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E-COMMERCE: MOTIVATIONAL FACTORS
AFFECTING ADOPTION OR NON-ADOPTION BY SMALL TO MEDIUM
ENTERPRISES
MSA 685 PROJECT
Submitted in partial fulfillment of
Requirements for the Degree of
Master of Science in Administration
(Concentration in General Administration)
by
Tami A. Anderson
#237386
Project Monitor
Dr. Calvin Lathan
Central Michigan University
April 23, 2008
TABLE OF CONTENTS
List of Tables............................................i
List of Figures..........................................ii
Chapter I
Introduction and Problem Background................. 1
Purpose of Study.................................... 4
Research Objectives................................. 4
Conceptual or Substantive Assumptions............... 5
Rationale and/or Theoretical Framework.............. 5
Definition of Terms................................. 8
Scope of Study...................................... 8
Chapter II
Historical and General Background................... 9
Existing Studies................................... 12
Methodology, Instrumentation, Statistical Approach. 13
Significant Studies................................ 15
Summary of Literature Reviewed..................... 16
Chapter III
Research Methodology............................... 18
Instrumentation.................................... 19
Field Procedures....................................19
Data Collection and Recording Procedures........... 20
Data Processing and Analysis Procedures............ 20
Methodological Assumptions......................... 21
Methodological Limitations......................... 22
Chapter IV
Research Findings.................................. 23
Chapter V
Summary............................................ 44
Conclusions........................................ 45
Recommendations.................................... 46
References.............................................. 48
Appendices...............................................50
Appendix A – Survey and Interview Questions
Appendix B – Survey Results, Motivational Factors
DEDICATION
This project is dedicated to my father who instilled in me, from
a very early age, a deep respect and appreciation of the value
of education.
Myron Charles Anderson, 1924-1969
ACKNOWLEDGEMENT
The author of this paper would like to acknowledge the
following for their special contribution to this project.
Thank you to the Keweenaw Peninsula Chamber of Commerce
Board of Directors and staff for their support and assistance in
the distribution and collection of this study’s survey.
Thank you to the members of the Keweenaw Peninsula Chamber
of Commerce who responded to the project survey. Thank you so
much for your participation without which this study could not
have been completed.
Thank you also to the business owners/managers that allowed
me to interview them for this study. Their insights and candid
sharing of information about themselves and their businesses,
contributed greatly to this study and my understanding of
e-commerce and small business enterprises.
EXECUTIVE SUMMARY
Many practicing and academic leaders in the field of
business agree that it is strategically important for every
business to have a web presence and to utilize e-commerce to
enhance its business performance. The fact that lack of adoption
by SMEs is higher in rural versus urban areas is of extreme
economic importance and a primary focus of this study.
Research studies on the adoption of e-commerce by SMEs have
all focused on the motivational factors behind this strategic
business decision. Secondary to this are factors such as firm
characteristics, business strategy, educational level of the
business owner or CEO and the type and age of the industry.
The primary purpose of this project was to determine the
motivational factors behind adoption of e-commerce by rural
small to medium size enterprises (SMEs). As well, the
motivational factors affecting a SME’s decision not to adopt e-
commerce practices were investigated. A secondary purpose was to
determine the effect that business and business owner
characteristics have on a SME’s adoption of e-commerce.
To best measure the motivational factors of adoption of e-
commerce by rural SMEs, a self-administered survey was sent to
SME business members of a chamber of commerce encompassing three
counties located in the Upper Peninsula of Michigan. The
researcher also conducted anonymous interviews with five of the
business owners/managers.
Survey respondents mean scores rated the motivational
factors that most affected their adoption of e-commerce as the
following; to enhance company image/brand, improve
communications with customers, distribute product/service
company information, provide or improve customer support, and
identify new markets or customers.
The mode and median scores of business size and sector, market
scope and business strategies all demonstrated their distinct
influence on adoption of e-commerce. Scores illustrated a clear
relationship between analyzer and prospector strategies and
adoption of e-commerce. Along with this indicator, businesses
also rated as first to market or in step with competitors were
much more likely to be adopters of e-commerce. The results of
studies pertaining to SMEs and adoption of e-commerce are
relative to business educators, granting foundations, computer
professionals, governmental agencies, and other organizations
concerned with economic growth and development. The findings of
this study can be used to further develop strategies for
building greater involvement of SMEs and e-commerce.
LIST OF TABLES
Table 1....................................................33
Median/Mode Age and Educational Levels of Non-Adopters
Table 2....................................................33
Median/Mode Age and Educational Levels of Adopters
i
LIST OF FIGURES
Figure 1 ....................................................32
Gender of Business Owners/Managers
Figure 2 ....................................................32
Age of Business Owners/Managers
Figure 3.....................................................35
Educational Level of Business Owners/Managers
Figure 4 ....................................................36
Leadership Management Style of Business Owner/Manager
Figure 5.....................................................39
Business Sector of SMEs
Figure 6.....................................................39
Market Scope of SMEs
Figure 7.....................................................40
Firm Size in Number of Employees
Figure 8.....................................................40
Firm Size in Annual Revenue
Figure 9.....................................................43
Business Strategies of SMEs
Figure 10....................................................43
New Product Strategy of SMEs
ii
1
Chapter I: The Problem/Situation
Introduction and Background of Problem/Situation
Throughout the past decade, tremendous advances in computer
technology have assisted in the growth and development of the
business world, including small to medium sized business
enterprises. The development of what we now know as e-commerce
and e-business is widely used throughout the world. Not only
has this technology for online business enterprises gotten more
affordable for large organizations, but it has also become
available to small to medium sized enterprises (SMEs) as well.
An increasing number of SMEs now consider e-commerce as a viable
part of their business strategy, recognizing the potential
growth and expansion through online selling of goods and
services (Levenburg, Kosalge and Magal, 2006).
“The Internet and electronic commerce present a number of
opportunities for small and medium-sized enterprises. These
include cost reductions, expansion of the customer base or
geographical market, new product and service niches, and easier
internal restructuring. SMEs in traditional sectors can use e-
commerce to reach new customers and markets, more innovative
small firms can find market niches in electronic-based goods and
services, and SMEs in all sectors can improve efficiency and
performance through joining electronic supply chains”
2
(Organization for Economic Co-operation and Development [OECD],
2002, p. 25).
This expansion of e-commerce activity is quite apparent to
the average Internet peruser. Nonetheless, there still exists a
considerable percentage of SMEs that are not taking advantage of
the potential increase in growth and profit via adoption of e-
commerce activity (Al-Qirim, 2007; Bharadwaj and Soni, 2007;
Dholakia and Kshetri, 2004; Levenburg et al., 2006; Lu, 2003;
McCole and Ramsey, 2005; Mohan-Neill, 2006; Quader, 2006).
“Despite the many benefits of electronic commerce for SMEs,
they are lagging behind larger firms in adopting both business-
to-consumer (B2C) and business-to-business (B2B) e-commerce.
An estimated 90% of large firms in the OECD area have Internet
access, but less than 50% of SMEs are linked to the Internet and
those that are tend to use it primarily for e-mail. It is
estimated that about 20% of SMEs maintain a Web site, but less
than 5% engage in online sales and purchases” (OECD, 2001, p.
32).
SMEs are often founded by entrepreneurs, individuals
typically described as innovative, creative, risk takers.
“Successful entrepreneurs have unusually strong confidence in
their ability to succeed. Failure is not an option. They have
the vision and faith that they will find solutions” (Garrett,
3
2006, p. 115). With this in mind, it seems even more perplexing
that a substantial number of SMEs resist adoption of e-commerce.
