Academic journal article Business Management and Strategy

Empirical Study of Theory of Reason Action (TRA) Model for ICT Adoption among the Malay Based SMEs in Malaysia

Academic journal article Business Management and Strategy

Empirical Study of Theory of Reason Action (TRA) Model for ICT Adoption among the Malay Based SMEs in Malaysia

Article excerpt

Abstract

Information and communication technology (ICT) plays very crucial role to enhance sales, expand business, reduce operating cost, reduce operating procedure, improve product or company image and easy access for product information in today's competitive world. Although, the intention to use ICT is significantly depends on the attitude and social norms of executives towards ICT, especially in SME level. The main objective of the present article is to examine the determinants of ICT adoption among Malay based SMEs in Malaysia. Theory of Reasoned Action (TRA) has been employed to measure main factors that have effect on ICT adoption. The paper is based on review of literature and primary data. Data were gathered through questionnaire survey of 199 SMES in Malaysia. Hypothetical relationships were identified using multiple regression analysis in this research. The findings of this study are discussed and conclusion and policy implication are also addressed here.

Keywords: ICT adoption, Malaysia, SMEs, Percept usefulness theory

1. Introduction

SMEs are playing important role in every economy. Start from bigger economy like, US or China to any small economy everywhere SMEs have been playing an important role in economic reform and development and, to some extent, have become a growth engine in the economy (Wang, 2009). Alike other country, SMEs are playing very pivotal role for the economic development in East Asia, like Malaysia, Singapore etc (Harvie, 2004). Considering the importance, this research intended to examine the determinants of ICT adoption among the Malay based SMEs in Malaysia.

Malaysia is one of the multiracial country in the world, citizen like Malay, Chinese and Indians are three major races lives peacefully (Goh and Parasakthi, 2001). Malaysian progress is one of milestone in the world due to the unique relationships with all three races. Chinese are more aggressive in business, where as Malay entrepreneurs are not that level and inexperienced, less involvement in business, late participation in business, are not creative and innovative in nature. Malaysian business as well as SMEs sectors is dominating by Chinese ethnic group which is well researched (Jesudason, 1997, Nagata, 1974). Actually, in Southeast Asia the Chinese ethnic has strong network, which allows Malaysian Chinese ethnic group to added leverage in the business arena (Harianto, 1999). Unfortunately, it leads to unsustainable economic development among the different ethnic groups in Malaysia. Hence, this study focus on ICT adoption within Malay based SMEs.

The objective of this research is to review very recent research in this area and to examine the determinants that affect ICT adoption among Malay based SMEs using primary data. The author considered ICT as an important instrument to achieve competitive advantages. There are number of research shown empirical evidence that ICT brought numerous benefits for a business corporation. The current study will show how these benefits works as subjective norms and directly influence on executives intention to adopt ICT. The paper will also urge that the attitude of executives and subjective norms jointly influence on ICT adoption within Malaysian SMEs.

In this paper we used theory of reasoned action to measure the determinants of ICT adoption. According to the theory, the intention of executives significantly depends on the subject norms and attitude of executives. Current research strongly urges that the prospect of ICT deeply the depends on the executives intention in the SMEs in Malaysia. The researchers collected data from 199 responds (executives of SMEs) and used regression analysis to explain the relation.

2. Evidence from Early Research

Small and medium sized enterprises known as the SMEs refers business entity whose employee numbers or annual sales turn-over falls under certain limitation. There is no unique definition or not possible to have a single definition of the term SME, since the term has been defined by the Government of each county based on their need. …

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