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Model for
A practical model for e-commerce e-commerce
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Abstract
Purpose – Developing countries are still challenged by infrastructural and cultural issues related to
the adoption of e-commerce although with the emergence of social commerce, a new stream has been
introduced. Iran is a developing country, in which the adoption of e-commerce by small to medium
sized enterprises (SMEs) is challenged by such barriers; it is now applying models for the adoption of
new technologies by SMEs. The paper aims to discuss these issues.
Design/methodology/approach – This research attempts to develop a model, based on existing
models of e-commerce, which can be applied in Iranian conditions. The study uses data gathered by a
survey, together with existing models in this area, in order to propose a new model, which has been
empirically tested.
Findings – The results of this research demonstrate that e-commerce barriers in Iran are related to a
lack of awareness of the benefits of e-commerce adoption, as well as organisational issues related to
its application. The paper also discusses the results and implications of this research, which can
be applied to other developing countries. The paper also gives a better picture of Iranian market.
Finally the paper discusses possible future directions of this research, as well as its limitations.
Originality/value – This study contributes to the theoretical basis of IS and e-commerce adoption
studies by proposing and testing a pre-adoption model for e-commerce. The adoption of e-commerce
in SMEs in Iran has not been substantially investigated. This is despite the fact that SMEs play
an important role in all economies. The results demonstrate a significant relationship between
organisational readiness and the adoption of e-commerce. It also shows that there is a positive
relationship between awareness of e-commerce and its adoption.
Keywords Iran, e-commerce
Paper type Research paper
1. Introduction
E-commerce adoption in small to medium sized enterprises (SMEs) is governed by its
benefits (Kaynak et al., 2005). SMEs need to be aware of the benefits of e-commerce
before they invest money in e-commerce technologies. E-commerce is a marketing tool
for doing online business (Noyce, 2002). E-commerce can be an important tool for
growth in developing countries, and several authors have highlighted the potential
profits of e-commerce for such countries (Moodley and Morris, 2004; Molla and Licker,
2005; Kshetri, 2007; Datta, 2011) as the popularity of e-commerce is growing at a global
level (Datta, 2011). However, most developing countries are not aware of the benefits of
e-commerce (Kshetri, 2007).
The digital gap between developed and developing countries remains, even though
we now live in the twenty-first century. In this era, many businesses and customers are Journal of Enterprise Information
connected through new platforms or social networks. This development appears to be Management
Vol. 27 No. 6, 2014
the result of a new stream in e-commerce called social commerce (Hajli, 2013, 2014a; pp. 719-730
r Emerald Group Publishing Limited
Hajli et al., 2014), but it is not taking place in developing countries, as they are still not 1741-0398
using the appropriate systems and model for e-commerce (Kshetri, 2007; Datta, 2011). DOI 10.1108/JEIM-09-2013-0070
JEIM Most research into developing countries is descriptive, and does not have a sound
27,6 theoretical foundation (Kshetri, 2007; Datta, 2011). To fill the current gap in the literature
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2. Literature review
In the first part of the study we review the relevant literature, although there is a
shortage of research in e-commerce adoption in developing countries to fully develop
this area. The aim of this phase of the research is to determine whether any patterns
can be discerned in e-commerce adoption within a developing country.
E-commerce is perhaps the most prevalent way in which economic growth can be
supported by information and communication technologies (ICTs) (Datta, 2011). In the
past, information and technologies adoption has been the subject of two corresponding
streams of research. The positivist school has mainly emphasised the alteration models
of diffusion and adoption and has treated them statistically and objectively.
Meanwhile, the interpretivist school has placed more emphasis on the comprehension
and construction of reality (Datta, 2011).
There are different definitions of e-commerce, although most emphasise the use of
the internet to process and facilitate business (DeLone and McLean, 2004). E-commerce
involves doing business and carrying out commercial activities through the internet.
It is argued that SMEs are in the front line of being able to take advantage of the
opportunities offered by the internet and e-commerce to reach out to the global market
(Kaynak et al., 2005). Additionally, e-commerce opens up new channels to communicate
with consumers, especially with recent advancements in ICT and the emergence of
social commerce.
E-commerce can be a beneficial channel to reduce transaction costs as well as a
means of offering certain goods at a price lower than the traditional market (Santarelli
and D’Altri, 2003). Most benefits derived from e-commerce are different factors such as
market development, efficiency of sales and promotion, ease of accessibility and cost
reductions (Kaynak et al., 2005). E-commerce can reduce SMEs’ market entry costs,
distribution costs and can help reach more customers in the global market (Santarelli
and D’Altri, 2003).
In the current literature of e-commerce adoption, many conceptual frameworks exist
which are mostly influenced by two main theories – the Technology Acceptance Model
(Davis, 1989), and the Theory of Planned Behaviour (Ajzen, 1985; Gefen et al., 2003;
Pavlou and Fygenson, 2006). Other research into e-commerce adoption is influenced by
the Theory of Emotion and other theories (Rodrı́guez-Ardura and Meseguer-Artola,
2010; Al-Qirim, 2007). However, other research has followed the main theories
concerning e-commerce adoption, and the authors have proposed their own research
frameworks. We would categorise them in two main areas to design our model:
organisational readiness and awareness.
