1.1 What is the problem?
In recent times, there has been an intense underlying issue regarding the amount of businesses within the UK that are not adapting to the modern business environment and embracing modern technologies for further economic gain. Noted by the office for National statistics (2009) that 76% of the UK’s business claimed to have a website, yet only 15% had completed transactions online. Furthermore, the issue lies deep within the fundamental business characteristics and the way in which businesses choose to operate and compete, leading to online sales via websites known as e-commerce, reaching ?115bn in 2009. Figures from the same study also demonstrate that the predicament shows no sign of slowing as e-commerce sales increased by 23% from 2008 to 2009, showing a rise of ?22bn, suggesting that many businesses are missing the chance to join the online market place whereby opportunities for the growth of a business appear limitless (Scupola, 2003).
Rosenbloom (2004, cited in Harrison & Waite, 2005) proposed that e-commerce technology is now viewed as an integral part of marketing channels and distribution systems. However the UK government acknowledges that there is a slow uptake of e-commerce in SME’s, particularly among micro businesses (UK Online, 2002) whereby many of the UK’s SME’s may be left behind, leaving the larger companies to dominate the e-commerce world (Harrison et al, 2005). Furthermore, the issue is emphasised through the suggestions of Julia (2002) stating that small and medium-sized businesses (SME’s) make substantial contributions to national economies and account for an estimated 80% of global economic growth (Julia et al, 2002).
This document aims to identify the numerous relevant factors preventing the assimilation of e-commerce and the capitalisation of its benefits within the UK’s SME’s. Conversely, the research also attempts to outline the previous benefits founded with its adoption and the current levels of practice within the recognised SME’s. Such known benefits may provide motivation and incentives for the apprehensive SME’s who are failing to embrace the advances in technology, as well as offering a range of potential opportunities for any traditional organisation to engage in the e-commerce transition whereby a business can ‘dominate the electronic channel and thereby control access to customers and set terms of trade’ (Walters & Lancaster, 1999, p800 cited in Harrison, 2005).
Following similar research in more economically developed countries such as USA, Canada and Australia appear to have made more progress as they have become the global leaders in e-commerce assimilation (Norton, 2000, cited in Quayle, 2002). This investigation will discuss whether these barriers and benefits still exist or that SME’s have adapted to the modern business environment and have effectively engaged in e-commerce. Consequently, have further beneficial or detrimental factors emerged and influenced integration of internet based transactions.
1.2 What is the purpose of this study?
For the purpose of this investigation, the term e-commerce will be used in the true sense of its concept and not divulge into the notion of electronic business (e-business). It will however include activities such as electronic mail (e-mail) and mobile commerce (m-commerce) whereby their fundamentals coincide with the essential aspects of e-commerce.
The primary purpose of this investigation is to identify the barriers in the UK’s SME’s in their adoption of e-commerce. These identified barriers may differ from those faced in other countries, regardless of economic development. In addition, this paper will study the benefits found once the e-commerce transition has taken place and how they may have become advantageous to any developing SME. It also aims to analyse the results and test them against the findings established within other international SME’s. Throughout this analysis, the paper will thoroughly investigate and critique the growth of the UK’s SME’s and how e-commerce has enabled it to do so.
1.2.1 What are the SME’s barriers to entry?
This study aims to investigate the way in which SME’s perceive e-commerce and devise a catalogue of factors that provide obstacles for its adoption. In doing so, the author aims to bring these issues in view of both business and governmental organisations, with the focus on those assisting SME’s to further contribute to both the local and global economy. Whether these issues exist in reality or are just ignorant perceptions, the fact of the matter is that these issues still appear to hinder the assimilation of e-commerce within SME’s. Barriers to adoption can occur for numerous reasons and many issues are inter-related, however, they will not be restricted to only the following factors:
Start up costs
Technical knowledge/computer literacy
Access to technology
Security of technology
Business partner(s) access to technology
Lack of governmental support
(Kshetri, N, 2007)
In addition to the primary aim, the secondary goal is to try and locate relationships between these barriers and whether or not they have a direct correlation with the demographic and financial features of the external environment. Furthermore, it will also attempt to identify any linkages between previous barriers and the technological affluence or perception of SME’s directors as previous research has shown that the owner’s opinion of e-commerce has a major influence on its possible implementation, and if so, what benefits does it bring.
