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An Investigation of Challenges in the Effective Uti lization of
E-Commerce in the Mining Industry in Zimbabwe: The Case of
RioZim Limited (2005 – 2011)
By
Sherpherd Kamango
R0100583
Dissertation submitted in partial fulfillment of the requirements for the degree of
Master of Business Administration, Graduate School of Management, University of
Zimbabwe
Supervisor : Mrs C.M.R. Tsikirayi
October 2012
i
DECLARATION
I, Sherpherd Kamango, do hereby declare that this dissertation is the result of my
own investigation and research, except to the extent indicated in the
Acknowledgements, References and by comments included in the body of the
report, and that it has not been submitted in part or in full for any other degree to any
other university.
______________________ __________________________
Student’s Signature Date
_______________________ __________________________
Supervisor’s Signature Date
ii
DEDICATION
To my late father who passed on in March 2010. You were my pillar of strength.
iii
ACKNOWLEDGEMENTS
First and foremost, I would like to thank the Almighty for guidance and wisdom
throughout this research study.
Special thanks go to my wife, Nyasha, for her support, encouragement and patience
during the long and tiresome hours of research.
A word of thanks to my mother and late father for all that I am today.
I sincerely thank my research supervisor, Mrs Tsikirayi, for her guidance and
encouragement throughout the research study. Her critical analysis, contributions
and suggestions helped to shape this dissertation.
My sincere gratitude goes to Mr Albert Machisvo, a friend and MBA classmate who
embraced me with brotherly love in my social and academic life.
I would also like to thank all the respondents to the survey, without their
contributions and cooperation this research would not have been possible. The
views and conclusions in this dissertation, however, are the author’s and he accepts
full responsibility.
iv
ABSTRACT
This dissertation focuses on the challenges encountered in achieving the effective
utilization of e-commerce in the mining industry. RioZim Limited was used as a case
study for the period 2005 to 2011.
Empirical data were gathered through the use of a structured questionnaire sent to
RioZim management concerning the challenges in the effective utilization of e-
commerce for the study period. The questionnaire was divided into distinct parts
which focused on the current utilization of e-commerce, benefits of e-commerce,
major challenges and recommendations for overcoming the challenges.
The findings were that RioZim managers were of the opinion that e-mail and the
Internet were the most widely used e-commerce applications at the organization.
The managers acknowledged very low usage in terms of e-commerce technologies
like e-procurement, e-recruitment, credit cards, point of sale, e-cheque and e-wallet.
The study revealed that improved communication was a key benefit associated with
e-commerce utilization at RioZim Limited. Other benefits included finding new and/or
global markets, improved competitiveness, finding new suppliers and improved
marketing.
It was concluded that lack of e-commerce infrastructure was the major technical
barrier to the utilization of e-commerce in the mining industry. Lack of secure
payment infrastructure, lack of e-commerce standards and absence of regulatory
and legal systems, lack of awareness of e-commerce benefits and low level of
readiness in government institutions also had great influence on e-commerce
utilization. The researcher recommended that, RioZim should purchase more ICT
and e-commerce equipment. Zimbabwean education system should include the
basics of e-commerce in its curriculum. Infrastructural development can help to
enhance Internet connectivity and other ICT technologies. The proposition, “lack of
senior management support is the major challenge”, was refuted.
v
TABLE OF CONTENTS DECLARATION .......................................................................................................... i DEDICATION ..............................................................................................................ii ACKNOWLEDGEMENTS .......................................................................................... iii ABSTRACT ................................................................................................................iv TABLE OF CONTENTS ............................................................................................. v LIST OF TABLES ...................................................................................................... vii LIST OF FIGURES .................................................................................................. viii LIST OF ACRONYMS ................................................................................................ix CHAPTER ONE ......................................................................................................... 1
1.0 Introduction .................................................................................................. 1
1.1 Introduction to the study ............................................................................ 1
1.2 Background to the study ............................................................................ 2
1.3 SWOT Analysis ......................................................................................... 6
1.4 External Environment Analysis (PESTEL) ............................................... 13
1.5 Statement of the Problem ........................................................................ 18
1.6 Research Objectives ............................................................................... 19
1.7 Research Questions ................................................................................ 19
1.8 Research Proposition .............................................................................. 20
1.9 Research Justification ............................................................................. 20
1.10 Scope of Research .................................................................................. 21
1.11 Assumptions of the Study ........................................................................ 21
1.12 Dissertation Structure .............................................................................. 22
1.13 Chapter Summary ................................................................................... 23
CHAPTER TWO ...................................................................................................... 24 2.0 Literature Review ........................................................................................ 24
2.1 Introduction .............................................................................................. 24
2.2 The Concept of Electronic Commerce ..................................................... 24
2.3 Categories of E-Commerce ..................................................................... 26
2.4 Challenges in the Utilization of E-Commerce .......................................... 31
2.5 Conceptual Framework ........................................................................... 35
2.6 Benefits of E-Commerce Utilization ......................................................... 38
2.7 Chapter Summary ................................................................................... 45
vi
CHAPTER THREE ................................................................................................... 46 3.0 Research Methodology ............................................................................... 46
3.1 Introduction .............................................................................................. 46
3.2 Research Philosophy ............................................................................... 46
3.3 Assumptions of the Paradigms ................................................................ 49
3.4 Research Approaches ............................................................................. 51
3.5 Research Design/Strategy ....................................................................... 54
3.6 Population of the Study ........................................................................... 60
3.7 Sampling Methods ................................................................................... 61
3.8 Sources of Data ....................................................................................... 64
3.9 Data Collection Methods ......................................................................... 65
3.10 Data Processing and Analysis and Presentation .................................. 69
3.11 Research Limitations ............................................................................ 69
3.12 Ethical Issues in Data Collection ............................................................. 70
3.13 Chapter Summary ................................................................................... 70
CHAPTER FOUR ..................................................................................................... 71 4.0 Results and Discussion .............................................................................. 71
4.1 Introduction .............................................................................................. 71
4.2 Response Rate ........................................................................................ 71
4.3 Results of the Research .......................................................................... 72
4.4 Chapter Summary ................................................................................... 83
CHAPTER FIVE ....................................................................................................... 84 5.0 Conclusions and Recommendations .......................................................... 84
5.1 Introduction .............................................................................................. 84
5.2 Conclusions of the Study ......................................................................... 84
5.3 Research Proposition .............................................................................. 86
5.4 Recommendations of the Study............................................................... 86
5.4 Areas for Further Study ........................................................................... 88
REFERENCES ........................................................................................................ 89 Appendix One: ......................................................................................................... 99 Cover Letter ............................................................................................................. 99 Appendix Two: ....................................................................................................... 101 Questionnaire circulated to RioZim managers ....................................................... 101
vii
LIST OF TABLES
Table 2.1: Barriers to E-Commerce .................................................................... 33
Table 3.1: Research Paradigms.......................................................................... 48
Table 3.2: Relevant Situations for Different Research Strategies ....................... 56
Table 3.3: Population of the Study ...................................................................... 60
Table 3.4: Sample Size ....................................................................................... 63
Table 4.1: Responses ......................................................................................... 71
viii
LIST OF FIGURES
Figure 1.1: RioZim Areas of Operations ................................................................ 5
Figure 1.2: Global Market Prices......................................................................... 11
Figure 2.1: B2B E-Commerce ............................................................................. 28
Figure 2.2: B2C E-Commerce ............................................................................. 29
Figure 2.3: Barriers to E-Commerce Utilization ................................................... 36
Figure 3.1: Research Philosophy Alternatives .................................................... 47
Figure 3.2: Research Design/Strategy Alternatives ............................................ 55
Figure 3.3: Choice of case study type ................................................................. 57
Figure 3.4: The Questionnaire Design Flow Chart .............................................. 68
Figure 4.1: Experience in Mining Industry ........................................................... 72
Figure 4.2: Importance of E-Commerce Utilization ............................................. 73
Figure 4.3: E-Commerce Technologies in Use ................................................... 74
Figure 4.4: Impact on Current Utilization ............................................................. 75
Figure 4.5: Key Benefits of E-Commerce ............................................................ 76
Figure 4.6: Technical Barriers to Utilization of E-Commerce .............................. 77
Figure 4.7: Economic Barriers to Utilization of E-Commerce .............................. 78
Figure 4.8: Legal and Regulatory Barriers to Utilization of E-Commerce ............ 79
Figure 4.9: Social and Cultural Barriers to Utilization of E-Commerce ................ 79
Figure 4.10: Political Barriers to Utilization of E-Commerce ............................... 80
Figure 4.11: Organizational Barriers to Utilization of E-Commerce ..................... 81
Figure 4.12: Internal Support Factors for Utilization of E-Commerce .................. 82
Figure 4.13: External Support Factors for Utilization of E-Commerce................. 83
ix
LIST OF ACRONYMS
AIDS Acquired Immuno Deficiency Syndrome
B2B Business-to-Business
B2C Business-to-Consumer
B2G Business-to-Government
C2C Consumer-to-Consumer
GDP Gross Domestic Product
GPA Global Political Agreement
HIV Human Immunodeficiency Virus
ICT Information Communication Technology
ISPs Internet Service Providers
IT Information Technology
OECD Organization for Economic Co-operation and Development
PEST Political, Economic, Social, Technological
PESTEL Political, Economic, Social, Technological, Ecological, Legal
RBZ Reserve Bank of Zimbabwe
SPSS Statistical Package for the Social Sciences
SWOT Strengths, Weaknesses, Opportunities, Threats
UNDP United Nations Development Programme
EU European Union
x
1
CHAPTER ONE
1.0 Introduction
1.1 Introduction to the study
Technological innovation and the rapid growth of information are key trends in
today’s economy. The development of digital technology has paved the way for the
emergence of a broad range of new communication channels, including Internet
services, mobile phones, email, video conferencing, and webcasting (Australian
Competition and Consumer Commission, 2001). Technological change has far
reaching implications for commercial activities globally. In particular, it has provided
significant growth opportunities for the information technology sector and for the
development of e-commerce services (Australian Competition and Consumer
Commission, 2001).
Lawrence et al. (2003), cited in Ilesanmi (2007) defined e-commerce as the buying
and selling of information, products and services via computers, telecommunication
networks and streamlined work processes. Electronic commerce or e-commerce is
expanding rapidly and continuously as a means of doing business in parallel to the
development in hardware and network technologies (Icli, 2005). In the emerging
global economy, electronic commerce (e-commerce) is believed to be an important
part business strategy as well as being vital for economic development (Andam,
2003). The integration of information and communication technology (ICT) in
business has enhanced business-to-business and business-to-customer
relationships. Magombedze (2008) specifically states that the use of ICT in business
enhances productivity, customer participation, mass customization and cost
reduction.
2
The mining industry, especially in the developed countries, is recognizing the value
of e-commerce as other industries and it is utilized widely in accessing commercial
databases or services, advertising, ordering goods and services, monitoring prices,
and e-mail applications (Icli, 2005). Mining companies only sell their products or
survive when they remain competitive within the global framework of prices in their
commodity sector. It is essential for companies to identify and qualify all possible
opportunities for sales and to provide service and support to customers who clearly
distinguish their business from the competition (Thompson, 1999). Managing cost
and using technology to help reduce those costs is a way of survival. Saving will
come from lower transaction costs, streamlined procurement, reduced inventories,
more standardization, greater transparency and more automated ordering (Barker,
2002).
1.2 Background to the study
1.2.1 General Overview
The rapid development of the Internet in the 1990s saw the global mining industry
beginning to seize opportunities to use this new technology in several aspects of its
business (Camese, 2011). Although finance, legal and other service industries have
higher Internet penetration rates than those in manufacturing and mining, the main
uses of the Internet by firms include accessing commercial databases or services,
advertising, ordering goods and services, monitoring prices, and e-mail applications
(El-Kateb, 2000).
E-commerce in the mining industry is no longer being treated or regarded
suspiciously by traditional channel buyers and sellers alike as a risk business
without clear benefit. Innovations and expanding interest in both public and private
exchanges have prompted the industry to embrace the e-commerce business model
(Carter, 2003).
3
The techniques are being used in other industries, and their value to the mineral
industries is becoming more recognized. The value of this new business paradigm is
increased efficiency in researching, negotiating and completing transactions. Other
advantages are improved order and inventory management, better tracking of
transaction, consolidated information collection and the ability to make informed
decisions. A main business objective is to make purchasing and sales more efficient,
productive and timely (Gibbs, 2001).
The emergence of private and public e-marketplaces that enable quick procurement
of products and services is especially useful to mine operators because of the critical
role that spare parts availability and maintenance play in the production process. In
particular, companies that operate mines in remote locations, far from supply centers
and transportation hubs, are finding that e-business can eliminate or reduce supply
chain-kinks (Carter, 2003). E-commerce can help locate equipment and reduce
procurement time. Many claim the ability to find and have equipment delivered
quickly is the main advantage of e-commerce (Kane, 2000).
In Zimbabwe e-commerce is not a new concept. The tourism and hospitality sector
has implemented e-commerce portals but such progress has not been very evident
in the manufacturing and mining sectors (Magombedze, 2008). The mining sector in
Zimbabwe has embraced Electronic Data Interchange (EDI) during business to
business transactions. However, little has been implemented for business over the
Internet. Also the current e-commerce implementation has not fully exploited all e-
commerce tools or integrated the technology to business processes (Magombedze,
2008).
There is a big inertia to move towards the new technology and many only use
computers for e-mail, internet and typing (Magombedze, 2008). Ainin and
Noorismawati (2003) also postulate that the use of Internet as a medium of
communication or messaging is greater than its use in other applications of e-
commerce. The study by Dube et al. (2010) highlighted that although organizations
4
in the Midlands town of Gweru seem to have taken aboard e-commerce related
technologies, the usage level is still in the bud stages. The predominant use of
electronic commerce applications was for communications or informative purposes
(Dube et al., 2010).
RioZim Limited is not an exception to the predominant use of e-commerce for
communication more than its other applications. One would have expected RioZim
Limited, a blue-chip company, to utilize e-commerce in areas like e-procurement,
online payment facilities, informative website, e-recruitment and private industrial
networks among other uses. It is against this background of limited use of e-
commerce that the researcher has embarked on an investigation of the challenges in
the effective utilization of e-commerce using the case of RioZim Limited.
1.2.2 Background of the Organization
RioZim Limited is a broad-based mining organization that owns mining rights for
gold, coal and diamonds. It started its operations in Zimbabwe about 56 years ago
as Rio Tinto Plc. It also refines nickel and copper from Bamangwato Concessions
Limited (BCL), a company in Botswana.
Renco Gold Mine, Empress Nickel Refinery, Sengwa Colliery and Skilled
Engineering Contractors (SEC) are the most active companies in the RioZim Group.
RioZim also owns a 22% stake in Murowa Diamonds. In the short-term, the Group
intends to invest in the expansion of its gold mining operations and is in the process
of finding a partner who can bring skills and capital in developing the next chapter in
their exciting story (Imara Edwards Securities, 2009). Figure 1.1 shows the areas of
operations for RioZim Limited.
5
Figure 1.1: RioZim Areas of Operations Source: RioZim Annual Report (2007)
6
RioZim has extensive claims across the country, with ongoing projects in gold, coal
and diamonds at Renco, Sengwa and Murowa. Gold production at Cam and Motor
mine near Kadoma is likely to materially grow the group’s gold production in the
years ahead.
The researcher presents a SWOT Analysis of RioZim Limited. This provides an
overview of whether a firm’s business position is fundamentally healthy or unhealthy
(Thompson and Strickland, 2003).
1.3 SWOT Analysis
Pearce and Robinson (2005) define SWOT as an acronym for the internal strengths
and weaknesses of an organization as well as the environmental opportunities and
threats facing an organization. Thompson and Strickland (2003) contend that
perceptive understanding of a company’s resource capabilities and deficiencies, its
market opportunities, and the external threats to its future well-being is essential to
good strategy-making. Below is a brief analysis of the strengths, weaknesses,
opportunities and threats of the RioZim Group.
1.3.1 Strengths
Thompson and Strickland (2003) define a strength as something a company is good
at doing or a characteristic that gives it enhanced competitiveness. Furthermore,
Mintzberg, Quinn and Hampel (2003) define strengths as the distinctive
competencies of an organization. Therefore, strengths are what the organization can
do best to show its capability and wield its reputation.
