A study on the factors that influence the adoption of e-commerce among Malaysian small and medium enterprises

Abstract

E-commerce has gained considerable attention in the past few years, giving rise to several interesting studies and industrial application. From time to time, significant effort has been spent to demonstrate the benefits of the new production paradigm on large companies but small and medium enterprises (SMEs) are still missing a proper approach in seeking advantages of e-commerce. The fundamental purpose of this study was to identify factors that influence Malaysian small and medium enterprises willingness in manufacturing sector to adopt e-commerce. Three factors were addressed in the study; perception on the characteristics of e-commerce, CEOs characteristics and organizational readiness. The data was collected through mailed survey to 735 randomly selected SMEs in manufacturing sectors. Out of this number, 107 responses were found to be useful for analysis. The analysis was conducted using statistical tools such as descriptive analysis, factor analysis and regression analysis. The finding shows that perceived relative advantage, perceived trialability, perceived observability and CEO characteristics have significantly influencing the adoption of e-commerce in SMEs. Perceived relative advantage helps in accelerating the adoption of e-commerce among SMEs. SMEs with limited resources will be very careful in spending their resources in new technology. Hence, perceived trialability of e-commerce has significantly influence SMEs willingness to adopt e-commerce. Perceived observability on the other hand proved that Malaysian manufacturing SMEs prefer to be late adopters instead of initiators in adopting e-commerce. The significant of CEO characteristics in influencing SMEs willingness to adopt e-commerce proved that CEO or ownermanager play an important role for success undertaking of e-commerce in Malaysian manufacturing SMEs. The findings from this study show the indication of current scenario on the adoption of e-commerce in Malaysian manufacturing SMEs. Hopefully this research will help to instill awareness among the SMEs towards e-commerce and help them to speed up their involvement in e-commerce.