chong_2008_cross country study of small and medium ent_success in e com implementation

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Success in electronic commerceimplementation

A cross-country study of small andmedium-sized enterprises

Sandy ChongCurtin University of Technology, Perth, Australia

Abstract

Purpose The purpose of this paper is to develop a model of electronic commerce (EC)implementation success for small to medium-sized enterprises (SMEs), and to present outcomes of acomparative study between two countries to reflect the differences in the adoption strategies and

explore reasons behind such variations.Design/methodology/approach Preliminary studies were conducted in both Australia andSingapore prior to a cross-country survey, which collected the perceptions of small businesses abouttheir experience with internet-based EC. Multiple regression analysis was conducted to identify theinfluencing factors that affect success in the implementation of internet-based EC.

Findings By regressing overall satisfaction on the 19 influencing factors of EC success, the paperfound that five factors: observability; communication channel; customer pressure; supplier pressure;and perceived governmental support, make significant contribution to the adoption of internet-basedEC in Australia; and only three factors: firm size; perceived readiness; and observability, havesignificant impact in Singapore.

Research limitations/implications The exploratory nature of the research means confirmatoryor causally directional hypotheses could be generated in the future. It would also be insightful toconduct longitudinal studies to confirm the direction, to help clarify causality and test for feedback

effects of adoption decisions. There was also no attempt made to control for industry type, which couldtested more intensively in a chosen industry. Generalisability to other geographical context could beachieved if the research model can be tested over several other countries.

Practical implications The study has found that the proposed model can be used ininvestigating drivers of EC implementation in SMEs, and the empirical data has adequatelysupported the model. The findings show that the organisational and innovation characteristics arenecessary, but to provide a more comprehensive picture in explaining the implementationbehaviour of SMEs, one needs to consider other factors and contexts especially when testing themodel in different countries. Communication methods employed, government support, externalpressure from customers and suppliers have been found to be very important for Australian SMEsin this decision.

Originality/value A major contribution of this study is that it provides an understanding of whatthe organisational, technological, communication, and external environmental drivers of EC

implementation are. The findings of this study could also help companies embarking upon crossborder activities by illustrating the differences in EC adoption between the two Asia-Pacific nations.The study also provides a close examination of the inhibiting and facilitating factors which can affectEC adoption success. By knowing the relative importance of these factors, SMEs may be spared fromexpending their limited resources and energy on less important factors which have limitedcontribution to EC implementation success.

KeywordsElectronic commerce, Internet, Small to medium-sized enterprises, Australia, Singapore,International marketing

Paper typeResearch paper

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/1741-0398.htm

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1. IntroductionThe last decade has witnessed tremendous advances since the emergence of theinternet and Worldwide Web (WWW). This phenomenon closely followed by thesignificant rise in electronic commerce (EC) has changed and is still changing the way

business is conducted around the world. For many companies, EC has become one ofthe most promising and opportunistic tools for reaching out to customers,communicating with business partners and the running of business operation.Despite the economic downturn and the burst of the dot-com bubble, EC is expectedto continue its significant growth. In the US alone, the second decade of EC wouldboost online sales from $172 billion in 2005 to $329 billion in 2010 (Forrester Research,2005), while Asia Pacifics B2B EC is forecasted to grow rapidly at a CompoundAnnual Growth Rate (CAGR) of 59 per cent (IDC, 2004). Specifically, in Australia, EC isestimated to be worth $11.3 billion dollars annually (Australian GovernmentInformation Management Office, 2005).

EC permeates all facets of business strategy, enabling organisations to improvebusiness communications as well as business processes. It is also known to benefit allstakeholders in the business such as consumer, supplier, management team andinvestors. One section of the economy that has clearly benefited from the opportunitiesthat EC offers is the small- and medium-sized enterprises (SMEs). EC has helpedopened up the market, particularly on the supply- and demand-side for SMEs. Smallfirms are now able to compete in the same global arena that has previously only beenthe exclusive territory of multinationals corporations. This massive change for SMEshas resulted in a number of studies being undertaken by EC researchers worldwide.The strong interest is driven by two clear facts:

(1) SMEs play a significant role in most countries economies; and

(2) EC can provide SMEs with an unprecedented range of benefits, including arelatively inexpensive means of accessing global markets using a low cost

communication medium.

1.1 Importance of small- and medium-sized enterprisesSMEs comprise an essential sector of all countries economies and in some countriesconstitute more than 90 per cent of businesses. Given the economic importance andtheir intrinsic community value, the role of small businesses in emerging marketsbased on EC is a major policy issue for governments. Smaller companies can benefitdisproportionately from the opportunities offered by information technologies and EC.The internet can make size irrelevant, because it can level the competitive playing fieldby allowing small companies to extend their geographical reach and secure newcustomers in ways formerly restricted to much larger firms. On the other hand, it isconceivable that the dynamics of electronic markets could create conditions that might

impede SME involvement, relating to access to networks and connectivity, technicalstandards, or institutional arrangements that might have anti-competitive effects orpose barriers to entry. This means that both governments and the business communitymust remain attentive to developments in the electronic marketplace in order toprevent or remove barriers to full SME participation.

It has been observed and verified in many studies that SMEs have been activelylooking for suitable solutions and methods of adopting and integrating EC into theirbusiness process (Benbasatet al., 1993; Cragg and King, 1993; Dos Santos and Peffers,

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1998; Massey, 1986; Purao and Campbell, 1998). If the EC implementation is successful,potential benefits to small businesses can include increased sales, improvedprofitability, increased productivity, reduced costs associated with inventories,procurement and distribution, improved quality of service, and secured competitive

positions (see Campbell, 1998; Dholakia and Kshetri, 2004; Grandon and Pearson, 2003;Purao and Campbell, 1998; Smith, 1998; Stockdale and Standing, 2004; Whiteley, 2000).On the other hand, if EC implementations are unsuccessful, it will have severerepercussions on small businesses with their limited resources (Soh et al., 1997; Leeet al., 1999). This paper aims to identify which factors are important in the successfulimplementation of EC for SMEs.

1.2 Definition of electronic commerceOver the years, there have been a number of varying definitions of what EC actuallyencompasses. The differences are generally dependent upon the focus or perspective ofthe individual researcher, and not upon the actual core elements of EC (Chong, 2004).

According to one of the earliest definitions, EC is defined as the buying and selling ofinformation, products and services via computer networks. Bauer and Glasson (1999)further extended the definition to include the assistance of computer andtelecommunication networks that use internet technology and argued that the keydistinction between EC and the discipline of Information System (IS), is the underlyingelectronic communication which stand-alone information systems do not possess in thecommunication with other users or computers. Clarkes (2005) definition includedetailed elements of EC functions such as support services for trading . . . .Itencompasses inter-organisational email, directories, trading support systems forcommodities, products, customized goods and services, management information, andstatistical reporting systems.