Valuable Physical Assets
RioZim Limited is a diversified company with operations in mining, engineering and
properties. It owns mining rights for gold, coal and diamonds. It also refines nickel
7
and copper from Botswana and has an engineering company called Skilled
Engineering Company (SEC). As previously mentioned, Renco Gold Mine, Empress
Nickel Refinery, Sengwa Colliery and Skilled Engineering Contractors (SEC) are the
most active companies in the RioZim Group.
Valuable Human Assets
RioZim Limited also has competent and well-qualified managers and staff who are
motivated to drive the company towards achieving its goals. The managers hold an
array of qualifications which include MBA, MSc, PhD and diplomas. The widely
experienced, competent and knowledgeable management teams are capable of
steering the company through any transformation phase.
Strong Company Reputation
RioZim Limited has built a strong company reputation emanating from the roots of its
former parent company, Rio Tinto Plc, which is a world class company with very
good record of health and safety standards as well as community development. The
company is committed to responsible and sustainable exploitation of the natural
resources under its control (RioZim Annual Report, 2010). The company uses the
RioZim Foundation as the vehicle for engagement with communities.
1.3.2 Weaknesses
Thompson and Strickland (2003) postulate that a weakness is something a company
lacks or does poorly (in comparison to others) or a condition that puts it at a
disadvantage. Pearce and Robinson (2005) define a weakness as a limitation or
deficiency in one or more resources or competencies relative to competitors that
impedes a firm’s effective performance. RioZim Limited, just like any other corporate
body, has its own weaknesses.
Financial Resources
8
Thompson and Strickland (2003) suggest that a short on financial resources to fund
promising strategic initiatives is a potential weakness and competitive deficiency.
RioZim Limited has numerous projects lined up for expansion but urgently needs
recapitalization. The global economic crisis has seen most metal prices going
tumbling thus posing some operational challenges to the company.
According to the RioZim Environmental and Social Report (2008) the core activity of
the company is mining and the company has been active in exploring for potential
new resources and developing existing resources through the year. The seemingly
conducive economic environment which began in 2009 calls for implementation of
growth projects whose capital injection is beyond RioZim’s current business cash
flows. Therefore, RioZim Limited needs capital injection to fund its numerous
expansion projects which are in the pipeline.
Weak Balance Sheet
The delay in recapitalizing the company had a major impact on performance as it
was forced to seek expensive short-term financing. The heavy debt burden ($60
million) has constrained RioZim’s profitability and growth (RioZim Annual Report,
2011).
Financial Losses
High expensive short-term debt severely affected the company’s ability to operate
profitably and as a going concern. The company recorded a comprehensive loss
after tax of $12 million compared to a comprehensive loss of $18.7 million in 2010
(RioZim Annual Report, 2011). In 2009 the comprehensive loss after tax was $16.2
million. The company was heavily laden with debt resulting in finance costs rising
from $4.3 million in 2009 to $10.2 million in 2010. The finance costs combined with
the distribution and administrative expenses contributed immensely to the
company’s losses.
Obsolete Facilities
9
The operating environment at RioZim Limited is characterized by dilapidated
infrastructure, especially the plant at Renco Mine (RioZim Annual Report, 2011). The
lack of long-term capital and working capital resulted in the shortage of inputs and
numerous plant breakdowns.
Labour Turnover
Brain drain which has affected our country since the late 1990s has not spared
RioZim Limited. The company lost some of its skills to the competitor market within
the mining industry. Turnover in the skilled worker category was higher in 2011 as
compared to 2010 (RioZim Annual Report, 2011). In 2010 it was slightly higher than
the rate in 2009 at 2% compared to 1.6% respectively. The marginally higher
turnover is attributed to the skilled staff category which lost 28 employees during the
course of the year for various reasons (RioZim Annual Report, 2010).
1.3.3 Opportunities
An opportunity is a situation of positive impact in a firm’s environment (Pearce and
Robinson, 2005). Thompson and Strickland (1990) contend that a company’s
opportunities are the prevailing and emerging industry opportunities which are
relevant to the company and either can provide avenues for growth or lead to
competitive advantage. Indeed, a market opportunity is a big factor in shaping a
company’s strategy (Thompson and Strickland, 2003).
Expansion
The regional shortage of power that started in 2007 has persisted and the need for a
thermal power station to be built at the Sengwa Colliery remains (RioZim
Environmental and Social Report, 2008). The company is actively pursuing the
development of a commercially viable Independent Power Producer at the mine site.
Therefore, the regional power deficit presents an opportunity to RioZim Limited to
build a thermal power station on a SADC level.
10
New Geographic Markets
The liberalization of the monetary policy has seen RioZim Limited selling its gold
directly to the Rand Refinery, a defining moment that enables it to benefit from the
firm gold prices internationally. Plans are in place to expand operations at Renco
and open up the dormant Cam and Motor Mine which will increase gold production
to between 150 and 250 kg per month (Imara Edwards Securities, 2009).
New Nickel Operations
RioZim Limited intends to set up its own nickel mining operation and slowly pull out
of toll refining. Exploration work at Chimakasa Nickel project is underway (Imara
Edwards Securities, 2009). This presents an opportunity to expand mining
operations.
Information Communication Technology (ICT)
There are immense opportunities offered by the Internet, e-commerce and IT. The
emerging technologies are an effective tool for automating processes at RioZim
Limited. They can reduce the time for all transactions and mitigate the skills gap
(O’Brien, 2003).
1.3.4 Threats
Threats are factors in a company’s external environment that negatively affect its
profitability and competitive well-being (Thompson and Strickland, 2003). It is
management’s job to identify the threats and take strategic actions to neutralize or
lessen their impact (Thompson and Strickland, 2003). Pearce and Robinson (2005)
concurred with Thompson and Strickland by defining a threat as a situation of
negative impact in a firm’s environment.
Fluctuating Global Metal Prices
11
The global economic recession which began in 2008 resulted in weak nickel prices.
Through 2008, the gold price remained firm while the base metal prices dropped
significantly in the second half of the year (RioZim Environmental and Social Report,
2008). The fluctuations in the prices of base metals directly affected profitability for
RioZim Limited.
The international prices for gold reached an all time high of around US$1500/ounce
during the first half of 2011. Platinum prices also remained buoyant at around
US$1800 during the same period.
Figure 1.2: Global Market Prices Source: The 2011 Mid-Year Fiscal Policy Review (Ministry of Finance)
The diagram above indicates lucrative gold prices in the first half of 2011 which,
nevertheless, could not help much on the increasing finance costs which had gone
up from $10.2 million in 2010 to $13.6 million in 2011.
Private Property Rights
12
Although RioZim Limited is 51% indigenous with regards to share ownership it is still
a sensitive asset because of the uncertainty prevailing in the mining industry and the
ever-changing legislation.
1.3.5 The SWOT Analysis and E-Commerce Utilization
The valuable asset base at RioZim Limited can be used as a platform for launching
full utilization of e-commerce. Income generated from these assets can be
channeled towards the e-commerce strategy of the organization.
The valuable human assets are capable of steering the company through any
transformation phase like implementation of e-commerce strategy. It is easy to
introduce knowledgeable and experienced personnel to new technologies which
include e-commerce.
The strong company reputation in which RioZim is basking is advantageous to luring
customers, suppliers and ICT oriented personnel and buttressing existing
relationships. E-commerce can come in and uplift this reputation to greater heights.
A regularly updated website can be a starting point in enhancing the company
reputation.
The shortage of financial resources, recurring financial losses, weak balance sheet
and high administrative costs can be eased by increased utilization of e-commerce
technologies. As a mining concern, RioZim has a large expenditure on procuring
mining consumables, spares, machinery and equipment. Utilization of e-
procurement can lead to a reduction of transaction costs, improved process
efficiency and reduction of inventory costs. Just-in-time (JIT) systems can be used in
e-procurement.
It is widely believed by many authors that a SWOT analysis is a simple but widely
used tool which assists in bringing out the strengths, weaknesses, opportunities and
threats of an organization (CIMA, 2007:5). On the other hand, a PESTEL analysis is
13
a scan of the external macro-environment in which an organization exists (CIMA,
2007:6). It is used for analyzing the political, economic, socio-cultural, technological,
ecological and legal environment that an organization operates in (CIMA, 2007:6).
Therefore, a SWOT analysis measures a business unit, a proposition or idea
whereas the PESTEL analysis measures a market and it is a business measurement
tool. The researcher, therefore, found it of utmost importance to embark on a
PESTEL analysis of RioZim Limited.
1.4 External Environment Analysis (PESTEL)
Kotler (1998) contends that PEST analysis is a useful strategic tool for
understanding market growth or decline, business position, potential and direction
for operations. On the other hand, Thompson and Strickland (2003) state that
environmental scanning involves studying and interpreting the sweep of social,
political, economic, ecological, and technological events, in an effort to spot budding
trends and conditions that could become driving forces.
1.4.1 Political Environment
Zimbabwe has been characterized by a polarized and volatile political environment
since 1999. This has adversely affected the operations of all the sectors in the
economy, including the private sector under which RioZim Limited falls. There is also
political uncertainty surrounding impending elections (RioZim Annual Report, 2011).
The perceived political instability, uncertainty and failure by the inclusive government
to implement fully the Global Political Agreement (GPA) added to the lack of
confidence by both local and foreign investors to commit long-term funds into the
Zimbabwean economy (RioZim Annual Report, 2010). The perceived political
instability has deprived RioZim Limited of investors who would have wanted to
improve technology in the company including e-commerce utilization. Matula and
Van Brakel (2007) found that countries faced with political instability commit less
14
time to ICT development and this includes e-commerce. Therefore, even directors
and management of corporations like RioZim Limited will commit very little time to e-
commerce technologies in such volatile political conditions.
1.4.2 Economic Environment
The Gross Domestic Product (GDP) of Zimbabwe has shrunk by almost 60% from
the last decade as a result of political turmoil, capacity under-utilization, investor
aversion and a host of austerity measures imposed on the country by the
international community in response to various policy differences. The economy
expanded by 8.1% in real terms in 2010 (Market Research Report, 2011). A large
proportion of the growth in 2010 was a result of significant increases in output from
the mining industry (47%) and agricultural output (34%). The GDP shows the
economic condition of a country. Lawrence and Tar (2010) argued that, the
establishment of technology infrastructure in most developing countries is beyond
their ability. As a result, e-commerce growth in countries with unfavourable
economic conditions is relatively slow (Lawrence & Tar, 2010). Zimbabwe is no
exception.
Whilst the economy grew by a commendable 8% in 2010 from a low base, the
economic environment, though conducive, was hamstrung by the high political risk
and external debt arrears of $4.8 billion (RioZim Annual Report, 2010). It remains
difficult for Zimbabwe to access concessionary international finance with such an
external debt burden. This is worsened by the lack of local finance. The growth of e-
commerce is highly dependent on the cost of the telecommunication infrastructure
so such economic conditions are a drawback to e-commerce utilization for RioZim
and other organizations in Zimbabwe. The financial constraints have made it difficult
for RioZim Limited to acquire state-of-the-art ICT infrastructure. Nevertheless, the
Global Political Agreement (GPA) which was signed in 2009 by Zimbabwe’s major
political parties resulted in marked economic recovery. The adoption of the multi-
currency regime also brought economic stability and hence may facilitate some e-
commerce advancement at RioZim Limited.
15
1.4.3 Legal Environment
Zimbabwe was subjected to many regulations, starting from the late 1990s.
Exchange control regulations and pricing regulations were the major ones in the
wake of economic instability. The Reserve Bank of Zimbabwe (RBZ) tightly
regulated the gold sector and passed various instruments to control the sale of gold.
These regulations were major drawbacks to RioZim Limited in the utilization of e-
commerce since funds to acquire equipment were tightly controlled by the powers
that be.
The Environmental Management Act (Chapter 20:27) was also enforced on all
industries at all cost. Radiation protection laws also generated high licence fees.
This greatly affected the companies’ cash flows. RioZim Limited was no exception
and the unfavourable cash flows meant the suffering of ICT development in the
company.
The implementation of the Indigenisation and Economic Empowerment Act
(Chapter 14:33) has also, unfortunately, become a source of concern for the whole
economy, not only the mining industry. This legislation has scared away foreign
direct investment (FDI) in corporations like RioZim Limited, thus slowing down the
pace of technological development.
In terms of the legal system, Zimbabwe has a legal framework for e-commerce
which is still in its nascent stage. There is limited experience in drafting e-commerce
legislation for issues such as transactional security, intellectual property rights
protection and tax. Regulations supporting areas critical to the development of e-
commerce such as the privacy, consumer rights, and validation of electronic
contracts and recognition of digital signatures have yet to be written (Kariyawasam
16
and Austin, 2011 p.270). This has a negative impact on ICT development and e-
commerce utilization in corporations like RioZim Limited. The company directors and
management tend to be skeptical towards ICT development in light of the lack of a
robust legal framework to govern ICT issues.
1.4.4 Technological Environment
Infrastructure in the mining industry is mostly dilapidated. There is obsolete plant
and machinery which need replacement (RioZim Annual Report, 2011). Lack of
capital investment further compounds this problem. The obsolete equipment works
adversely to the advancement of various technologies, including e-commerce.
Nevertheless, in some cases, modern technologies have reduced some of the
inherent risks in mineral exploration, discovery and resource evaluation. Global
communications are favourable with the fibre networks and satellite access and can
be used as leverage by the mining industry in Zimbabwe towards e-commerce
advancement.
1.4.5 Social Environment
The society in which the business operates shapes its values, beliefs and norms.
According to Kotler (1998), people absorb almost unconsciously, a world view that
defines their relationship to themselves, to others, to organizations, to society, to
nature and to the universe. Kapurubandara and Lawson (2008) mention that, in
some countries, cultural barriers can contribute a significantly to the adoption of e-
commerce. People consider shopping as a social event and the face-to-face
interaction with the seller is an important experience. The mining industry in
Zimbabwe is also adversely affected by these cultural barriers.
The harsh economic environment in Zimbabwe has increased brain drain.
Professional and technical people have migrated to the diaspora in search of
17
greener pastures. This brain drain has a negative impact on technological
advancement and e-commerce is no exception. Those already in the diaspora
express uncertainty about returning home to pursue their careers amid growing
concern with the developing political landscape (RioZim Annual Report, 2011). Mine
closures in the peak of economic instability have led to the challenge of high
unemployment and related social woes. Cash flows were affected and the mining
industry had to shelve ICT development.
The prevalence of HIV and AIDS has also affected the industry as a whole due to
loss of manpower. The high prevalence of the pandemic in the 16 to 45 year age
group in Zimbabwe has led to the decimation of young, skilled and working class
professionals. According to the World Health Organization Country Report (2009),
the infection rates in this age group in Zimbabwe are between 13 to 16%. RioZim
Limited and other organizations lost some of the much needed talent and skill hence
adversely affecting technological advancement.
1.4.6 Ecological Environment
The government of Zimbabwe enforces active stewardship of biodiversity and tries
to minimize the environmental impact resulting from the operations of various
organizations in the country. The Environmental Management Agency (EMA) is a
statutory body which was established in terms of the Environmental Management
Act (Chapter 20:27) of 2002. It was established to ensure sustainable utilization and
protection of Zimbabwe’s environmental goods and services (The Herald, 29 June
2011). The Radiation Protection Authority of Zimbabwe (RPAZ) is mandated to
protect people and the environment against the harmful effects of radiation through
the Radiation Protection Act (Chapter 15:15).
The mining industry has to abide by these environmental laws since the operations
leave a trail of destruction to the environment if not properly administered and
monitored. However, the implementation of the laws comes at a greater cost to the
18
mining firms. The cost of EMA licences is high. This may leave little funds for ICT
development since priority will be given to statutory issues. Therefore, there has
been a negative impact on e-commerce in corporations such as RioZim Limited.
1.4.7 PESTEL and E-Commerce Utilization
The uncertain political environment that is prevailing in Zimbabwe can stall the
implementation of RioZim’s strategies, and technological advancement is no
exception. The company may be hesitant to implement full utilization of e-commerce
since there will be no confidence in the current political system.
On the other hand, RioZim can take advantage of the economic stability brought by
the multi-currency regime to introduce some of the latest technology, especially ICT.
