Các yếu tố ảnh hưởng đến sự chấp nhận mô hình thương mại điện tử phát triển cho các doanh nghiệp nhỏ và vừa ở việt nam

luận văn, khóa luận, chuyên đề, đề tài, báo cáo,

Thai Nguyen University

Socialist Republic of Vietnam

Southern Luzon State University Republic of Philippines

FACTORS AFFECTING THE ADOPTION OF E-COMMERCE MODEL DEVELOPED FOR SMALL AND MEDIUM ENTERPRISES IN viet nam

A Dissertation Presented to the Faculty of Graduate School Southern Luzon State University, The Philippines and Thai Nguyen University, Socialist Republic of Vietnam

In Partial Fulfillment

of the Requirements for the Degree Doctor in Management

By NGUYEN TIEN HUNG - FAT SLSU-DBA 6A (Hanoi)

May 2013

Abstract

E-commerce can be an important source of competitive advantage for most business organizations, especially small and medium enterprise sized (SMEs) This study examines the factors that influence e-commerce adoption in Vietnam SMEs

By studying the ecommerce model advantage and SMES‟ Readiness to Adopt, this study proposed and validated a predictive model

Developed from the technology acceptance model and other relevant researches in the area, the author identified six factors that influence electronic commerce adoption in VietNam as follows: Capacity of the firm to start e-commerce adoption; compatibility of e-commerce to the value, work practices, and technology at the firm; influence of managers on e-commerce adoption; effect of the ease of use on e-commerce adoption; effect of the usefulness on e-commerce adoption; and effect of effectiveness on e-commerce adoption

To validate the research model, 200 questionnaires were collected from 200 SMEs in HaNoi

TABLE OF CONTENTS

CHAPTER 1:1INTRODUCTION 1

1.1 Background of the Study 2

1.2 Statement of the Problems 5

1.3 Significance of the Study 5

1.4 Scope and Limitation 6

CHAPTER II: 7REVIEW OF RELATED LITERATURE 7

2.1 Internet 7

2.2 E-commerce 9

2.3 E-Commerce Models 12

2.4 Theory of Reasoned Action (TRA) 16

2.5 Technology Acceptance Model 18

2.6 Grandon and Perason's Model 20

2.7 Innovations Diffusion Theory (IDT) 23

2.8 Model of Factors Influencing Electronic Commerce Adoption and Diffusion in Small- & Medium-sized Enterprises 27

2.9 Model for Assessing E-commerce Success in SMEs 29

2.10 Conceptual Framework 33

CHAPTER III: 38RESEARCH METHODOLOGY 38

3.1 Research Design 38

3.2 Determination of sample size 38

3.3 Sampling design and techniques 39

3.4 Research instrument 39

CHAPTER IV:41 PRESENTATION, ANALYSIS AND INTERPRETATION OF

RESULTS 41

4.1 Respondents‟ profile 41

4.2 Factors afecting the adoption of e-commerce 45

4.3 Logistic Regression 55

CHAPTER V: 66SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 66

5.1 Summary of the findings 66

5.2 Conclusion 68

5.3 Recommendations 70

REFERENCES 71

QUESTIONNAIRE 73

LIST OF TABLES

Table 4.1: Descriptive analysis of the respondents

Table 4.2: Business areas

Table 4.3: Firms utilizing e-commerce and firms having a website Crosstabulation

Table 4.4: KMO and Bartlett's Test

Table 4.5: Rotated Component Matrix

Table 4.6: KMO and Bartlett's Test

Table 4.7: Rotated Component Matrix

Table 4.8: Reliability Statistics

Table 4.9: Item-Total Statistics

Table 4.10: Reliability Statistics

Table 4.11: Item-Total Statistics

Table 4.12: Reliability Statistics

Table 4.8: Reliability Statistics

Table 4.9: Item-Total Statistics

Table 4.10: Reliability Statistics

Table 4.11: Item-Total Statistics

Table 4.12: Reliability Statistics

Table 4.13: Item-Total Statistics

Table 4.14: Reliability Statistics

Table 4.15: Item-Total Statistics

Table 4.16: Reliability Statistics

Table 4.17: Item-Total Statistics

Table 4.18: Omnibus Tests of Model Coefficients

Table 4.19: Model Summary Table 4.20: Classification Table

LIST OF FIGURE

Figure 2.1: Internet model

Figure 2.2: B2B Business Model

Figure 2.3: B2C Business Model

Figure 2.4: C2C Business Model

Figure 2.5: C2B Business Model

Figure 2.6: Schematics of the theory of reasoned action (TRA)

Figure 2.7: Acceptance Model TAM (Davis 1989)

Figure 2.8: Research model (Grandon and Pearson, 2004)

Figure 2.9: The common characteristics of IT innovation that influence intended

Figure 2.10: Proposed Electronic Commerce Adoption Model for Small- and Medium-sized Enterprises