After considering alternative definitions, it is necessary to define Electronic

Commerce in the context of the operative word of Commerce and the concepts ofinterorganisational communication and commercial transactions. ElectronicCommerce is first and foremost Commerce and that the electronic component ismerely one of the means of serving the commercial ends. In this study, the followingdefinition will be used, which adopts a broad approach to EC:

Electronic commerce is the provision, buying and selling of information, products, andservices with the assistance of computer and telecommunication networks that use internettechnology to perform commercial activities (adapted from Bauer and Glasson, 1999).

EC uses Information Systems (IS), Information Technology (IT) or Information andCommunication Technologies (ICT) to achieve the provision of information and buyingand selling of good and services among business stakeholders (Whiteley, 2000). In

particular, EC currently makes use of the internet-based technologies because these arethe current technologies that provide the widest network of information systems.Historically, the development of an EC strategy might be seen as an element in theIS/IT strategy. However, for many organisations, EC has wider implications than justanother IT system. In other words, EC may well be an essential component in theformulation of the overall business strategy. The extension of networks outside thecompany gave birth to the Interorganisational System (IOS) and the use of ElectronicData Interchange (EDI). There are considerable differences between EC and EDI; some

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EC applications may exchange unstructured information, while some others have theneed for structured information. EDI is only one facet of an EC implementation.According to Whiteley (2000), even though EDI is used for regular and standardisedtransactions between organisations, it is only one part of the overall sphere of EC. The

further evolution of the network from an interorganisational facility to one that reachesout to almost any member of the public set new horizons and EC is one of these. Thefollowing Figure 1 illustrates the relationship of EC-related concepts.

1.3 Cross-country study of EC adoptionAs the markets expand to a global arena, the importance of understanding differentadoption and implementation behaviour triggered by different cultural and nationalbackground becomes clear. Yet the largest body of research has been directed towardsthe actual adoption and diffusion of EC within Western economies such as the USA,UK, Australian, New Zealand, Canadian, and European firms, and single country studyinstead of cross-national, comparative type of research (Parker and Castleman, 2006).

As such, there is a real need to conduct these studies to provide a more thoroughperspective of the international impact of EC adoption and implementation.According to the report of the Australian National Office of the Information

Economy, Australia is well positioned to benefit from the emerging informationeconomy. On a number of metrics, Australia is among the leading nations in terms ofmeasures of internet infrastructure, penetration and activity. However, in comparisonwith other countries and other larger Australian businesses, small- and medium-sizedenterprises (SMEs) have been relatively slow in adopting EC. Singapore also began itsnationwide internet journey in the 1990s with the launch of Singnet, its firstcommercial internet service, in 1994. This is followed by a domestic drive to establish anational broadband infrastructure with the launch of Singapore-ONE in 1997. Today,Singapore is ranked 12th in the world for internet penetration, with a penetration rate

of 60 per cent, and it is predicted that this will continue to rise as Singaporese-commerce revenue is forecast to hit some US$43 million in 2008. Yet Singaporeangovernment recognises that there is still a long way to go before the country is truly

Figure 1.Relationship among the

concepts of electroniccommerce

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embracing the benefits of EC and consequently they are continuously looking atstrategies to assist the uptake of EC within the nations business community.

On international-level initiatives, in July 2003, Australia demonstrated thepromotion of EC outside the country by forming an international EC partnership as

part of the bilateral free trade agreement with Singapore. In doing so, Australia andSingapore not only reduced transaction costs in the form of tariffs, but also introducedpaperless trading between the two countries especially within the private sector. Whilethe joint approach to promoting EC has clear economic benefits, one factor that mustalso be considered is that past studies have shown that an innovation (such as EC)diffuses differently in different cultures depending on the sociocultural environment.While both Australia and Singapore want to increase their internationalcompetitiveness by entering a free trade agreement, cultural barriers in EC adoptionand implementation have to be considered and championed.

1.4 Significance of the study

SMEs that hope to operate successfully in a global environment would not onlyconsider adopting EC but also be able to adapt to foreign EC business practices. Thisstudy can help companies embarking upon cross border activities by illustrating thedifferences in EC adoption in different countries. Possessing cross-country awarenessis a critical factor to succeed in any international business interaction. For Australiaand Singapore, this study is useful for both governments and their respective localenterprises, as it provides a close examination of the inhibiting and facilitating factorsthst can affect EC adoption success. This knowledge may eventually prove to be thekey for a successful partnership between these two Asia-Pacific nations.

Based on case studies and surveys, a number of potential factors have beenidentified in the literature of IS and IT as critical to implementation success in smallbusiness (Cragg and King, 1993; Delone and McLean, 1992; Gunasekaran and Cecille,

1998; Lees, 1987; Montazemi, 1988; Raymond, 1990;). However, limited IS, IT and ECliterature have investigated the relative importance of the identified factors ofimplementation success. Without knowing the relative importance of these factors,SMEs may be expending their limited resources and energy on less important factorswhich have limited contribution to EC implementation success. Thus, there is a need toidentify the more important factors so that implications and guidelines can be drawnfor effective EC implementation in SMEs. Although adoption and implementationprocesses may vary from industry to industry, the findings of this study should bebroadly applicable. It is therefore the intention of this research to develop generalconclusions free of industry bias.

1.5 Research objectives and scope

The purpose of the paper is two-fold. First, to develop a model of EC implementationsuccess for SMEs, and second, to present outcomes of a comparative study betweentwo countries to reflect the differences in the adoption strategies and explore reasonsbehind such variations. In this study, the assessment of implementation success isrepresented by overall satisfaction, which is a strong and subjective component usedextensively in previous IS/IT adoption studies. In attempting to determine the successof the overall EC effort, the study measures the overall satisfaction of the owner or topmanagement of SMEs.

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The study focuses solely on SMEs mainly because they are the backbone of theAustralian and Singaporean economies[1]. In Australia, SMEs constitute 95 per cent ofthe total market and employ more than half of those Australians working in the privatesector. Similarly, half of Singapores workforce is employed in the SME sector.

EC as defined in this study principally includes, but is not limited to, internet-basedEC. The scope of EC applications is limited to the utilisation of the internet as thetechnological infrastructure to communicate, distribute and conduct informationexchange and transactions with business partners. It purposely focused onorganisations that use business-to-business EC to carry out transactions andinteractions that affect existing business relationships or preexisting contractualrelations between trading partners.