This seemingly profound contradiction may actually provide
important information for a better understanding of what
motivates these entrepreneurs or SME owners to adopt or resist
adoption of e-commerce practices. This study also offers an
opportunity to explore the needs of SMEs to experience success
in the marketplace. The results of studies pertaining to SMEs
and adoption of e-commerce are relative to business educators,
granting foundations, computer professionals, governmental
agencies, and other organizations concerned with economic growth
and development (Ewing Marion Kauffman Foundation, 2008;
Bharadwaj and Soni, 2007).
Many practicing and academic leaders in the field of
business agree that it is strategically important for every
business to have a web presence and to utilize the Internet to
enhance its business performance. The fact that lack of adoption
by SMEs is higher in rural versus urban areas is also of extreme
economic importance. Are SMEs making these business decisions
based on a careful analysis or simply a gut feeling (Bharadwaj
and Soni, 2007)?
With a further understanding of SME resistance to adoption
of e-commerce, educators as well as federal, state, and local
4
agencies for economic development can better meet the needs of
growing SMEs.
Purpose of the Study
The purpose of this study is to explore the motivational
factors or perceived benefits behind adoption of e-commerce
while also examining the motivational factors or perceived costs
behind non-adoption of e-commerce.
While most research has focused attention on e-commerce
adoption by large companies throughout the world, this study
will focus on a smaller segment of industry commonly referred to
in business research literature as small to medium enterprises
or SMEs. Another distinguishing feature of this study is that
all of these businesses are physically located in a rural
geographical setting of the Midwest.
Questions to be Answered/Objectives to be Investigated
The study will address the following objectives:
1. What are the motivational factors or perceived benefits
associated with a SMEs adoption of e-commerce strategies?
2. What are the motivational factors or perceived costs
associated with a SMEs non-adoption of e-commerce strategies?
3. What affect do the personal characteristics of a SME business
owner/manager have on a SMEs’ decision to adopt e-commerce?
5
4. What affect does the size (in revenue dollars and employees)
and business strategy of a SME business have on its decision to
adopt e-commerce?
Conceptual or Substantive Assumptions
Adoption of e-commerce by SMEs has a positive effect upon
business growth and development.
The survey will be limited to a local rural tri-county
random sampling of SMEs.
Rationale and Theoretical Framework
Several business theories are relative to this study. The
first two under discussion are cost benefit analysis and firm
value chains and resulting competitive advantage. Each of these
theories or concepts provides a supportive framework through
which adoption of e-commerce is considered.
Cost benefit analysis refers to a firm weighing the costs
versus the benefits or assets of a particular activity. For the
sake of this study, we have referred to the costs and benefits
as motivational factors in the adoption or non-adoption of e-
commerce. A SME is likely to adopt e-commerce practices when the
benefits (perceived positive outcomes) of adopting e-commerce
outweigh the costs (perceived detractions or negative outcomes).
The inverse, as well is true. A SME is likely to elect non-
adoption of e-commerce practices when the costs (perceived
detractions or negative outcomes) outweigh the benefits
6
(perceived positive outcomes) of adopting e-commerce. Making
this comparison refers to a cost benefit ratio.
A firm value chain is the strategically relevant activities
performed by an industry or a firm in creating its final product
and/or service. Analysis of the efficiency of the value chain
helps to determine if e-commerce adoption can make the process
more efficient and cost-effective resulting in a competitive
advantage in the marketplace (Porter, 1985, chap. 2; Laudon and
Traver, 2007, chap. 2).
(http://en.wikipedia.org/wiki/Value_chain)
Also worth noting is the business level competitive
strategies theory developed by Miles and Snow in 1978 where
business units are classified into four strategic types;
prospectors, defenders, analyzers and reactors. A prospector
strategy focuses on growth through the development of new
products and markets. The defender strategy concentrates on
7
maintaining their positions in established product-markets while
paying less attention to new product development. The analyzer
strategy falls in between these two. It attempts to maintain
strong position in its core product markets, seeking also to
expand into new and related markets as well. The reactor
strategy has no clearly defined strategy, but rather reacts to
the environment (Miles and Snow, 1978; Mullins, Boyd and Walker,
2007).
Another commonly known and widely discussed theory relative
to this study’s survey involves leadership styles. Several
leadership styles are considered for this study; autocratic,
participative or democratic, and laissez-faire. An autocratic
leader makes decisions without any form of consultation with
employees. In the participative or democratic style, the leader
involves employees in decision-making, although the process for
the final decision may vary from the leader having the final say
to them facilitating consensus in the group. The laissez-faire
style minimizes the leader's involvement in decision-making, and
hence allows the employees to make their own decisions, although
the leader may still be responsible for outcomes
(http://changingminds.org/disciplines/leadership/styles/lewin_st
yle.htm).
8
Definition of Terms
Differentiation – refers to all the ways producers can make
their products unique and different to distinguish them from
those of competitors.
E-commerce (E-business) – the use of the Internet and the
Web to transact business. More specifically, the digitally
enabled commercial transactions between and among organizations
and individuals.
Types of e-commerce:
B2B – Business to business – e-commerce in which online
businesses focus on selling to other businesses.
B2C – Business to consumer – e-commerce in which online
businesses are selling to individual consumers.
Internet - Worldwide network of computer networks built on
common standards.
SME – A small to medium sized enterprise or business. For
the sake of this study, a SME will be defined as a business with
less than 500 employees.
Scope of the Study
This study will include a local sampling of 572 small to medium
enterprises from a rural tri-county area of the Upper Peninsula
of Michigan.
9
Chapter II: Literature Review
Historical & General Background
The literature on this subject is limited and therefore
little data has been available to researchers. Most of the
research conducted so far has taken place in the past ten years
and even this research has been forthwith in its limitations of
scope and methodology. Despite the limited research findings,
there does exist a common thread throughout the published
research that points to the fact that e-commerce does provide an
efficient and profitable advantage to the small business
entrepreneur. Nearly all agree that e-commerce adoption by
small business owners is clearly a positive strategic objective
for business growth and profitability (Al-Qirim, 2007; Bharadwaj
and Soni, 2007; Dholakia and Kshetri, 2004; Levenburg et al.,
2006; Lu, 2003; McCole and Ramsey, 2005; Mohan-Neill, 2006;
Quader, 2006).
“The Internet has proven to be a powerful catalyst for
promoting the growth of “start-ups”,... and newly established
firms that use the Internet as the principal medium for buying
and selling goods and services. In addition, the Internet is
providing a broader range of SMEs with opportunities to expand
their customer bases by providing a low-cost, global platform
for promoting information and commerce. In a sense, the Internet
is allowing many SMEs to become global players in ways that have
10
heretofore been reserved primarily for large multinational
companies” (OECD, 2001, p. 25).
Despite this overwhelming evidence and consensus among
researchers, the fact remains that there is still a distinct
percentage of small businesses that are not adopting e-commerce
as part of their business strategy. The mystery and question on
every researchers mind remains the same. Why are these
businesses resisting adoption of a method of marketing and
selling that has proven to be both efficient and profitable?
What motivates one SME owner to adopt e-commerce, while another
resist adoption?
A business owner’s perception of the usefulness or non-
usefulness of e-commerce activity appears to be the strongest
factor in their resistance to or adoption of e-commerce
activity. If a business owner is able to perceive a benefit from
adoption of e-commerce activity, only then will they be
motivated to pursue such a strategy (Levenburg et al., 2006; Lu
and Zhang, 2003).