Figure 2.11: Proposed model for assessing e-commerce success in SMEs

Figure 2.12: Research model

Figure 4.1 Business areas

Figure 4.2 Business areas and firm utilize e-commerce

Figure 4.3: Number of the firms have internet

Figure 4.4:Research model after factor analysis

CHAPTER 1

INTRODUCTION

For recent decades, Information technology (IT) has been changing the world by significantly contributing to fasten the globalization process in which all competitors come to have equal opportunities in a flattened world as well as creating a real revolution in every field of science and life

The application of IT in production and business is not out of this trend either The concept of IT application in commercial activities, also known as e-commerce, came into the world and become a new trend E-commerce has been gradually replacing the old ways of doing business because of its variousprominent advantages, such as faster buying/selling procedure, lowered operational costs , more convenience for customers to place orders, increased efficiency with unlimited space and time properties, etc

However, for developing countries in general and for Vietnam in particular, commerce is a relatively new thing although the development of this trend have been taking place in both width and depth It has not actually been completed for this area

e-in State management The application e-in the enterprises as well as e-in the agencies and organizations is also at explorative level, to support the traditional business form or to combine these two forms with each other

In fact, many enterprises have applied and developed e-commerce and some of them have become good models in this area such as VIETGO, a pricing joint stock

company with e-commerce page www.vatgia.com; and Peaceoft solution company

with website www.chodientu.vn, etc…Despite its increased popularity, the

Firstly, we are in a transitional period from traditional business to e-commerce business method, so it is necessary to always make pragmatic and short-term comparison of the efficiency between these two methods

Secondly, there also requires a different and more intellectual way of looking at e-commerce In order to successfully apply and develop e-commerce, it is required that negative aspects such as a fraudulence, distrust and sabotage, etc are limitted by raising public awareness, developing firms‟ policy, executing management of ecommerce .These things, however, have been difficult to control because of the fast, powerful and high-tech characteristics of e-commerce

The development of e-commerce has happened in the same manner as the development of traditional commerce, in which the first step was unprompted as each individual, company, agency or organization realized its internal benefits then it became more advanced and multiform However, to expand and develop it to a high

level as well as to create real benefits for society, it needs an intervention of “State hand” from the angle that these entities can not or do not want to do

For the above reasons, there is a question to ponder how do we develop and manage e-commerce in order to minimize the negativity and make optimal use of the positivity, and to successfully promote high efficiency to the society, the community, and each individual?

1.1 Background of the Study

It can not be denied that benefits achieved by e-commerce have a great impact

to the development of a nation‟s economy Many developed countries in the world, among which United States was the first, have created favorable conditions for e-commerce to be developed, leading human being in achiving great business results

Although there are many problems needed to be solved in the application of commerce, the developed countries, realizing its huge advantages, has quickly emloyed and developed e-commerce with the expectation of achieving the foundation for digital economy

e-Internet is changing the lifestyle and the way of working e-Internet creates good conditions for everyone, from university researchers and students in big cities to people in remote mountainous areas , in which everyone have the opportunity to access the same endless information resources Moreover, Internet also provides means of communication for people or places to carry out transactions at any time Enterprises with different scales all can communicate to their partners and customers via Internet Online activities help them quickly get necessary information, thereby improving the quality of products and services with low cost

The Government of Vietnam has placed special emphasis on developing commerce and assigned the Ministry of Commerce to be the clue agency who is responsible for examining and constructing the projects of e-commerce development

e-in Vietnam On 22/11/2001, the Center of Promoting Software Development, directly under Department of Vietnam Trade and Industry, opened the first training course named “E-commerce for Business” that was held free in Dong Nai with the purpose of helping enterprises step by step approach e-commerce and serve business activities on Internet

Since an initial application of e-commerce still faces a number of difficulties, it

is essential to create real power, which comes from the infrastructure for e-commerce, strategy to develop e-commerce business in small and medium enterprises, government support, and awareness of business e-commerce applications in business The intelligentsia needs to meet the requirements of specialty, and the cultural

standards of the people also need to be gradually improved, especially for young people, one of the main forces helping to deploy e-commerce.

According to figures from the Ministry of Industry and Commerce, at present, small and medium enterprises account for more than 85% of enterprises in Vietnam, with registered capital of nearly 2,313,857 billion dongs (equivalent to 121 billion dollars) and 100% having Internet access While more and more customers are looking for new products and trade opportunities with Southeast Asian countries, Vietnamese enterprises are also seeking new opportunities to reach them through e-commerce Along with maintaining domestic operations actively, Vietnam will definitely continue to receive more attentions from importers in a near future (Mr Vincent Wong, Senior Managing Director of Business Development and Customer

Services Department of Group Alibaba.com shared).