2. Theoretical perspective of the studyIt should be noted that this study has been informed by a substantial variety ofprevious research on adoption, implementation, and innovation diffusion theories

applied to technology in general: information systems (IS), information technology (IT),electronic data enterchange (EDI), inter-organisational system (IOS), and managementof information systems (MIS). Clearly, EC is not identical with any of them. Itnecessarily involves IT which it shares with IS and MIS and at more sophisticatedlevels is likely to enable EDI. It is also undeniably Inteorganisational. It maytherefore be argued that any factor that has been shown to influence the adoption andimplementation of technology or application in general is worthy of consideration as apotential explanatory variable with respect to EC. To ensure thoroughness, whereverprevious research or reasoning suggested a relationship between a factor and one ofthe variables, its possible influence on the focal variables will also be hypothesised.Innovation diffusion theories have been particularly useful for understanding thefacilitators and inhibitors of EC, because they provide insight into the factors that

influence the adoption of innovation. After a critical analysis of existing models, theirinfluencing factors, stages, and process, the theoretical framework is extended toincorporate important organisational and contextual aspects of adoption in thedevelopment of the research model.

2.1 Adoption and implementation of ECAs defined in Rogers (1995) innovation diffusion theory, adoption is a decision to makefull use of an innovation as the best course of action. In this study, we are only lookingat the factors that influence the extent of adoption and not the adoption process. It isargued that EC adoption is essentially a continuum involving a range of progressivedevelopments and a broadening variety of applications. For several reasons, there israrely any clear separation between adoption and implementation in EC. In other

words, EC is not one simple or single innovation that a firm either does or does notadopt, but should be considered as consisting of a number of combinations ofinnovations of varying complexity and sophistication on a continuum requiring lesserto greater levels of commitment. Implementation success of EC has technicalcomponents, similar to other IT innovations. However, EC is also a special case ofinnovation that also encompasses inter-organisational elements, and this distinguishesit from other types. Perhaps the most obvious, intellectually appealing, and arguablythe most commercially appropriate measure of success for any given state of EC

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adoption would be the change in profitability that is attributable to it. However, toarrive at a valid measurement for this within the rubric of a rapidly changing businessworld is almost impossible, as it would be extremely difficult to separate the profit thatis engendered by EC from what is generated by a myriad of other powerful influences.

Clearly, there exists a need for a criterion that incorporates the values held byindividual firms as far as possible. A measure of success that reflects this range ofvalues is investigated and outline in the following sections.

2.2 Measure of adoption and implementation success for ECIn searching for an IS or EC success measure, the researcher found that there are nearlyas many measures as there are studies. The literature on organisational ISeffectiveness has proposed numerous measures of success. These include usersatisfaction, decision-making performance, frequency of use and cost-benefit analysis.Delone and McLean (1992) provide examples of many more measures including bothold and new, IS and EC success metrics. Delone and McLean (1992) proposed taxonomyof success measure in six distinct categories or aspects of IS:

(1) System quality;

(2) Information quality;

(3) Use;

(4) User satisfaction;

(5) Individual impact; and

(6) Organisational impact.

Among various measures suggested in the IS literature for measuring success inimplementation, usage and satisfaction have been found to be the most common.However, not withstanding the advantages of usage itself as an indicator of

implementation success, volume does not translate automatically into dollars or anyother measure of value that is generalisable across firms. As argued more fully later,any assessment of implementation success must ultimately contain a strong andsubstantial subjective component. Overall satisfaction incorporates the subjectiveperspective and has been used extensively in previous studies.

Binary measures such as adopting versus not adopting and success versus failurehave been found to be grossly inadequate. The need to use dependent measures otherthan the binary has been remarked upon by several researchers. In particular, it hasbeen suggested that innovation has several dimensions including breadth, depth andsophistication. These and similar concepts are incorporated in the discussion andmeasurement of the variables in this study.

2.2.1 Overall satisfaction. Although many variables may be considered for

constituting the indicator for success of an internet-based EC undertaking, overallsatisfaction has been chosen for the current study. User satisfaction or userinformation satisfaction is probably the most widely used single measure of IS success.In small business research, satisfaction has often been used as the dependent variable(Lees, 1987; Montazemi, 1988; Raymond, 1990; Raymond, 1990; Delone and McLean,1992). The reasons for this are at least three-fold. First, satisfaction has a high degreeof face validity. It is hard to deny the success of a system where users say that they likeit. Second, the development of the Bailey and Pearson (1983) instrument and its

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derivatives has provided a reliable tool for measuring satisfaction and for makingcomparisons among studies. The third reason for the appeal of satisfaction as a successmeasure is that most of the other measures are so poor; they are either conceptuallyweak or empirically difficult to obtain (Delone and McLean, 1992). Being one of the

popular constructs of IS implementation success, satisfaction has been found tocorrelate with usage. Other scholars have even suggested that low satisfaction causesdiscontinuity in the usage of information technology (Thong, 2001). In situations whereuse is mandatory, satisfaction is thought to be a better surrogate for success thanactual use. When the use of EC is required, the successful interaction with the systemby management can be measured in terms of overall satisfaction. The key issue iswhose satisfaction should be quantified. In attempting to determine the success of theoverall EC effort, this study measures the satisfaction of the owner or the topmanagement of SMEs.

At present, the purpose of the paper is to direct its discussion towards theidentification of factors that exert an influence on the overall satisfaction of ECimplementation; and this is achieved by utilising the findings of the survey. To thisend, the paper has been structured as follows:

(1) a model of EC implementation success and the outline of the influencing factors;

(2) a brief description of the data collection, measurement of the variables, andinstrument validation; and

(3) a discussion of the findings of the study, encompassing the implications that arelikely to be of importance in assisting SMEs and public policy makers achieve abetter understanding of EC adoption and implementation.

3. Research modelIn this study, it is proposed that several factors influence the satisfaction level of EC

implementation. To assist in the selection of the most significant variables for ECadoption, a number of possible relevant factors have been identified from previousadoption studies and grouped into broad categories of internal and externalenvironmental factors. The distinction between internal and external environmentalfactors is made to separate organisation-specific (and organisation-determined) factorsfrom those that are imposed (and determined) from outside the organisation. Figure 2presents the research model in which the relationship between the influencing factorsand the overall satisfaction was examined.

3.1 Influencing factors of EC adoption and implementation3.1.1 Internal environmental factors. Despite the advantages of EC, SMEs aroundthe world are not adopting it as rapidly as originally anticipated (Purao and

Campbell, 1998; Dholakia and Kshetri, 2004; Grandon and Pearson, 2003; Wagneret al., 2003). Several organisational factors that inhibit EC adoption were identifiedafter conducting preliminary interviews and an extensive literature search in thefield of IT and IS. Among these were the cost of technology, a lack of managerialand technological skills, a lack of system integration and a lack of financialresources (Cragg and King, 1993; Iacovou et al., 1995; Stockdale and Standing, 2004).These inhibitors are expected to play a major role in the context of smallorganisations, where resources and the level of computer sophistication are limited

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(Dholakia and Kshetri, 2004; Grandon and Pearson, 2003; Stockdale and Standing,2004). As shortages of resources, energy and time constraints these companiesexperienced are common challenges faced by small organisations, thus firm size andperceived readiness are included in the category of internal environmental factors.Another recurrent observation is that EC adoption seems to be more of amanagement issue than a technical one. Many researchers have found that if thereis a lack of support amongst top executives, technology cannot be successfullyadopted (Grandon and Pearson, 2003). It is therefore reasonable to assume thatmanagement support is a critical factor to the successful adoption of EC. Previousscholars also anticipated that the age of the firm could either foster or impede

technology adoption in terms of resistance to change, a track record of successfullyovercoming hurdles, and experience in adopting prior technological advances. Theinternational orientation of the company is also examined in this study. Previousresearch within the area of internet adoption suggests that firms that are operatingin the international markets tend are more likely to conduct EC through portalsthan those that do not have foreign collaborations (see Lal, 2002; Wagner et al.,2003).