The economic stability can be combined with the technological environment in which
RioZim can utilize the existing fibre networks and satellite access to fully implement
its e-commerce strategy.
The social environment worked adversely to the sustenance of e-commerce
technologies since RioZim has lost key personnel to brain drain and HIV and AIDS.
There will be need for succession plans to curb this loss of manpower.
1.5 Statement of the Problem
Manufacturing and mining sector companies have invested in e-commerce but have
not been able to achieve competitive advantage via its implementation
(Magombedze, 2008). These current investments in e-commerce have not been
backed by properly crafted e-commerce strategies and full utilization of e-commerce
technologies for value addition to companies. RioZim Limited, a company weaned
off Rio Tinto Plc, is lagging behind in terms of utilizing state-of-the-art e-commerce
technologies and practices as compared to the former parent company and its
19
current subsidiaries. Rio Tinto is committed to an e-commerce strategy that includes
automation of the purchase-to-pay process and the transmission of purchase orders,
invoices and related transaction documents through a common, internet-based,
procurement framework (RioTinto Procurement Principles, 2011). The e-
procurement technology is one such aspect which is effectively utilized by Rio Tinto
Plc but not embraced at RioZim Limited. What, then, are the challenges that are
hindering the effective utilization of e-commerce technologies by RioZim Limited?
1.6 Research Objectives
The goal of this study was to investigate the challenges in the effective utilization of
e-commerce at RioZim Limited. Therefore, the research objectives are as follows:
1. To determine the degree to which RioZim Limited has utilised e-commerce
technologies in the period 2005 – 2011.
2. To identify the challenges in the effective utilization of e-commerce by RioZim
Limited.
3. To identify the benefits of effective utilization of e-commerce by RioZim
Limited.
4. To make recommendations on how RioZim Limited can overcome the
challenges of effectively utilizing e-commerce technologies in its business
processes.
1.7 Research Questions
20
The key question was: Why has RioZim Limited, a blue chip company on the local
bourse, has not yet fully embraced the various e-commerce technologies?
Subsequently, the following research questions were drawn up:
1. What is the extent to which RioZim Limited has utilized e-commerce
technologies in the period 2005 – 2011?
2. What are the challenges that are being faced by RioZim Limited in the
effective utilization of e-commerce?
3. What are the benefits that can be derived by RioZim Limited from the
effective utilization of e-commerce?
4. How can RioZim Limited overcome the barriers of effective utilization of e-
commerce in its business processes?
1.8 Research Proposition
Lack of senior management support is the major challenge in the effective utilization
of e-commerce technologies at RioZim Limited.
1.9 Research Justification
Implementing an e-commerce strategy is neither straightforward nor cheap. It
comprises a complete rethink of traditional modes of behaviour, the need and
importance to involve internal staff and external suppliers and customers right from
the conceptual stage, need to re-evaluate the company’s core competencies, and
requires substantial investment in IT (Magombedze, 2008). As such, this study
seeks to unveil the challenges of effectively utilizing e-commerce technologies for
the betterment of, not only the mining industry but, all sectors of the economy.
21
The knowledge gained from this research will be useful, not only to RioZim
management and staff, but also to other organizations whether profit-making or non-
profit making. It will provide insights and recommendations to enhance the effective
utilization of e-commerce technologies.
The research will also provide academia with information on the applicability of e-
commerce in the Zimbabwean mining industry and provide a source platform for
further research.
1.10 Scope of Research
The study will focus on RioZim Limited which is a mining concern headquartered in
Harare. The respondents of the study will be drawn from its Harare offices, Empress
Nickel Refinery (Kadoma) and Renco Mine (Masvingo).
1.11 Assumptions of the Study
The researcher made the following assumptions in the preparation and conduct of
the research study:
1. All sampled respondents would participate in the study.
2. The selected respondents would be willing to provide their responses within the
timeframe set for the study.
3. The respondents would provide accurate and unbiased opinions.
22
1.12 Dissertation Structure
The research study is divided into five chapters which are outlined below:
Chapter 1: Introduction
This chapter introduced the whole study and contained the background, problem
statement, research objectives, research questions, research proposition,
justification and scope of the research study.
Chapter 2: Literature Review
In this chapter the researcher reviews the relevant theoretical and empirical literature
on e-commerce. The primary source is published literature and other research
papers and case studies on the topics of e-commerce in the context of its utilization
and barriers.
Chapter 3: Research Methodology
This chapter details the research methodology applied in the study. It is a description
of how the research was conducted, that is, research approach, sampling methods,
research instruments, data processing, analysis and presentation.
Chapter 4: Research Findings and Analysis
This chapter is for the research results and discussion. It presents the results of the
findings which are then discussed by the researcher.
Chapter 5: Recommendations and Conclusions
In this last but vital chapter the researcher presents the conclusions and
recommendations of the research study, as well as the areas of further research.
23
1.13 Chapter Summary
The chapter outlined the background to the research study and also formulated the
research problem and what motivated the researcher to conduct the study.
Research objectives and questions were also drawn from the research problem. The
chapter also covered the research proposition and the scope of the study. The next
chapter reviews the literature related to the concepts of e-commerce, benefits and
challenges to effective utilization of e-commerce.
24
CHAPTER TWO
2.0 Literature Review
2.1 Introduction
This chapter analyses the existing body of knowledge on e-commerce. It focuses on
what academic literature and empirical evidence offer in terms of the utilization of e-
commerce by organizations and how e-commerce has influenced business.
The primary source of this study is published literature and other research papers
and case studies on the topics of e-commerce in the context of benefits and
challenges in the utilization of e-commerce. The literature study is utilized as a base
to clarify the concepts of e-commerce. The literature is selected and critically
evaluated. The aim of the literature review is to analyze the importance of the
utilization of e-commerce by businesses. It will also identify and give an insight to the
challenges inhibiting the utilization of e-commerce.
2.2 The Concept of Electronic Commerce
2.2.1 E-Commerce
There are a number of definitions of e-commerce that are currently available in the
literature which was reviewed by the researcher. Zwass (1998:3) defines e-
commerce as ‘‘the sharing of business information, maintaining business
relationships, and conducting business transactions by means of
telecommunications networks.’’ On the other hand, Treese and Stewart (1998:5)
25
define it as ‘‘the use of the global Internet for purchase and sale of goods and
services, including services and support after the sale.’’ Further, Kalakota and
Whinston (1997:3) define it as ‘‘the delivery of information, products/services, or
payments via telephone lines, computer networks or any other means.’’ All of them
do not limit their coverage to just Internet-based means.
Kauffman and Walden (2001:3) emphasize ‘‘the Internet as a medium for enabling
end-to-end business transactions.’’ Their definition ‘‘applies equally well in dotcom
[and] Internet-only business settings, as well as more traditional business settings
where the new channel of the Internet is being used alongside existing channels.’’
On the whole, electronic commerce refers, generally, to all forms of transactions
relating to commercial activities, including both organizations and individuals, that
are based upon the processing and transmission of digital data, including text, sound
and visual images (OECD, 1997). In a broad sense, it is the use of computer
networks to improve organizational performance (Watson et al, 2008). It involves all
aspects of an organization's electronic interactions with its stakeholders, the people
who determine the future of the organization. In brief, electronic commerce involves
the use of information technology to enhance communications and transactions with
all of an organization's stakeholders. Such stakeholders include customers,
suppliers, government regulators, financial institutions, managers, employees, and
the public at large.
According to Rosen (2000:2), electronic commerce or e-commerce refers to a wide
range of online business activities for products and services. It is any kind of
business transaction with parties engaging electronically and there is no direct
physical contact (Rosen 2000:2).
According to Mesenbourg (1999), e-commerce is simply the buying and selling of
products and services over the Internet. Mesenbourg (1999) further elaborates that
26
e-commerce uses computer-mediated network to conduct transactions which result
in the exchange of ownership or rights to use products or services.
This is a popular definition. However, it is not comprehensive and does not embrace
recent developments in business.
A comprehensive definition was formulated by Lallana et al. (2000:2). They say E-
commerce is the use of electronic communications and digital information
processing technology in business transactions to create, transform, and redefine
relationships for value creation between or among organizations, and between
organizations and individuals. (p. 2).
The researcher seeks to identify an appropriate definition for e-commerce that
emphasizes the B2C side of e-commerce. With this in mind, he uses a B2C-focused
version of Treese and Stewarts’ and Kauffman and Walden’s definitions: B2C
electronic commerce is the use by business and consumers of the global Internet for
the sale and purchase of goods and services, including business services and after
sale support to consumers. Similar to Kauffman and Walden, it is noted that the
present definition emphasizes the Internet as a medium for end-to-end B2C
transactions. Their definition also applies to Internet only and bricks-and-clicks
settings in which businesses and consumers share information and make
transactions.
2.3 Categories of E-Commerce
Laudon and Laudon (2006) classify electronic commerce roughly into five major
categories:
a) Business-to-business (B2B)
b) Business-to-consumer (B2C)
27
c) Business-to-government (B2G)
d) Consumer-to-consumer (C2C)
e) Mobile commerce (m-commerce). (p. 196)
2.3.1 B2B e-commerce
According to Andam (2003), B2B e-commerce is simply e-commerce between
companies. It focuses on relationships between and among businesses (Andam,
2003). Andam 2003 further state that the majority of e-commerce transactions
belong to this category. Hence, it is believed that B2B e-commerce will continue to
enjoy a bigger stake than the B2C segment (Andam, 2003). Laudon and Laudon
(2006) agree that B2B e-commerce involves sales of goods and services among
businesses. They give an example of Milacron’s web site for selling machinery,
mould bases, and related tooling, and services to companies engaged in plastics
processing.
B2B is commerce where purchase and sale transactions occur, not between
individuals but, between companies by using the Web and extranets. The B2B
model involves electronic transactions for ordering, purchasing, as well as other
administrative tasks between companies. It includes trading goods, such as
business subscriptions, professional services, manufacturing, and wholesale
dealings (Ptusce, 2011). Figure 2.1 depicts a firm (seller business) selling its
products to another firm (buyer business) over the Internet. The product information
is available on the seller business website and orders are placed over the Internet.
28
Figure 2.1: B2B E-Commerce Source: Eservglobal (2011)
The B2B market has two primary components: e-frastructure and e-markets.
According to the Goldman Sachs Investment Research (1999), e-frastructure is the
domain B2B e-commerce. It includes logistics, outsourcing of functions, content
management software, auction solutions, application service providers and web-
based commerce enablers (Goldman Sachs Investment Research, 1999:3).
E-markets are defined as websites where buyers and sellers interact together and
conduct business transactions (Goldman Sachs Investment Research, 1999:3).
2.3.2 B2C e-commerce
According to Lallana et al. (2000), business-to-consumer (B2C) e-commerce is
commerce between companies and consumers. Lallana et al. (2000) further state
that it involves customers gathering information; purchasing physical goods or
information goods; and, for information goods, receiving products over an electronic
network.
These transactions take place between the consumers and the sellers via the
Internet (Lee et al. 2002a). Individuals can purchase goods and services from
retailers electronically through B2C commerce, who in turn can use B2B commerce
to link directly to their suppliers. This is depicted in Figure 2.2 where a consumer
29
accesses a company website and places his/her order for a product. The firm
receives the order, processes it and dispatches the product.
Figure 2.2: B2C E-Commerce Source: Eservglobal (2011)
Electronic payment systems are used in both the B2C and B2B commerce. Both
technologies like electronic funds transfer, credit cards, smart cards, debit cards and
internet based payment systems to pay for services and products online. Lack of
consumer trust in e-commerce transactions and the social, financial and legal
infrastructures of the e-commerce environment, poses a major challenge to the
large-scale uptake of B2C e-commerce (Patton and Josang, 2004). Online shopping
is one of the main activities in B2C electronic commerce.
B2C e-commerce is the second largest and the earliest form of e-commerce
(Andam, 2003). Its origins can be traced to online retailing (or e-tailing). It has
common applications in buying goods and information, and personal investments
and finance (Kalakota and Whinston, 1997). Andam (2003) goes on to state the
merits of B2C e-commerce and gives examples like reducing transaction costs and
eliminating some of the market entry barriers.
30
2.3.3 B2G e-commerce
According to Andam (2003), business-to-government e-commerce (B2G) is defined
as commerce between corporations and the public sector. Generally, it uses the
Internet for public procurement, licensing procedures, and other public sector
activities (Andam, 2003). The TA Project (2002) state that there are two features for
this kind of e-commerce. First, the government takes a leading role in the
establishment of e-commerce and secondly, the government has the greatest need
for the effectiveness of its procurement system (TA Project, 2002).
Web-based purchasing policies can enhance transparency in government
procurement systems (Khurana et al., 2011:457). Nevertheless, B2G ecommerce
market in Zimbabwe and other developing countries is insignificant, as government
e-procurement systems remain undeveloped (Khurana et al., 2011:457).
2.3.4 C2C e-commerce
Consumer-to-consumer e-commerce or C2C is simply commerce between private
individuals or consumers (Khurana et al., 2011:457). Electronic marketplaces and
online auctions are its key components (Tradeinasia.com, 2002). It perhaps has the
greatest potential for developing new markets. Andam (2003) points out that
statistics on the relative size of global C2C e-commerce are not available.
31
Figure 2.3: C2C E-Commerce Source: Ersevglobal (2011)
eBay and www.bazee.com are common examples of online auction websites that
provide a consumer to advertise and sell their products online to another consumer
(Laudon and Laudon, 2006). However, it is essential that both the seller and the
buyer must register with the auction site as shown in Figure 2.3 (Eservglobal, 2011).
2.3.5 M-commerce
According to Khurana et al. (2011:457), M-commerce or mobile commerce is the
buying and selling of goods and services using wireless technology which includes
handheld devices such as cellular telephones and personal digital assistants
(PDAs). Andam (2003) points Japan as a global leader in m-commerce. Khurana et
al. (2011:457) as cited in the website whatis.com (2010) briefly explains that m-
commerce affects telecommunications, information services, financial services and
the retail or service sector.
2.4 Challenges in the Utilization of E-Commerce
Challenges in the utilization of e-commerce will be discussed in terms of general
barriers and barriers that are specific to the mining industry.
32
2.4.1 General Barriers
According to a 2006 study (harmonyhollow.net, accessed 30 September, 2011), the
major barriers to electronic commerce are:
• Resistance to new technology.
• Implementation difficulties.
• Security concerns.
• Lack of technology skills.
• Lack of potential customers.
• Cost.
In addition, Van Toorn et al. (2006), postulate that the barriers to e-commerce are:
• Sectoral barriers (government, private sector, international organizations).
• Internal barriers (e.g. security, lack of technical knowledge, and lack of time
and resources).
• External barriers (e.g. lack of government support).
On the other hand, Turban et al. (2008), classify the barriers to electronic commerce
as either technological or non-technological. The major barriers under technological
and non-technological are shown in Table 2.1:
33
Table 2.1: Barriers to E-Commerce
Technological Barriers Non-technological Barriers • Lack of universal standards for
quality, security and reliability.
• The telecommunication bandwidth is insufficient, especially for mobile-commerce.
• Software tools are still evolving.
• It is difficult to integrate the internet and electronic commerce software with some existing (especially legacy) applications and databases.
• Special web servers are needed in addition to the network servers, which add to the cost of electronic commerce.
• Internet accessibility is still expensive and/or inconvenient.
• Order fulfilling of large-scale B2C requires special automated warehouses.
• Security and privacy concerns deter customers from buying.
• Lack of trust in electronic commerce and in unknown sellers hinders buying.
• People do not yet trust paperless, faceless transactions.
• Many legal and public policy issues, including taxation, have not yet been resolved or are not clear.
• National and international government regulations sometimes get in the way.
• It is difficult to measure some of the benefits of electronic commerce such as online advertising. Mature measurement methodologies are not yet available.
• Some customers like to feel and touch the products before they buy them.
Source: Turban et al. (2008)
Lawrence and Tar (2010) put the barriers under specific categories, namely
infrastructural, socio-cultural, socio-economic, and political and governmental
barriers. They concentrated on developing countries.
Infrastructural Barriers
Lawrence and Tar (2010) give examples of infrastructural barriers which include low
credit card system, Internet security, poor distribution logistics, poor
34
telecommunication transmission capability and lack of trustworthy merchants. (p.