1.2.2 Existing benefits achieved by SME’s
This investigation will recognise the major benefits already achieved by SME’s who have utilised the capabilities of engaging in e-commerce. These benefits may need to be analysed by budding SME’s or MSME’s (micro, small medium enterprises) or any developing business for that matter, in order to fully understand, make relevant and integrate e-commerce successfully within their organisation. This investigation can also be used for governmental organisations to utilise e-commerce as an adaption of its services that supply SME’s, which will in turn provide benefits to both stakeholders involved. This may potentially lead to a future development of electronic infrastructure, which will in turn greater it’s usage and by virtue of EOS (economies of scale) will lead to an increased level of economic efficiency. This study will address those benefits but will not be constrained by such:
Increased audience levels (market reach)
Reduce cycle time
Higher levels of turnover
Lower marketing and distribution costs
Increased profit margin
New business opportunities
(Daniel & Wilson, 2002)
These existing benefits will provide a basis to identify any trends with the demographic data found, along with its barriers. This information will also be examined in comparison to the technological perception of the directors of a given enterprise in order to understand whether or not the attitude of the director directly influences the benefits achieved, similar to that of the director’s perceptions and previous success within the business environment.
1.2.3 SME’s adoption of technology
In order to grasp the usage of technology within SME’s, the author has made efforts to discover more about businesses that have embraced technology and how they may be putting to use the advantages of the internet.
The levels of adoption and the processes put in place in order to assimilate, as well as the trends of usage are all imperative to the overall validity of the investigation. Although the author earlier conveyed that the study will concentrate on the true definitive characteristics of e-commerce, in order to fully investigate the usage and perceptions of e-commerce, the study must consider aspects of e-business to fully identify and understand the correlation of internet usage and the potential benefits it possesses. Furthermore, the study will advance deeper and discuss whether or not linkages exists in the technological affluence, literacy or perception of the SME’s director and the benefits and barriers achieved through the adoption of e-commerce.
2. Literature Review
2.1 The UK market
Throughout the investigation, the author noticed that the majority of research was conducted in more economically developed countries (MEDC’s), with the United States being most popular. However, this study aims to conduct the majority of its research within the UK environment as well as delving into the international and emerging markets whereby the growth of e-commerce is still primarily at an elemental level. Although that particular research is valid, it merely aims to provide a contrasting statistical viewpoint to that found in the UK. Studies by Benjamin (2000) and Pulley and Sessa (2001) indicate that there is a limited amount of analysis of e-commerce in SME’s, however there is a wider acceptance on a number of factors. In particular, SME’s who are determined to achieve a competitive advantage require an improvement in levels of e-commerce and the need to develop credible approaches for its implementation. Further studies conducted by Standing and Stockdale (2003) emphasised further issues of concern whereby the ‘motivation for adoption and use of e-commerce by SME’s are overlooked and underestimated’ (Standing et al, 2003. p;2). Further issues within the same study indicated concern surrounding categorised groupings of SME’s and their perceptions to adoption.
In contrast to the UK market for e-commerce, in developing areas of the world, including countries such as Egypt, research has show that ‘governments have been eager to apply the emerging information and communication technologies to join the world in the development and realization of the digital economy’ (Kamel and Hussein, 2002. P;2). Therefore, e-commerce growth in Egypt and other developing countries may decide to utilise the research and examples of that in the UK in order to greater the adoption levels within SME’s. Conversely, UK governments may choose to analyse the way in which developing countries introduce e-commerce and its technological infrastructure in order to fully understand what factors they provide as benefits or barriers.
Following the studies on the international and emerging markets, the author aims to reemphasise that this research is merely conveyed as a contrasting viewpoint in order to further understand the way in which e-commerce adoption in the UK is both perceived and achieved.
2.2.1 E-commerce growth and development
Originally, electronic commerce was identified as the facilitation of commercial transactions electronically, using technologies such as EDI (Electronic Data Interchange) and EFT (Electronic Funds Transfer) in the 1970’s. Furthermore, increasing developments in technology in the 1980’s lead to the creation of ATM’s (Automated Teller Machines) and telephone banking which were also noticed as forms of electronic commerce. It wasn’t until 1990 that the development of the World Wide Web and the modern day internet also known as the ‘6th Continent’ by Yongxiang, that the term coined e-commerce was specifically designated to the exchange transactions which take place over the internet, including buying and selling of information, service or goods (Schniederjans, 2002).
