research, 29(3), 306–320. https://doi.org/10.1080/09593969.2019.1598466
Wen, L. Z, & Guy, H. A., (2019). Factors and Barriers to Adoption of E-Commerce: The Case of Developing Countries. Journal of Entrepreneurship & Organization Management 8, 265. https://doi.org/10.4172/2169-026X.1000265
Xie, Y., Xue, W., Li, L., Wang, A., Chen, Y., Zheng, Q., Wang, Y., & Li, X. (2018). Leadership style and innovation atmosphere in enterprises: An empirical study. Technological Forecasting and Social Change, 135, 257–265. https://doi.org/10.1016/j.techfore.2018.05.017
Xuhua, H., Chosniel Elikem, O., & Akaba, S. (2019). Effects of Business-to-Business E-commerce Adoption on Competitive Advantage of Small and Medium-Sized Manufacturing Enterprises. Economics & Sociology, 12(1), 80–99. https://doi.org/10.14254/2071-789x.2019/12-1/4
Zainudin Awang. (2015). Structural Equation Modeling Using AMOS Graphic. Shah Alam: UiTM Press.
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Dec 5, 2021
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How to Cite
Fonseka, K., Jaharadak, A. A., Raman, M., & Tham, J. (2021). Determinants Affecting the Adoption of E-commerce and Its Impact on Organisational Performance of SMEs in Sri Lanka. Journal of Telecommunications and the Digital Economy, 9(4), 23–43. https://doi.org/10.18080/jtde.v9n4.412
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Digital Economy & Society
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Author Biographies
Kapila Fonseka, Management and Science University (MSU)
Ph.D. (Candidate), Management and Science University (MSU), Malaysia.
Adam Amril Jaharadak, Management and Science University (MSU)
Associate Professor, Management and Science University (MSU), Malaysia.
Murali Raman, Management and Science University (MSU)
Visiting Professor, Management and Science University (MSU),
Malaysia.
Jacquline Tham, Management and Science University (MSU)
Senior Lecturer, Management and Science University (MSU),
Malaysia