26).
Socio-cultural Barriers
Lawrence and Tar (2010:26) state that developing countries have cultures that do
not support e-commerce. There is lack of confidence in technology an e-commerce
is no exception. The culture of engaging in online activities is very low (Lawrence
and Tar, 2010).
Socio-economic Barriers
Lawrence and Tar (2010:27) gave examples of socio-economic barriers which
include economic conditions, distribution systems for transferring goods, payment
systems and educational systems.
Political and Governmental Barriers
According to Lawrence and Tar (2010:27), the majority of developing countries
suffer from obsolete telecommunications infrastructure. They further state the major
concerns which include the high cost of bandwidth, lack of telephone lines, low
quality, slow speed and also security issues. Lawrence and Tar (2010) further
postulate that most developing countries suffer from lack of ICT policies which are
required in Internet services. Lawrence and Tar (2010) conclude that government
policy and regulation are, therefore, key factors in the adoption of e-commerce.
2.4.2 Specific Barriers to the Utilization of E-Com merce in the Mining Industry
The Ministry of Industry and Commerce (2011) admitted that there is low utilization
of e-commerce in all the industrial sectors in Zimbabwe including the mining sectors.
The Industrial Development Policy (2012-2016) which was crafted by the Ministry in
2011 states that the Government of Zimbabwe is geared to see business embrace
ICT and e-technology to produce higher value chain products through the National
ICT Policy Framework and the Strategic Plan spearheaded by the Ministry of ICTs.
35
There is a wide range of reasons why mining corporations face hindrances in the
utilization of e-commerce utilization. The reasons vary widely among countries
(OECD, 2004). The reasons include cost considerations, infrastructure, security
concerns and trust, distribution networks, not being able to feel and touch the goods
and difficulties in returning wrong or malfunctioning products (OECD, 2004).
The mining sector in Zimbabwe is greatly affected by the costs of ICT equipment
and networks since the mines are generally located out of town. RioZim Limited has
mines in remote areas like Nyajena and Sengwa among other examples. Network
availability is also a problem for mining companies in remote areas.
Overall most of the barriers that affect other industries also affect the mining sector
whether they are infrastructural, socio-cultural, socio-economic, or political and
governmental barriers.
2.5 Conceptual Framework
After scrutinizing the various barriers mentioned above, the researcher adopted the
conceptual framework postulated by Zaied (2011). The barriers were divided into six
major categories which are:
• Social and Cultural Barriers
• Technical Barriers
• Economic Barriers
• Political Barriers
• Organizational Barriers
• Legal and Regulatory Barriers
36
Figure 2.3: Barriers to E-Commerce Utilization Source: Zaied (2011)
While e-commerce has been growing rapidly, there are several open issues that
must be resolved. These include:
- Legal and financial issues: If a service was sold over the Internet across countries
can the transaction be deemed to have occurred? This question may be important
from the point of view of consumer protection and establishing the jurisdiction (Hoda,
1999), the legal status of contract, financial regulations over payment, taxes and
• Lack of popularity for online marketing and sales.
• Lack of awareness of e-commerce benefits.
• Lack of external pressure from suppliers and customers.
• Linguistic barriers.
Social & Cultural Barriers Technical Barriers
• Lack of Internet security. • Lack of e-commerce
infrastructure. • Lack of qualified staff. • Inadequate quality and
speed of lines. • Increased innovations and
new technologies.
Economic Barriers
• Lack of financial information.
• Unclear benefits from e-commerce adoption.
• Cost too high. • Competitive pressure. • Lack of secure payment
infrastructures.
E-Commerce Utilization in Mining Industry
Political Barriers
• Change in regulations by Government.
• Changes in government policy.
• Lack of appropriate legal environment to apply e-commerce.
• Low level of readiness among government institutions.
Organizational Barriers
• Difficulty in changing the existing working procedures.
• Lack of management support.
• Organizational resistance to change.
• Limited use of Internet banking and web portals.
Legal & Reg. Barriers
• Absence of legal and regulatory systems.
• No simple procedures and guidelines.
• Lack of e-commerce standards.
• Lack of e-trading legislations.
37
customs charges applied to the products (UNDP, 2011). Electronic transactions
require electronic contracts and electronic signatures which have not been provided
for in the contract laws of many countries.
E-commerce could result in the erosion of tax bases. Given the present size of e-
commerce, serious erosion of the tax base is not in prospect. In the future, however,
it may become more of an issue for tax authorities (El-Kateb, 2000).
- Ownership: Intellectual property is that is owned by the person who thought it up. A
copyright is a right of intellectual property, for a limited time, provides the creator of a
work (or someone to whom the creator assigns rights) specific, exclusive rights to
work (Kienan, 2001). Particularly for goods that can be distributed electronically, and
hence can readily be copied, the issue of protecting copyright and intellectual
property rights represents a major challenge (EU, 2011).
- Privacy and security: e-commerce over open networks demands effective and
trusted mechanisms for privacy and security. The lack of security and reliability are
the major barriers to expanding ecommerce (Turban et al., 2000). Since the
recognized privacy and security mechanism depend upon certification by a trusted
third party (such as a government body), global e-commerce will require the
establishment of a global certification system (EU, 2011).
- Infrastructure, interconnectivity and interoperability: Realizing the full potential of e-
commerce requires universal access. This in turn demands universal standards for
network interconnection and interoperation (EU, 2011) and decreasing digital divide.
- Deployment: One factor that could limit the emergence of e-commerce is lack of
awareness and skills (EU, 2011). Hence, there is an urgent need to promote
awareness, to publicize examples of best practice, and to provide education and
training.
38
In a seminar on e-commerce and its development in 1999 it is explained that the
obstacles to e-commerce were different for developed and developing countries.
The major issues identified in developed countries were such as privacy concerns,
censorship, navigation difficulties, taxes, etc, whereas the main issues in a
developing region were slow speed, prices for access to net, ISP prices, and lack of
local content (WTO, 2011).
2.6 Benefits of E-Commerce Utilization
The emergence of e-commerce has brought immense benefits to business,
individual and society as a whole.
2.6.1 General Benefits
The spread of e-commerce will depend on the perception of the consumer regarding
its advantages and disadvantages. This perception depends on the individual, their
circumstances and the goods that are to be traded (Whiteley, 2000). E-commerce
creates many potential benefits to organizations, individuals, and society (Turban et
al., 2000).
Organizations can use a minimal capital outlay to easily and quickly expand the
marketplace to national, international and locate more customers, suppliers and
business partners, which means new opportunities (EU, 2011), increase in sales
giving rise to increased revenue (Chaffey, 2002); creating economies of scale
(Wilson and Abel, 2002).
According to Icli (2005) there is a growing realization that profitably producing and
selling a top quality product at best price, is not solely a function of the organization
alone, but increasingly dependent upon the effectiveness in which the total supply
chain is managed. Therefore, business process improvements need to extend
39
beyond organizational boundaries to envelop and integrate with those activities of all
trading partners within the supply chain (that is, consumer and market research,
product design, marketing, material planning, procurement, manufacturing, sales,
distribution, logistics, accounting and customer services) (Chester et al., 2003;
UNDP, 2011).
Chaffey (2002) believes that it is useful to identify both tangible and intangible
benefits of ecommerce. Tangible benefit identifies monetary saving or revenues,
intangible benefits for which it is more difficult to calculate cost savings.
Wilson and Abel (2002) contend that e-commerce decreases costs. There is
reduction of marketing cost through low cost or no cost market research, reduced
time in customer service through online sales; supply chain cost reduction from
reduced level of inventory; increased competition from suppliers; shorter cycle time
in ordering; administrative cost reduction from more efficient routine business
process such as recruitment, invoice payment (Chaffey, 2002), decreasing of
creating, processing, distributing, storing, retrieving paper-based information.
Organizations that sell information goods gravitate towards disintermediation, that is,
the process by which the logistical stream is shortened, (Mahadevan, 2000).
Blanning et al. (2000) as cited in Chan et al. (2001) studied and compared e-
marketplaces with traditional markets on cost-based economics and they believe
that there are economics incentives for e-marketplaces. Icli (2005) postulates that
the increased competition in e-commerce has resulted in Internet-based business
applications migrating from being on-line and cost-saving transactions into full-
service Internet commerce. These systems are expected to provide increasing
decision support functionalities to traders while reducing biased decisions to
increase market transparency and transaction speed (Blanning and Bui, 2000).
E-commerce enhances internal and external communication and the transfer of
information (The Hong Kong Productivity Council, 2003) which can improve
40
customer relationship (Wilson and Abel, 2002). It has changed the role of customers
involved in product and service innovation in all steps of designing, manufacturing,
promoting, selling and delivering (Cak, 2002). Customer information and feedback
from customers on products or data mining can be used to create/improve
specialized product that gives competitive advantage of the company (The Hong
Kong Productivity Council, 2003).
Icli (2005) states that modern business is characterized by ever increasing supply
capabilities, global competition, and customer expectations. In response, businesses
throughout the world are changing both their organizations and their operations.
They are flattening old hierarchical structures and eradicating the barriers among
company divisions (EU, 2011).
2.6.2 Benefits of E-Commerce to the Mining Industry
The rapid development of the Internet has seen the global mining industry begin to
seize opportunities to use this new technology in several aspects of its business
(Camese, 2011). El Kateb (2000) postulates that finance, legal and other service
industries have higher Internet penetration rates than those in manufacturing and
mining.
Icli (2005) on the other hand, states that e-commerce in the mining industry is no
longer being treated and regarded suspiciously by traditional channel buyers and
sellers alike as a risky business without clear benefit. Carter (2003) buttresses this
point by adding that innovations and expanding interest in both public and private
exchanges have prompted the industry to embrace the e-commerce model. The
main business objective in the mining industry is to make purchasing and sales more
efficient, productive and timely (Gibbs, 2001). E-commerce in the mining industry
comes with increased efficiency in researching, negotiating and completing
transactions. Other advantages are improved order and inventory management,
better tracking of transactions, consolidated information collection and the ability to
make informed decisions (Icli, 2005).
41
Icli (2005) further indicated that mining companies only sell their products or survive
when they remain competitive within the global framework of prices in the
commodity sector. Therefore, managing cost and using technology to help reduce
operational costs is a way of survival. It is in this vein that Barker (2002) postulated
that saving will come from lower transaction costs, streamlined procurement,
reduced inventories, more standardization, greater transparency and more
automated ordering.
For producers of raw materials whose financial health depends largely on cost of
production, the change in attitude is simple to explain: Time is money, and the less
time spent on internal and external transactions, the lower the cost of doing business
(Icli, 2005). The emergence of private and public e-marketplaces that enable quick
procurement of products and services is especially useful to mine operators because
of the critical role that spare parts availability and maintenance play in the production
process. In particular, companies that operate mines in remote locations, far from
supply centers and transportation hubs, are finding that e-business can eliminate or
reduce supply chain kinks (Carter, 2003). E-commerce can help locate equipment
and reduce procurement time. Many claim the ability to find and have equipment
delivered quickly is the main advantage of e-commerce (Kane, 2000).
Gibbs (2001) contends that B2B e-commerce has created opportunities to reduce
cost and create value for mining companies. Procurement links the production side
of the mining industry to its suppliers (Camese, 2011). However, the supply chain in
mining industry is highly fragmented and contains much inefficiency in the
procurement process (Icli, 2005). If electronic procurement means that mining
companies deal directly with manufacturers instead of through representatives, the
saving in commission could offset fees to the e-procurement facilitator. The
relationship between the manufacturer, the representative and the customer is likely
to change significantly (Gibbs, 2001).
42
Icli (2005) postulates that the amount of money that e-commerce might save is
significant. Will Berends, director of e-business at Hatch Engineering as cited in Icli
(2005), estimates that procurement processes account for 1 % to 2 % of total capital
cost, and John Heskin, manager of information system for Placer Dome, calculates a
possible 3% saving on procurement expenditure. INCO’s Wayne Smith, manager of
purchasing, warehousing and traffic also cited in Icli (2005), estimated the total
amount spent annually by the industry worldwide on procurement to be US$200
billion. Combined, those estimates indicate an industry-wide saving of US$60 to 120
million (Icli, 2005).
Mahadevan (2000) states that goods traded over the net broadly fall into two
categories: experience goods and economy goods. Experience goods require
greater personal involvement in the buying process (Mahadevan, 2000). Engineered
equipments or ore or concentrates are more difficult to purchase online since they
typically require inspections, testing and reviews by several internal departments
and often coordination with an outside contractor (Kane, 2000). The trading of
metals has different requirement than purchasing equipment and depends on
extensive interaction between the producers and buyer (Gibbs, 2001).
Icli (2005) contends that some suppliers fear they will lose control over how they
present and provide their products to customers. Still others are concerned about
the security of doing business on the Web (Chambers, 2001). Most e-commerce
experts agree that fundamental changes in the way a company conducts business
may be necessary to achieve maximum value from e-business systems and tools.
On the other hand, experienced e-business practitioners warn that some
fundamentals, including customer relations, cannot be ignored (Carter, 2003).
The newest e-procurement and metal trading sites are growing rapidly and there will
be continued development and exciting new advances in the technology (Icli, 2005).
Besides e-procurement, mineral ore and metal trading sites are running on the
Internet and more are appearing regularly. The capabilities of trading sites range
43
from simple information and links to full auction and transaction service sites (Gibbs,
2001). Some use simple website portals to allow interested parties to locate them.
Others use their sites for direct sales. Exchanges are being established to provide
global buyers and sellers with a place to meet and auction their products.
Therefore, the utilization of e-commerce also brings valuable benefits to the mining
sector in Zimbabwe and the world as a whole. The huge investment and operational
cost associated with the mining sector can be militated against by using technology
to help reduce the costs as a way of survival. As mentioned earlier, savings will
come from lower transaction costs, streamlined procurement, reduced inventories,
more standardization, greater transparency and more automated ordering.
Despite these many advantages, businesses in Zimbabwe and in other developing
countries have not realized full benefits from e-commerce and continue to face
challenges (Zimtrade Newsletter, 2011). E-commerce growth in these countries has
been slow for a variety of reasons including low levels of Internet penetration and
limited communication infrastructure. This also includes the mining sector. As a
result, many people are still unaware of the opportunities offered by e-commerce.
Much still needs to be done to encourage e-commerce in these countries.
In as much as there are benefits derived from the utilization of e-commerce, there
are also authors who argue that there are factors which work against the successful
implementation of e-commerce. These factors are now discussed in the next
section.
2.6.3 Factors Affecting the Successful Implementati on of E-Commerce
Although it is simple to describe the benefits of using e-commerce, it is not nearly as
easy to develop and deploy e-commerce systems. A number of factors affect the
successful implementation of e-commerce.
44
Commitment
Commitment in an organization has been identified in many information technology
implementations (Lucas, 1986) as the major factor influencing the success of the
implementation. In e-commerce implementation, too, commitment can be identified
as one of the significant factors contributing to the progress of implementation.
Trading Partner Participation
E-commerce, by definition, is about electronic trading between companies. The
participation of trading partners is vital to the success of the implementation.
Pro-active Approach
Implementation of e-commerce systems is quite different from implementation of
intra-organizational information technologies (Lucas, 1986). The need to market the
concept and persuade trading partners to get involved is critical.
Business Value
According to Horback (1995), businesses are most concerned with the benefits that
e-commerce can bring – what level of savings can be expected? Top management
would need to be convinced about the savings before the implementation process
takes place.
Training and Educational Programmes
Training is part of the unfreezing stage in the whole implementation programme,
where employees are introduced and encouraged to become involved in improving
the system and process (Wigand, 1997). If training and educational programmes are
not done then this can affect the successful implementation of e-commerce.
Rapid Changes in Technology
The rate of change of the technologies and systems used in information systems
applications, as well as the business needs which result from these changes, have
45
forced organizations to modify their business practices and processes rapidly (Meier,
1992).
Complexity and Compatibility
The very nature of e-commerce, which works by linking multiple organizations, tends
to lead to complexity of both technology and process (Chan and Swatman, 1999).
Although technological complexity can be minimized if there is commitment and
willingness to work together with trading partners to solve problems as they arise,
complex processes can cause an implementation to falter.