Since the conceptualisation of e-commerce, researches have studied the barriers that exist which may prevent its adoption within SME’s. Whether these barriers physically exist in reality or whether they are merely a perception, the facts remains that they still provide an obstacle for e-commerce assimilation within the UK’s SME’s. Studies conducted by Cragg and King (1997, cited in Shah et al, 2000) discovered that the strongest inhibiting factors to SME adoption include lack of ICT knowledge, lack of managerial time and limited financial resources. All of which factors appear to apply to resistance to change and possibly suggest an underestimation of the potential benefits to its adoption. Further studies by Dowler and Lawrence-Slater (1998) highlight ‘technological phobia’ and ‘no perceived benefits’ as realistic barriers.
Since these studies were conducted at an elemental stage of e-commerce, further investigations have been carried out since. Investigations undertaken by Marshall and Mckay (2002) found that in recent times, SME’s are reluctant to adopt due to difficulties identifying and measuring costs, benefits and risks associated with IT adoption and investment. Furthermore, research conducted by Edwards (2007) and Hudson et al (2007) indicated that the lack of strategy for evaluation was also a major inhibiting factor to adoption. Although all studies identified provide valid and important evidence, it is the most recent information that supplies the most pertinent, as it considers factors within the modern business environment in comparison to those noted within the primary stages of e-commerce development.
2.2.1 The Role of UK Government in the growth of e-commerce
In order to fully investigate the role that government plays in the adoption of e-commerce, the author aims to find out whether they are an enabler of its adoption or a characteristic of its barriers.
A study by Keindl (2000) portrays that SME’s are generally unwilling to develop e-commerce strategies or to change their current business models, despite the government introducing campaigns such as the CW2000 project, a European funded project to encourage internet adoption amongst SME’s in the West Midlands of the UK. As discussed earlier, there remain a variety of barriers to the adoption of e-commerce and regardless of the government initiatives, certain barriers still exist and are chiefly found within the internal features of an organisation. Kshetri (2007), stating that start up costs and the relevance of e-commerce within a particular SME to be key factors in its adoption. Furthermore, additional research by Beckinsdale and Levy (2004) reported that neither pressure from competitors within the same business environment or governmental initiatives provides any pressure upon the adoption of e-commerce, and that the chief reasoning for its assimilation is concerned with customer satisfaction.
As a result of these findings, certain infrastructure should be implemented in order enable to the transition of adoption as it appears that governmental frameworks are unable to do so.
2.2.3 Perceived barriers to e-commerce adoption
Early studies by Tonatzky and Klein (1982) found that innovation is more likely to be adopted when it is compatible with an individual’s job responsibility and value system. Although this study portrays a vague acceptance of innovation, it is definitely applicable to e-commerce as an innovative entity and its adoption and application within a value system, or for the purpose of the study, SME’s.
Further studies conducted by Ratnasingam (2001, cited in Hussin, 2005) to identify factors that may discourage adoption include the perceived lack of security, customer readiness, organisational inertia and lack of knowledge. Additional studies by Darch and Lucas (2002) also conveys the perceived barriers to adoption as lack of awareness to what e-commerce actually involves and lack of e-commerce related skills. Therefore, adoption is far more complex than earlier studies portrayed and is a decision that involves a variety of interconnected issues, which include both internal and external factors. Adoption therefore, must be seen as a gradual process, rather than an individual occasion and will be discussed further in the levels and stages of adoption sections.
E-readiness is genuinely defined as the degree to which a society is prepared to participate in the digital economy with the underlying concept that the digital economy can help build a better society (Krull, 2003). Krull makes reference to society as a whole, but for purpose of the study, the author will understand the society as being an organisation or SME. Huang et al (2004) describes e-readiness for enterprises important and that it will lead them to a more positive direction in managing their relationships with key stakeholders as well as providing the opportunity to access quality information, reduce the digital divide and create new business opportunities (Kurnia, 2008 cited in Krull, 2003). According to the e-readiness rankings report (2009) the UK is placed 13 suggesting SME’s are in a good position to adopt e-commerce as all the foundations are in place.