SMEs are becoming increasingly aware of the potential benefits of e-commerce and
how it can increase their profits and market share. E-commerce requires work to
upgrade communication systems both at intra-organisational and inter-organisational Model for
levels. It is argued that the environment of communication has changed (Capozzi and e-commerce
Downloaded by LIBRARY & INFORMATION CENTRE of National Economics University, Mr Khoa Bui Thanh At 06:08 21 December 2016 (PT)
Zipfel, 2012) as new technologies has emerged (Hajli, 2014b). Adopting e-commerce is
one of the key issues for SMEs in different countries, as is redesigning the relationship adoption in Iran
between customers and businesses and re-engineering the business processes (Daniel
et al., 2002). SMEs can use e-commerce and new developments in this area, such as
social commerce, to improve relationships with their customers, many of whom are 721
active in social platforms such as online communities (Hajli, 2014b).
Organizational
readiness
722
e-Commerce
Adoption
Figure 1.
E-commerce Awareness
pre-adoption model in
developing countries
In the case of Iranian SMEs, the lack of English language skills and of ICT literacy
are key determinants of the use of e-commerce, as is the case in other developing adoption in Iran
countries. Senior managers also play an important role when they have positive
perceptions of e-commerce adoption and determine that it can bring strategic value to
their companies. This is true in developed countries, as well as in developing countries 723
(Grandon and Pearson, 2004). This perception requires awareness of the business
benefits of e-commerce in developing countries (Molla and Licker, 2005). Our second
hypothesis is therefore that:
4. Research methodology
4.1 Research design
The primary objective of this research is to develop a pre-adoption model for
e-commerce, and to test the model using its constructs. In order to achieve this
objective, we pose three research questions, which are shown in Table I.
We select a quantitative approach in order to test the model empirically. In this
study, which had a non-experimental design, data is collected using a paper survey.
RQ1. What are the barriers to e-commerce adoption for SMEs in developing countries?
RQ2. Do cognitive issues for SMEs, such as lack of awareness and knowledge of the benefits
of e-commerce, or lack of computer literacy, influence their level of e-commerce adoption? Table I.
RQ3. Does organisational readiness influence adoption of e-commerce by SEMs? Research questions
JEIM SMEs in Iran are categorised as companies with between five and 49 employees. The
27,6 population of the research in this paper consists of those SMEs in the IT sector which
Downloaded by LIBRARY & INFORMATION CENTRE of National Economics University, Mr Khoa Bui Thanh At 06:08 21 December 2016 (PT)
we were able to investigate. According to the literature and document review which we
carried out in Iran, Iranian SMEs lack awareness of e-commerce, and are also
challenged by problems of infrastructure. It is consistent with other research in Iranian
SMEs in IT sectors, that ICT infrastructure, high network speed, internet availability
724 and the quality of IT employees employed are the critical issues for SMEs (Fathian
et al., 2008). Although previous governments have had specific plans to develop ICT
throughout Iran and among SMEs in particular, the trend of e-commerce adoption is
not positive in this country. However, they have recently reconsidered their need for a
digital economy and have attempted to join the online marketplace. This study will
investigate the barriers to the use of e-commerce in Iran.
4.3 Participants
When we conducted our research in Iran, we chose to target SMEs, because, in general,
they have a crucial impact on the economies of developing countries, and they
form a large part of these economies. To focus our research, we selected SMEs in the
Iranian IT sector. The reason the authors selected Iran as the case for research in
developing countries is that they were an experienced research team in this country
and authors had access to relevant data enabling them to collect the data more easily
than from other countries. Although Iran is a developed country in different sectors, the
IT sector has been unable to expand in recent years. Research shows that development
in IT can bring huge benefits to developing countries (Harbi et al., 2009) and help
these countries to reduce digital gaps. In the case of Iran, the IT sector is one of the
most innovative industries that has recently used e-commerce in the business process.
The other reason for selecting the IT sector is that the association of Iranian IT SMEs
collaborated with this research in the data collection phase. They supported the
research by inviting their members to participate in this work. Therefore, it is easier for
us to collect the data. It is an important factor as it is difficult to attract people to
participate in a survey.
It is also essential to mention that IT in Iran is being affected by different issues,
especially with the sanctions faced by the country at the time of the research. The state
government is in control of this sector, although this sector is privatised. Finally, the
other reason for selecting the IT sector is that these SMEs are more familiar with
the language used and activities related to “e”. SMEs in the IT sector are pioneers in
e-commerce in Iran (Fathian et al., 2008).