In 2012, Vietnam Association of commerce (VECOM) constructed the business Index in order to support agencies, organizations and enterprises evaluating quickly the application of e-commerce on a national scale as well as in each province and central city E-business Index, abbreviated to EBI, helps agencies, organizations and enterprises to evaluate quickly the degree of ecommerce application and to compare the developments by the years in each locality, concurrently support to an assessment and comparison between the localities based on a system

E-of index

So in Vietnam today there is only VECOM which constructed the EBI to assess

a degree of e-commerce application in the enterprises and home organizations But this is only statistical and investigative index that reflects a degree of e-commerce application annually, it can not bring out an index that helps enterprises identifying

whether the abilities of their own enterprises can apply e-commerce or not; how to invest and which problems needed to be solved to apply e-commerce to business

1.2 Statement of the Problems

This research project focuses on the adoption of e-commerce in Viet Nam SMEs and aims to test adoption factors in e-commerce model which it built based on the models of effective e-commerce in the world Authors propose a model that factors are based on the actual situation of e-commerce in the viet nam enterprises Thus the research problem for this study can be as follows:

What are the main factors, which influence the adoption of e-commerce in Viet nam SMEs?

Thus the research problem for this study can be as follows:

H1 Capacity of firm affects e-commerce adoption

H2 Compatibility of e-commerce for the value, work practices, and technology

in the firm affects e-commerce adoption

H3 Managers influence e-commerce adoption

H4 The ease of use affects e-commerce adoption

H5 The usefulness affects e-commerce adoption

H6 Effectiveness affects e-commerce adoption

1.3 Significance of the Study

- This study can serve small and medium enterprises in Vietnam

- This research will support the enterprises in constructing business strategies, strengthening advertising, and improving competitive advantages in the market

economy and in the integration of Vietnam today to the world economy

- This study can provide necessary information and support the Government‟s programs in formulating policies and laws on e-commerce applied for businesses in Vietnam

- Researchers can use this study as a reference for further research related to this issue

1.4 Scope and Limitation

The study shall focus on determining the e-commerce strategy that might help small and medium enterprises improve the production, sales and profit of the company

- Scope: Mainly research on the small and medium enterprises (SMES) in Vietnam

- The forms of ownership and types of enterprises: The enterprises of all forms

of ownership and business types, except for the enterprises with 100% foreign capital

- The geographical limits: the research focuses on the enterprises in Hanoi This representative meet the requirement and capacity for applying e-commerce in particular and IT in general at the highest level in Viet Nam

CHAPTER II REVIEW OF RELATED LITERATURE

2.1 Internet

The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite (TCP/IP) to serve billions of users worldwide It is a network of networks that consists of millions of private, public, academic, business, and government networks, of local to global scope, that are linked by a broad array of electronic, wireless and optical networking technologies The Internet carries an extensive range of information resources and services, such as the inter-linked hypertext documents of the World Wide Web (WWW) and the infrastructure to support email

Figure 2.1: Internet model

Internet in Viet Nam

Number of users in Vietnam up to the end of July 2011 reached over 31 million people, in which there were 4 million people using wide-bandwidth Internet A large number of people using an Internet are considered to a potential basis, make a chance but also challenges for an e-commerce development in Vietnam

According to statistics of General Directorate of Statistics on March 2012, number of people using an Internet in Vietnam reached to 32,1 million in which a number of subcribers on a country reached to 4,2 million (compared to 134 million telephone subcribers included 15,3 million fixed subcribers and 118,7 million mobile subcribers)

Figures on a number of Internet users in Vietnam:

Year Number of

Users

Percent of Population (%)

Number of Subcribers

Capacity (Bit/s)

Domestics Bandwidth (Bit/s)

According to the report of Akamai, US Internet survey firm, at the end of 2011, Internet transfer rate in Vietnam reached about 1,7 Mbps, ranked 32/50 countries that

to be surveyed and was lower than the average degree on the world (2,6 Mbps)

Internet Service Providers (ISP) in Vietnam:

 Vietnam Telecommunications Group - VNPT

 General Corporation of Army Telecommunications - Viettel

 FPT Corporation directly under Ministry of Science and Technology

 NetNam directly under Institute of Information Technology - Vietnam Institute of Science and Technology

 Join-stock Company of Saigon Post and Telecommunications Service - SPT

 Hanoi Telecommunications Corporation

 General Corporation of Multimedia Communications - VTC

 Join-stock Company of Global Mobile Telecommunications (G-Tel)

 Electricity Telecommunication Corporation - EVNTelecom

 Vietnam Maritime Information Electronics Corporation - Vishiped

 Computing and Data Transfer Corporation - VDC

 Join-stock Company of Telecom Infrastructure CMC - CMC TI

Internet in Vietnam today is managed by Vietnam Internet Center (VNNIC) that is a division directly under Ministry of Information and Communication

VNNIC was established in 28th April 2000 performing the following functions:

 Manage, allocate, supervise and impulse the use of domain resource, address and Internet number sign of Vietnam

 Give information, guide and total up on Internet

 Join in international activities on Internet

(Source: http://en.wikipedia.org/wiki/Internet)

2.2 E-commerce

E-commerce (electronic commerce or EC) is the buying and selling of goods and services on the Internet, especially the World Wide Web In practice, this term and a newer term, e-business, are often used interchangably For online retail selling, the term e-tailing is sometimes used