Significant levels of research into the realisation of SME benefits of e-commerce adoption have been conducted thoroughly in recent times. A report conducted by Poon and Swatman (1999) regarding the benefits achieved refers to the fact that e-mail and document transfer have both been useful to SME’s. Since then, e-commerce and researchers have moved on, with many authors agreeing on the benefits of e-commerce, however further discussions have arisen in regards to the way in which benefits are not achieved automatically. Wilson, Daniel and Davies (2006) stating that adoption does not however, of itself, guarantee that the intended business benefits will be achieved. They are also of the opinion that, along with Pawar and Driver (2000, cited in Quayle, 2002) who also conducted similar studies, that despite the awareness of potential benefits, not every firm is ready to embrace e-commerce as a business tool.
2.3.1 Economic Benefits
Once the adoption process takes place, there are two main benefits that a SME can expect, economical and strategical. For the purpose of the study, the author will concentrate upon the economic benefits incurred through the adoption of e-commerce. With the UK’s total spend through e-commerce reaching nearly ?56billion in 2010 (IMRG, Capgemini, 2010) and expectations for the market to grow by 110% in the next decade, the financial benefits are obvious.
Studies conducted in the UK’s SME’s by Clegg et al (2001) concluded that three issues are likely to have an effect on the uptake of the internet by SME’s was the perceived benefits, organisational readiness and external pressures. However, Dongen et al (2002) argued that much of the literature supposes that ICT adoption is for opportunistic reasons, such as cost, rather than for strategic reasons. Furthermore, recent surveys suggest that the main reason for adoption amongst UK’s SME’s is to increase sales (Actinic, 2002 cited in Simpson et al, 2004). Although literature suggests that the chief reasoning behind e-commerce adoption is for financial benefit, the actual reality of attaining economic growth is difficult to achieve. Furthermore, the research by DTI (2001b) suggest that the financial benefits come about through the reduction in expenditure and the increase of opportunity gain, as advertising costs can be reduced through having a web presence.
2.3.2 Illusions and Promises
Additional studies by Chrysostome and Rosson (2004) support the fact that it is certainly difficult to attain economic benefits. Subsequently, they devised a framework, consisting of eight factoring suggestions that convey both the illusions and promises of the growth UK SME’s and they’re engagement in the international market. They highlight the view that not all expectations of innovative advancements are recognised, with an example of the invention of the printing press in 1450. They suggest that many of the perceived benefits are illusions while promises are realistic and attainable benefits through the process of adoption.
MARKET PENETRATION (difficult international market)
GLOBAL COMPETITION (intensity)
COSTS (difficult to attain)
LEGALITY DIFFERENCES (foreign trade laws)
SPEED OF MARKET ENTRY (instant)
VARIETY OF MARKETS (penetrate numerous markets)
ENTRY MODE (choice = minimised risk)
INTER-ORGANISATIONAL NETWORKS (reduced costs)
Chrysostome and Rosson (2004)
2.3.3 Do or Die: Internationalisation
The rate of the occurrence of Internationalisation for an organisation is an important characteristic in any neo-classical approach. Furthermore, in evolutionary theories, stage by stage development is considered necessary so that cautious progress can be made, ensuring that an enterprise can build resources, gain knowledge of international markets and therefore develop a stronger capability (Chrysostome and Rosson, 2004).
Added studies by Peterson et al (2002) found that the internet can speed up the rate of enterprise internationalisation, especially through the reduction in costs incurred by SME’s. As a result, SME’s should worry less about the amount of resources they have when aiming to penetrate the international market. This leads to the ‘Born Global’ concept derived from Knight and Cavusgil (1996) suggesting that SME’s can ‘leapfrog’ the primary stages of the neo-classical internationalisation process.
Although numerous advantages exist through SME internationalisation, there is also an element of risk associated with its development. The most noticeable barriers reported by SME’s are included in the Internationalisation report of European SME’s (2010). The reports illustrates that the barriers exist in two separate categories, internal and external.
Price of own product or service
High cost of Internationalisation
Lack of capital
Lack of adequate information
Lack of adequate public support
Costs/difficulties with extended transport partnerships
Although the majority of the barriers are objective, sum issues within the external barriers are perceived and do not necessarily exist in reality. Consequently, UK SME’s are generally not aware of the existence of public support programmes for internationalisation (Mendoza et al, 2001). Having discussed the promises that e-commerce adoption and its ability to internationalise a business, the author will now examine the illusions that appear to be embedded within the perception of UK SME’s.