Business owners resisting adoption of e-commerce have
reported that their products or services do not lend themselves
well to selling over the Internet. Others express concerns such
as; they don’t see any benefit to adopting e-commerce, they have
considered it but just haven’t gotten around to it, they don’t
11
know how to set up e-commerce activity or they perceive the e-
commerce environment to be too competitive (Mohan-Neill, 2006).
Internal and external variables within a business
organization affect a business owner’s adoption or resistance to
e-commerce. Smaller size firms are less able to manage the fixed
and variable costs associated with the use of the Internet,
given their limited resources as compared to larger firms. A
business owner’s self-efficacy or belief in their ability to
implement e-commerce technology and assure customer security and
privacy affect adoption decisions. Computer and Internet usage
experience by firm owners positively affects adoption as well as
a perceived pressure from competitors using technology (Dholakia
and Kshetri, 2004).
For many small businesses entering the e-commerce trade,
the Internet can be an overwhelming environment, constantly
changing and ripe with competition. It is not surprising then
that many small businesses attempting to build an e-commerce
option often fail. Typically, what occurs is that a business
loses what it considers its primary value-added proposition,
their personal focus on the customer. The small business
entrepreneur struggles to find ways to differentiate him/herself
from the competition. Developing and maintaining customer
loyalty and trust is essential to entrepreneurial survival and
success in the competitive environment of e-commerce (Levenburg
12
and Magal, 2005; Childers and Offstein, 2007). “In fact, the
internet may be the one place in the world where service,
service, service is more important than location, location,
location” (DiMaria, 2001).
Existing Studies
A study to assess e-commerce activity in rural areas found
that there was significantly less activity than in urban areas.
This study of SMEs in a rural area of Pennsylvania established
that the lack of adoption of e-commerce by these businesses was
attributed to a lack of knowledge of potential benefits of e-
commerce applications and a lack of technological and human
resource infrastructure. The study demonstrated the need for
education to entrepreneurs about the benefits and opportunities
presented by e-commerce and the need for development of
broadband infrastructure to rural areas (Bharadwaj and Soni,
2007).
A study of a national sample of U.S. SMEs found a similar
result. This larger more diverse sampling of business owners
also demonstrated that a business owner’s perception of benefits
of e-commerce played a major role in their adoption decision.
The study illustrated that a SME owner’s perceived
incompatibility of product/service offerings with the Internet
was the greatest obstacle to adoption of e-commerce applications
(Mohan-Neill, 2006).
13
Another study explored the organizational factors and
motivations that influence SMEs adoption of e-commerce. In this
study, like the others, a business owner’s perception of
benefits played a major role in their adoption of e-commerce.
The study further demonstrated that business strategy,
educational level of the business owner or CEO and the type and
age of the industry were also influential factors in the
adoption of e-commerce (Levenburg et al., 2006).
The need for further research to determine the motivational
factors that contribute to adoption of e-commerce are necessary
to assist small business enterprises to experience economic
success. Research that can result in this data, particularly
from a rural sampling of SMEs would further this research query.
Methodology – Instrumentation – Statistical Approach
All of the above studies, like most research studies
concerning this issue, used a mail survey method to collect
data. Levenburg and associates used a self-administered
questionnaire. Respondents were to indicate on a five-point
Likert-type scale, the level of importance of each listed
motivational item in engaging them in e-business. The
motivational items were analyzed to identify underlying factors.
The identified four factors were labeled marketing,
communication, e-profitability and research for the purposes of
the study. This factor analysis provided evidence of construct
14
validity – were the motivational questions indeed measuring what
they were intended to measure (Levenburg et al., 2006). Based on
resulting scores by respondents, the motivational factors were
rated for importance based on the mean importance rating of each
grouped set of motivational items. These mean scores were then
translated into percentages to explain their variance and to
provide a simpler comparison for the reader. Tables were used to
present the results of the study.
Mohan-Neill stressed the importance of random sampling size
in his study of SMEs. One of the strengths of his study was in
the significance of the substantial national random sample drawn
from 2001 Dun and Bradstreet files. “One cannot over-exaggerate
the importance of this area of research. The advantages of a
fairly substantial national random sample of small firms can
only enhance the quality and significance of the findings”
(Mohan-Neill, 2006, p 205). Using tables and bar charts, Mohan-
Neill statistically presented, as frequency distributions in
percentages, firms who had adopted the use of a web site and
those who were also using their site for online selling. In
table format, with results very similar to Levenburg et al.,
Mohan-Neill listed the various factors that respondents noted
were the reasons or motivations behind their adoption or non-
adoption of various levels of e-commerce involvement.
15
Significant Studies
Each of the studies cited in this section are especially
relevant to further research on this topic. Studies by
Levenburg et al., Mohan-Neill, Bharadwaj and Soni, and Dholakia
and Kshetri are the backbone of the most recent research
literature focusing on SMEs and adoption of e-commerce. They
are also the most prominent studies to utilize a survey
methodology. Each study candidly reported on its limitations
whether in terms of population sampling size, percentage of
respondents, or its inaccurate assumptions. Each of the
researchers cited, objectively addressed the need for further
research on the subject, recommending that a continued focus on
small business enterprises was a critical aspect to this
research. Continued research is needed in order to assist SMEs
in understanding the strategic importance of e-commerce
adoption. “With the ever-changing technology and business
paradigm, the usage and perceptions pertaining to e-commerce can
change in a very short time. Consequently, longitudinal studies
with the help of surveys conducted over a period of time can
provide more insightful results of not only the current state of
e-commerce, but also of the trends in the industry” (Bharadwaj
and Soni, 2007, p. 518).
The research conducted in this study will build upon this
foundation of research literature. This study will contribute
16
to the research concerns addressed by others and particularly
those studies focused on rural SMEs. It will analyze the
motivational factors involved in e-commerce adoption as well as
discuss the perceived expected, versus actual, benefits and
costs by SMEs.
Summary of Literature Reviewed
Research on adoption of e-commerce by SMEs is clearly a
growing body of literature, only just begun with the advent of
public access to the Internet. Adoption of e-commerce by large
corporations has been well underway for nearly 20 years, but
adoption by SMEs began nearly a decade later, and therefore
research literature on the subject is still evolving.
Nearly all researchers agree that e-commerce adoption by
small business owners is clearly a positive strategic objective
for business growth and profitability. Despite this, the fact
remains that there is still a distinct percentage of SMEs not
adopting e-commerce as part of their business strategy.
Research studies on adoption of e-commerce by SMEs have all
focused on the motivational factors behind this strategic
business decision. Studies have shown that by far, the greatest
influence upon adoption decisions is the SMEs perception of the
benefits or costs involved in e-commerce adoption. Secondary to
this are other factors such as firm characteristics, business
17
strategy, educational level of the business owner or CEO and the
type and age of the industry.
18
Chapter III: Methodology/Procedures
Research Methodology
The research methodology utilized in this study was most
similar to the methods used by Levenburg and her associates who
focused on the motivational factors at work in SME decisions to
either adopt or not adopt e-commerce. This study further
investigated characteristics of business owners/managers along
with SME business strategies and their affect upon e-commerce
adoption. The study utilized an anonymous self-administered
survey.
In addition to the mailed survey, one-to-one interviews
were conducted with five SME business owners/managers. The
interviewees were selected from a spectrum of business sectors.
The interviewees were asked three open-ended questions,
developed by the researcher, pertaining to their reasons for
adopting or not adopting e-commerce. The questions addressed the
following; the primary reasons the business owner chose to
adopt or not adopt e-commerce, the affect that the business’
overall strategy has had on their decision, and lastly, the
affect that the business owner’s personal characteristics (i.e.
age, gender, educational level, management style) has had on
their decision. The business owners’ identities remained
confidential.