Although the most well known have been developed by Rogers (1995), theseinnovation factors have also been the key feature of several other IT adoption studies(Iacovouet al., 1995) and EC studies (Van Slykeet al., 2004; Wagneret al., 2003). In thisstudy, they are adapted as follows:

.

perceived relative advantage (i.e. the perceived EC benefits and impact relative toits existing practice or system);

. compatibility (how well EC fits in both technical and organisational processes);

. trialability (the degree to which EC can be pilot tested or experimented withouthigh start-up costs);

. complexity (ease of use or the ease with which EC can be learned); and

. observability (the extent to which EC advantages or gains are visible to firms).

Figure 2.Conceptual model offactors that influenceimplementation success ofEC

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According to the findings of preliminary interviews and an extensive literature search,there is a lack of reliable sources of information that SMEs can exploit in order to gainknowledge of EC. This may serve to hinder the smooth adoption of EC in many cases.Moreover, following the work of Rogers (1995), other scholars argue that the adoption

of a new technology is influenced by communication channel types (mass media vs.interpersonal channels), information source (external source vs. internal source) andcommunication amount. Hence, communication factors were added to the EC adoptionmodel.

3.1.2 External environmental factors. SMEs are usually characterised by a highlevel of environmental uncertainty that includes fluctuations in interest rates,reliability of supply, and competition. Related to this factor, the use of IT and EC isoften imposed on SMEs by major customers or suppliers. Such pressure from tradingpartners plays a critical role in encouraging small firms to adopt IT and EC, asevidenced in previous studies (Grandon and Pearson, 2003; Iacovou et al., 1995;Stockdale and Standing, 2004; Thong, 1999; Wagner et al., 2003). In addition, thecompetitive pressure that firms face within the industry also has an influence on thecompanys decision to adopt IT or EC (Grandon and Pearson, 2003; Iacovouet al., 1995;Wagneret al., 2003). As more competitors adopt EC, small firms are more inclined tofollow suit in order to maintain their own competitive positions. Even though it shouldalso be noted that the influence of non-trading institutions such as industryassociations, government, financial institutions, the media and universities may not beas strong as that of the entities the firm trades with, they may still influence theadoption of EC to a certain extent. Thus, the aforementioned justifications lead to theinclusion of trading partners pressure, competitive pressure and non-tradinginstitutional influence under the category of industry factors.

Relevant environmental participation is also an important factor for any firm that istrying to employ new technology or systems to their fullest potential. Without the wide

acceptance of applications or systems, current or potential customers may resist theadoption of EC because of the lack of infrastructure, suitable platform, or compatibletechnological standards (Wagneret al., 2003). It should be noted that although relevantenvironmental participation recognizes the existence of a possible critical mass, it isnot synonymous with that term. While the concept of critical mass may be appropriateto studying the movement of a single innovation through a large social system, itsusefulness when applied to innovations that lie on a continuum (such as EC in SMEs) islimited.

Finally, the national factor is included in the adoption model in order to providea macro country-level view of EC, its adoption behaviour and the businessenvironment. Previous studies have illustrated that governmental support infunding infrastructure projects, adoption schemes and initiatives have provided

direct and indirect stimulation to the supply of information which as aconsequence produces faster technology diffusion (Tan, 2000). Governmentalsubsidy and supports have been shown to have a positive impact on the uptake ofIT use and innovative business practice by organisations, especially SMEs (Wagneret al., 2003). Institutional regulations that promote electronic interactions andtransactions may also encourage EC or future IT adoption in small businesses. Inthis study, we examine the influence of governmental support and its propensity toshape the push for EC in SMEs.

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4. Research methodologyA positivist approach was undertaken in order to develop a research model rather thanconfirming an existing one. This model is operationalised on the basis of correlationalhypothesis testing, as opposed to the determination of a definitive cause and effect

relationship. The desired result testing the model is the identification of variables thatare associated with the overall satisfaction of EC adoption. A cross sectional approachwas undertaken to measure firms responses with regard to the adoption of EC.

4.1 Data collectionThe study was conducted in three phases:

(1) preliminary investigation;

(2) pilot study; and

(3) questionnaire survey.

4.1.1 Preliminary interviews. First, five SMEs were selected to participate in a

preliminary interview in Australia and Singapore[2]. This initial stage of research hasbeen essential to the researcher as it provides direction as to what adoption factors areimperative to SMEs; how these factors are being assessed, and what measures arebeing used. Other issues covered during the interview included the facilitating factors,barriers, strengths, weaknesses and general experience that the organisation facedduring or prior the adoption of EC all of which helped to design the research modelshown earlier and to formulate the questions in the survey.

4.1.2 Pilot study.A survey instrument with questions and multiple-item scales wasdeveloped and pilot-tested to capture the information reflecting the perceptions andpractice of those adopting EC, specifically what internal or external environmentalfactors affect the adoption of EC and the degree of influence. In order to focus on SMEs,assistance was sought from governmental and research institutions in both countries

to develop a database of such businesses and contact details of target respondents. Thesurvey was pilot-tested on the sample of 20 SMEs from Australia and Singapore. It wascarried out to re-confirm the dimensions of the proposed theoretical framework as wellas determining the measurement of the dimensions.

4.1.3 Survey. Upon finalisation of the questionnaire, the multi-mode survey waschosen for data collection. A self-administered questionnaire was distributed via acombination of mail, e-mail and web survey consisting of scaled response questions.Multi-mode or mixed-mode survey techniques were shown to enhance therepresentativeness of the sample by providing wider sample coverage, withoutbiasing other results. This is also supported by Swoboda et al. (1997), that whenresearchers implement a multi-mode survey, they may be able to generate responsesfrom a greater range of individuals and boost response rates. Other researchers alsoreported successfully overcoming population coverage errors by using mixed-modemethods. In fact, mixed-mode approaches might increase respondents motivationbecause people may appreciate being able to choose their response mode. A total of 780survey questionnaires were personally disseminated and addressed to the director orowner of the respective firms in Australia and Singapore. In order to improve responserate, reminders were sent out to target respondents two weeks after the commencementof the first and second-waves of mail-outs. Total of 115 usable responses were collectedin Australia and 42 in Singapore.