Large scale global competition lies waiting for those SME’s who aim to utilise the internet as a tool for internationalisation. Fillis (2002) found that exporting SME’s in the UK experienced pricing and promotion difficulties in regards to those displayed by competitors. This was a greater problem for those who rely upon the internet as its main operational medium. As the enterprises discussed are relatively small in capacity, they’re limited resources make it difficult to match competitors budgets and prices (Sawhney and Mandal, 2000). As well as the intense internet global competition, the so called ‘savings’ will now be discussed.
Contrary to the perceptions of budding SME’s, online business incurs significant levels of cost. In contrast to view that the internet generates cost savings, in reality, these savings are far less noteworthy than initially thought and studies by Fattori (2001) state that in many cases, SME’s have actually experienced higher costs. This is largely accurate for SME’s who have penetrated the international market as Heart and Priskin (2002) state that internet costs savings are cited to most often occur in paperwork, customer service, intermediation and advertising and promotion. However, they also conveyed that the actual savings incurred differed with the size of an enterprise. Further studies showed that larger companies were more likely to save in customer service where as SME’s were expected to save on advertising and promotional costs (Riquelme, 2002). Apart from these potential variant costs, other costly expenditures exist with the initial creation of internet based commerce. These costs consist of website creation, including software and hardware, maintenance and updating and website translation or cultural adjustments should the SME wish to penetrate the international market (Chrysostome and Rosson, 2004). Futhermore, a standard 10 page website with e-commerce capabilities may cost around ?2500 with additional fees for forums, interactivity, Search engine optimization (SEO) and content management [www.toucher.co.uk/website-price, cited in 2011].
Tiwari (2007) defines Mobile Commerce as any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device. As Tiwari explains, m-commerce has the same basic definition as e-commerce, however is achieved with portable technology. Since its origination in 1997 through mobile-phone enabled Coca-Cola vending machines in Finland, using SMS text messages to receive payment, the mobile industry has revolutionised the portability of business transactions (Ahonen, 2002). In recent times, m-commerce has developed greatly and since the invention of Apples, Iphone in 2007, the levels of purchase using a mobile devise has risen dramatically. Findings from the Broadbank m-commerce content report (2010) displayed that 46% of UK consumers had purchased using their mobile phone. Furthermore, Raicu (2001) believes that m-commerce provides numerous benefits including independent access any time, access on demand anywhere and use of devises that suits the needs of the consumer, for example mobile phones, laptops or Tablets. As well as possessing all the attributes of e-commerce, Khosrow-Pour (2006) suggests that enterprises are using mobile devices to re-engineer and speed up internal and connecting business processes. Furthermore, Nysveen et al (2005) suggests that this is possible since employees and partners can connect to ‘back-end’ applications needing the finalise sales and in turn reducing the sales process and eliminates extra travelling costs. Therefore, a SME can utilise m-commerce in the same way as e-commerce with additional benefits of providing accessibility anytime, anywhere (Raicu, 2001).
2.3.5 Benefits for UK SME’s
Following a plethora of literature regarding the concepts and potential of e-commerce, the question remains whether SME’s have benefited from its adoption. During the investigation process throughout this document, the author noticed that Poon (2002) and the degrees of success was a constant barometer. Poon stated that there having been various levels of success and that they are the reasons why e-commerce is more important than ever before. These factors have included the reduction in the adoption process of e-commerce in regards to both hardware and software. Secondly, companies have learnt from either their own experience or the experiences of others and are now finding e-commerce adoption easier. Finally, the rise in resources and programmes offered, many from government provide assistance for SME’s.
Although, many SME’s have utilised the adoption of e-commerce as previously discussed, Poon’s studies (2002) suggest that not all companies have benefited from it. Furthermore, even in favourable organisations with a respectable e-readiness, mixed success rates have been found, and those who have actually achieved benefits have either been insignificant or have had a short life p.