E-commerce can be divided into:

• E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes gathered into a "virtual mall"

• The gathering and use of demographic data through Web contacts

• Electronic Data Interchange (EDI), the business-to-business exchange of data

• E-mail and fax and their use as media for reaching prospects and established customers (for example, with newsletters)

• Business-to-business buying and selling

• The security of business transactions

E-tailing or The Virtual Storefront and the Virtual Mall

As a place for direct retail shopping, with its 24-hour availability, a global reach, the ability to interact and provide custom information and ordering, and multimedia prospects, the Web is rapidly becoming a multibillion dollar source of revenue for the world's businesses A number of businesses already report considerable success As early as the middle of 1997, Dell Computers reported orders

of a million dollars a day By early 1999, projected e-commerce revenues for business were in the billions of dollars and the stocks of companies deemed most adept at e-commerce were skyrocketing Although many so-called dotcom retailers disappeared

in the economic shakeout of 2000, Web retailing at sites such as Amazon.com, CDNow.com, and CompudataOnline.com continues to grow

Market Research:

In early 1999, it was widely recognized that because of the interactive nature of the Internet, companies could gather data about prospects and customers in unprecedented amounts -through site registration, questionnaires, and as part of taking orders The issue of whether data was collected with the knowledge and permission of

market subjects had been raised (Microsoft referred to its policy of data collection as

"profiling" and a proposed standard has been developed that allows Internet users to decide who can have what personal information.)

Electronic Data Interchange (EDI):

EDI is the exchange of business data using an understood data format It predates today's Internet EDI involves data exchange among parties that know each other well and make arrangements for one-to-one (or point-to-point) connection, usually dial-up EDI is expected to be replaced by one or more standard XML formats, such as ebXML

E-Mail, Fax, and Internet Telephony:

E-commerce is also conducted through the more limited electronic forms of communication called e-mail, facsimile or fax, and the emerging use of telephone calls over the Internet Most of this is business-to-business, with some companies attempting to use e-mail and fax for unsolicited ads (usually viewed as online junk mail or spam) to consumers and other business prospects An increasing number of business Web sites offer e-mail newsletters for subscribers A new trend is opt-in e-mail in which Web users voluntarily sign up to receive e-mail, usually sponsored or containing ads, about product categories or other subjects they are interested in

Business-to-Business Buying and Selling:

Thousands of companies that sell products to other companies have discovered that the Web provides not only a 24-hour-a-day showcase for their products but a quick way to reach the right people in a company for more information

The Security of Business Transactions:

Security includes authenticating business transactors, controlling access to resources such as Web pages for registered or selected users, encrypting

communications, and, in general, ensuring the privacy and effectiveness of transactions Among the most widely-used security technologies is the Secure Sockets Layer (SSL), which is built into both of the leading Web browsers (Mark van Ketel and Tim D Nelson)

2.4 E-Commerce Models

Creating an e-commerce solution mainly involves creating and deploying

an e-commerce site The first step in the development of an e-commerce site is

to identify the e-commerce model Depending on the parties involved in the transaction, e-commerce can be classified into 4 models These are:

 Business – to – Business (B2B) model

 Business – to – Consumer (B2C) model

 Consumer – to- Consumer (C2C) model

 Consumer – to – Business (C2B) model

Business-to-Business (B2B) Model

The B2B model involves electronic transactions for ordering, purchasing,

as well as other administrative tasks between houses It includes trading goods, such as business subscriptions, professional services, manufacturing, and wholesale dealings Sometimes in the B2B model, business may exist between virtual companies, neither of which may have any physical existence In such cases, business

is conducted only through the Internet

The advantages of the B2B model are:

 It can efficiently maintain the movement of the supply chain and the manufacturing and procuring processes

 It can automate corporate processes to deliver the right products and services quickly and cost-effectively

The B2B model is predicted to become the largest value sector of the industry within a few years This is said to be the fastest growing sector of e-commerce

Figure 2.2: B2B Business Model

Business-to-Consumer (B2C) Model

The B2C model involves transactions between business organizations and consumers It applies to any business organization that sells its products or services to consumers over the Internet These sites display product information in

an online catalog and store it in a database The B2C model also includes services online banking, travel services, and health information

Figure 2.3: B2C Business Model

Figure 2.2: B2B Business Model

Fig.2:B2C Business Model

The B2C model of e-commerce is more prone to the security threats because individual consumers provide their credit card and personal information on the site of a business organization In addition, the consumer might doubt that his information is secured and used effectively by the business organization This is the main reason why the B2C model is not very widely accepted Therefore, it becomes very essential for the business organizations to provide robust security mechanisms that can guarantee a consumer for securing his information

Figure 2.4: C2C Business Model

Fig.3:C2C Business Model

Let us now look at the previous figure with respect to eBay When a customer plans to sell his products to other customers on the Web site of eBay, he first needs to interact with an eBay site, which in this case acts as a facilitator of the overall transaction Then, the seller can host his product on www.ebay.com, which in turn charges him for this Any buyer can now browse the site of eBay to search for the product he interested in If the buyer comes across such a product, he places an order for the same on the Web site of eBay eBay now purchase the product from the seller and then, sells it to the buyer In this way, though the transaction is between two customers, an organization acts as an interface between the two organizations

