The Uptake of Electronic Commerce by Smes: A Meta Theoretical Framework Expanding the Determining Constructs of Tam and Toe Frameworks

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ABSTRACT

The world is flat with Electronic Commerce moving it into new terrains of information exchange and means of conducting business activities. The acceptance of Electronic Commerce as an IT infrastructure depends on the users' conscious assessment of the influencing constructs as could be depicted in Technology Acceptance Model (TAM), Theory of Reasoned Action (TRA), Theory of Planned Behaviour (TPB), Innovation Diffusion Theory (IDT), and Technology-Organization-Environment (T-O-E) model. The paper accused TAM and TPB of being traditional and utilitarian-based. Though TPB adds the constructs of perceived behavioural control and subjective norms to the original TAM's characteristic constructs of perceived usefulness (PU) and perceived ease of use (PEOU), both predominantly base analysis on attitudinal variables and view EC as purely productivity tool, communication mediator, or intelligent decision-making partners. Further, T-O-E model adds such descriptive constructs as firm's size, consumer readiness, trading partners' readiness, competitive pressure and scope of business operations. In order to make for better explanatory and predictive values, TAM need be integrated with other IT theories that incorporated decision-makers' social and idiosyncratic characteristics. Therefore, this paper reviews and synthesizes the constructs of these models and proposes an improved TAM using the T-O-E approach for ease of comprehension. The improved TAM and T-O-E discussed embodies more constructs than the original TAM, T-O-E, TPB, and IDT, leading to fourteen propositions to promote and facilitate future empirical enquiries on the subject matter. This paper adds to existing body of knowledge on IT acceptance behaviour and provides bases for more informed decision by offering such new constructs as company mission, individual difference factors, perceived trust, and perceived service quality. The proposed improved TAM and T-O-E Model of Innovation Adoption and Use combines the constructs to form a richer theoretical framework that guides the understanding, explanation and prediction of adoption and use behaviours of IT in an organized system.

INTRODUCTION

The Japanese experience gives empirical backing to 'small is beautiful. ' Previous studies (Adam et al, 1999; Machacha, 2002; Stanyon, 2004; Jutla et al, 2002) and recent ones (Federici, 2009; Shiau et al, 2009; Ramdani et al, 2009) show that Small and Medium Scale Enterprises (SMEs) are the bedrock for industrialization. SMEs are drivers of diversified socio-economic infrastructures in forms of employment creation, flexibility and innovations (Southwood, 2004; Mutula and Brakel, 2006). Approximately 80 percent of economic growth comes from SMEs (Jutla et al, 2002) and 99 percent of all businesses in North America and Europe are SMEs (Adam et al, 1999). Although no universally acknowledged definitions of SMEs exist, the commonest denominator in most definitions across countries is based on employment figures and perhaps sales volumes and fixed assets. SMEs employ less than 500 persons (OECD, 2004); the South African Act gave their estimate to be between 100 and 200 persons or a turnover rate of 5 million Rand, while micro enterprises have up to 5 employees (Gorden, 2003); and the Ministry of Trade of Egypt looks at them in terms of number of workers, fixed assets, and annual turnover (Rizk, 2004). However, governments and large corporations seemingly dominate the economies of many nations; yet the real driving engine of economic growth lies with the informal sector or SMEs (Muuka, 2002; Southwood, 2004; Zacharakis et al, 2000; Reynold et al, 2002). Perhaps this explains why many nations, especially Botswana, Japan, China, Taiwan, among others, promulgate measures to encourage (often in financial terms) the sector in this digital age. Even the South African Enterprise Development Fund (SAEDF) set up by grants from the United States Agency for International Development was specifically intended to aid private-sector development among SMEs in Southern African region. …