Organizational Factors Affecting E-commerce Adoption in Small and Medium-sized Enterprises

The use of e-commerce in SMEs has become an important topic in information systems research. Despite the enormous attention given to encourage SMEs to adopt e-commerce by governments, research undertaken to identify strategies of e-commerce adoption for SMEs in developing countries, especially in Sri Lanka is minimal. The primary objective of this study was to examine the relationship between organizational factors and ecommerce adoption to understand the factors that contribute to e-commerce adoption. Quantitative approaches were considered in this research. The study draws on the data obtained from a sample of 200 SMEs in Colombo District using a postal survey. The sample was chosen using a stratified random sampling technique based on business type of the SMEs. Based on correlation, regression and cluster analysis, the findings of this research were revealing and facilitated the understanding of certain organizational factors that influence the level of e-commerce adoption. The main factor identified was organizational culture. The results of this study show empirical evidence that there is a positive correlation between the adhocracy cultural characteristics among the SMEs and the level of e-commerce adoption. Also, hierarchy cultural characteristic showed a negative correlation with the level of e-commerce adoption in SMEs. An argument can be made out that a culture promoting innovation and risk acceptance would provide the needed support for higher levels of adoption of new technologies. Top managers’ opinion towards innovation also influences the way of doing business by the firm.

Key words: e-commerce; e-commerce adoption; internet; organizational culture; Small and Medium-sized Enterprises (SMEs)

DOI: 10.4038/tar.v22i2.2829

Tropical Agricultural Research Vol. 22 (2): 204-210 (2011)