Consumer-to-Business (C2B) Model

The C2B model involves a transaction that is conducted between a consumer and a business organization It is similar to the B2C model, however, the difference is that in this case the consumer is the seller and the business organization is the buyer In this kind of a transaction, the consumers decide the price

of a particular product rather than the supplier This category includes individuals who sell products and services to organizations For example, www.monster.com is a Web site on which a consumer can post his bio-data for the services he can offer Any business organization that is interested in deploying the services of the consumer can contact him and then employ him, if suitable

Figure 2.5: C2B Business Model

2.5 Theory of Reasoned Action (TRA)

The theory of reasoned action (TRA), developed by Martin Fishbein and Icek Ajzen, posits that individual behaviour is driven by behavioural intentions The theory received particular attention in the field of consumer behaviour as it provides a simple tool to identify possibilities to change customers‟ behaviour when using an innovation To this regard, the actual use of an innovation is determined by the individual‟s behavioural intention to use it The model resulting from their research is visualised in and consist of the following components:

Starting from the behavioural intentions, these include the functions of an individual‟s attitude towards the behaviour and the subjective norm surrounding the performance of the behaviour Accordingly, the actual use of an innovation is determined by the individual‟s behavioural intention to use it The attitude towards an act or a behaviour are the individual‟s positive or negative feelings about performing a behaviour, determined through an assessment of one‟s beliefs Subjective norm is defined as an individual‟s perception of whether people important to the individual think the behaviours should be performed “To put the definition into simple terms: a

Fig.4:C2B Business Model

person‟s volitional (voluntary) behaviour is predicted by his/her attitude toward that behaviour and how he/she thinks other people would view them if they performed the behaviour A person‟s attitude, combined with subjective norms, forms his/her behavioral intention”

Figure 2.6: Schematics of the theory of reasoned action (TRA)

However, the TRA has some limitations in explaining all mechanisms of the actual use of an innovation and the role of the individual‟s behavioural intent, which are discussed in the relevant scientific literature One limitation is the significant risk

of confounding between attitudes and norms since attitudes can often be reframed as norms and vice versa Furthermore, the assumption that when someone forms an intention to act, they will be free to act without limitation, is often unfounded Lastly,

in practice, constraints such as limited ability, time, environmental or organisational limits, and unconscious habits will limit the freedom to act

Consequently, extended theories were needed to better describe the mechanisms that actually explain the use of an innovation and the role of the individual‟s behavioural intent A selection of these theories is described in the following sections

(Source: www.fidis.net)

2.5 Technology Acceptance Model

Davis, F., (1989), came up with a model that he believed would explain effects

of system characteristics on user acceptance of computer- based Information Systems The model referred to as the Technology Acceptance Mode (TAM) is an information systems model that shows how users come to accept and use a technology The model suggests that when users are presented with a new technology, a number of factors influence their decision about how and when they will use it, notably: Perceived usefulness (PU) and Perceived ease of use (PEOU) and their attitudes towards the use

of the system

The technology acceptance model (TAM), developed by Davis, F., et al., (1989), is one of the most widely used and influential models in the field of information systems, technology and services It has been validated to be powerful as

a framework to predict user acceptance of new technology The goal of TAM is to predict information system acceptance and diagnose design problems before users have any significant experience with the system TAM specifically measures the determinants of computer usage in terms of perceived usefulness and perceived ease

of use TAM has been effective in the modeling of acceptance of IT and has received extensive empirical support through the studies predicting the use of information systems

TAM is derived from the Theory of Reasoned Action (TRA) model which seeks

to explain a broader range of behaviors based on situations specific combinations of personal beliefs and attitudes, and the effect of beliefs of others The technology acceptance model is based on principles adopted from Fishbein, M., and Ajzen, I.,‟s (1975) attitude paradigm from psychology, which specifies how to measure the behavior-relevant components of attitudes, distinguish between beliefs and attitudes,

and specifies how external stimuli are actually linked to beliefs, attitudes and behavior Hence, within the technology acceptance model, attitude was employed By identifying the particular beliefs that are operative in the context of computer user behavior, the proposed model provided diagnostic insight into how system characteristics influence user attitudes and usage

TAM has been widely utilized by several researchers to understand the factors that determine technology acceptance and usage Fred Davis developed the Technology Acceptance Model foundation to explain how and when users decide to accept and use a technology The model suggest that when users are presented with a new software package, “perceived usefulness” and “perceived ease of use” influence their decisions about how and when they use the new software Davis developed TAM

to provide an explanation of the determinants of computer acceptance that is general, capable of explaining user behavior across a broad range end-user computer technologies and user populations, while being both parsimonious and theoretically justified TAM has extensively been incorporated as a methodology to measure attitude towards technology adoption from users in multiple domains Davis, F., et al., listed some boundary conditions for the applicability of their model They acknowledged that their primary interest is in workplace settings in which utility is the primary value of user acceptance

external

variables

perceived usefulness

perceived ease of use

behavioural intention

actual system use

(Source: JULIET BUGEMBE - 2010)