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4.2 Response rate of cross-country surveyIn the first round of distribution in Australia, 68 responses were returned in a useablemanner, 18 were returned in an unusable manner, and 85 were returned markedundeliverable. Three weeks after the first round, a second round was sent out. For

those surveys sent electronically, the returned responses contained the e-mailaddresses of respondents, reminders were not sent to them on the follow-up rounds.New e-mail addresses, mailing addresses and fax numbers were identified for some ofthe undeliverable responses. In the second and third round, out of the 314 reminders, 47were returned in a useable manner, seven were identified as unusable. Overall, the totalnumber of usable responses from the Australian SMEs was 115, amounting to anacceptable rate of 23.7 per cent responses.

Because of the distance between Singapore and Australia (the country in which theresearcher was located) much of the survey distribution was conducted via electronicmeans. The electronic version of the questionnaire was e-mailed to 295 companies inSingapore in the first round and 80 companies in the second round. The targetrespondents were given the option of responding on the e-mail attachment sent to themor on the online survey from the official web site for this study. A total of 15 usableresponses that were obtained from the Singaporean SMEs, achieved a 5.1 per centresponse rate. Reminders were sent out to target respondents but this follow-up effort,which only yield an additional nine responses. The reason for such low rate of responsemay be due to the distance between the target respondents and the researcher, causingthe difficulty of following up potential respondents. Many of those SMEs may have feltuncomfortable in providing information relating to their business and strategy aboutEC over the internet to an overseas institution. In order to improve the response rate, afinal attempt of data collection was made via cooperation between the local university(National University of Singapore) and the researcher. This time, a combination ofelectronic and mail survey solicited additional 18 usable responses, amounting to a

total usable response rate of 14.2 per cent for the entire sample.

4.3 Measurement of variablesSome of the indicators were developed by the researcher, whilst some were adopted ormodified from previous scholars. For cases in which previous measures were adequateand instructive, the researcher has adopted or adapted them; and due credit was givenfor these items. In other cases, new indicators were added and compared to previousmeasures according to the suggestions made by Neuman (1999) in coming up with anew index. Table I depicts a comprehensive list of the variables used in the study.These variables were presented with the corresponding indicators, the types of scalesutilised, and an indication of whether they were researcher-defined or adapted and/oradopted from other sources (as indicated in the appropriate column). Some variables

were based on many multiple-item scales, as incorporating several items results in amore realistic and comprehensive indicator (Neuman, 1999). To ensure the validity ofthe dependent measure, this study also incorporates a single rating scale so as toprovide a comparison of results.

4.4 Non-response bias assessmentIn order to encourage SMEs participation in the study, more than two distribution ofthe questionnaire were conducted. To further increase the response rate, each of the

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Variables

Indicators

Measurement

Adopted/adaptedsources

Dependentvariables

Implementationsuccess

Overallsatisfaction

Perceivedoverallsatisfaction

oftheECadoptionand

implementation

Likertscale

DeloneandMcLean,

1992;Raymond,

1985

Independentvariables

Organisationalfactors

Managementsupport

Compositeofperceivedmgm

tsupportitems

Likertscale

Iacouvouetal.,

1995

Perceivedreadiness

Overallperceivedpreparedness

Likertscale

Iacouvouetal.,

1995

Firm

size

Numberoffull-timeequivalentemployees

Ordinalscale

GatignonandRobertson,

1989;Dama

npour,1991

Firm

age

Numberofyearsthefirm

hasbeenestablished

Ordinalscale

Researcherdefined

Internationalorientation

Proportionofturnoverderivedfrom

internationaltrade

Ratioscale

Lal,2002

Innovationfactors

Perceivedrelativeadvantage

Compositeofperceivedrelativeadvantageitems

Likertscale

Rogers,1995;Sohetal.,

1997

Compatibility

Compositeofperceivedcomp

atibilityitems

Likertscale


1997

Complexity

Compositeofperceivedcomp

lexityitems

Likertscale


1997

Trialability

Compositeofperceivedtriala

bilityitems

Likertscale


1997

Observability

Compositeofperceivedobservabilityitems

Likertscale


1997

Communicationfactors

Informationsources

Varietyofmaterialandorgan

isationsourcesthatfirmsused

toattaininformationaboutE

C

Ratioscale

Researcherdefined

Communicationchannels

Varietyofchannelsfirmsusedtodeliveryinformation

aboutEC

Ratioscale

Researcherdefined

Communicationamount

Frequencyofcommunication

betweenthefirm

andits

tradingpartners

Ordinalscale

Mohretal.,

1996

Industryfactors

Customerpressure

Levelofperceivedpressureex

ertedfromcustomerstoadopt

EC

Likertscale

Iacouvouetal.,

1995;Premkumarand

Roberts,

1998

Supplierpressure

Levelofperceivedpressureexertedfromsupplierstoadopt

EC

Likertscale

Iacouvouetal.,

1995;Premkumarand

Roberts,

1998

Competitivepressure

PerceivedcompetitorinfluenceontheadoptionofEC

Likertscale

Iacouvouetal.,

1995;GatignonandR

obertson,

1989

Relevantenvironmentalp

articipation

Compositeofparticipationof

specifiedrelatedorganisations

inthebusinessenvironment

whichthefirm

operatesin

Ordinalscale

Researcherdefined

Non-tradinginstitutionalinfluence

Compositeofperceivedinfluenceofspecifiednon-trading

institutions

Ordinalscale

Researcherdefined

Nationalfactors

Levelofgovernmentalsupport

Perceivedlevelofsupportpr

ovidedbythegovernmentto

adoptEC

Likertscale

Researcherdefined

Table I.Original constructmeasurement

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covering letters accompanying the questionnaire was personally addressed to theDirector or Chief Executive Officer (where such information was available). For thosebusinesses for which no details were supplied, the covering letter was addressed to theposition title of Director or Chief Executive Officer. A reply paid envelope was also

issued and this was an effort to encourage responses even further. A copy of summaryfindings was yet another incentive offered to ensure a high response rate. To arrive atthe estimate of total non-response error, a comparison of the data obtained from thetwo mailing rounds was conducted. The basic assumption behind this approach is thatsubjects that respond only after further prompting were potential non-respondents.Analyses from the first round of respondents are compared with results from laterrounds. If no statistically significant difference between the two groups is found, then itis reasonable to assume that non-response error is not present and that the remainingnon-respondents exhibit similar characteristics to the respondents (Churchill, 1991).

In summary, the two-step response assessment process that was utilised, togetherwith the personally addressed covering letters, reply paid facility, and an offer ofsummary findings, were put into practice in order to counteract the disadvantages

normally associated with a mail survey: namely, low response rates and the problem ofnon-response error. It was therefore safe to make the assumption that the data obtainedfrom the respondents was representative of the sample and that, as a consequence, anyfindings derived from this data were generalisable to the sample frame in its entirety.