Therefore, the organizations in the mining sector have to take into consideration
these factors in order to achieve successful implementation of e-commerce.
2.7 Chapter Summary
This chapter utilized existing literature as a base to clarify the concepts of e-
commerce. The aim of the chapter was to focus on what academic literature and
empirical evidence offer in terms of the utilization of e-commerce by organizations
and how e-commerce has influenced business. To this end, the chapter has
identified and given an insight to the challenges inhibiting the utilization of e-
commerce in organizations.
The next chapter will discuss the research methodology that will be used to evaluate
the validity of the research proposition and determine whether other factors, both
endogenous and exogenous contribute to this problem.
46
CHAPTER THREE
3.0 Research Methodology
3.1 Introduction
This chapter highlights the research philosophy, approach, design and methods
used by the researcher to address the research problem.
An appropriate research methodology is a general plan of how the researcher will go
about providing answers to the research questions, considering the sources from
which to collect data and the constraints that one might have (access to data, time,
location and money). It should reflect the fact that the researcher has thought
carefully about why a particular strategy has been employed. This chapter will
elaborate the considered and selected research paradigm, approach and tools for
testing the research proposition.
3.2 Research Philosophy
The selection of an overall research philosophy in conducting this research study
was done from two primary alternatives, namely, the positivist (quantitative) and the
phenomenological (qualitative or interpretivist) philosophy. This is depicted in Figure
3.1.
47
Figure 3.1: Research Philosophy Alternatives
Source: Tobin (2006:51)
According to Tobin (2006), authors who include Easterby-Smith et al. (1991) and
Saunders et al. (2000) concurred on the major factors guiding the selection of a
research philosophy. Easterby-Smith et al. (1991) as cited in Tobin (2006) offer
these key elements of the two philosophy paradigm alternatives as shown in Table
3.1:
Positivist Research
Phenomenological Research
Research Philosophy
48
Table 3.1: Research Paradigms
Positivist Paradigm Phenomenological Paradigm
Basic Beliefs The world is external and objective.
The world is socially constructed and subjective.
Observer is independent. Observer is part of what is being observed.
Science is value-free. Science is driven by human interests.
Researcher should Focus on facts. Focus on meanings.
Look for causality and fundamental laws.
Try to understand what is happening.
Reduce phenomenon to simplest elements.
Look at the totality of each situation.
Formulate hypotheses and test them.
Develop ideas through induction from data.
Preferred Methods Operationalising concepts so that they can be measured.
Using multiple methods to establish different views of phenomena.
Samples Taking large samples. Small samples investigated in depth or over time.
Source: Easterby-Smith et al., (1991:27)
Levin (1988) posits that the positivist perspective is that reality is stable and can be
studied objectively. The researcher looks for causality and fundamental laws. There
is also formulation of hypothesis and testing it. Generally, positivism results in
quantitative data. Conversely, phenomenological philosophy is that reality is socially
constructed and therefore subjective (Easterby et al., 1991). The researcher focuses
on meanings and tries to understand what is happening.
49
3.3 Assumptions of the Paradigms
Three major assumptions influence the research philosophy of any research study.
Saunders et al. (2009) postulate that the assumptions are ontology, epistemology
and axiology and are based on the way the researcher views the relationship
between knowledge and the process with which the knowledge is developed.
3.3.1 Ontology
Wand and Weber (1993:220) refer to ontology as “a branch of philosophy concerned
with articulating the nature and structure of the world.” Ontology is concerned with
what the researcher considers as real. The main focus is on how the researcher
views the world operating. It is from this perspective that the paradigms of realism
and pragmatism emerge.
Blaikie (1993) describes the root definition of ontology as ‘the science or study of
being’ and develops this description for the social sciences to encompass ‘claims
about what exists, what it looks like, what units make it up and how these units
interact with each other’. In short, ontology describes our view (whether claims or
assumptions) on the nature of reality, and specifically, is this an objective reality that
really exists, or only a subjective reality, created in our minds.
3.3.2 Axiology
Engle (2009) define axiology as the science of moral choice, of fundamental values.
It is concerned with the values of the researcher and how they affect the judgements
made in the research study.
50
3.3.3 Epistemology
Hirschheim et al. (1995:20) state that the term epistemology denotes the nature of
human knowledge and understanding that can possibly be acquired through different
types of inquiry and alternative methods of investigation. According to Burrel and
Morgan (1979) as cited in Gill and Johnson (2003) the epistemological debate is
hinged on two premises which are positivism and anti-positivism. Positivism asserts
that knowledge is in a tangible form and can be observed. As such, true or false can
be used as a basis for hypothesis testing. Anti-positivism calls for participatory
observation as it asserts that knowledge is soft and can only be understood from the
point of view of individuals directly involved in the activities.
Guba and Lincoln (1994) categorize alternative inquiry paradigms according to their
stance on the following three questions:
• The ontological question
What is the form and nature of reality and, therefore, what is there that can be
known about it?
• The epistemological question
What is the nature of the relationship between the knower or would-be
knower and what can be known?
• The methodological question
How can the inquirer go about finding out whatever he or she believes can be
known? (p. 108)
In this study, the epistemological assumption was used in determining the research
paradigm. The researcher studied one case in detail with regards to the challenges
in the utilization of e-commerce. The research was conducted in the natural setting
of RioZim Limited; not in a controlled environment (Hussey and Hussey, 1997).
51
3.4 Research Approaches
3.4.1 Non-Empirical or Empirical Research
Tobin (2006) points out that research can take the route of a non-empirical
approach, an empirical approach, or a combined approach.
Non-Empirical Research
Tobin (2006) articulates that the researcher should consider the pre-existing body of
knowledge. Furthermore, Tobin (2006) states that some researches may be based
solely on literature review as in researches of a historical nature.
Empirical Research
Hussey and Hussey (1997:10) state that “four different types of research purpose
exist: exploratory, descriptive, analytical or predictive.” According to Tobin (2006)
empirical evidence is required no matter what the purpose of the research is.
Hussey and Hussey (1997:10) define empirical evidence as, “data based on
observation or experience.”
This research study took into account both the non-empirical and empirical research
approaches. The researcher reviewed literature by various authors and also
gathered empirical data.
3.4.2 Qualitative or Quantitative Approach
The researcher considered the qualitative approach, quantitative approach or
blending the two as postulated by Tobin (2006).
52
Quantitative Approach
Kumar (1996:17) describes the characteristics of quantitative research as, “if
information is gathered using predominantly quantitative variables, and if the
analysis is geared to ascertain the magnitude of the variation”.
Quantitative research designs are either descriptive or experimental. A descriptive
study establishes only associations between variables. Descriptive research
comprises of surveys and observation. Wong Toon Quee (1999:5) defined survey
research methods as “a systematic gathering of primary data through the use of
structured questionnaires and communication in a reasonably large number and
highly representative sample of respondents.” Survey research methods include
personal, telephone and postal interviews. Wagenaar and Babbie (1983) point out
that the most commonly used way of gathering data in social sciences is done
through survey research.
Qualitative Approach
Qualitative research is generally defined as research that utilizes open-ended
interviewing to explore and understand the attitudes, opinions, feelings, and
behaviour of individuals or a group of individuals. Qualitative research can take
many forms; typical are, focus groups, in-depth interviews, mini-groups, dyads, and
triads. According to Remenyi (2008), qualitative research designs strive for in-depth
understanding of subjects through such techniques as participant observation or
narrative analysis, or they may strive for in-depth understanding of texts through
such methods as exegesis or deconstruction. A variety of methods for conducting
the qualitative research approach are participant observation, action research, and
interviewing, story-telling and narrative analysis. This approach was used for this
study. The reasons why this approach was used are explained below.
Strengths of Qualitative Approach
Qualitative research is best used for depth, rather than breadth, of information. While
quantitative surveys are an outstanding medium for gathering a breadth of
53
information regarding, “How many?” or “How much?”, qualitative research is the best
research method for discovering underlying motivations, feelings, values, attitudes,
and perceptions (Chisaka, 2000: 11).
The primary limitation for this approach is that, unlike quantitative research, the
findings are not statistically projectable to the population under study. This limitation
is created by two facts: recruiting is rarely completely representative; and, the very
nature of qualitative research necessitates small sample sizes.
It is important to note that whilst quantitative and qualitative research methods are
often seen as opposing and polarized views, they are frequently used in conjunction
with one another (Crossan, 2001). Since the study focus was on investigating the
challenges in the effective utilization of e-commerce at RioZim Limited, the
qualitative approach was adopted.
3.4.3 Deductive or Inductive Research
According to Tobin (2006) several authors like Cavaye (1996) and Perry (2001)
elaborated on deductive and inductive research.
Deductive Research
Deductive research is defined by Hussey and Hussey (1997:19) as “a study in which
a conceptual and theoretical structure is developed which is then tested by empirical
observation; thus particular instances are deducted from general influences.” In the
same vein, Tobin (2006) defined it as “a study in which theory is tested by empirical
observation”.
Inductive Research
Hussey and Hussey (1997:13) define it as a study in which theory is, “developed
from the observation of empirical reality; thus general inferences are induced from
54
particular instances, which is the reverse of the deductive method since it involves
moving from individual observation to statements of general patterns or laws.”
The selected approach for this research study is deductive research. According to
Chappell (2002), a deductive approach to research is one, where the aim is to
establish facts and test hypotheses. This is in line with this research study whereby
a research proposition was established based on the literature review and tested
using primary research through questionnaires.
3.4.4 Subjective or Objective Approach
Table 3.1 indicates that the positivist research paradigm is, by its very nature,
objective. Objectivity is associated with the positivist paradigm where the researcher
is to be independent from the research so as to make the research valid (Hussey
and Hussey, 1997). On the other hand, the phenomenological research paradigm is,
by its very nature, subjective.
3.5 Research Design/Strategy
According to Tobin (2006) there are many research design or strategy alternatives.
The various research design alternatives are depicted in Figure 3.2:
55
Figure 3.2: Research Design/Strategy Alternatives Source: Tobin (2006:58)
Noor (2008) defines a case study as “an empirical enquiry that investigates a
contemporary phenomenon within its real life context using multiple sources of
evidence.” Yin (1984:23) on the other hand defines the case study research method
as “an empirical inquiry that investigates a contemporary phenomenon within its
real-life context; when the boundaries between phenomenon and context are not
clearly evident; and in which multiple sources of evidence are used.” The case study
can be used for contemporary events where there is no manipulation of variables
and when questions to be asked are ‘how’ and ‘why’ (Yin, 1994). Table 3.2 shows
the relevant situations for different strategies including the case study strategy.
Case Study
Experimental
Action
Research
Survey
Ethnography
Modelling
Operational
Research
Grounded
Theory
56
Table 3.2: Relevant Situations for Different Resear ch Strategies
Strategies Form or
Research
Question
Requires Control
over Behavioural
Events?
Focuses on
Contemporary
Events?
Experiment How, why Yes Yes
Survey Who, what, where,
how many, how
much
No Yes
Archival Analysis Who, what, where,
how many, how
much
No Yes/No
History How, why No No
Case Study How, why No Yes
Source: Yin (1994)
Therefore, the researcher chose the case study research strategy since e-commerce
is a contemporary phenomena and using a case study allows the researcher to
conduct an in-depth investigation in the natural setting of the selected organization.
Types of Case Studies
Jensen and Rodgers (2001:237-239) mentioned and elaborated on the types of case
studies which include snapshot, longitudinal, pre-post, patchwork and comparative
case studies. These are depicted in Figure 3.3.
57
Figure 3.3: Choice of case study type Source: Tobin (2006)
This research study was undertaken as a longitudinal case study where a particular
phenomenon is studied at different periods of time (see Figure 3.3). The focus was
on the challenges in the effective utilization of e-commerce at RioZim Limited over
the period from August 2005 to August 2011.
Selection of the Case Study Organization
According to Hussey and Hussey (1997:67), “you may wish to select a critical case
which encompasses the issues in which you are most interested.” In the same vein,
Darke et al. (1998:281) concurred with Hussey and Hussey and stated that clear
benefits can win the involvement of an organization in the research. This was taken
into consideration by the researcher in selecting RioZim Limited as the case study
organization.
According to Yin (1994), there are four main factors and these relevance, feasibility,
access and application.
Relevance
Yin (1994) defined relevance as “the extent to which the organization selected for
the case study suits the purpose of the study.” The relevance of what was to be
studied was partially dependent upon the perceptions of management of RioZim
Snapshot
Pre-post
Longitudinal
Patch-work
Comparative
58
Limited about the challenges to the effective utilization of e-commerce. The
researcher is an employee at the organization and encounters various opinions from
various managers.
In particular, the investigation of challenges to the effective utilization of e-commerce
would be most relevant where the case study organization had a large labour force;
geographically diverse locations, and a well-established interest in e-commerce.
Feasibility
Yin (1994) required that the researcher should be able to conceptualize, plan,
execute and report back on the research project with the case study organization.
The researcher is an employee in the Internal Audit Department at RioZim Limited
so he is able to travel to the various locations on business trips. This enabled him to
comfortably conduct the research study in those locations.
Feasibility also entailed that there be appropriate support from the staff of the
organization (Yin, 1994). The researcher managed to secure this support. Overall,
RioZim Limited met these criteria.
Access
Yin (1994) identified that there should be full co-operation of the organization under
research. RioZim Limited satisfied this criterion.
Application
Yin (1994) also identified the extent to which the case study method can be applied
in a particular situation. In identifying possible subjects for the research, factors such
as size, industry sector, and the status of the ICT should be considered.
RioZim Limited was a large organization (over 1000 employees spread over
Zimbabwe), part of the mining sector (of interest due to its contribution to the
Zimbabwean economy), and also being mature in its approach to ICT and e-
59
commerce. Therefore, RioZim Limited represented a potentially fruitful subject for
the case under investigation.
Criticism of Case Studies
Critics of the case study method believe that the study of a small number of cases
can offer no grounds for establishing reliability or generality of findings (Onatu,
2012). The results of a case study cannot, therefore, be generalized as they are
specific to the case. The question commonly raised is “How can you generalize from
a single case?” (Yin, 1984:21). Case studies are also often accused of lack of rigour.
Yin (1984:21) notes that “too many times, the case study has been sloppy, and has
allowed equivocal evidence or biased views to influence the direction of the findings
and conclusions.”
Case studies are further often labeled as being too long, difficult to conduct and
producing a massive amount of documentation (Yin, 1984). In particular, case
studies of ethnographic or longitudinal nature can elicit a great deal of data over a
period of time. The danger comes when the data are not managed and organized
systematically.
Another common criticism of the case study method is its dependency on a single
case exploration, making it difficult to reach a generalizing conclusion (Tellis, 1997).
Yin (1993) considered case methodology ‘microscopic’ because of the limited
sampling cases. However, Hamel et al. (1993) and Yin (1994) argued that parameter
establishment and objective setting of the research are far more important in the
case study method than a big sample size.
Despite these criticisms, researchers continue to deploy the case study method
particularly in real-life situations governing social issues and problems (Zainal,
2007). Case studies from various disciplines and domains are widely reported in
literature.
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3.6 Population of the Study
The population includes all individuals whom the researcher is interested in
obtaining information and making inferences. Fraenkel and Wallen (1996) state that
population can be divided in two categories; the target and the accessible
populations. According to Ferber (1974), population is the group of interest to the
researcher. The study findings will be generalized upon this group. The target
population is the actual population to which the researcher would really like to
generalize. However, this population is rarely available.
The population of this study was considered to be 75 and this comprised of middle
and top management in the whole RioZim Group. They had an appreciation of e-
commerce and were involved in decision making at either the departmental level or
business unit level or the group level. E-commerce is a strategic issue that needs
management and the board of directors to decide on its implementation and
utilization. They also utilized the Internet through personal computers and mobile
devices. The population is tabulated in Table 3.3 below:
Table 3.3: Population of the Study
Description Number
Directors 5
Head Office and Msasa 10
Renco Mine 30
Empress Nickel Refinery 30
Total Population 75
The researcher sought authority from management to send questionnaires to a
sample of the population. Therefore, sampling was then done to determine which
elements of the population would be part of the research study.