2.6 Grandon and Perason's Model

Grandon and Perason's model, the same as this research project, represents a fusion of two independent research streams: the strategic value of certain information technologies to top managers and factors that influence the adoption of e-commerce in SMEs After achieving the results, the casual relationship between perceptions of strategic value and factors that influence the adoption of e-commerce will be investigated The research model of this project is showed below

Figure 2.8: Research model (Grandon and Pearson, 2004)

The trend of coming sections is as follows: First, the e-commerce adoption models in general and the model presented by Grandon and Pearson are investigated in depth Second, theories supporting IT adoption models are examined Third, some of the IT adoption models, which were previously mentioned in Table 1, are studied Fourth, the concept of perceived strategic value and the researches about

IT value are reviewed And at last, the support for the casual link between

perception and adoption is studied

Organizational readiness: Organizational readiness was assessed by including

two items about the financial and technological resources that the company may have available as well as factors dealing with the compatibility and consistency of e-commerce with firm‟s culture, values, and preferred work practices (existing technology infrastructure; and top management‟s enthusiasm to adopt e-commerce) Financial readiness refers to financial resources available for IT to pay for installation costs, implementation of any subsequent enhancements, and ongoing expenses during usage (such as communication charges, usage fees, etc.) Technological readiness is concerned with the level of sophistication of IT usage and IT management in an organization IT sophistication captures not only the level

of technological expertise within the organization, but also assesses the level of management understanding of and support for using IT to achieve organizational objectives

This factor was considered because small firms tend to lack the resources that are necessary for IT investments Such items were found relevant in other researches,

as well

External pressure: External pressure to adopt refers to influences from the

organizational environment External pressure was assessed by incorporating five items: competition, dependency on other firms already using e- commerce, the industry, social factors, and the government as it said that another pressing and practical reason for small businesses to adopt IT comes from government policies Also the two main sources of external pressure that includes the concept of

competition and the industry are competitive pressure, and more importantly, imposition by trading partners Competitive pressure refers to the level of IT capability of the firm's industry and, most importantly, to that of its competitors As more competitors and trading partners become IT-capable, small firms are more inclined to adopt IT in order to maintain their own competitive position Small businesses are extremely susceptible to impositions by their larger partners Such impositions are especially prevalent in case of EDI, Internet or e-commerce because

of its network nature

Perceived ease of use & perceived usefulness: They considered a subset of

Davis‟ instrument to measure perceived ease of use and utilized the six items for perceived usefulness as modified to make them relevant to e-commerce According to Davis perceived ease of use could be measured by identifying how

IT is: easy to learn, controllable, clear & understandable, flexible, easy to become skillful in and easy to use Perceived usefulness can be measured by investigating the impact of IT on job performance, speed of work, increased productivity, effectiveness, make job easier and useful

Their findings in US added one more factor to previous ones: compatibility, which emerged freely as a significant independent factor they found that the enthusiasm of top management, compatibility with the company‟s work environment, perceived advantage from e-commerce, and knowledge of the company‟s employees about computers were significant factors that differentiated between adopters and non-adopters of e-commerce in United States

In Chile they found that managers/owners most receptive to adopting e- commerce believe they possess the financial and technological resources necessary to

implement this initiative, see e-commerce as increasing managerial productivity and supporting strategic decisions, feel external pressure to put e-commerce in operation, perceive e-commerce as compatible with preferred work practices and existing technology infrastructure, and perceive e-commerce as useful to their organization

(Source: Maryam Ghorishi - 2009)

2.7 Innovations Diffusion Theory (IDT)

This study was started in 1950s at the University of Chicago with funding from television producers who sought a way to measure the effectiveness of broadcast advertising

The IDT studies how, why, and at what rate new ideas and technology spread through cultures Not just in information technology exclusively, this theory applies to other diffusion processes through the society such as the acceptance of new technological product, food, music style, dressing style, ideals, political candidates, or services According to Rogers (2003) “is the process by which an innovation is communicated through certain channels over time among the members of a social System.”

Roger through his IDT theory found that when an individual or unit faces with a new innovation/product/technology/service, they will passes 5 steps before accept it: (1) starting from knowledge: knowing its existence and how it functions This is

a basic requirement if you want your innovation to be accepted by your intended consumers You have to make sure that consumers must be knowing that your innovation/product is there and they know the functions It is why we found

product/service/technology is a must!