2.4 E-commerce adoption
In recent times, numerous studies have been conducted to investigate the levels of e-commerce adoption for the purposes of SME’s. The focus of this research has concentrated upon three crucial factors: the level of adoption, the stages of adoption and the factors that inhibit or permit adoption.
2.4.1 Levels of adoption
In order for an enterprise to fully understand the levels of adoption, the author will discuss Grewel’s (2001) classification model to support SME e-commerce adoption initiatives.
Firstly, there is a risk in approaching the question of whether SMEs can be seen as a homogenous group in terms of e-commerce adoption, as there is a scarcity of literature. For example, while it is clear that the owner/manager is a significant driver for e-commerce adoption, it is only recently that research has begun to appear that investigates the motivations behind their move towards adoption (Levy and Powell, 2003). Therefore, for the purpose of the study, the author will use the model as a categorisation tool to homogenise SME’s theoretically.
LEVEL 1: Landlubbers – SME’s have no intention of moving to the electronic environment. These businesses tend to be small, have little employees and occupy and small and stable market with no intention of expansion.
LEVEL 2: Toe Dippers – SME’s that have basic computer needs and limited skills in using them. Unwillingness to expend beyond a minimal level but are of the view that the internet can be helpful for tasks on a day-to-day basis for use of e-mail and online banking.
LEVEL 3: Paddlers – Participants of e-commerce and are sometimes registered within an e-marketplace, but carry out virtually no business through it. Have an eagerness to learn but a lack of confidence and ability to advance to a higher level of involvement.
LEVEL 4: Waders – Categorised by SME’s that for reasons of choice or pressure from stakeholders, have moved into the electronic environment. The firms within are initiated in electronic services and are beginning to learn how to participate in online business.
LEVEL 5: Swimmers – Businesses within this level are experts and are comfortable with many e-commerce applications and online trading is an integral part of their business.
Grewel’s (2001) classifications indicate that the diffusion levels are affected the resources and can be best targeted at specific groups to encourage higher levels of e-participation, rather than disperse the resources holistically across all SME’s (Levy and Powell, 2003). Furthermore, findings of Grey (2003) show further evidence that adoption levels are not merely down to resources but that adoption rates differ from country to country and that SME’s throughout the world are at different levels of adoption in comparison to others found in different countries. Additionally, both the levels, stage and rate of adoption is influenced by the conditions within that locality. As discussed earlier, the UK is placed 13th on the e-readiness rankings (2009) suggesting that the UK’s levels of adoption are reflective of the benefits already achieved by its SME’s.
2.4.2 Stages of adoption
The second factor of adoption deals with the stages or phases of adoption. Cater-Steel and Grist (2004) describe the steps that should be taken to further adopt the internet, although they are also of the opinion that e-commerce will only be adopted as the need arises for the integration into the supply-chain and not just for the sake of having e-commerce.
Jeffcoate, Chappell and Feindt (2002) also explored the topic matter and devised a best-practise model for the process in adopting e-commerce. They indentified 11 imperative dynamics of success that are vital during the different phases of the adoption process. However, the most crucial issue raised was that the process which is normally segmented into numerous stages is definitely an ongoing process rather than a one-off event. Similarly, Rogers (1995) also subscribes to the view of adoption as a process with the 5 factors model of innovation adoption. Levy and Powell (2003) further assist Rogers with their adoption ladder framework and are of the opinion that most SME’s only see value at the bottom end of the ladder.Furthermore, there seems to be an overall agreement that the process in the adoption of e-commerce is indeed a process and is implemented in stages rather than an individual one-off occasion. Additionally, the stages are usually adopted at the lower end of the classification model (Grewel, 2001), slowly climbing the adoption ladder towards the more complex aspects of e-commerce.
2.4.3 Influencing factors of adoption
Qi (2007) and Kiong (2004) investigated the reasoning behind moving from neo-classical forms of commerce to the post-modern capabilities of electronic commerce. They identified a wide range of influencing factors, yet most were mainly regarding monetary benefits. However, further studies by Simpson (2004) conveyed that pressure from society was also a pivotal factor encouraging adoption. Scupola (2003) devised a framework that represents the factors influencing adoption. These factors have been categorised into three segmented groups including the external environment, organisational context and technological context. In addition, managers who perceived e-commerce has having a positive effect on the strategic value of an company posses a positive attitude to adoption (Grandon and Pearson, 2003) whereas Ramsey’s (2005) research into the differences in adopters and non-adopters found that adopters are far more proactive and have a greater e-awareness to indentifying technological possibilities.