4.5 Instrument developmentThe questionnaire used in this study was design to measure variables in the theoreticalmodel illustrated previously. Some of the indicators were developed by the researcher,while some were adopted or modified from previous scholars. In some cases in which aprevious measure is adequate, sources and proper credit were cited. In other cases, newindicators were added and compared with the previous measures to help improve theexplanatory power of the research model. Slight modifications of the wordings weremade to reflect the business-to-business EC nature of the study and any furtherchanges to the instrument were retested and then included in the final survey.

4.6 Instrument validationAs recommended by Nunnally (1978), the reliability and validity of the measures forthis study were tested to ascertain the suitability and rigour of the study instrument.The Cronbach (1951) coefficient alpha has been used in the present research to examinethe internal consistency of the scales relating to all the independent variables of thisstudy. This reliability measure of two or more construct indicators produces valuesbetween 0 and 1. Higher values indicate greater reliability among the indicators (Hairet al., 1998, p. 618). The amount of scale reliability could have been improved by

repeating or requesting the same essential question in a disguised or re-oriented formin another part of the questionnaire. However, this would have substantiallylengthened the questionnaire and very likely decreased the response rate. Thefollowing are the practical considerations and principles (Neuman, 1999) that weretaken to ensure the reliability of the current study:

. Clarity of most constructs was carefully examined. Most of which have alreadybeen established in previous literature.

. Pre-tests and pilot studies were used.

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. The most precise level of measurement was used in each question within theconstraints of meaningful discernibility of values. A five-point scale is used inthe questionnaire.

. Multiple indicators were used where any possibility of ambiguity existed on thepart of the respondents.

It should be noted that methods of testing the stability of any measurement becomesrelatively meaningless and unnecessary when a concept or construct has defined theessential components, each of which is measured using an appropriate item (Jacob,2000). Here, the items are not expected to be homogeneous, nor are they selected atrandom.

A test of internal consistency amongst each set of items representing the internaland external environmental factors was conducted. These tests reveal that theinnovation factors perceived relative advantage (0.73), compatibility (0.77) andcomplexity (0.72) and observability (0.79), all had Cronbach alpha values greater thanthe 0.7 benchmark suggested by Nunnally (1978). The value for trialability (0.56) wasmarginally below the cut off value of 0.6, acceptable in the early stages of research(Tan and Teo, 2000). The reliability coefficient for the new variables, managementsupport (0.94), and non-trading institutional influence (0.98) all exceeded 0.7. Thus,overall the results appeared robust enough to carry out further analysis. It must beacknowledged however, that since the items comprising some of these scales were notheterogeneous collections drawn from a large number of possible candidates butspecifically designed to cover distinct components, the appropriateness of equivalencereliability measures such as Cronbach alpha may be debated. The lists of items for thevariables concerned are not created by a large sample of possible phenomena. They arealmost an exhaustive list but not a complete one. The applicability of the standardreliability score (0.70) by Cronbach alpha is limited for the following reasons:

(1) The list does not consist of a small heterogeneous collection of items drawnfrom a large number of potential candidates.

(2) However, for those who insist on Cronbach alpha, the results are presentedabove. The Cronbach alpha indicates that the list of items is internallyhomogeneous.

(3) These methods of reliability analysis are of limited ability. However, in eachcase Cronbach alpha does at least indicate a satisfactory level of internalconsistency.

The issue of face validity in the case of previously recognized concepts is taken asestablished. The researcher-defined concepts naturally awaits general acceptance.Content validity is achieved during the planning and construction stages of the scaleand not when the scale is completed, hence procedures that are used to develop theinstrument are the key to content validity (Churchill, 1991). The key issues to beaddressed in this study regarding content validity include: whether the full set of itemsbeing measured covers all the relevant variables; and whether each specific set of itemscover the intended range of components in a given variable. Various indexes such asthe management support, organisational readiness, innovation factors and thecommunication factors have already been tested, as many of these measures containitems or components that have been borrowed or adopted from previous studies.

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Criterion-related validity is an important issue where latent variables are involved.No variable in this study can be regarded as truly latent. Whilst several measuresinvolve subjective perceptions on part of the respondents, it is the actual perceptionwhich is the focal variable and not the latent reality behind it. One such variable is the

Perceived Readiness. The perception of ones own readiness is a potential influencingfactor related to, but nonetheless distinct from, the actual readiness; and has aninfluence on decisions in its own right. To assess whether the various indicators of theconcept operate in a consistent manner, construct validity was tested. Very fewvariables in this study fall into the category of abstract concepts that possess seriousambiguity. Those that did, namely, the Innovation Factors, were extensivelyinvestigated. The issue of construct validity was addressed in the pilot study andresulted in the removal or modification or some potentially ambiguous items, whichfurther ensures clear measurement and consistency.

Despite all endeavour to ensure the validity of each measure in this study, it shouldbe noted that it is not possible to achieve it in an absolute sense, as constructs areabstract ideas while indicators are concrete observations. As argued by Bohrnstedt(1992), validity is a matter of degree and is a part of a dynamic process that grows byaccumulating evidence over time, and without it all measurement becomesmeaningless.

5. ResultsTable II represents the Australian results of the stepwise-backward elimination,whereby factors that are statistically significant in the model for overall satisfactionare retained. These reveal an expected moderate reduction in R-squared and anincrease in adjustedR-squared value from 0.397 to 0.407. There is also an improvementin the overall significance ofF-value from 0.001 to 0.000.

Since theF-value is significant at the 1 per cent level, it can be asserted that there isstrong evidence to support that the overall model is significant and the independentvariables retained are related to the overall satisfaction. As illustrated in Table II, theadjusted R-squared value indicates that 40.7 percent of the variation in overallsatisfaction by Australian SMEs is explained by the corresponding variations inobservability, variety of communication channels, customer pressure, supplierpressure, and perceived governmental support. All variables are significant at the0.05 level or better.

As for the Singaporean data, the regression model explained 60.6 per cent of overallsatisfaction. Of all the three factors, Observability was the only significant variable at

Influencing factors Standardised coefficient (beta) t-value Significance

(Constant) 1.600 0.115OBSERVA 0.478 4.391 0.000COMM.CHAN 0.315 2.865 0.006CUST.PRES 20.312 22.228 0.030SUPP.PRES 0.263 1.915 0.061PCD.GOV.SUP 0.216 2.132 0.038

Notes:R2 0.457; adjusted R2 0.407;F-significance 0.000; observations 115

Table II.Final model estimationfor overall satisfaction

(Australian data)

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the 0.01 level for the Singaporean SMEs (Table III). This result is consistent with theAustralian findings. Both organisational factors, size of the firm and perceivedreadiness, are associated with significance in the Singaporean data but not in theAustralian data. This may imply that firm size and perceived readiness are more of an

issue for the implementation of EC in Singaporean firms than for companies inAustralia.

Figure 3 depicts the factors that are supported by significant evidence in bothcountries.