(2) forming an attitude toward the innovation (Persuasion)

This is the most crucial phase when you persuade the target user to use your innovation It is the time when “the ball” is on your technology/service, whether your technology/service can or cannot achieve the goal depends on the current state of your technology/service

(3) making decision to adopt or to reject It is the time when the “ball” has been passed to the target user and now the “ball” is on their hand to either commit using your technology/service or reject it

(4) putting in use the innovation (implementation) It is time when the user decides to use and really use your technology/service

(5) confirming the decision (confirmation) However, Roger found that people will always confirm their decision to use a technology/service even when they have already decided to use it, e.g they make sure by discussing or social chatting with other users about their opinions/impressions to the technology/service

The second very important suggestion in IDT is about how to effectively persuade your target user to use your innovation (or how to make your innovation appealing to your target user) (in Persuasion phase)? :

Further Roger found that there are five characteristics of the technology/service that persuade the individual to adopt them:

a) Relative advantage (the extent to which it offers improvements over available tools, often measured in economic profitability but can be measured in other dimensions such as social)

So if you want to increase the power of persuasion that your product/innovation appeals to your targeted user, you should make it HAVE MORE ADVANTAGES for them (depending on the characteristics needs of your target users)

b) Compatibility (the degree to which the technology/service is perceived as consistent with the existing values, social practices, past experiences, and users‟ needs)

So if you want to make your product/innovation powerful to persuade your targeted user, it is advisable to make CONSISTENT with previous/common technology/services, norms/social values, user needs, etc For example, personally, I

am not in favor of the Microsoft Word 2007 just because the user interface is not consistent with previous versions, which causes confusion and frustration to users c) Complexity (how easy it is to understand and to use),

It is recommended to make your product/innovation/service is as SIMPLE as possible, including simple to learn, simple to understand, and simple to use For example, you should provide the manual associated with the product (online, add-on the software, printed)

d) Trialability (the possibility to try the technology/service before committing to use it)

It is why we often found there are many Beta versions (Trial versions) of commercial software Giving your target user a chance “to TASTE” your innovation will help reduce their doubt of using the product and increase possibility of purchase decisions

e) Observability (the degree to which the results of the technology/service are visible to others)

Further, among these characteristic factors, Tornatzky and Klein (Dillon 1996) found that the compatibility, relative advantage, and complexity have the greatest influence on adoption: “Compatibility and relative advantage were positively related

to innovation adoption (p<0.05), while complexity was negatively related to adoption

at marginally significant (p<0.062).”

Specifically in Information Systems context, Moore and Benbasat (1991 in Dillon 1996) examined these characteristics and generated eight factors that impact the adoption of IT: voluntariness of use, relative advantage, compatibility, image (“the degree to which use of an innovation is perceived to enhance one‟s image or status in one‟s social system”), ease of use, result demonstrability, visibility, and trialability However, among current researches in IT adoption, there are three characteristics that has been consistently found as the important antecedents to the adoption of IT innovations: technical compatibility, technical complexity (easy of use), and relative advantage (perceived need) (Bradford and Florin, 2003; Crum et al., 1996) as depicted

Figure 2.9: The common characteristics of IT innovation that influence intended

users to accept the system/technology

(Source: http://tonydwisusanto.wordpress.com)

2.8 Model of Factors Influencing Electronic Commerce Adoption and Diffusion

in Small- & Medium-sized Enterprises

It is believed that the Internet will eventually be an extremely important vehicle for commercial and consumer transactions To date, however, SMEs have been slow

to adopt the technology While most firms now have an Internet presence, in the form

of a corporate Web site, few SMEs use Internet to conduct transactions with customers and suppliers In a recent survey of Electronic Commerce in Australian SMEs, it was found that only 11% of the SMEs place orders and 7% pay over the Internet, confirming that the widespread use of the Internet does not automatically translate into Electronic Commerce Moreover, early adopters of Electronic Commerce have found that customers have been slow to accept the technology and therefore, with few exceptions, the benefits of early adoption have not been realized Even in cases where benefits are generally available to all potential Electronic Commerce adopters, some adopted Electronic Commerce rapidly while others require longer time to adopt

Using theoretical foundations from established information system implementation research, innovation diffusion theories, and Electronic Commerce and small business literature, this research seeks to explain Electronic Commerce implementation success by examining factors that may be associated with the adoption of Electronic Commerce within organizations and between its business partners The relationships of these factors with the adoption of Electronic Commerce are shown in Figure 2.10

Figure 2.10: Proposed Electronic Commerce Adoption Model for Small- and

Medium-sized Enterprises

This study examines 5 types of factors that are considered to be relevant to the adoption and diffusion of Electronic Commerce The classification of the factors is illustrated in the figure above and further elaborated in the following sections Some

of these factors may be more important at the time the organization is deciding whether to adopt Electronic Commerce technology than in influencing the extent to which Electronic Commerce is implemented in the organization or vis versus On the other hand, some factors may be important both in the adoption decision and in the subsequent implementation Many of the factors identified here are suggested by the literature, which attempts to distinguish adopters from non-adopters; many of these same factors may also impact the adoption decision and the extent to which Electronic

Commerce is implemented

This research has identified the factors exerting influence on the adoption of Business-to- Business Electronic Commerce in SMEs Furthermore these factors have been combined into a model to describe and explain the drivers and critical success factors for Electronic Commerce implementations