Following the analysis upon the factors influencing adoption, the most notable appears to be the perceptions and attitudes of managers towards e-commerce within organisation. SME’s that have made to successful transition to utilising e-commerce have all portrayed an positive opinion of technological innovation and that it provides them with a opportunity to create a competitive advantage over rival companies and a basis to build better relationships with any stakeholders involved.
Qualitative research has been extensively compared with quantitative research and has found three different theories about how knowledge is accepted known as epistemology (Bryman and Bell, 2007). Quantitative research has been labelled under the natural scientist theory of positivism (Saunders et al, 2007), which collects data and creates facts on what is in front of them. Hypothesis’ are made by reviewing past literature before undertaking research, which is then compared as to whether the predictions are correct.
Qualitative research is labelled at the other end of the epistemological spectrum (Strauss and Corbin, 1998) under Interpretivist or social constructivist (Bryman and Bell, 2007). This theory looks past statistical evidence and penetrates deeper into the information to identify dissimilar answers and read the reactions of people’s behaviour (Saunders et al, 2007). This has a very subjective view due to differentiated opinions and different minds of people (Strauss and Corbin, 1998), which can cause negative outcomes which will be discussed later.
Finally, Realism could be said to be in the middle of the two extremes, showing characteristics of both a positivist and an interpretivist (Bryman and Bell, 2007). Realism is comparable to positivism (Saunders et al, 2007) with its scientific approach to data but the theory is divided into two mindsets: Direct realism takes more of the positivist approach by looking at the data and producing results from what is in front of them (Bryman and Bell, 2007). However another mindset has been formulated in the form of critical realism (Saunders et al, 2007), looking past the direct realism and believe that complexities occur in data, which leaves the researcher creating their own interpretations of data (Bryman and Bell, 2007).
3.2 Qualitative V Quantitative
It has long been recognised that qualitative and quantitative methods produce different types of information. The use of quantitative methods permits statistical analysis using standardised measures to gauge and compare the reactions of a large number of people on a limited set of questions (Patton, 1997). By contrast, qualitative methods facilitate use of data that are perceived as rich, holistic and real for which face validity seems faultless (Miles, 1983 cited in Howard et al 2001).
These characteristics and the lack of standardisation of much qualitative data make them difficult to analyse and require that the researcher devote much time and effort to managing the data (Howard et al, 2001). In contrast, a number of quantitative indices are generally available and additional indicators can be developed by various means, including satisfaction scales and involvement levels. However, Lillis (2008) states that the knowledge that books and numbers have limitations as it doesn’t tell the whole truth.
Conversely, qualitative indicators are less readily available. A research design that includes a collection of these indicators is important for numerous reasons. Firstly, qualitative research can lead to the findings of unanticipated data that wasn’t previously expected. Secondly, qualitative methods can also assist the decision makers whose main desire is to gain an understanding to what the people studied actually think and why they think that as well as the values and motivations to that particular thought and behaviour (Van Maanen, 1983 cited in Howard et al, 2001). Furthermore, Bryman and Bell (2007) identify qualitative research as too subjective, on a person’s opinion, their perception could be based on a poor experience however, overall perceptions from others could be different. The data is also difficult to replicate, which is therefore a huge difficulty in analysing, unlike quantitative research (Veal, 1998).
To summarise, there is always going to be conflict between the contrasting methods and that both methods have advantages and disadvantages, yet each can be realised when used to research different topics. Furthermore, the author concurs with the opinion of Van Maanen suggesting that qualitative methods provide access to deep-routed answers.
In the approach to deciding upon the research method, two means have been identified including both inductive and deductive approaches (Veal, 1998). Qualitative research takes on the inductive approach, in which a collection of data and a development of theory is a result of data analysis owing itself to paradigms of interpretivism. Whereas, quantitative research uses a deductive approach, in which theory and/or a hypothesis is developed to design a research strategy to test that hypothesis which owes itself to positivism (Saunders et al, 2007).
Although, both approaches provide contrasting paradigms and that they are divided rigidly, Saunders et al (2007) suggest that it is misleading and that not only is it perfectly possible to combine the approaches, but it may be advantageous to do so. However, as the author is aiming to understand why something is happening, rather than being able to describe what is happening, it is more appropriate to undertake the research, inductively.