19
Instrumentation
The survey was developed by the researcher using a “create
a survey” tool provided by an online company called
SurveyMonkey.com (http://www.surveymonkey.com/). The survey was
composed of several factual demographic questions regarding the
size and market reach of the SME followed by several questions
concerning characteristics of the business owner/manager such as
age, gender, leadership style and educational level. Next,
several questions that explored the SME business strategy lead
up to a final funneled question, which asked the respondent
whether or not their business had adopted e-commerce. Depending
on this response, the subject was directed to a final series of
motivational statements to be rated on five-point Likert-type
rating scale from a strongly agree value of five to strongly
disagree value of one.
Field Procedures
A cover letter along with a postage-paid return envelope
was included with each survey. The cover letter explained the
objectives of the study, and that a graduate student of Central
Michigan University is conducting the study as part of the
student’s completion of degree requirements. The survey was
mailed to 572 members of the Keweenaw Peninsula Chamber of
Commerce, a public mailing list available on the Keweenaw
Peninsula Chamber of Commerce website
20
(http://keweenaw.org/index.php?page=current_members). The
Keweenaw Peninsula Chamber of Commerce membership encompasses a
rural tri-county area of Houghton, Keweenaw and Baraga counties
of the Upper Peninsula of Michigan. The survey materials were
included with the March issue of the Chamber’s monthly
newsletter. This inclusion in the organizational newsletter
helped lend additional credibility to the research survey and
encourage member response.
Data Collection and Recording Procedures
Surveys were returned to the researcher in the provided
self-addressed envelopes. The response rate to the survey was
8.4% - 48 of the 572 SME businesses returned completed surveys.
All five interviews were arranged and conducted by the
researcher.
Data Processing and Analysis Procedures
The survey responses were analyzed using descriptive
statistics, such as the mean, mode, median, and percentages.
Analysis primarily focused on the univariate distribution of
responses, while also making some bivariate and multivariate
analysis as appropriate. Analysis of the central tendency of
variables affecting the resistance to or adoption of e-commerce
were at the core of this study. Respondents indicated on a
five-point Likert-type scale, the level of importance of each
listed motivational item with regard to its influence on their
21
decision to adopt or not adopt e-commerce practices. Each group
of motivational factors, for adopters or non-adopters, were
rated by their mean importance scores to provide a method of
comparison for analysis. Tables were used to illustrate each set
of motivational factors and their importance rating.
Responses to the questions regarding firm demographics,
business owner characteristics and business strategies were
represented in percentages for ease of analysis. Bar and line
graphs and charts were used to illustrate results and to provide
for easy comparison and analysis of results. Some of these
characteristics were discussed in terms of their mode and median
scores, which allowed for further comparison and analysis.
The results of the personal interviews were also discussed
in terms of either their support of or contradiction to the
survey results and existing literature.
Methodological Assumptions
Respondents were capable of reading and understanding all
survey questions and instructions.
Respondents answered all questions honestly and to the best
of their ability.
The survey and interview process was assumed reliable, as
all responses were either anonymous or voluntarily identified.
22
Methodological Limitations
The survey sample was limited by the population size and
rural geography.
23
Chapter IV: Findings
The results of this study including the survey and
interview questions are discussed in this section. The survey
questionnaire and interview questions are presented in Appendix
A.
As stated earlier, the survey was composed of several
factual demographic questions regarding the size and market
reach of the SME followed by several questions concerning
characteristics of the business owner/manager such as age,
gender, leadership style and educational level. Next, several
questions that explore the SME business strategy lead to a final
funneled question, which asked the respondent whether or not
their business had adopted e-commerce. Depending on this
response, the subject was directed to a final series of
motivational statements to be rated on five-point Likert-type
rating scale from a strongly agree value of five to strongly
disagree value of one.
Of the 572 chamber of commerce members who received the
survey, 48 respondents completed and returned the survey
providing a credible 8.4% response rate. Of the 48 respondents,
26 identified themselves as adopters of e-commerce practices
while the remaining 22 identified themselves as non-adopters of
e-commerce.
24
Five SME owners/managers were interviewed for the study. Of
the five SMEs, four had adopted e-commerce practices. Two of the
four SMEs were retail oriented businesses, one a non-profit
service organization and the other a self-described technology
service business developing software applications to meet the
needs of large engineering, manufacturing and industrial
customers. The non-adopter of this group was a manufacturing
company with the largest number of employees and the highest
annual revenue of this interview group.
What are the motivational factors associated with a SMEs
adoption of e-commerce strategies?
Objective one of this study questioned what are the
motivational factors associated with SME’s adoption of e-
commerce. The survey included nineteen specific e-commerce
motivational factors drawn from existing research. These
nineteen factors were randomly listed with a Likert-type rating
scale with the following associated values:
Strongly Agree = 5 points
Agree = 4 points
Neutral = 3 points
Disagree = 2 points
Strongly Disagree = 1 point
Appendix B Table 1 lists the motivational factors in the
order of their importance or mean point scores. Each factor
score was determined by multiplying the number of respondents (f
25
or frequency) to that factor rating by the points (X = points)
for that rating. For example, 13 (f) respondents rated the
first factor as strongly agree or 5 points (X) providing a score
of f(x) = 13(5) = 65. The total rating scores for each factor
were then divided by the number of respondents to provide the
mean or average rating score for that particular factor. Based
on these mean scores, each motivational factor was listed in
order of importance.
Marketing and Customer Service
As illustrated in Appendix B Table 2, the five most
important motivational factors affecting the adoption of e-
commerce are to enhance company image/brand, improve
communications with customers, distribute product/service
company information, provide or improve customer support, and
identify new markets or customers. All of these factors are
marketing or customer service related.
These findings are consistent with the existing research
literature analyzing motivational factors. SMEs notably concern
themselves with customer service and the need to market their
enterprise to as wide an audience as possible. E-commerce
provides this opportunity at an affordable cost to most SMEs.
A surprising outcome of this study is the comparatively
lower rating given to motivational factors associated with
profitability. Although still within a mean rating of plus
26
four, suggesting that they are motivational factors in the
adoption of e-commerce, their comparative rating placed them at
a lower rating then the predominant marketing factors. It
appears that SMEs are primarily motivated to market their
business and provide customer service, while profitability
becomes a secondary factor and perhaps a hopeful outcome to
effective marketing and customer outreach.
This result was also evident in the interviews conducted.
All four SMEs that had adopted e-commerce practices responded
that one of their primary reasons for adopting e-commerce was to
provide product and company information to potential and
existing customers. Specific responses to the initial interview
question, what are the primary reasons that you chose to adopt
e-commerce practices, focused on customer outreach or marketing.
Included in these responses were, the need to educate the buyer,
attract customers to the (geographical) area, provide customer
service and support, and to reach customers internationally.
Marketing outside of the geographical region was a common theme
of these rural based SMEs.
The technology service company emphasized that e-commerce
has allowed their offices to physically remain in a rural
setting. Their capacity to communicate with customers, provide
training, and analyze customer needs and or concerns online has
allowed them to develop relations with customers worldwide. This
27
SME manager emphasized that e-commerce practices are an absolute
necessity to their business, “It levels the playing field for us
in our market of software development and service”. This twelve-
year old business has grown from a small cluster of engineers to
a staff of over 20 and an annual revenue exceeding five million.
