The Impact of Business Size and Business Type on Small Business Investment in Electronic Commerce: a study of Swedish small businesses

Abstract

In the past, organisations relied on traditional quantitative metrics, such as Return on Investment (ROI) to make decisions when investing in technology. With the advent of electronic commerce (EC), organisations have had to rethink their investment and acquisition decisions due to the strategic nature of electronic commerce. Where ROI measures have failed, they have been replaced with a plethora of organisational driving forces. This paper focuses on the driving forces behind EC adoption by small and medium enterprises (SME's) and aims to determine the impact of organisational factors such as size and type of business on EC acquisition criteria. The results of a research study carried out in Sweden are presented and suggest that there exist high levels of significance between the size of the business and customer demand, reduced costs, developing new markets and improvement to marketing as driving forces, and the type of business and customer demand, pressure from competition, increased sales and improvement of relationship with business partners as driving forces for EC adoption.

Using ICT as a Value Adding Tool in South African SMEs

“…However, some SME owners believe that the investment in ICT has been substantial and there has been no noticeable increase in revenue despite the more efficient business processes. This observation further validates the findings of MacGregor et al (2002) who argued that SMEs need to see the immediate returns on investment (ROI), whereas ICT is a long term investment.…”

“…The "Manager-Owner factors" category is a recent addition to the list, coming about as organisational and manager-owner factors are recognised as influencing ICT usage in small businesses (Wagner, Fillis, & Johansson, 2003) . MacGregor et al (2002) argued that some of the barriers to ICT adoption are unique to SMEs, and came up with the following list: low level of existing hardware technology, the need to see immediate returns on investment (ROI), whereas E-commerce/ICT is a long term investment resistance to change, preference for traditional technologies such as normal telephone system or face to face interaction, lack of IT skills and technical knowledge amongst employees, time constraints, lack of awareness about ICTs'…”

“…(MacGregor et al, 2002) Walchzuch et al (2000) also consolidated a list of barriers SMEs face during ICT adoption, into three categories: awareness of SMEs and access to infrastructure, confidence in the security framework and ICT use among business partners and adaptation of business processes.…”

“…Successful ICT adoption and implementation rely on both socioeconomic and technological issues; these issues can be based on internal or/and external factors (Arendt, 2008;Modimogale, 2008;MacGregor, Vrazalic, Carlsson, Bunker, & Magnusson, 2002).…”

The Role of Small Business Strategic Alliances in the Adoption of E-Commerce in Small/Medium Enterprises (SMEs)

“…Studies by Dibb (1997), MacGregor & Bunker (1999), Bennett & Robson (1998), Meikle & Willis (2002), MacGregor et al (2002 have found that business sector is significantly associated with the level and type of IT use in SMEs. These studies found that the manufacturing and retail sectors tended to adopt IT far more quickly than professional or service related SMEs.…”