(Source: Chong Yee Ling)

2.9 Model for Assessing E-commerce Success in SMEs

A comprehensive review of literature from last 20 years starting from 1991 to

2011 has done to develop the proposed model of e-commerce adoption in SMEs The proposed model consists of factors from relevant researches that divided into internal and external factors affecting e-commerce success in SMEs The proposed model is shown in Fig 2.11 Here, the factors are divided into Independent Factor that is Organizational, Management, Technological, Individual, Implementation, and Trust and Environmental Under each independent factor consists of variables or dependent (Contributing) factors shown in Table 2.1

Figure 2.11: Proposed model for assessing e-commerce success in SMEs

Table 2.1: Success factors for SMEs

Organizational:

Organizational factors also known as firm internal factors, in general represented by size, quality of Information System, Management support, and resources of enterprise According to the firm size which greatly influences the firm‟s decision toward adoption of e-commerce, and small and median enterprises think that they are too small to adopt e-commerce in their companies The same goes for enterprise resources as a small business tend to believe that they do not have enough resources to support e-commerce implementation in the company Enterprise resources consist of human, financial, and technology (computer, telephone lines, cable, etc) The organization sometimes feels that e-commerce will be irrelevant for its business and will cost too much to implement, and that the cost will increase with time to maintain the system

Management:

The support and enthusiasm of management are very important for SMEs in successful adoption of e- commerce Poon and Swatman (year?) found that manager

or CEO‟s innovativeness and IT knowledge have a positive effect toward the adoption of e-commerce Individual characteristics such as age, education, experience, and physiological traits of CEO are essential to the adoption of internet technology in SMEs International web use should consist of languages and features that follow according to rules, regulation and culture that cannot be offensive to any web user

Technological:

Technological components involve of various internet technologies such as COBRA, software agents, and mobile agents; and mark-up languages such as HTML, XML, HTML, and programming language like java, ASP; and web development tools such as dream viewer, Photoshop, and multimedia, etc Network Technology is a lower level includes TCP/IP that is a protocol used to create and transfer information packet across the internet; HTTP is set of rules for transferring files over the internet; and POP, SMTP, IMAP manages emails and network management issues like quality of service (QOS) Support systems include decisions support system and distributed application and algorithm/methodology that assist, enhance, or improve EC application

Individual:

People factor is considered the most important part toward the adoption of commerce in SMEs The individual factors consist of customer, staff, and management of business as they are the ones greatly affected by the adoption of e-commerce The education and awareness of these people p l a y t h e most important role b o t h before and after the implementation of e-commerce Many organizations

e-delay the adoption of e-commerce because of lacking internal enterprise Therefore, education and awareness along with IT skill and expertise are necessary for any organization in their adoption of e-commerce as the implementation of new techniques may need to change employees‟ work attitude, qualification, performance, and knowledge of e-commerce If employees have already known about e-commerce, the organization will be more disposed to adopt e-commerce

Implementation:

There is a need of a good functioning website as a key for businesses to success is a professional website that can target a niche market and attract the right customers to their products and services There are several things that are needed to consider when developing website, e.g website should be attractive with easy–to-use features, the right amount of graphic and text (size, color, background), and appropriate/clear information on product and services, shortened website download time Customers can register and communicate with businesses to order products and services and can pay by credit card or other payment method, all can

be done online It is also necessary to have forums on a website that can be filled up

by customers‟s discussions, as well as contact address by via emails that customers can refer to

Environmental:

Competitive pressure has a positive influence on t h e adoption of technologies As t h e i n c r e a s i n g n u m b e r o f firms using the internet for marketing and customer service will bring more fierce competition, and accelerate SMEs‟ toward the adoption of e-commerce Government support is

necessary for the adoption of e-commerce as government can simplify rules and regulation and provide technical infrastructure toward adoption of e- commerce in SMEs The level of government support and infrastructure varies from country to country together with the difference in cultures Cultural differences that exist between various countries may affect the organization‟s ability to utilize and adopt e-commerce

Trust:

A part from the quality of the site and its contents; e-commerce use and satisfaction could be affected by customer disposition of security and privacy issues Customer trust on website use and its product & services is important for successful e-commerce system E-loyalty is an economic and competitive necessity because acquiring new customers is extremely expensive; and unless those customer's sticks around and make a lot of purchases over the year, profits will remain elusive

(Source: Fatima Ajmal, Norizan Binti Mohd Yasin - 2012)

2.10 Conceptual Framework

To develop e-commerce applications in small and medium enterprises in Vietnam, e-commerce must be approved for use by firms To be accepted, businesses should see the benefits of e-commerce deployment Besides, we must have strategies

to guide them to successfully implement e-commerce in their business So based on Grandon and Perason's model with 4 Influencing factors (Organizational readiness, external pressure, Perceived ease of use, Perceived usefulness); Innovations Diffusion Theory (Compatibility) and the factors influencing the others are based on reference some tissues the electronic commerce application successfully