6. Discussion of findingsThe study has provided a framework for understanding the factors affecting theimplementation of EC in SMEs. The application of the framework has contributed to adiscussion of the role of internal resources, communication methods, Governmentsupport, customers and suppliers pressures in small business decisions to implementEC. Previous studies have mainly focused on the importance of characteristics of the

innovation and organisational context on SMES EC adoption behaviour. This studyhas shown that the characteristics of these two context are necessary conditions for the

Figure 3.Factors significant tooverall satisfaction

Influencing factors Standardised coefficient (beta) t-value Significance

(Constant) 21.146 0.260SIZE. FIRM 0.190 1.814 0.078PCD.RDNS 0.537 4.988 0.000OBSERV 0.387 3.684 0.001

Notes:R2 0.637; adjusted R2 0.606;F-significance 0.000; observations 42

Table III.Final model estimationfor overall satisfaction(Singaporean data)

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implementation of EC for Singaporean SMEs, but not sufficient enough for theAustralian sample. Communication and external environmental context are keys inthis process. As EC supports multiple business function (from human communicationto business transactions) and has an interorganisational focus, the utilisation of

different communication channels and attaining trading partners support (i.e.customer and supplier) is essential to successfully implement EC.

6.1 Size of firmFor Singaporean SMEs, size of firm was found to have a probable relationship to theiroverall satisfaction, indicating that the perceived level of satisfaction with ECimplementation was more likely to be high when respondents are derived from a largercompany. The emergence of size of firm as a significant variable in influencingadoption success is in line with existing literature, in which it was found that firms thathave large operations are comparatively better off than other firms where investmentin new technologies is concerned (Pavitt et al., 1987; Siddharthan, 1992). Moreover,large firms are in a better position to appropriate the benefits of new innovation. Soundfinancial positions and appropriate conditions have strong bearings on the adoption ofthe latest technologies and investing in innovative activities. Larger firms have theother advantage of employing a more skilled workforce in aggregate, which may benecessary for the utilisation of new technologies at a certain level of efficiency andefficacy. This would presumably lead to a higher degree of satisfaction in the adoptionand implementation of such technologies.

6.2 Perceived readinessPerceived readiness is found to be the most significant factor relating to the overallsatisfaction of EC adoption in the Singaporean SMEs. This finding supports the notionthat organisational resources increase the likelihood of IS implementation success for

small businesses (Thong, 2001). As SMEs often lack financial and technologicalresources, insufficient funds may be allocated for the implementation of EC. Aninadequate resource base may place constraints on the implementation effort and thismay lead to partial ineffectiveness and thus dissatisfaction with EC. On the other hand,firms with adequate resources can contribute more effectively to the ECimplementation through their involvement during the requirements and designphases. This involvement may also encourage more realistic expectations from EC andmore comfortable participating in the implementation process which leads to a moresatisfying experience for the adopting firms.

6.3 ObservabilityObservability appears to be a significant factor related to the overall satisfaction with

EC adoption in both Australian and Singaporean data. The degree to which the resultsof EC are more visible to SMEs leads to higher satisfaction in its implementation. In theability to observe the benefits of EC, SMEs may have already observed success in theinitiatives taken by other companies, be it trading partners or competitors. With theconstant media exposure about EC, SMEs would have now believed EC to be highlyvalued and that most firms would adopt EC in the near future. With such confidenceand belief, it is very likely that this would naturally be transformed into satisfactionwith what the firm is pursuing in the adoption of EC. In the case of doing business

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online, effects such as quicker access and dissemination of information, and savings incosts (e.g. printing, advertising, communication and overhead costs) are moreimmediate and easier to acknowledge from trading partners or associates. These easilydemonstrated benefits (short-term, but visible effects) might help promote continued

adoption of the long-term goals of EC, which inevitably lead to higher level of successof implementation for the adopting firms..

Despite its significance, the validity of the observability items when transferred intothe context of overall satisfaction of EC implementation may be questionable. Thecomponents of the observability variable are in fact a combination of confidence,optimism, observed outside success and inevitability (i.e. the inevitable progress of ECin the future). The explanation for the existence of this relationship therefore requires apsychological approach. For future reference, this variable has to be treated with slightcaution, as the benefits of EC or any kind of technological adoption have to beobservable to be satisfying.

6.4 Variety of communication channelsIn Australia, overall satisfaction was found positively related to the variety ofcommunication channels used by firms to disseminate EC-related information orstrategy. The use of a greater variety of communication channels to communicate ECinformation may help to encourage the firms trading partners to adopt EC, thusincreasing the business links, and leading to higher levels of satisfaction with adoption.Expanding the variety of communication channels to increase the awareness andknowledge about EC also helps in improving the level of confidence in users, whichincrease the level of adoption, and eventually improves the level of use and satisfactionwith EC. Thus, SMEs should consider adopting multiple channels as part of theinfluence strategy to encourage their employees and trading partners to adopt EC.

The descriptive findings of this study suggested that EC initiators (e.g. early

adopters, vendors, consultants) could actively communicate the benefits of EC throughpromotional seminars, presentations, and on-site visits or demonstrations. Internally,on-the-job-training is the most popular communication channels utilised by firms todisseminate EC-related information within the company as hands-on experience isconsidered to be more effective than mass training. In terms of interorganisationalcommunication channel, it has been found that the most effective means of influencingtrading partners is to set the example by using electronic means themselves tocommunicate with their partners.

6.5 Customer pressureCustomer pressure was negatively related to overall satisfaction for Australian SMEs,suggesting that the more pressure the customers placed on the firm, the less satisfied

they might be with the current adoption. On the other hand, it can be interpreted asonce the firms attained the desired outcome of adoption and are satisfied with theperformance, they may perceive lower pressure from their customers. This perhapsimplies that firms that adopt and use EC on their own initiative tend to be less affectedby their customers.

If firms feel easily pressured by their customers, then it is possible that their ECsystem is not working well enough. A firm will tend to feel pressure from a sourcewhenever it is vulnerable and its performance in relation to that source is less than

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adequate. In relation to customers, the firm must necessarily be sensitive to clientsneeds and demands. If the potential client controls the relationship, then the fate of thefirm is in the clients hands. When the customer is satisfied (exerting little pressure),the firm is likely to see its own systems (including its EC status) as being satisfactory.

Hence, the inverse relationship between perceived customer pressure and overallsatisfaction.

6.6 Supplier pressureFor Australian SMEs, supplier pressure was found to have a probable relationship tothe overall satisfaction, indicating that the perceived level of satisfaction with ECadoption was more likely to be higher when respondents perceived the pressureimposed by their suppliers to be high. The relationship with suppliers is different inone important respect: the firm is now much less vulnerable as it controls therelationship. The supplier is unlikely to try to exert pressure on an unimportant clientto modify his business practice (i.e. adopt EC) unless there are substantial benefits to

the supplier (due to lower costs and increased efficiency). When they do so, thisincreases with the volume of business transacted. However, the greater the volumeordered from the supplier, the more thriving the business of the client firm is likely tobe, and the greater the overall satisfaction the client would have with his current stateof business practice (of which EC is a part). This results in a direct positive relationshipbetween suppliers pressure and overall satisfaction.