Profitability and Research
Although not yet selling online, the sports retailer does
have a web site that emphasizes exposure of its business to
customers and advertises sports events that link to the
business. This SME owner utilizes e-commerce for purchasing and
inventory control access. This business does see their current
use of e-commerce as a method of reducing both administrative as
well as shipping costs by limiting in-store inventory. Their
online access allows them to order inventory as needed for
customers.
The non-profit organization’s manager stated that next to
providing information, resources and referrals to the public and
other agencies, another primary reason for their use of
e-commerce is to access potential funding sources (grants,
foundations, etc.) through online prospect research.
Although survey findings on the motivational factors behind
adoption of e-commerce in this study are consistent with the
literature, the SME interviews helped to provide additional
28
interpretation of the nuances and exceptions to data that does
not fall directly inline with expected outcomes.
What are the motivational factors associated with a SMEs non-
adoption of e-commerce strategies?
Objective two of this study questioned what are the
motivational factors associated with SME’s non-adoption of e-
commerce. The survey included ten specific e-commerce
motivational factors drawn from existing research. These ten
factors were randomly listed with a Likert-type rating scale
with the following associated values:
Strongly Agree = 5 points
Agree = 4 points
Neutral = 3 points
Disagree = 2 points
Strongly Disagree = 1 point
Appendix B Table 3 lists the motivational factors in the
order of their importance or mean point scores. Each factor
score was determined by multiplying the number of respondents (f
or frequency) to that factor rating by the points (X = points)
for that rating. For example, 13 (f) respondents rated the
first factor as strongly agree or 5 points (X) providing a score
of f(x) = 13(5) = 65. The total rating scores for each factor
were then divided by the number of respondents to provide the
mean or average rating score for that particular factor. Based
on these mean scores, each motivational factor was listed in
order of importance.
29
The five most important motivational factors affecting the
non-adoption of e-commerce are that, e-commerce is not a
priority to our business at this time, an unwillingness to make
the change at this time, a lack of knowledge or expertise with
technology, a lack of awareness of benefits from e-commerce, and
the resistance by business employees.
Responses to this portion of the study’s survey were not as
the researcher expected. Reviewing the mean scores of these
motivational factors places the validity of this portion of the
survey under scrutiny. Only one motivational factor rated a mean
importance rating above 3 points suggesting that the other nine
motivational factors had little to no bearing on a firm’s non-
adoption of e-commerce. An explanation for this is that the
factors listed in this study’s survey are simply not
motivational factors affecting rural SMEs’ decision not to adopt
e-commerce. The following voluntary comments left on surveys
from non-adoption respondents are worth noting here:
1. “What about the option of e-commerce not being conducive to
our line of business?”
2. “As a health care provider at the one on one level with the
patient where services are rendered I’m not convinced after
35 years of doing what I do that the quality will be
better.”
30
3. “We cannot sell over the internet as we are bound to a
geographic area by franchise agreements. We do use e-mail
for customers contact, orders, etc. We also order from
suppliers online.”
4. “Do not need E-commerce at this time.”
These comments suggest that respondents questioned the
factors listed for non-adoption since each comment appears to
offer another perspective for consideration, namely that of e-
commerce not being conducive to their type of business.
Information gathered in the interview conducted with the
SME manager whose business has not adopted e-commerce further
supports the above analysis. This manager agreed with only two
factors as motivations for not adopting e-commerce, e-commerce
is not a priority to our business at this time and a lack of
awareness of benefits of e-commerce, which are responses
consistent with the final mean ratings.
Also worth noting from this interview were the primary
reasons he stated for not adopting e-commerce. “There are no
indicators that our customers demand e-commerce. We respond to
customer demands. We are a customer focused manufacturer.” This
business manager also seems to be suggesting that, like the
observation above, e-commerce is not conducive to his firm’s
type of business.
31
What affect do the personal characteristics of a SME business
owner/manager have on a SMEs’ decision to adopt e-commerce?
Business owner/manager characteristics gathered for this
study included gender, age, educational level and management
style.
Gender, Age and Educational Level
Figure 1 illustrates the gender differences between
adopters and non-adopters. Males dominate total respondents by a
2:1 ratio. For adopters this remains a consistent 2:1 male to
female ratio but changes when we look at non-adopters. Males
exceed females by a nearly 3:1 ratio, suggesting that more of
the surveyed women were adopters of e-commerce than were men.
Considering non-adopters further in Table 1, findings show
that the median and mode age range for female non-adopters is
<45 years and the median educational level is college graduate.
Although the median educational level for the males is also
college graduate (and a mode of post-graduate level), the age
disparity shows up in the median age range, which is 55-64 years
of age. Figure 2 further illustrates this increase in age range
with non-adopters versus adopters.
The manager of the manufacturing company and only non-
adopter of the interviews conducted, stated that perhaps age was
a factor in non-adoption, regardless of his educational level.
His age, stated as between 45-54, reflects a generation
32
Figure 1: Gender of Business Owners/Managers
0%
20%
40%
60%
80%
Male
Female
Male 65% 72%
Female 35% 28%
AdoptersNon-
Adopters
Figure 2: Age of Business Owners/Managers
0%
5%
10%
15%
20%
25%
30%
35%
40%
Under 45 45-54 55-64 65 and
over
Adopters
Non-Adopters
33
Table 1: Median/Mode Age and Educational Levels of Non-Adopters
Ed. Level M F Total Age M F Total
< HS graduate 0 0 0 <45 2 3 5
HS graduate 2 1 3 45-54 4 1 5
Some College 4 1 5 55-64 7 1 8
College Graduate 4 2 7 >65 3 1 4
Post College Graduate 5 2 7
Totals 16 6 22 16 6 22
Overall Median Ed. Level = College Graduate Overall Median and Mode Age Range = 55-64
Mode and Median Age for Female Non-Adopters = <45 Median Ed. Level for Female & Male Non-Adopters = College Graduate
Mode and Median Age for Male Non-Adopters = 55-64
Table 2: Median/Mode Age and Educational Levels of Adopters
Ed. Level M F Total Age M F Total
< HS graduate 0 0 0 <45 3 3 6
HS graduate 0 0 3 45-54 7 2 9
Some College 4 1 5 55-64 4 2 6
College Graduate 7 5 12 >65 3 2 5
Post College Graduate 6 3 9
Totals 17 9 26 17 9 26
Overall Median & Mode Ed. Level = College Graduate Overall Median and Mode Age Range = 45-54
Median Age for Female Adopters = 45-54 Mode and Median Age for Male Adopters = 55-64
Median & Mode Ed. Levels for Female & Male Adopters = College Graduate
34
sandwiched between past methods of conducting business and the
newer progressive, fast-paced advances in computer technology.
Figure 3 as well supports this analysis of education among
non-adopters reaching college graduate and post-graduate levels
regardless of gender.
Considering adopters in Table 2, findings show that the
median age range for female adopters of e-commerce is 45-54
consistent with the overall age range for adopters. Worth noting
is the fact that the <45 mode age range of female adopters was
consistent with the female non-adopters.
The median and mode educational levels for both males and
females are college graduate, followed very closely again by
post-graduate education levels. The male and female adopters
are very similar in their characteristics suggesting that age,
gender and educational level may not have as much as an impact
on adoption of e-commerce as it does with non-adoption, where
age and gender were potential factors.