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3.7 Sampling Methods
Sampling techniques provide a range of methods that enable the researcher to
reduce the amount of data needed to collect and to restrict data collection only to a
sub-group rather than all possible cases or the whole population (Saunders, Lewis
and Thornhill 2000). Similarly, Esterby-Smith et al. (2000) support this view, arguing
that it is not always necessary to contact everyone in a population in order to know
what they think; a subset of the population which is fully representative of main
areas of interest can be constructed. Studying the entire population is always
impossible due to constraints in logistics and budgetary resources and this was true
to the researcher’s local reality. Aaker and Kumar (1997) agree that sampling is
appropriate when the population to be used is large and both the time and cost
associated with obtaining information is large.
There are two known basic sampling techniques, which are, the probability sampling
technique, and the non-probability sampling technique.
3.7.1 Probability Sampling
Probability sampling is also referred to as the random or representative sampling
and each unit of the population has a known chance of being included in the sample.
Simple Random Sampling
This method involves selection at random from a list of the population of the required
number of units from the sample (Merrian and Simpson, 1984). Random number
tables or a computer can be used for the random selection of units
Systematic Sampling
This involves choosing a starting point in the sampling frame at random and then
choosing every nth person (Cohen and Marion, 1992). For the sample to be
62
representative, this method relies on the list being organized in a way unrelated to
the subject of the study.
Stratified Sampling
According to Saunders et al. (2000), stratified sampling involves dividing the
population into a number of groups or strata, where members of a group share a
particular characteristic(s). There is then random sampling within the strata.
Cluster Sampling
This involves dividing the population into a number of units or clusters, each of which
contains individuals with a range of characteristics (Bloemer and Ruyler, 1999). The
clusters themselves are chosen on a random basis. The subpopulation within the
cluster is then chosen.
Ferber (1994) as cited by Chisnall (1986) commenting on the importance of
probability sampling declared that probability is at the heart of all sampling theories.
However, this type of sampling may bring challenges due to the non-availability of a
selected subject or the inaccessibility of a subject due to distance.
3.7.2 Non-Probability Sampling
Non-probability sampling occurs when selection of the sample is dependent on
human judgment.
Quota Sampling
Cohen and Marion (1992) assert that in quota sampling, the strategy is to obtain
representatives of the various elements of a population, usually in relative
proportions in which they occur in the population.
63
Convenience Sampling
It involves choosing the nearest and most convenient units to act as respondents.
The process is continued until the required sample size has been reached (Susan
and Mick, 1999). This is probably one of the most widely used and least satisfactory
methods of sampling. The term ‘accidental sample’ is sometimes used but it is
misleading as it carries some sense of randomness, whereas all kinds of largely
unspecifiable biases and influences are likely to affect who gets sampled.
Judgmental Sampling
Judgmental sampling is where the researcher attempts to draw a representative
sample of the population by using judgement and the amount of error depends upon
the degree of expertise of the person making the selection (Susan and Mick quoting
Tse et al, 1990).
3.7.3 Sample and Sampling Procedure
Sample Size
The researcher was allowed to engage all five directors and 50% of the other
managers at various locations of the RioZim Group. The directors are involved in
policy formulation and strategy and since they are only five it was important to
involve all of them in the sample. Therefore, a sample size of 40 was taken and is
shown in the Table 3.4.
Table 3.4: Sample Size
Description Total Population Sample Size
Directors 5 5
Head Office and Msasa 10 5
Renco Mine 30 15
Empress Nickel Refinery 30 15
Total 75 40
64
Sampling Technique
Stratified random sampling was used in the selection of the sample. This technique
was chosen because the population consisted of various locations or centres of the
RioZim Group, each being a stratum. This was done by, first identifying all locations
of the group and then classifying each of them as a stratum. Secondly, the total
sample was divided for each stratum according to the 50% which was permitted by
management for the purpose of the research study. Directors of the company were
taken in their totality.
3.8 Sources of Data
The researcher used both primary and secondary sources of data in conducting this
research.
3.8.1 Primary Data
Primary data is data originated by the researcher for the specific purpose of
addressing the research problem (Malhotra and Birks, 2007). It is what the
researcher originally collects from the sample or target population. Therefore,
primary data is data which is captured at the point where it is generated. Such data
is captured for the first time and with a specific purpose in mind (Wegner 2008:26).
The researcher obtained primary data through administering a questionnaire. The
questionnaire permitted wide coverage for minimum expense both in terms of money
and effort. The researcher was convinced that the questionnaire elicits more candid
and objective responses since it does not require any form of identification.
3.8.2 Secondary Data
Malhotra and Birks (2007) define secondary data as “data that are collected for
some purpose other than the problem at hand.” Therefore it refers to data collected
for other purposes other than the current study (Wegner, 2000). The researcher
65
obtained secondary data from journals, articles, reports, company records, websites
and books on e-commerce and internet technologies.
3.9 Data Collection Methods
According to Saunders, et al. (2005), there are three research instruments that are
available for data collection. They are the questionnaire, observations and
interviews. The questionnaire is the most widely used method of data collection
under the survey method (Saunders et al., 2005). Sekaran (2000) suggests that
questionnaires are an efficient data collection mechanism provided the researcher
knows exactly what is required and how to measure the variables of interest. The
researcher used the questionnaire as a research instrument for data collection in this
study.
3.9.1 Questionnaire
A structured questionnaire, attached in Appendix Two, was used to gather primary
data. It covered the objectives of the study. Each questionnaire was accompanied by
a covering letter from the researcher (Appendix One). The letter explained the
purpose of the study to the prospective respondent. The researcher also assured the
prospective respondents that their responses would be treated with utmost
confidentiality and used solely for academic purposes. Further to that there was
assurance that results would be collated and presented anonymously.
Questionnaire Development
According to Fisher (2007) there are a number of issues to be considered when a
researcher wants to design a questionnaire. Some of which are:
• Keep the questionnaire short and simple.
• Design it to look attractive by using the capabilities of the word processor.
66
• Give the questionnaire a logical and sequential structure so as to attract the
attention of the respondents and also to lead them into following the themes
in the questionnaire as they develop.
• Divide the questions into parts that consist and correspond to the various
issues that the researcher wants to delve into.
• Ask the easy questions first and the hard ones last.
In order for the researcher to satisfy the conditions set by Fisher (2007) and to delve
deep into the selected subject area, the questionnaire was divided into six distinct
parts which were as follows:
• Part 1: Personal Profile
• Part 2: Attitudes and Views
• Part 3: Current Utilization of E-Commerce
• Part 4: Benefits of E-Commerce
• Part 5: Major Challenges in the Utilization of E-Commerce
• Part 6: Recommendations
Question Format
According to Fisher (2007), a question format should be representative of the
information being sought. The researcher used mostly the likert scale type of
questions to solicit answers from respondents. According to Fisher (2007), a likert
scale is a form of rating that is commonly used to ask people about their opinions
and attitudes. Neuman (2006) states that the likert scale is often used on research
where people express attitudes in terms of ordinal-level categories (for example,
agree, disagree) that are ranked into a continuum. The researcher also used very
few open-ended questions so as to minimize the time needed to complete the
questionnaire.
67
The questionnaire consisted of 26 questions which were a mix of both closed and
open-ended questions. The respondents would tick in boxes provided on closed
questions and spaces were provided on open-ended questions.
The researcher adopted the questionnaire since this technique of data collection
addressed issues of cost, time and geographical constraints. The respondents could
also complete the questionnaires at their own convenience, at home or during
weekends. The researcher also reduced bias that would have emanated from face-
to-face interviews.
However, the questionnaire had its own weaknesses. These weaknesses are
summed up by Saunders et al. (2005). Some questions were left unanswered for
reasons known to the respondents. There was also no room for further probing as
would have been the case with face-to-face interviews. Above all, some respondents
did not return their questionnaires.
In order to collect relevant data, broad research questions were translated into
specific primary data gathering questions. The preoccupation of this process was:
(i) Content of questions (only relevant and unambiguous questions were
preferred),
(ii) Response format (structured, close ended, multiple choice plus scaled
response questions),
(iii) Wordiness (verbose, wordy and long winding questions were excluded in
favour of concise ones),
(iv) Organisation (the questionnaire was structured into sections, each with a
specific data collection objective for instance, personal profile, current
utilization of e-commerce and recommendations from the respondents.
Throughout the questionnaire design process the author was guided by the flow
chart in Figure 3.4.
68
Design Methodology ��
Determine Feasibility �
Develop Instruments �
Select Sample �
Conduct Pilot Test ��
Revise Instruments �
Conduct Research �
Analyze Data �
Prepare Report
Figure 3.4: The Questionnaire Design Flow Chart Source: Walonick (2004:4)
Pilot survey
A pilot survey was conducted primarily in order to pre-test the efficacy of the survey
instrument (the questionnaires). This test run for 10 respondents revealed
unanticipated problems with question wording, instructions to skip questions and
helped see if the interviewees would understand the questions in order to give useful
answers (Walonick, 2004). Pre-testing ensured that the questions were valid and
represented the data accurately as proposed by Boudreau, Gefen and Straub
(2001).
69
Administering the questionnaire
The researcher distributed a total of forty (40) self-administered questionnaires for
the survey. The questionnaires were distributed by e-mail in order to utilise
information systems in line with the area of research study. This phenomenon was
much appreciated by the respondents as they would just type in answers and return
the questionnaire at the click of a button. The researcher found this technique
economical as it minimized printing, postage and travelling costs. Follow-ups were
also done using e-mail.
3.10 Data Processing and Analysis and Presentation
After data collection, the researcher analysed the information in order to provide
conclusions and recommendations of the study. Data processing consisted of
questionnaire coding, data entry and data cleaning. Data entry was done using
Microsoft Excel. After entry, the data was cleaned to remove inconsistent responses
by running frequency tables in the Statistical Package for Social Scientists (SPSS
version 17.0). The data was also analysed using SPSS 17.0. In data analysis and
interpretation, frequencies percentages and the mean were used. The information
was presented using tables, graphs, and charts to enable easy comparison and
clear projection of the situation.
3.11 Research Limitations
The findings of this study should be viewed with certain limitations in mind. One of
the limitations of this study was the sample size which was used to get responses.
The time for conducting the study was confined to one semester so this had an
impact on the sample size that was targeted by the researcher.
Nevertheless, the research made every effort to objectively conduct the research
study. Follow-ups were done intensively to ensure that most of the questionnaires
were returned.
70
3.12 Ethical Issues in Data Collection
Glesne and Peshkin (1992) propose appropriate ethical standards in data collection.
Researchers need to protect the anonymity of the informants. In this particular study,
the researcher assigned numbers to the questionnaires. The names of the
respondents were not included in any way.
A researcher should gain the support of the participants by informing them that they
are participating in a study and state the purpose of the study (Creswell, 2005). This
was done in the cover letter (Appendix One). The respondents were also assured
that the responses were to be used solely for research purposes. Contact details of
the researcher, as well as those of the Graduate School of Management (GSM)
officials were also provided for any queries that could arise.
3.13 Chapter Summary
This chapter has discussed the research design used in the study and the reasons
for choosing the design. The chapter also discussed how research instruments were
developed, methods of data collection, data entry, data processing and analysis.
Limitations and ethical issues were also covered. The next chapter presents and
discusses the research findings.
71
CHAPTER FOUR
4.0 Results and Discussion
4.1 Introduction
The objective of this chapter is to analyze the data gathered during the empirical
phase of this research project. In the discussion of the findings the research will
make connections between the results of the analysis and existing theory and
research as outlined in Chapter Two. Trends in survey responses were illustrated
using graphs and tables. Identified trends were also discussed in accordance with
the research questions in Chapter One.
4.2 Response Rate
A total of 40 research questionnaires were sent out and 34 questionnaires were
completed and returned as shown in Table 4.1. Therefore, a combined response
rate of 85% was achieved.
Table 4.1: Responses
Description Sample Size Response
Directors 5 4
Head Office and Msasa 5 5
Renco Mine 15 12
Empress Nickel Refinery 15 13
Total 40 34
The researcher attributes the high response rate to the co
management and also to the constant reminders during the two
collection.
4.3 Results of the Research
4.3.1 Attitudes and Views
The research respondents had varying levels of experience in the mining industry
with those below 10 years constituting 58%. Those above 20 years of experience
constituted 12%. Respondents in the 10 to 15 years category constituted 12% and
the remaining 18% had 15 to 20 years of experience in the mining industry.
Figure 4.1: Experience in Mining Industry
The researcher felt confident about this demographic characteristic
respondents had diverse experience and would strike a balance in their contributions
to the research study.
The researcher attributes the high response rate to the co-operation of RioZim
management and also to the constant reminders during the two
Results of the Research
Attitudes and Views
The research respondents had varying levels of experience in the mining industry
with those below 10 years constituting 58%. Those above 20 years of experience
12%. Respondents in the 10 to 15 years category constituted 12% and
the remaining 18% had 15 to 20 years of experience in the mining industry.
Figure 4.1: Experience in Mining Industry
The researcher felt confident about this demographic characteristic
respondents had diverse experience and would strike a balance in their contributions
Below 5
29%
5 - 10
29%
10 - 15
12%
15 - 20
18%
Above 20
12%
Experience in Mining Industry
72
operation of RioZim
management and also to the constant reminders during the two weeks of data
The research respondents had varying levels of experience in the mining industry
with those below 10 years constituting 58%. Those above 20 years of experience
12%. Respondents in the 10 to 15 years category constituted 12% and
the remaining 18% had 15 to 20 years of experience in the mining industry.
The researcher felt confident about this demographic characteristic since the
respondents had diverse experience and would strike a balance in their contributions
In seeking the attitudes and views of the respondents on the importance of e
commerce utilization, the researcher found out that 31% of t
importance and 25% attached much importance. The results also revealed that 25%
of the respondents viewed the e
importance. On the low scale was 19% of the respondents and 13% were on the
very low scale.
Figure 4.2: Importance of E
Therefore, slightly more than half of the managers at RioZim attached greater
importance to the utilization of e
4.3.2 Current Utilization of E
E-mail and the Internet ranked as the most widely used e
RioZim. This finding is shown in Figure 4.3 and is congruent to the finding in the
Gweru study by Dube et al.
for communication/informative purposes
that although organizations in the Midlands town of Gweru seem to have taken
Average
25%
Low
6%
Importance of E
In seeking the attitudes and views of the respondents on the importance of e
commerce utilization, the researcher found out that 31% of them attached very much
importance and 25% attached much importance. The results also revealed that 25%
of the respondents viewed the e-commerce utilization as being of average
importance. On the low scale was 19% of the respondents and 13% were on the
Figure 4.2: Importance of E -Commerce Utilization
Therefore, slightly more than half of the managers at RioZim attached greater
importance to the utilization of e-commerce.
Current Utilization of E -Commerce Technologies
e Internet ranked as the most widely used e-commerce technologies at
RioZim. This finding is shown in Figure 4.3 and is congruent to the finding in the
et al. (2010) that the main use of e-commerce technologies is
rmative purposes. The study by Dube et al.
that although organizations in the Midlands town of Gweru seem to have taken
Vey Much
31%
Much
25%
Very Low
13%
Importance of E-Commerce Utilization
73
In seeking the attitudes and views of the respondents on the importance of e-
hem attached very much
importance and 25% attached much importance. The results also revealed that 25%
commerce utilization as being of average
importance. On the low scale was 19% of the respondents and 13% were on the
Therefore, slightly more than half of the managers at RioZim attached greater
commerce technologies at
RioZim. This finding is shown in Figure 4.3 and is congruent to the finding in the
commerce technologies is
et al. (2010) highlighted
that although organizations in the Midlands town of Gweru seem to have taken
74
aboard e-commerce related technologies, the usage level is still in the bud stages.
The predominant use of electronic commerce applications was for communications
or informative purposes (Dube et al., 2010). A previous study in Malaysia by Ainin
and NoorIsmawati (2003) also state that the usage of e-mail as an e-commerce tool
is found to be common among Malaysian businesses. One of the reasons is that the
cost of setting up e-mail is the cheapest compared to all the other applications. In
addition, e-mail is the easiest application to use that does not require high level of
expertise and technical knowledge (Ainin and NoorIsmawati, 2003).
Figure 4.3: E-Commerce Technologies in Use
E-commerce technologies like credit cards, point of sale, e-cheque and e-wallet
were on the very low side (that is, below 5% of the cases). A possible reason for this
low usage could be the risks associated with electronic payments. Gao (2002)
stated that a payment system should support secured payment processes by
providing reliable, secured, and efficient transaction services between sellers and
buyers.