Being a customer, the positive link between supplier pressure and overallsatisfaction shows that supplier pressure ought not to be resisted. Needless to say,suppliers would have to provide their customers with the necessary educationalsupport and incentive in order to achieve mutually beneficial gains through theimplementation of EC. This support may be critical especially for customers that donot have the expertise to implement EC. It is imperative that firms and their trading

partners work together to build trust and a supportive operational relation orenvironment and share the potential benefits waiting to be unleashed from EC.

6.7 Perceived level of governmental supportThe perceived level of governmental support was related to the overall satisfaction ofEC implementation for Australian SMEs. This demonstrates that in addition to theprivate sector, the governmental sector can also act as a crucial catalyst in stimulatinga successful adoption experience for the SMEs (see Grandon and Pearson, 2003;Wagner et al., 2003). Although many responding firms consider the level ofgovernmental support to be disappointing (Chong, 2004), those firms that thinkfavourably of the assistance tend to be satisfied with the EC experience. In this case, itis reasonable to suggest that when the government improve the support, adopters are

likely to experience higher level of satisfaction. Another assumption may also be truethat when a firm is satisfied with the adoption, it naturally holds higher regard to thegovernmental support that was given to the firm at that point of time.

In any case, increasing governmental support would not be futile and it could leadto a greater satisfaction in adoption and implementation for SMEs. As revealed in thedescriptive findings, even though educational support was found to be the most usedform of support at the time of the survey, SMEs have high expectations thatgovernmental assistance would come in the form of advisory support. In other words,

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governmental support is expected to be more advisory-oriented than anything else.Success in this area would tend to be seen as success in governmental support.

7. Conclusion, limitation and further researchThe major contribution of this study is in understanding what the organisational,technological, communication, and external environmental drivers of ECimplementation are. The study has been conducted in Australia and Singapore. Thestudy has found that the proposed model can be used in investigating drivers of ECimplementation in SMEs, and the empirical data has adequately supported the model.The findings have showed that the organisational and innovation characteristics arenecessary, but to provide a more comprehensive picture in explaining theimplementation behaviour of SMEs, one needs to consider other factors andcontexts especially when testing the model in different countries. Communicationmethods employed, government support, external pressure from customers andsuppliers have been found to be very important for Australian SMEs in this decision.

In this paper, overall satisfaction is the more subjective measure of success thatcomplements the other components of implementation success in the broader study(such as extent of deployment and the level of usage). According to the results of thisstudy, firms in Singapore that are larger, possess higher sense of readiness, havehigher confidence and observability in the value and benefits that EC would bringthem, tend to be more satisfied with the implementation of EC. In Australia, apart frompossessing positive attitude towards future gains of EC, those that use a greatervariety of communication channels to disseminate EC-related information tend to havegreater overall satisfaction with the adoption. Supplier pressure should not be resistedby SMEs and it should be viewed as an opportunity to seek support from supplyingfirms to improve its EC capability. In contrast, when higher customer pressure isexperienced, the overall satisfaction tends to be lower for the adopters. Interestingly,

the factors that were found to be unique to the SMEs in Singapore are internalenvironment-related (size of firm, perceived readiness), while factors that are exclusiveto the Australian experience are external environment-related (supplier pressure,customer pressure, and perceived governmental support). This further confirms theview that SMEs in both countries adopt a different attitude towards adoption andimplementation of EC. In Singapore, SMEs adopts an inward-looking attitude towardsadoption and implementation when the knowledge of sufficient resources seemed toimprove the overall satisfaction. On the other hand, firms in Australia are moreoutwardly-oriented when the overall satisfaction of the adoption involves adequatelymanaging or controlling the pressure that was exerted by their trading partners, andattaining assistance from the Government. Then again, the perceived readinessamongst Singaporean SMEs may also be due to the extensive effort put in by the

Singapore government in establishing electronic-infrastructure services and setting(Garelli, 2001)[3].

The exploratory nature of the research has helped identify associations betweenvariables from which more confirmatory or causally directional hypotheses can begenerated in the future. Progress towards the formulation of a more comprehensivecausal model may be achieved in future research. Here, the technique of structuralequation modelling may be usefully applied. It would also be insightful to conductlongitudinal studies to confirm the direction and to help clarify causality and test for

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feedback effects of adoption decisions. In this study, no attempt was made to controlfor industry type. The models may be tested more intensively in a chosen or a specificindustry. Comparison of the research model can also be conducted over severalcountries to test for generalisability, particularly in different geographic regions. The

contrasting contexts may provide some interesting results. Last, having establishedthe soundness of the theoretical framework of implementation success for SMEs, otherresearchers may investigate its applicability to a wider range of businesscommunication technologies and further innovations in the future.

Notes

1. Australian SMEs are typically organizations with an annual turnover of less than $20million and a staff of less than 200 employees (Australian Bureau Statistics, 2004). As forSingapore, the Productivity Board of Singapore (PSB) defines a SME as a companyemploying less than 200 people with an annual turnover not exceeding $15 million.

2. Definition of small- and medium-sized enterprises (SMEs) differ between Australia andSingapore. According to the Australian Bureau Statistics (ABS), small business is anybusiness employing less than 20 people; and 20 or more but less than 200 people for mediumbusiness. As for Singapore, the Productivity Board of Singapore (PSB) defines a SME as acompany employing less than 200 people with an annual turnover not exceeding $15 million.(For further definitions of SMEs, please refer to http://sbdc.gov.au and http://psb.gov.sg).

3. Global research has shown that Singapore has done reasonably well in their transformationefforts. Singapore was rated 1st in Asia and 5th worldwide for its EC infrastructure in theWorld Competitiveness Yearbook 2001 (Garelli, 2001). The Boston Consulting Group (1999)places Singapore as one of the top ten companies in the Asia Pacific for online consumerspending and the Economic Intelligence Unit (2001) ranks Singapore as the 1st in Asia and7th internationally for E-Business readiness.

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Further reading

Davis, D. (1996), Business Research for Decision Making, 4th ed., Duxbery Press, Belmont, CA.

Gibbs, J., Kraemer, L. and Dedrick, J. (2003), Environment and policy factors shaping global

e-commerce diffusion: a cross-country comparison, The Information Society, SpecialIssue: Globalization of Electronic Commerce, Vol. 19 No. 1, pp. 5-18.

Meringer, J. (2002), E-commerce next wave: productivity and innovation, paper presented at aseminar on Revenue Implications of E-commerce: Trends in E-commerce, WTOCommittee on Trade and Development, Forrester Research, April.

Corresponding authorSandy Chong can be contacted at: [email protected]

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