35
Figure 3: Educational Level of Business
Owners/Managers
0%
10%
20%
30%
40%
Adopters 0% 0% 31% 23% 19%
Non-Adopters 0% 14% 22% 32% 32%
Less than
high school
High school
graduateSome college
College
graduate
Post
graduate
Leadership Management Style of a SME Business Owner/Manager
As Figure 4 illustrates, leadership management style as
this study has defined it, appears to have an influence on
adoption of e-commerce, and a potential influence on non-
adoption as well. The majority of both non-adopters and
adopters described themselves as having a participative
management style. The adopters show a slight edge over non-
adopters, expected from this study. The lack of a significant
difference is surprising. Of significance is the fact that non-
adopters represent more of the other management styles, which
would help to explain their non-adoption of e-commerce. An
autocratic management style is typically less open to change and
innovation and the laissez-faire style may just not care to make
the change.
36
Figure 4: Leadership Management Style of Business Owner/Manager
0% 20% 40% 60% 80% 100% 120%
Participative
Autocratic
Laissez-Faire
Non-Adopters 86% 9% 5%
Adopters 96% 4% 0%
Participative Autocratic Laissez-Faire
Information gathered in the interviews with owners/managers
of SMEs may support the fact that management style may be a
greater determinant as a business grows and has more employees
to consider in the decision making process.
The two retail owners with fewer than five employees both
described themselves as practicing a participative management
style, but when asked about their personal style or strategy
that motivated them to adopt e-commerce, their response was not
about management style, but about their personal passion to
succeed. The owner of the small sporting goods retail store saw
his personal passion for his work and its focus on recreation
and the outdoors as driving him to succeed. He described e-
commerce as something that his business just needs to do in
order to grow and stay profitable. The owner of the retail art
37
gallery responded much the same way. He emphasized that his
business approach emphasizes a positive can-do spirit. He
constantly tells himself - ”It’s going to work”! There is no
room for negativity or doubt.
On the other hand, the two business managers of larger
staffed businesses, both service related, did empathize with the
significance of management style. The director of the non-profit
that employees 10-19 employees discussed the importance of
participative management and the extent to which he must depend
on the skills and opinions of his staff and other organizations
he must collaborate with. The CEO of the technology services
company employing 20-49 also discussed collaborative management
style that he and his colleagues practice. He called it an
“open-book” style of management with regular effective
communication among staff at every level.
What affect does the size and business strategy of a SME
business have on its decision to adopt e-commerce?
Business size, Sector and Market Scope
Firm size in number of employees of both adopters and non-
adopters of e-commerce appears evenly split and even shows a
comparatively similar decline as employee size increases. The
greatest degree of disparity appears at the 5-9 and then again
at the 50-99 employee sizes.
38
As illustrated in Figure 5, other and retail market sectors
comprise the majority of adopter SMEs in this study. Upon
further examination of these firm surveys, a relationship
between firm size in number of employees and annual revenue
develops.
The results charted in Figures 6-8 are made clearer when
the median and mode scores of the two sectors are considered.
The combined results for the two majority sectors are a mode
employee range of 1-4 employees, a medium and mode annual
revenue of 1-4.9 million and a median regional market scope.
Figure 7 illustrates this peak in adopters as 31% of the
total adopter SMEs as represented primarily by the retail and
other sectors. This result opposes existing literature on SME
adopters, that the larger a firm is the more likely it is to
adopt e-commerce. Some support for this assumption is evident
in the slight rise occurring at the 50-99 employee range,
reflecting other firms identified as publishing and healthcare.
In Figure 7 and 8 the literature clearly supports small
firms being the more likely non-adopters. Figure 7, line chart
illustrates as non-adopters decrease, firm size increases. The
trend in Figure 8 shows a similar gradual decline in non-
adoption as revenue size increases.
39
Figure 5: Business Sector of SMEs
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Agric./Forestry
Construction
Manufacturing
Services
Retail
Technology
Transportation
Wholes./Dist.
Other
Non-Adopters 0% 0% 14% 36% 18% 0% 0% 0% 32%
Adopters 0% 4% 4% 12% 42% 7% 4% 0% 27%
Agric./Fo
restry
Construc
tion
Manufact
uringServices Retail
Technolo
gy
Transport
ation
Wholes./
Dist.Other
Figure 6: Market Scope of SMEs
0% 10% 20% 30% 40% 50% 60%
Local
Regional
National
International/Global
Non-Adopters 50% 36% 5% 9%
Adopters 23% 35% 23% 19%
Local Regional National International/Global
40
Figure 7: Firm Size in Number of Employees
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Adopters 31% 23% 15% 8% 19% 0% 4%
Non-Adopters 41% 14% 18% 14% 9% 0% 4%
One - four Five - nine Ten - 19 20 - 49 50 - 99 100 - 249 250 - 500
Figure 8: Firm Size in Annual Revenue
0%
5%
10%
15%
20%
25%
30%
35%
Adopters 19% 27% 11% 27% 8% 8%
Non-Adopters 18% 27% 32% 14% 0% 9%
Under
$100,000
$100,000-
$499,000
$500,000-
$999,000
$1,000,000-
$4,999,999
$5,000,000-
$9,999,999
$10,000,000
or greater
41
Business Strategies
Consistent with the literature and the expectations of the
researcher, Figure 9 shows that adopters surpassed non-adopters
in both the analyzer and prospector strategies. SME adopter
firms expected to be innovative entrepreneurial business
strategists, analyzing the markets maintaining a strong position
in an already successful product while expanding into new and
related product ideas and/or prospectors, focused on developing
new products and markets. What surprised the researcher was the
fact that analyzers surpassed prospectors. This may be
attributable to the age of a firm and the length of time it has
practiced e-commerce. A younger adopter SME is more likely to be
a prospector strategist and a longer established adopter an
analyzer.
Non-adopters were spread rather evenly across all of the
strategy types, with analyzer highest. Consistent with non-
adopters being more cautious and less innovative than adopters
27% non-adopters versus 0% adopters identified as reactors,
lacking a clearly defined strategy.
In Figure 10, adopter new product strategy of first to
market followed by in step with competitors was no surprise to
the researcher. As stated above, such strategy is consistent
with the innovative entrepreneurial approach expected of adopter
SMEs. The classic example of this is the technology service SME
42
interviewed for this study. At twelve years old, this adopter
company continues to utilize a prospector strategy and first to
market approach to staying ahead of the competition. This firm
has also developed strategic alliances with other firms in
various sites internationally. All four of the adopter
interviewees for this study identified as first to market. Two
identified as analyzers and two as prospectors consistent with
the majority responses for adopter firms.
Of particular notice with respect to non-adopters, was the
majority who identified as in step with competitors, while at
the same time identifying as reactors – a seeming contradiction.
It may well be that the non-adopters surveyed for this study do
see themselves as in step with their competition and, as stated
earlier in the findings, think that their form of business just
isn’t conducive to adoption of e-commerce.
The non-adoption manufacturing sector SME interviewed for
this study is just that, an analyzer and in step with
competitors. According to this business manager, his company is
maintaining a strong position in a “niche” market with a finite
customer base. Their emphasis is on reaching existing and new
customers with quality personal communication. Also as an
analyzer, he describes his company as expanding into new and
related products based entirely on the customer’s demand.
43
Figure 9: Business Strategies of SMEs
0% 10% 20% 30% 40% 50% 60%
Defender
Prospector
Analyzer
Reactor
Non Adopters 14% 23% 36% 27%
Adopters 8% 35% 57% 0%
Defender Prospector Analyzer Reactor
Figure 10: New Product Strategy of SMEs
0% 10% 20% 30% 40% 50% 60% 70% 80%
First to Market
Early Follower
In step with
competitors
Late Follower
Non Adopters 14% 4% 68% 14%
Adopters 54% 15% 27% 4%
First to Market Early FollowerIn step with
competitorsLate Follower
44
Chapter V: Summary, Conclusions and Recommendations
Summary
The response rate of 8.4% for this study was above the
average for most study rates in the literature. The motivational
factors for adopters used in this survey were an effective
indicator for assessing and rating factors that most influenced
SME adopters of e-commerce. The results indicate a distinct
priority of motivational factors at work influencing the
decision of SMEs to adopt e-commerce.