The researcher also further wanted to know the impact of e-commerce on various
business aspects. The research study as shown in Figure 4.4 confirmed that the
highest impact was on communication between employees and communication with
% 5% 10% 15% 20% 25% 30%
E-wallet
E-cheque
Point of Sale
Credit Card
E-recruitment
Firewall
E-procurement
Internet
E-C
om
me
rce
Te
chn
olo
gie
s in
Use
Respondents
E-Commerce Technologies in Use
75
customers or suppliers. Almost 90% of the respondents rated both of these aspects
on the high side. This finding is in line with the finding that e-mail was highly used at
RioZim Limited.
Figure 4.4: Impact on Current Utilization
Figure 4.4 indicates that e-commerce utilization has had low impact on advertising
and some average impact on recruitment, communication with shareholders and
investors, receiving payments, goods and services information and company
information.
4.3.3 Benefits of E-Commerce
The research study reflected that the respondents totally agreed that improved
communication was a key benefit associated with e-commerce utilization at RioZim
as shown in Figure 4.5. This is also in line with the findings of Dube et al. (2010) and
Ainin and NoorIsmawati (2003).
0% 10%20%30%40%50%60%70%80%90%100%
Company Information
Goods and Services Information
Taking Orders
Receiving Payments
Delivery of Goods and Services
Identifying New Inventory Suppliers
Ordering and Payment of Inventory Purchasing
Communication with Customers or Suppliers
Internal Communication between Employees
External Information Search
Communication with shareholders and …
Advertising
Recruitment
Respondents
Uti
liza
tio
n
Impact on Current Utilization
Very Much Much Average Low Very Low
76
Figure 4.5: Key Benefits of E-Commerce
The key benefits of e-commerce are depicted by Figure 4.5. Above 80% of the
respondents agreed that the other key benefits of e-commerce were finding new
and/or global markets, improved competitiveness, finding new suppliers, improved
marketing, cost-effective marketing and increase in sales. Only 40% of the
respondents agreed that reduced stock and lead time, and job creation were key
benefits of e-commerce. This may be due to that fact the Information Technology
Department at RioZim Limited has remained small in terms of personnel over a long
period of time. Lead time for stocks has also remained high in the organization. This
does not concur with the literature reviewed in Chapter Two where Carter (2003)
stated that companies that operate mines in remote locations, far from supply
centers and transportation hubs, are finding that e-business can eliminate or reduce
supply chain kinks. E-commerce can help locate equipment and reduce procurement
time. Kane (2000) also state that many researchers claim the ability to find and have
equipment delivered quickly is the main advantage of e-commerce.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
Increase in Sales
24-Hour Customer Service
Job Creation
Improved Communication
Cost Effective Marketing
Improved Marketing
Reduced Stock and Lead Time
Cost Savings
Finding New Suppliers
Improved Operational Efficiency
Improved Competitiveness
New Products and Services
New and Global Markets
Reduced Information Search and Transaction Costs
Inexpensive Advertising Medium
Respondents
Be
ne
fit
Key Benefits of E-Commerce
Strongly Agree Agree Neutral Disagree Strongly Disagree
4.3.4 Major Challenges in the Utilization of E
In Chapter Two, the researcher adopted a conceptual framework by Zaied (2011)
the barriers to the utilizatio
divided into six categories; technical, economic, legal and regulatory, social and
cultural, political and organizational barriers. The findings from the survey with
respect to these barriers are now disc
Techical Barriers
As shown in Figure 4.6, lack of e
technical barrier to the utilization of e
to by 94% of the respondents.
Lawrence and Tar (2010) and the OECD (2004).
Figure 4.6: Technical Barriers to Utilization of E
Inadequate quality and speed of lines was ranked second and the third highest
technical barrier was lack of
(2007) also found out that low penetration of the Internet was among the most
important barriers to using e
which were widely discussed and considered a
commerce in other literature (Humphrey
Lack of Internet Security
Lack of E-Commerce Infrastructure
Lack of Qualified Staff
Inadequate Quality and Speed of
Increased Innovations and New
Te
chn
ica
l B
arr
ier
Technical Barriers to Utilization of E
Major Challenges in the Utilization of E -Commerce
In Chapter Two, the researcher adopted a conceptual framework by Zaied (2011)
the barriers to the utilization of e-commerce by organizations. The barriers were
divided into six categories; technical, economic, legal and regulatory, social and
cultural, political and organizational barriers. The findings from the survey with
respect to these barriers are now discussed in the next sections.
As shown in Figure 4.6, lack of e-commerce infrastructure emerged to be the highest
technical barrier to the utilization of e-commerce at RioZim Limited. This was agreed
to by 94% of the respondents. Infrastructure, as a barrier, was also cited by
Lawrence and Tar (2010) and the OECD (2004).
Figure 4.6: Technical Barriers to Utilization of E -Commerce
Inadequate quality and speed of lines was ranked second and the third highest
technical barrier was lack of internet security. The study in Nigeria by
(2007) also found out that low penetration of the Internet was among the most
important barriers to using e-commerce technologies. It is also among the issues
which were widely discussed and considered as the major threats to adoption of e
commerce in other literature (Humphrey et al., 2003; Alos and Bamiro, 2005).
0% 20% 40% 60% 80% 100%
Lack of Internet Security
Commerce Infrastructure
Lack of Qualified Staff
Inadequate Quality and Speed of …
Increased Innovations and New …
Respondents
Technical Barriers to Utilization of E-Commerce
77
In Chapter Two, the researcher adopted a conceptual framework by Zaied (2011) on
commerce by organizations. The barriers were
divided into six categories; technical, economic, legal and regulatory, social and
cultural, political and organizational barriers. The findings from the survey with
ussed in the next sections.
commerce infrastructure emerged to be the highest
commerce at RioZim Limited. This was agreed
ucture, as a barrier, was also cited by
Inadequate quality and speed of lines was ranked second and the third highest
The study in Nigeria by Ilesanmi
(2007) also found out that low penetration of the Internet was among the most
commerce technologies. It is also among the issues
s the major threats to adoption of e-
., 2003; Alos and Bamiro, 2005).
Commerce
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Economic Barriers
The majority of the respondents (75%) were of the opinion that lack of secure
payment infrastructure and unclear benefits from e
affected the utilization of e
economic barriers (Figure 4.7). The OECD (2004) also cite
methods as a main barrier to e
Figure 4.7: Economic Barriers to Utilization of E
The least ranked economic barrier was competitive pressure as
4.7.
Legal and Regulatory Barriers
Figure 4.8 revealed that the respondents ranked the lack of e
and absence of regulatory and legal systems as the highest barriers in this section.
This concurred with the OECD (20
main barrier to e-commerce utilization in developing countries.
Lack of Financial Information
Unclear Benefits from E
Competitive Pressure
Lack of Secure Payment Infrastructures
Eco
no
mic
Ba
rrie
r
Economic Barriers to Utilization of E
The majority of the respondents (75%) were of the opinion that lack of secure
payment infrastructure and unclear benefits from e-commerce adoption greatly
affected the utilization of e-commerce technologies at RioZim Limited in terms of
Figure 4.7). The OECD (2004) also cite uncertainty of payment
methods as a main barrier to e-commerce utilization in organizations.
Figure 4.7: Economic Barriers to Utilization of E -Commerce
The least ranked economic barrier was competitive pressure as
Legal and Regulatory Barriers
Figure 4.8 revealed that the respondents ranked the lack of e-commerce standards
and absence of regulatory and legal systems as the highest barriers in this section.
This concurred with the OECD (2004) which concluded that the legal framework is a
commerce utilization in developing countries.
0% 20% 40% 60% 80% 100%
Lack of Financial Information
Unclear Benefits from E-Commerce …
High Cost
Competitive Pressure
Lack of Secure Payment Infrastructures
Respondents
Economic Barriers to Utilization of E-Commerce
78
The majority of the respondents (75%) were of the opinion that lack of secure
commerce adoption greatly
commerce technologies at RioZim Limited in terms of
uncertainty of payment
commerce utilization in organizations.
The least ranked economic barrier was competitive pressure as indicated in Figure
commerce standards
and absence of regulatory and legal systems as the highest barriers in this section.
04) which concluded that the legal framework is a
100%
Commerce
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Figure 4.8: Legal and Regulatory Barriers to Utiliz ation of E
Complex procedures and guidelines were not seen as a major barrier a
Limited by the respondents of the study.
Social and Cultural Barriers
The researcher also had a section in the questionnaire for social and cultural
barriers that hinder the utilization of e
Figure 4.9. Lack of awareness of e
barrier in this section.
Figure 4.9: Social and Cultural Barriers to Utiliza tion of E
Absence of Legal and Regulatory Systems
Complex Procedures and Guidelines
Lack of E-Commerce Standards
Lack of E-Trading Legislations
Leg
al
an
d R
eg
ula
tory
Ba
rrie
rs
Legal and Regulatory Barriers to Utilization of E
Strongly Agree
Lack of Popularity for Online
Lack of Awareness of E
Lack of Pressure from Suppliers and
So
cia
l a
nd
Cu
ltu
ral
Ba
rrie
r
Social and Cultural Barriers to Utilization of E
Figure 4.8: Legal and Regulatory Barriers to Utiliz ation of E -
Complex procedures and guidelines were not seen as a major barrier a
Limited by the respondents of the study.
Social and Cultural Barriers
The researcher also had a section in the questionnaire for social and cultural
barriers that hinder the utilization of e-commerce, the results of which are shown in
Figure 4.9. Lack of awareness of e-commerce benefits emerged as the highest
Figure 4.9: Social and Cultural Barriers to Utiliza tion of E -Commerce
0% 10% 20% 30% 40% 50% 60%
Absence of Legal and Regulatory Systems
Complex Procedures and Guidelines
Commerce Standards
Trading Legislations
Respondents
Legal and Regulatory Barriers to Utilization of E
Commerce
Strongly Agree Agree Neutral Disagree Strongly Disagree
0% 20% 40% 60% 80% 100%
Lack of Popularity for Online …
Lack of Awareness of E-Commerce …
Lack of Pressure from Suppliers and …
Respondents
Social and Cultural Barriers to Utilization of E-Commerce
79
-Commerce
Complex procedures and guidelines were not seen as a major barrier at RioZim
The researcher also had a section in the questionnaire for social and cultural
commerce, the results of which are shown in
commerce benefits emerged as the highest
Commerce
70% 80% 90%100%
Legal and Regulatory Barriers to Utilization of E-
Strongly Disagree
100%
Commerce
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
One factor that could limit the emergence of e
skills (EU, 2011). Therefore, the research finding shows that the respondents share
the same sentiments as expressed in other markets.
Political Barriers
Figure 4.10 shows low level of readiness in government institutions as having the
highest ranking in the category of political barriers. Lawrence and Tar (2010)
concluded that the lack of a
countries is a major hindrance to the adoption of e
study shows that Zimbabwe still has a long way to go in order to facilitate e
commerce in the mining sector.
Figure 4.10 : Political Barriers to Utilization of E
Lawrence and Tar (2010) revealed in the literature review in Chapter Two that most
developing countries do not have ICT policies to guide the provision of Internet
services. No progress is possible in the
implementation of such policies.
Change in Regulations by Government
Changes in Government Policy
Lack of Appropriate Legal Environment
Low Level of Readiness in Government
Po
liti
cal
Ba
rrie
r
Political Barriers to Utilization of E
Strongly Agree
One factor that could limit the emergence of e-commerce is lack of awareness and
2011). Therefore, the research finding shows that the respondents share
e sentiments as expressed in other markets.
Figure 4.10 shows low level of readiness in government institutions as having the
highest ranking in the category of political barriers. Lawrence and Tar (2010)
he lack of a policy to guide e-commerce expansion in developing
countries is a major hindrance to the adoption of e-commerce. The finding in this
study shows that Zimbabwe still has a long way to go in order to facilitate e
commerce in the mining sector.
: Political Barriers to Utilization of E -Commerce
Lawrence and Tar (2010) revealed in the literature review in Chapter Two that most
developing countries do not have ICT policies to guide the provision of Internet
services. No progress is possible in the absence of clear policies and the determined
implementation of such policies.
0% 20% 40% 60%
Change in Regulations by Government
Changes in Government Policy
Lack of Appropriate Legal Environment
Low Level of Readiness in Government …
Respondents
Political Barriers to Utilization of E-Commerce
Strongly Agree Agree Neutral Disagree Strongly Disagree
80
commerce is lack of awareness and
2011). Therefore, the research finding shows that the respondents share
Figure 4.10 shows low level of readiness in government institutions as having the
highest ranking in the category of political barriers. Lawrence and Tar (2010)
commerce expansion in developing
commerce. The finding in this
study shows that Zimbabwe still has a long way to go in order to facilitate e-
Lawrence and Tar (2010) revealed in the literature review in Chapter Two that most
developing countries do not have ICT policies to guide the provision of Internet
absence of clear policies and the determined
80% 100%
Commerce
Strongly Disagree
Organizational Barriers
Organizational barriers were entirely internal challenges to the utilization of e
commerce by RioZim Limited. The majority of the respondents (88%) in
felt that limited use of internet banking and web portals was the main barrier in this
category.
Figure 4.11: Organizational Barriers to Utilization of E
Difficulties on existing working procedures was ranked last. Around 40% of t
respondents did not see it as an organizational barrier to the utilization of e
commerce at RioZim Limited with 60% considering it as such. This might be an
indication to the organization that it needs to review its working procedures in order
to make them conducive to the effective application of e
4.3.5 Internal Support Factors
Figure 4.12 considers the opinions of the respondents on the provision on internal
support for e-commerce in the organization.
upon by the respondents were
awareness building and education (94%), and guidance on implementation risks
Difficulties on Existing Working
Procedures
Lack of Management Support
Organizational Resistance to Change
Limited Use of Internet Banking and
Web Portals
Org
an
iza
tio
na
l B
arr
ier
Organizational Barriers to Utilization of E
Organizational Barriers
Organizational barriers were entirely internal challenges to the utilization of e
commerce by RioZim Limited. The majority of the respondents (88%) in
felt that limited use of internet banking and web portals was the main barrier in this
Figure 4.11: Organizational Barriers to Utilization of E-Commerce
Difficulties on existing working procedures was ranked last. Around 40% of t
respondents did not see it as an organizational barrier to the utilization of e
commerce at RioZim Limited with 60% considering it as such. This might be an
indication to the organization that it needs to review its working procedures in order
hem conducive to the effective application of e-commerce.
Internal Support Factors
Figure 4.12 considers the opinions of the respondents on the provision on internal
commerce in the organization. The factors which were mostly agreed
upon by the respondents were advice and direction for ICT and e
awareness building and education (94%), and guidance on implementation risks
0% 20% 40% 60% 80% 100%
Difficulties on Existing Working
Procedures
Lack of Management Support
Organizational Resistance to Change
Limited Use of Internet Banking and
Web Portals
Respondents
Organizational Barriers to Utilization of E-Commerce
81
Organizational barriers were entirely internal challenges to the utilization of e-
commerce by RioZim Limited. The majority of the respondents (88%) in Figure 4.11
felt that limited use of internet banking and web portals was the main barrier in this
Commerce
Difficulties on existing working procedures was ranked last. Around 40% of the
respondents did not see it as an organizational barrier to the utilization of e-
commerce at RioZim Limited with 60% considering it as such. This might be an
indication to the organization that it needs to review its working procedures in order
commerce.
Figure 4.12 considers the opinions of the respondents on the provision on internal
The factors which were mostly agreed
advice and direction for ICT and e-commerce (95%),
awareness building and education (94%), and guidance on implementation risks
100%
Commerce
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
(94%). These findings concur with the conclusion drawn by Iles
main step needed to be taken internally is the awareness building of ICT and e
commerce, which was seen to have been the most voted for in the Nigeria survey.
Alamayehu (2005), and Zott and Donlevy (2000) also drew similar conclusions
regards to awareness of ICT.
Figure 4.12: Internal Support Factors for Utilizati on of E
An observation of importance in this section is that all the internal support factors
were ranked high by more than 80% of the respondents.
commerce was important from this research, the study in Nigeria by
revealed that it was not necessarily an important measure to be taken to enable e
commerce on organizations in Nigeria.