4.8 Validity
In seeking content validity, we are attempting to ensure that the measures of the
questionnaire are drawn from all the potential measures of the material under
investigation (Straub, 1989). To obtain a high content validity, we undertook a
substantial literature review in the area of e-commerce and piloted it using a small
number of SMEs. Moreover, some of the constructs – for cognitive and organisational
readiness – are taken from the existing literature, and have frequently been shown to
demonstrate evidence of strong content validity. It is evident that such constructs drew
their items from different validated sources, something which improved the validity of
this research with regard to the measurement of the constructs. However, we also
considered the face validity of the research by simply showing the survey to lay people,
in order to ensure that the questions were fully comprehensible. We conducted the main
survey after taking these steps.
internet availability and network speed is a key factor in obtaining benefits from
e-commerce for SMEs. In fact, development of SMEs in Iran is being challenged by adoption in Iran
some basic issues such as lack of English language and lack of awareness in
management to the benefits of e-commerce.
Having established these two key factors through our research, we developed and 727
tested our model. The present research has employed some local researchers who were
familiar with the environment along with the experience gained from a few months’
residence of the team leader in Iran. This has ensured that the data collected reflects the
real situation in this country. We would like to propose it as an action plan for
developing countries, when they take pre-adoption steps as part of the e-commerce
process. These variables should be carefully considered, so that developing countries
are ready to adopt e-commerce.
It is important for SMEs in developing countries to re-structure their attitudes and
knowledge about e-commerce. The world is now adopting social commerce as a new
stream in e-commerce, where businesses and consumers interact on the internet
through social technologies. However countries such as Iran are still challenged with
low internet penetration and organisational readiness to employ IT in SMEs. In fact,
sanctions for the country were one of the main issues in preventing the development in
e-commerce. Iranian SMEs face additional difficulties when they make a strategic plan
to connect to the world wide digital market. There are a variety of problems and
barriers that the model of this research has uncovered. The problems are mostly
organisational readiness. Some of these are linked to the environment and cannot be
controlled by SMEs, but some of them are in control of SMEs. For instance, there is lack
of awareness by management to the benefits of e-commerce in SMEs. These are mostly
related to the business structure and culture of established SMEs.
5.2 Implications
This study could be a basis for further rigorous research into e-commerce in
developing countries such as Iran. The research introduced the pre-adoption model for
e-commerce, and contributed to the theory of this topic by investigating pre-adoption
models in developing countries using multisource data. The study shows that the
development of e-commerce is continuing, and that the adoption of e-commerce is an
on-going issue in IS research. In terms of practical and policy implications, the research
highlights the need for development in ICT in Iran. This should include internet
availability and network speed, employing skilled IT workers in SMEs and supporting
a programme to increase the awareness of SME managers. It is also crucial for the
government to investigate more in the e-banking system and the issues related to
linking them to global banks. As has been mentioned, the Iranian SMEs also have
problems in sending and receiving money worldwide because of current sanctions.
6. Conclusion
This study contributes to the theoretical basis of IS and e-commerce adoption studies
by proposing and testing a pre-adoption model for e-commerce. The adoption of
e-commerce in SMEs in Iran has not been substantially investigated. This is despite the
fact that SMEs play an important role in all economies. The results demonstrate a
significant relationship between organisational readiness and the adoption of e-commerce.
It also shows that there is a positive relationship between awareness of e-commerce and
its adoption. The discussion presented above shows the importance of organisational
readiness and lack of awareness in the pre-adoption process for e-commerce in SMEs
within developing countries. The model has been tested in a single case study in
developing countries, using multiple data sources, collected through interviews,
secondary data and surveys of Iranian SMEs.
The majority of Iranian SMEs do not use e-commerce properly. The reason for this,
as indicated in this paper, is that they are not aware of the benefits of e-commerce, and,
as a result, are not ready to adopt it. It is important, therefore, to increase both
knowledge and understanding of e-commerce within SMEs in developing countries,
so that they are aware of its benefits and can prepare their organisations to participate
in the contemporary digital economy. The study shows that the issues related to
e-commerce adoption in Iran have multi dimensions. Initially, the government has a
strong influence on organisational readiness of IT SMEs. There are a number of key
factors that are controlled by the central government, such as the infrastructures in
ICTs and e-banking services. These are areas that are vital in encouraging SMEs to
adopt e-commerce in Iran. The other dimension is the present sanctions, which
prevents Iranian SMEs to trade freely with their global partners. Finally, SMEs
themselves need to take more steps to become familiar with the benefits of e-commerce
for their business and future business plans. Although new business plans throughout
the world for e-commerce consider social commerce, SMEs in Iran are struggling with
the infrastructure or some cognitive issues such as managerial perspectives and lack of
awareness of the benefits.
The factors influencing adoption which have been demonstrated by this research –
organisational readiness and lack of awareness – can be improved through support
from government, as has been demonstrated by other research which shows the
importance of the governmental role (Kshetri, 2007). Governments of developing
countries can improve awareness of e-commerce within their borders, and can also play Model for
a key role in the development of their countries’ infrastructure. This is clearly e-commerce
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Corresponding author
Dr Nick Hajli can be contacted at: m.hajli@mbs.bbk.ac.uk
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