The survey tool used to measure motivational factors
influencing non-adoption of e-commerce did not appear to serve
as a strong indicator of motivators. The absence of outstanding
mean scores to illustrate a strong influence might suggest that
the factors used were inappropriate. Other explanations may
include the fact that non-adopters are simply not aware of the
value that e-commerce has for them or an understanding of the
tools that the web, internet and e-commerce can provide them.
An analysis of business owner/manager’s personal
characteristics also lacked strong scores to indicate an
influence on adoption of e-commerce by SMEs. One observation
consistent with the literature was the higher age-range and male
gender of the majority of non-adopters. Also worth noting were
the young age of the majority of female non-adopters, which
might suggest to this researcher that these women may just be
45
entering positions of SME ownership and management and have not
yet considered e-commerce as a business strategy.
A look at SME’s business strategies provided a clear
relationship between analyzer and prospector strategies and a
SME adoption of e-commerce. Along with this indicator,
businesses also rated their business as first to market or in
step with competitors. Business strategies, consistent with the
literature, are a strong indicator of adoption of e-commerce.
Interviews were of special value to this study lending
either supportive documentation or insight into apparent
disparity or contradictions within the findings. A common theme
throughout the interviews was the obvious need for SMEs to
market beyond their geographical region or local market. Survey
results also supported this finding.
This study provides further insight as to the motivational
factors at work for small to medium enterprises and their
adoption of e-commerce.
Conclusions
The purpose of this project was to investigate motivational
factors behind adoption of e-commerce as well as the influence
that business characteristics have on adoption of e-commerce by
rurally located small to medium enterprises. Although research
has been done on assessing motivational factors of adopters,
very little research has been conducted that provides insight
46
into the factors that affect non-adoption of e-commerce. This
study sought to lend further research findings to this
particular area of interest.
The information gathered in this study with regard to
adopter motivation is consistent with the literature
investigating SMEs and larger firms. Consistently revealed in
this study and the existing literature is that marketing and
customer service is the primary motivation for adoption of e-
commerce.
Although the personal characteristics of business owners
assessed in this study did not appear to be strong indicators of
adoption versus non-adoption, the characteristics of the
businesses themselves did. Business size and strategy have a
distinct influence on adoption of e-commerce.
The motivational factors posed in this study and their
influence on non-adopters lacked the strong evidence needed to
suggest a strong correlation. Fortunately, comments left by non-
adopter respondents and interviewee will provide direction to
further studies in this area.
Recommendations
The results of this study provide clear evidence of the
motivational factors at work in the adoption of e-commerce.
Small business associations for economic development that
service rural SMEs can utilize this information to improve the
47
counseling and educational programming they provide to SMEs.
Associations should enlist business owners who have adopted e-
commerce as resource people and community educators. Their
first-hand experience can reach non-adopters with a better
understanding of how e-commerce can benefit their business
strategies with regard to marketing, customer service, and
profitability.
Business education in secondary schools and higher
education will need to build strong e-commerce programs for
students to better prepare them for the business world.
E-commerce is here to stay. It is the marketplace of the future
and it is inevitable that nearly all business sectors will need
to utilize it whether through business to business or business
to customer communications and transactions.
Further study is needed with regard to SMEs and adoption of
e-commerce. This researcher has identified the need for further
investigation into the barriers to adoption of e-commerce.
Examination of non-adopters perceptions of e-commerce, what it
is and what are its benefits, warrants further study. The most
appropriate method for investigation of this issue may well be
through focus groups and personal interviews of a larger segment
of this rural population.
48
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50
APPENDICES
Appendix A – Survey and Interview Questions
Appendix B – Survey Results, Motivational Factors
Page 1
Electronic Commerce - Small to Medium Enterprises
Central Michigan University MSA Graduate Research Project, T. Anderson
Please select only one response to each of the following questions. Thank you for your participation.
1. What is the employee size of your business?
2. In what year was your business founded?
3. In what sector would you classify your business?
4. What is the market scope or reach of your business?
5. What is your business' annual revenue?
6. What is the age of your business owner/manager?
7. What is the gender of your business' owner/manager?
8. What is the educational level of your business' owner/manager?
9. What is the leadership/management style of your business' owner/manager?
1-4
5-9
10-19
gfedc
gfedc
gfedc
20-49
50-99
100-249
gfedc
gfedc
gfedc
250-500 gfedc
Agriculture/Forestry
Construction
Manufacturing
gfedc
gfedc
gfedc
Services
Retail
Technology
gfedc
gfedc
gfedc
Transportation
Wholesale/Distribution gfedc
gfedc
Other (please specify)
gfedc
Local
Regional gfedc
gfedc
National
International/Global gfedc
gfedc
Under $100,000
$100,000 - $499,000 gfedc
gfedc
$500,000 - $999,000
$1,000,000 - $4,999,999 gfedc
gfedc
$5,000,000 - $9,999,999
$10,000,000 or greater gfedc
gfedc
Under 45
45 - 54 gfedc
gfedc
55 - 64
65 and over gfedc
gfedc
Female
Male gfedc
gfedc
Less than high school graduate
High school graduate
Some college
gfedc
gfedc
gfedc
College graduate
Post graduate degree gfedc
gfedc
Participative (This leader includes one
or more employees in decision making, but
still maintains the final decision making
authority.)
gfedc Autocratic (This leader makes
decisions without consulting with
employees.)
gfedc Laissez-faire (This leader is "hands-
off" allowing employees to make their own
decisions, although as leader they are still
responsible for the outcome.)
gfedc
Please turn this page over to continue and thank you for your participation.......
Page 2
Electronic Commerce - Small to Medium Enterprises10. How would you describe your overall business strategy?
11. When it comes to introducing new products, is your business:
12. Has your business adopted E-commerce/E-business as part of its business strategy? (E-business is defined as: Business to business (B2B) and/or business to customer (B2C)commercial transactions via the Internet.)
13. Our business chose not to adopt e-commerce because (of):
Defender (focus on maintaining position in established
market, little attention to new product development)
Prospector (focus on growth through the development of new
products and markets)
gfedc
gfedc
Analyzer (focus on maintaining a strong position in a core
product, while also expanding into new & related product/markets)
Reactor (focus on reacting to the environment; no clearly
defined strategy)
gfedc
gfedc
First to market
Early follower gfedc
gfedc
In step with competitors
Late follower gfedc
gfedc
*
Yes, continue to question #14 on the next page (skip question #13)
No, continue to question #13 below (skip question #14) gfedc
gfedc
* Strongly Agree Agree Neutral Disagree Strongly Disagree
A lack of knowledge or
expertise with technologynmlkj nmlkj nmlkj nmlkj nmlkj
An unwillingness to make
the change at this timenmlkj nmlkj nmlkj nmlkj nmlkj
The concerns with security
and privacy of online
technology
nmlkj nmlkj nmlkj nmlkj nmlkj
The cost of technology
(computers, software,
etc.)