4.3.6 External Support Factors
The researcher also looked at the external support factors for the utilization of e
commerce. About 94% of the respondents agreed that improving computer and
Internet diffusion was the biggest external support factor as shown in Figure 4.13.
Awareness Building and Education
Guidance on Implementation Risks
Guidelines for Appropriate
Advice and direction for ICT and
Inte
rna
l S
up
po
rt F
act
or
Internal Support Factors for Utilization of E
(94%). These findings concur with the conclusion drawn by Iles
main step needed to be taken internally is the awareness building of ICT and e
commerce, which was seen to have been the most voted for in the Nigeria survey.
Alamayehu (2005), and Zott and Donlevy (2000) also drew similar conclusions
regards to awareness of ICT.
Figure 4.12: Internal Support Factors for Utilizati on of E -Commerce
An observation of importance in this section is that all the internal support factors
were ranked high by more than 80% of the respondents. While adv
commerce was important from this research, the study in Nigeria by
revealed that it was not necessarily an important measure to be taken to enable e
commerce on organizations in Nigeria.
External Support Factors
her also looked at the external support factors for the utilization of e
commerce. About 94% of the respondents agreed that improving computer and
Internet diffusion was the biggest external support factor as shown in Figure 4.13.
0% 20% 40% 60% 80% 100%
Awareness Building and Education
Guidance on Implementation Risks
Guidelines for Appropriate …
Advice and direction for ICT and …
Respondents
Internal Support Factors for Utilization of E-Commerce
82
(94%). These findings concur with the conclusion drawn by Ilesanmi (2007) that the
main step needed to be taken internally is the awareness building of ICT and e-
commerce, which was seen to have been the most voted for in the Nigeria survey.
Alamayehu (2005), and Zott and Donlevy (2000) also drew similar conclusions with
Commerce
An observation of importance in this section is that all the internal support factors
While advice on e-
commerce was important from this research, the study in Nigeria by Ilesanmi (2007)
revealed that it was not necessarily an important measure to be taken to enable e-
her also looked at the external support factors for the utilization of e-
commerce. About 94% of the respondents agreed that improving computer and
Internet diffusion was the biggest external support factor as shown in Figure 4.13.
Commerce
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Figure 4.13: External Support Factors for Utilization of E
Financial assistance for e
organizations (88%) were also important external support factors as revealed by
Figure 4.13.
4.4 Chapter Summary
The chapter discussed the response rate which was very high (85%).
respondents had varying levels of experience in the mining industry. Attitudes and
views of the respondents on the importance of e
analyzed. The respondents attached high importance on the utilization of e
commerce.
The challenges to e-commerce utilization were analyzed using the conceptual
framework by Zaied (2011)
organizations. The barriers were di
legal and regulatory, social and cultural, political and organizational barriers.
respondents’ opinions were discussed under these categories.
Improve Computer and Internet
Financial Assistance for E
Tax Incentives
Improve National Infrastructure
Improve Bank Account and Credit
Collaboration among Organizations
Enforce Suitable Software
Ex
tern
al
Su
pp
ort
Fa
cto
r
External Support Factors for Utilization of E
Support Factors for Utilization of E -Commerce
Financial assistance for e-commerce development (89%) and collaboration among
organizations (88%) were also important external support factors as revealed by
Chapter Summary
The chapter discussed the response rate which was very high (85%).
respondents had varying levels of experience in the mining industry. Attitudes and
views of the respondents on the importance of e-commerce utilization were
ndents attached high importance on the utilization of e
commerce utilization were analyzed using the conceptual
framework by Zaied (2011) on the barriers to the utilization of e
organizations. The barriers were divided into six categories; technical, economic,
legal and regulatory, social and cultural, political and organizational barriers.
respondents’ opinions were discussed under these categories.
0% 20% 40% 60% 80% 100%
Improve Computer and Internet …
Financial Assistance for E-…
Tax Incentives
Improve National Infrastructure
Improve Bank Account and Credit …
Collaboration among Organizations
Enforce Suitable Software …
Respondents
External Support Factors for Utilization of E-Commerce
83
Commerce
commerce development (89%) and collaboration among
organizations (88%) were also important external support factors as revealed by
The chapter discussed the response rate which was very high (85%). The research
respondents had varying levels of experience in the mining industry. Attitudes and
commerce utilization were
ndents attached high importance on the utilization of e-
commerce utilization were analyzed using the conceptual
on the barriers to the utilization of e-commerce by
vided into six categories; technical, economic,
legal and regulatory, social and cultural, political and organizational barriers. The
Commerce
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
84
CHAPTER FIVE
5.0 Conclusions and Recommendations
5.1 Introduction
The previous chapter presented the research findings and also analyzed the data
collected during the research study. In this chapter, conclusions on the research
findings, as well as recommendations will be presented based on the findings in
chapter four. The conclusions made from the research are also used to recommend
areas of further research.
5.2 Conclusions of the Study
5.2.1 RioZim managers’ attitudes and views towards e-commerce utilization
5.2.1.1 More than half of the managers at RioZim attach greater importance to
the utilization of e-commerce in the organization.
5.2.2 RioZim managers’ understanding of the current utilization of e-
commerce
5.2.2.1 RioZim are of the opinion that e-mail and the Internet are the most
widely used e-commerce applications.
5.2.2.2 The managers acknowledge very low usage of e-commerce
technologies like e-procurement, e-recruitment, credit cards, point of
sale, e-cheque and e-wallet.
85
5.2.2.3 The managers confirm that the highest impact was on communication
between employees and communication with customers or suppliers.
They perceive e-commerce utilization as having low impact on
advertising and some average impact on recruitment, communication
with shareholders and investors, receiving payments, goods and
services information and company information.
5.2.3 RioZim managers’ views on the benefits of e-c ommerce to the mining
industry
5.2.3.1 Improved communication is a key benefit associated with e-commerce
utilization at RioZim Limited. Other benefits are, finding new and/or
global markets, improved competitiveness, finding new suppliers,
improved marketing, cost-effective marketing and increase in sales.
5.2.3.2 Reduced stock and lead time are not considered key benefits at
RioZim Limited, even though there are huge purchases of
consumables, stationery, spares and machinery.
5.2.4 Major challenges faced in the mining industry as depicted by the case
study of RioZim Limited
5.2.4.1 RioZim managers consider that lack of e-commerce infrastructure as
the major technical barrier to the utilization of e-commerce in the
mining industry.
5.2.4.2 Lack of secure payment infrastructure and unclear benefits from e-
commerce adoption is the major economic barrier.
5.2.4.3 Lack of e-commerce standards and absence of regulatory and legal
systems is the major legal and regulatory barrier.
86
5.2.4.4 Lack of awareness of e-commerce benefits is the major social and
cultural barrier.
5.2.4.5 The managers also regard low level of readiness in government
institutions as the major political barrier to the utilization of e-commerce
in the mining industry.
5.2.4.6 Limited use of internet banking and web portals is the major
organizational barrier.
5.3 Research Proposition
The major challenges that were mentioned in the research study were mainly lack of
e-commerce infrastructure, lack of secure payment infrastructure and unclear
benefits from e-commerce adoption, lack of e-commerce standards and absence of
regulatory and legal systems, lack of awareness of e-commerce benefits, low level
of readiness in government institutions and, limited use of internet banking and web
portals. Therefore, the proposition that lack of senior management support is the
major challenge in the effective utilization of e-commerce technologies at RioZim
Limited has been refuted.
5.4 Recommendations of the Study
5.4.1 Concerning RioZim Limited
5.4.1.1 Management at RioZim Limited should purchase more ICT and e-
commerce equipment so that all its areas of operation have increased
accessibility in terms of the Internet. Budgets should be linked to the e-
commerce strategy of the organization in order for the e-commerce
infrastructure to be improved.
87
5.4.1.2 Management should ensure that there is more education and training
of employees with regards to e-commerce technologies. There should
be emphasis on advice and direction for ICT and e-commerce,
awareness building and education, and guidance on implementation
risks.
5.4.2 Concerning the National Level
5.4.2.1 A “catch-them-young” spirit should be adopted in our Zimbabwean
education system by including the basics of e-commerce in the school
curriculum. Gadgets like mobile phones and computers are often
underutilized, with people incurring more transaction and
communication costs, instead of just using these gadgets in the
comfort of their homes or workplaces or even when travelling.
5.4.2.2 There is need to for infrastructural development to enhance Internet
connectivity and other ICT technologies. The government can partner
internet service providers (ISPs) like Econet to assist with financial and
other resources required for this infrastructural development.
5.4.2.3 Financial resources should be availed for improving computer and
Internet diffusion in the country. This can be done through public and
private partnerships where the government works in conjuction with the
private sector to gather the necessary resources the improvement of
computer and Internet diffusion. Organizations also need to increase
their collaboration with regards to e-commerce.
88
5.4 Areas for Further Study
The research study focused on challenges in e-commerce utilization at
RioZim Limited. The results cannot be generalised without bias. Therefore,
further research work can be conducted at other mining companies in
Zimbabwe and also other industrial sectors.
89
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99
Appendix One:
Cover Letter
100
December 15, 2011
Dear Sir/Madam
I am an MBA student with the Graduate School of Management at the University of
Zimbabwe (UZ). I am currently conducting a research on the challenges in the
effective utilization of e-commerce in the mining industry in Zimbabwe using the
case of RioZim Limited.
It would be much appreciated if you can assist by completing the enclosed
questionnaire. The questionnaire may take you 10 minutes to complete. Your
participation is voluntary and you can withdraw at any time.
Your response will be treated with utmost confidentiality and used solely for
academic purposes. Results will be collated and presented anonymously.
Should you have any queries please do not hesitate to contact me on my mobile
number 077 2 433 884 or telephone 746141 – 9 (Bus) or alternatively you can
contact the Graduate School of Management on telephone 307377 (Bus) .
Thank you in advance for your valuable time and effort in completing the
questionnaire.
Yours truly,
____________________
Sherpherd Kamango.
Enc.
101
Appendix Two:
Questionnaire circulated to RioZim managers
102
QUESTIONNAIRE Part 1: Personal Profile 1. Gender [ ] Male [ ] Female 2. Educational level [ ] Diploma Level [ ] Degree Level [ ] Postgraduate Level 3. Field of study……………………………………………………………………………………………. 4. Occupation………………………………………………………………………………………………. 5. Department/Section……………………………………………………………….............................. 6. Number of years in the mining industry [ ] below 5 [ ] 5-10 [ ] 10-15 [ ] 15-20 [ ] above 20 Part 2: Attitudes and Views 7. To what extent are you acquainted with the concept and application of e-commerce? [ ] Very Much [ ] Much [ ] Average [ ] Low [ ] Very Low 8. For your company e-commerce is a/an [ ] opportunity [ ] challenge [ ] threat [ ] ambiguous [ ] do not know 9. How important is the utilization of e-commerce to your company? [ ] Very Much [ ] Much [ ] Average [ ] Low [ ] Very Low
103
Part 3: Current Utilization of E-Commerce 10. Which e-commerce technologies do you use in your organization? Technology Yes No Internet E-mail E-procurement E-recruitment E-wallet Credit card Point of sale E-shopping E-cheque Biometric Firewall Intrusion Detection
11. To what extent has the current utilization of e-commerce imparted on each of the following
items with respect to your organization?
Utilization Very Much
Much Average Low Very Low
Providing information on the company Providing information on goods and services Taking orders Receiving payments Delivery of goods and services Identifying new inventory suppliers Ordering and payment of inventory purchasing Communication (e-mail) with customers or suppliers Internal communication between employees External info search (i.e. competitors, regulations etc.) Communication with shareholders and investors Advertising Recruitment
12. To what extent is your company equipped to implement e-commerce for each item listed below:
Infrastructure
Very Much
Much Average Low Very Low
Hardware and network (computers, internet, intra/extra-net, e-mail, etc.)
Software (public & specialized/ advanced packages, standardized processes & systems, etc.)
IT experts
Skilled staff (in e-commerce)
104
13. What does your company website do? Function Yes No Provides information about the company Provides information about the company’s products/services Allow customers to place orders online Enables tracking of sales order status Use it for customer feedback on products and services Enables suppliers to interact electronically with the company Others, please specify
14. Who maintains the website? In-house Employees External Consultants
15. Has the website increased your business opportunities? Please, explain ___________________________________________________________________________________________________________________________________________________________________________________________________________________________ Part 4: Benefits of E-Commerce 16. What do you think are the key benefits associated with e-commerce among the following items? 1 – Strongly Agree 2 – Agree 3 – Neutral 4 – Disagr ee 5 – Strongly Disagree Benefit 1 2 3 4 5 Increase in sales 24-hour service to customers Job creation Improved communication/quality information Provide cost effective ways to market organizations Improved marketing Reduced stock and lead time Cost savings Find new suppliers Improve operational efficiency Improved competitiveness Offer entirely new products and services Reach new and/or global markets Reduced information search and transaction costs Inexpensive advertising medium
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17. Please provide your views on the benefits that e-commerce utilization by the mining industry has on the economy of developing countries like Zimbabwe.
Factor 1 2 3 4 5 Job Creation/employment opportunities Creation of wealth Leads to lower and better communication services Enables organizations to be more reachable globally Improves the level of ICT usage in general Improves standard of living Provision of a cashless society Supply chains of industries
Part 5: Major Challenges in the Utilization of E-Co mmerce 18. The factors listed below are possible technical barriers to using or extending use of e-
commerce technologies. Please tick relevantly on the barriers pertaining to your organization.
Barrier 1 2 3 4 5 Lack of Internet security Lack of e-commerce infrastructure Lack of qualified staff Inadequate quality and speed of lines Increased innovations and new technologies
19. The factors listed below are possible economic barriers to using or extending use of e-
commerce technologies. Please tick relevantly on the barriers pertaining to your organization.
Barrier 1 2 3 4 5 Lack of financial information Unclear benefits from e-commerce adoption. Cost too high Competitive pressure Lack of secure payment infrastructures
20. The factors listed below are possible legal and regulatory barriers to using or extending use of e-
commerce technologies. Please tick relevantly on the barriers pertaining to your organization. Barrier 1 2 3 4 5 Absence of legal and regulatory systems No simple procedures and guidelines Lack of e-commerce standards Lack of e-trading legislations Absence of legal and regulatory systems No simple procedures and guidelines
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21. The factors listed below are possible social and cultural barriers to using or extending use of e-commerce technologies. Please tick relevantly on the barriers pertaining to your organization.
Barrier 1 2 3 4 5 Lack of popularity for online marketing and sales Lack of awareness of e-commerce benefits Lack of external pressure from suppliers and customers
22. The factors listed below are possible political barriers to using or extending use of e-
commerce technologies. Please tick relevantly on the barriers pertaining to your organization.
Barrier 1 2 3 4 5 Change in regulations by government Changes in government policy Lack of appropriate legal environment to apply e-commerce Low level of readiness among government institutions
23. The factors listed below are possible organizational barriers to using or extending use of e-
commerce technologies. Please tick relevantly on the barriers pertaining to your organization. Barrier 1 2 3 4 5 Difficulty in changing the existing working procedures Lack of management support Organizational resistance to change Limited use of Internet banking and web portals
Part 6: Recommendations 24. Possible internal support factors required for organizations to use or extend use of e-
commerce technologies are listed below. Please indicate your opinion on each item. 1 – Strongly Agree 2 – Agree 3 – Neutral 4 – Disagr ee 5 – Strongly Disagree
Factor 1 2 3 4 5 Awareness building and education in ICT and e-commerce Guidance in overcoming risks associated with implementation Assistance with guidelines for appropriate hardware and software Advice and direction for ICT and e-commerce
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25. Possible external support factors required for organizations to use or extend use of e-commerce technologies are listed below. Please indicate your opinion on each item.
Factor 1 2 3 4 5 Improve computer and Internet diffusion in the country Provide financial assistance for e-commerce development Provide tax incentives Improve national infrastructure Improve bank account and credit card penetration in the country Government and industry associations to take leadership and promotion role
Improve collaboration among organizations Enforce suitable software standards
26. Any other recommendation(s) with regards to the utilization of e-commerce technologies
at your organization ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ END OF QUESTIONNAIRE. THANK YOU.