After exploring both Bryman and Bell (2007) and Saunders et al’s (2007) methods for research literature, the author noticed various techniques to devise a research plan. Taking a quantitative approach may include techniques such as questionnaires or experiments and provide statistical evidence. However, the approach taken by the author to conduct the research is via a qualitative approach and therefore its emphasis upon specific strategies such as observations, interviews and focus groups.
Further strategies may include Glaser and Strauss’ (167, cited in Bryman and Bell, 2007) Grounded theory whereby an alternative strategy for linking both theory and research is available suggesting that the research may build up a collection of theory throughout the ongoing process of research. An additional technique known as archival research makes use of administrative records and documents as the principle source of data. Furthermore, the data is part of an archival strategy and is analysed because they are part of the day-to-day activities (Hakim, 2000 cited in Saunders et al, 2007). This may become relevant for the purpose of the study as it assists qualitative methods of research within suitable environments, such as observations.
3.5 Choices of method
Adoption of e-commerce in SME: Lessons from the stage model: Ada Scupola, 2003.
Office for national statistics 2002
Critical factors affecting intermediary web site adoption: understanding how to extend e-participation. Tina Harrison & Kathryn White, 2005.
A classification model to support SME e-commerce adoption initiatives: Rosemary Stockdale & Craig Standing, 2006.
E-Commerce: the challenge for UK SME’s in the 21st century: Michael Quayle, 2002.
Barriers to e-commerce and competitive business models in developing countries: A case study. Nir Kshetri, 2007.
Adoptions intentions and benefits realised: a study of e-commerce in UK SME’s: Elizabeth Daniel & Hugh Wilson, 2002.
E-Commerce operations management: Marc Schniederjans and Qing Cao, 2002.
Management issues regarding e-commerce and the internet: Nilpa Shah and Ray Dawson, 2000.
A study of planning and implementation stages in electronic commerce adoption and evaluation: Chad Lin, Yu-An Huang and Shu-Woan Tseng, 2007.
SME’s and internet adoption strategy: who do SME’s listen to: M Beckinsdale, 2004.
Innovating business through e-commerce: Exploring the willingness of SME’s: Husnayati Husiin and Rafidah Mohamed Noor, 2005.
The internet and SME’s internationalization: Promises and Illusions: Elie Chrysostome and Philip Rosson, 2004.
ICT infrastructure and E-readiness: Assessment report, Estonia. Andre Krull, April 2003.
Beyond the hype: the truth about e-commerce internationalization: Mendoza, Powell, Gezelius, Hellstrom and Klevmarken, 2001.
Barriers to internationalisation: an investigation of the craft microenterprise: I Fillis, 2002.
Make the web world wide: a road for globalization of e-commerce: M Sawhney and S Mandal, 2000.
Commercial internet adoption in China: H Riquelme, 2002.
M-Profits: Tomi Ahonen, 2002.
The Mobile commerce prospects: A strategic analysis of opportunites in the banking sector: R Tiwari and S Buse, 2007.
Broadbank: e-commerce consumer report 2010
Wireless internet: the future is here: I Raicu, 2001.
Emerging trend and challenges in information technology management: Medhi Khosrow-Pour, 2006.
An investigation into the antecedents of organizational participation in business-to-business electronic markets: R Grewel, J Corner and R Mehta, 2001.
Exploring SME internet adoption: Towards an intercontinental model: M Levy and P Powell, 2003.
A investigation to e-commerce adoption profile for small and medium enterprises in Bury, Manchester, UK: B QI, 2007.
Analysis in the state of e-commerce adoption by SME’s: LV Kiong, 2004.
E-commerce adoption support and advice for UK’s SME’s: M Simpson, 2004.
Business research methods: Alan Bryman and Emma Bell, 2007.
Research methods for business students: Mark Saunders, Philip Lewis and Adrian Thornhill, 2009.
Balancing qualitative and quantitative information for effective decision support: Richard Howard and Kenneth Borland Jr, 2001.
Research methods for leisure and tourism: A practical guide: A J Veal, 2008.
E-readiness rankings report, 2009.
IRMG Capgemini, 2010.