nmlkj nmlkj nmlkj nmlkj nmlkj
The resistance by
business employeesnmlkj nmlkj nmlkj nmlkj nmlkj
A lack of interest to
invest the time and effort
to make the change
nmlkj nmlkj nmlkj nmlkj nmlkj
A lack of awareness of
benefits from e-
commerce
nmlkj nmlkj nmlkj nmlkj nmlkj
The cost of infrastructure
(internet and broadband
access)
nmlkj nmlkj nmlkj nmlkj nmlkj
E-commerce is not a
priority to our business at
this time
nmlkj nmlkj nmlkj nmlkj nmlkj
The resistance by
business ownernmlkj nmlkj nmlkj nmlkj nmlkj
Page 3
Electronic Commerce - Small to Medium Enterprises14. Our business chose to adopt e-commerce in order to:
15. Thank you for your participation. Please feel free to leave any additional comments.
Strongly Agree Agree Neutral Disagree Strongly Disagree
Reduce advertising
expenses for traditional
media
nmlkj nmlkj nmlkj nmlkj nmlkj
Reduce shipping costs nmlkj nmlkj nmlkj nmlkj nmlkj
Find information about
new sources of supplynmlkj nmlkj nmlkj nmlkj nmlkj
Find information on
industry or other
economic data
nmlkj nmlkj nmlkj nmlkj nmlkj
Enhance company
image/brandnmlkj nmlkj nmlkj nmlkj nmlkj
Generate sales leads nmlkj nmlkj nmlkj nmlkj nmlkj
Comply with
requirements of a large
customer or supplier
nmlkj nmlkj nmlkj nmlkj nmlkj
Increase net profit nmlkj nmlkj nmlkj nmlkj nmlkj
Gain an edge over
competitionnmlkj nmlkj nmlkj nmlkj nmlkj
Improve communications
with customersnmlkj nmlkj nmlkj nmlkj nmlkj
Improve marketing
intelligencenmlkj nmlkj nmlkj nmlkj nmlkj
Distribute product/service
company informationnmlkj nmlkj nmlkj nmlkj nmlkj
Improve communications
with channel/business
partners
nmlkj nmlkj nmlkj nmlkj nmlkj
Reduce direct costs of
creating product or
service
nmlkj nmlkj nmlkj nmlkj nmlkj
Identify new markets or
customersnmlkj nmlkj nmlkj nmlkj nmlkj
Provide or improve
customer supportnmlkj nmlkj nmlkj nmlkj nmlkj
Improve communications
with employeesnmlkj nmlkj nmlkj nmlkj nmlkj
Sell products online nmlkj nmlkj nmlkj nmlkj nmlkj
Reduce administrative
costsnmlkj nmlkj nmlkj nmlkj nmlkj
Appendix B, Table 1: Motivational Factors of Adoption of E-commerce
Mean
Score
Motivational Factors Strongly
Agree
f fx Agree f fx Neutral f fx Disagree f fx Strongly
Disagree
f fx
1 4.61 Enhance company
image/brand
5 17 85 4 8 32 3 1 3 2 0 0 3 0 0
2 4.54 Improve communications with
customers
5 15 75 4 10 40 3 1 3 2 0 0 1 0 0
3 4.50 Distribute product/service
company information
5 13 65 4 13 52 3 0 0 2 0 0 1 0 0
4 4.46 Provide or improve customer
support
5 14 70 4 10 40 3 2 6 2 0 0 1 0 0
5 4.38 Identify new markets or
customers
5 13 65 4 11 44 3 1 3 2 1 2 1 0 0
6 4.35 Generate sales leads 5 13 65 4 10 40 3 2 6 2 1 2 1 0 0
7 4.27 Improve marketing
intelligence
5 11 55 4 12 48 3 2 6 2 1 2 1 0 0
8 4.20 Increase net profit 5 8 40 4 17 68 3 1 3 2 0 0 1 0 0
9 4.15 Gain an edge over competition 5 10 50 4 13 52 3 1 3 2 1 2 1 1 1
10 4.15 Sell products online 5 12 60 4 6 24 3 5 15 2 4 8 1 1 1
11 3.81 Find information on industry
or other economic data
5 8 40 4 11 44 3 2 6 2 4 8 1 1 1
12 3.81 Improve communications with
channel/business partners
5 6 30 4 13 52 3 3 9 2 4 8 1 0 0
13 3.38 Find information about new
sources of supply
5 4 20 4 8 32 3 9 27 2 4 8 1 1 1
14 3.23 Reduce advertising expenses
for traditional media
5 5 25 4 8 32 3 4 12 2 6 12 1 3 3
15 3.15 Improve communications with
employees
5 4 20 4 5 20 3 10 30 2 5 10 1 2 2
16 3.04 Reduce direct costs of creating
product or service
5 4 20 4 4 16 3 8 24 2 9 18 1 1 1
17 2.96 Comply with requirements of
a large customer or supplier
5 2 10 4 7 28 3 9 27 2 4 8 1 4 4
18 2.85 Reduce administrative costs 5 2 10 4 6 24 3 8 24 2 6 12 1 4 4
19 2.58 Reduce shipping costs 5 1 5 4 4 16 3 7 21 2 11 22 1 3 3
Appendix B, Table 2: Motivational Factor Areas
Mean Score Motivational Factors Marketing Communication
Customer Service
Profit Research
1 4.61 Enhance company image/brand
2 4.54 Improve communications with customers
3 4.50 Distribute product/service company information
4 4.46 Provide or improve customer support
5 4.38 Identify new markets or customers
6 4.35 Generate sales leads
7 4.27 Improve marketing intelligence 8 4.20 Increase net profit
9 4.15 Gain an edge over competition
10 4.15 Sell products online
11 3.81 Find information on industry or other economic data 12 3.81 Improve communications with channel/business partners
13 3.38 Find information about new sources of supply 14 3.23 Reduce advertising expenses for traditional media
15 3.15 Improve communications with employees
16 3.04 Reduce direct costs of creating product or service
17 2.96 Comply with requirements of a large customer or supplier
18 2.85 Reduce administrative costs
19 2.58 Reduce shipping costs
Appendix B, Table 3: Motivational Factors of Non-Adoption of E-commerce
Mean
Rating
Motivational Factors Strongly
Agree
5 points
f fx Agree
4 pts
f fx Neutral
3 pts
f fx Disagree
2 pts
f fx Strongly
Disagree
1 pts
f fx
1 4.00 E-commerce is not a priority to
our business at this time
5 8 40 4 8 32 3 5 15 0 0 0 1 1 1
2 3.00 An unwillingness to make the
change at this time
5 1 5 4 8 32 3 7 21 2 2 4 1 4 4
3 2.95 A lack of knowledge or
expertise with technology
5 6 30 4 1 4 3 6 18 2 4 8 1 5 5
4 2.86 A lack of awareness of benefits
from e-commerce
5 3 15 4 5 20 3 4 12 2 6 12 1 4 4
5 2.82 The resistance by business
employees
5 0 0 4 2 8 3 7 21 2 9 8 1 4 4
6 2.68 The concerns with security and
privacy of online technology
5 1 5 4 4 16 3 8 24 2 5 10 1 4 4
7 2.64 A lack of interest to invest the
time and effort to make the
change
5 1 5 4 3 12 3 9 27 2 5 10 1 4 4
8 2.59 The cost of technology
(computers and software, etc.)
5 0 0 4 6 24 3 6 18 2 5 10 1 5 5
9 2.32 The resistance by business
employees
5 0 0 4 2 8 3 7 21 2 9 8 1 4 4
10 2.14 The cost of infrastructure
(internet and broadband access)
5 0 0 4 2 8 3 5 15 2 9 18 1 6 6
