A Research Trilogy into E-Commerce Adoption in Small Businesses in New Zealand

Transcription

1 RESEARCH Copyright ß 2007 Electronic Markets Volume 17 (4): DOI: / A b s t r a c t This research trilogy about e-commerce (EC) adoption in small to medium-sized enterprises (SMEs) in New Zealand (NZ) started with a survey research, followed by an initial focus group (FG) research and concluded with a second FG in order to fill some of the gaps in the first FG and to add more insights into the EC phenomenon in NZ SMEs. In this research, nine factors were identified from the technological innovation literature as potential determinants of EC adoption in SMEs. The research findings highlighted three main issues pertaining to EC adoption in NZ SMEs. First, at the low level of adoption such as adopting simple and Web pages, none of the research factors seemed to strongly influence the adoption decision of EC as such. This finding highlighted the importance of the communication aspect of EC and of having a presence in cyberspace even if it was a simple one. Second, the majority of the NZ SMEs perceived to progress these simple EC initiatives in the long-term projections only. They called such initiatives as advanced levels of EC where they envisaged adopting fully functional and interactive websites. At this level of adoption, the participants started to raise the importance of the different factors to their adoption decision of EC. However, this was contrasted by the fact that the participants stressed that they would not risk investing their scant resources on perceived risky advanced EC initiatives. The last point pertains to the SMEs that adopted different EC technologies high adopters such as websites, Intranet and Extranet technologies. This category retained a positive view about EC and indicated that non-adopters of EC and low level adopters should not be deterred from adopting EC and that all their fears were mere misperceptions. The overall results indicated that EC adoption and use among NZ SMEs was limited. The research highlights professional and theoretical significance and implications. Keywords: e-commerce in New Zealand SMEs, adoption framework, survey, focus groups, multiple methodologies framework A u t h o r s Nabeel Al-Qirim (nalqirim@uaeu.ac.ae) is the editor of three books in the area of ebusiness. He has published more than 70 research A Research Trilogy into E-Commerce Adoption in Small Businesses in New Zealand NABEEL AL-QIRIM administered workshops. His research interests included IT and e-commerce strategy in businesses and in SMEs, e- government, health information systems and telemedicine, mobile commerce, outsourcing, supply chain management, and e-commerce in developing countries and in NGOs. He is in the editorial board of several journals. He chaired a conference (IIT 05), and several tracks and sessions in international conferences. Prior to joining Auckland University of Technology (Auckland, New Zealand) in 1999 and UAE University in 2004, he worked as an IT consultant for 11 years with multinational companies including IBM, Data General, Compaq and Siemens Nixdorf. INTRODUCTION The characteristics of electronic business are in direct conflict with the implicit assumptions underlying most academic research. Information systems research is challenging enough. The nature of the electronic business domain presents even greater difficulties. (Clarke 2001: 1) It is becoming a well-recognized fact that the recent technological emergence of e-commerce (EC) in the 1990s and its subsequent revolutionary development in the past 20 years has impacted individuals as well as businesses in a profound way. The hype that surrounds the EC phenomenon led many proponents to postulate that the future will hold many promises and surprises for both businesses and humanity. However, the impending issue here is whether this new emerging electronic business (EB) era will converge in the near future and provide seamless and integral services to both businesses and consumers. That is why it is not surprising that researchers like Kalakota and Robinson (2001) have defined electronic business as the complex fusion of business processes, enterprise applications, and organizational structure necessary to create a high-performance business model. This definition highlights the

2 264 Nabeel Al-Qirim & E-Commerce Adoption in Small Businesses in New Zealand complexity of the field and the transformation process. Whether EC will succeed in changing the behaviour and the attitude of individuals and businesses such as abandoning their old and traditional practices and manage the transformation to the new digital era represents one of the greatest challenges facing researchers, professionals and policymakers. Small to medium-sized enterprises (SMEs) are brought to the fore with their significant contributions to the economies of their countries (GDP and employment levels). They are also the source for most of the inventions and innovations (Cameron and Massey 1999; Iacovou et al. 1995). Thus, it is expected that this sector will attract the attention of most of the concerned stakeholders and policymakers in the world and hence, increasing the efficiency of this sector through technological means should reflect positively on the bottom-line of most of these countries. More specifically, it was believed that technology could assist this sector in solving many of its inherent internal and external problems (Blili and Raymond 1993) such as its small size and limited resources (employees, skills, financial/capital, knowledge, lack-of-time and managerial skills, encapsulation/isolation from the outside environment, limited market scope, etc.). 1 Therefore, it was expected that this sector will benefit immensely from adopting different technological EC solutions in order to bridge the technological gap between them and large enterprises. The implications here are threefold. Initially, the importance of the SME sector was ignored for many years by professionals and researchers (i.e., media, vendors, politicians) where large enterprises attracted most of the attention of those stakeholders (Cameron and Massey 1999). This remained the case until the 1980s. Second, Liu and Arnett (2000) found that in reality the available empirical research focusing on success factors of EC (e.g., websites) is anecdotal, exploratory in nature, and does not provide sufficient insights into the combinations of these factors. In the SME s context, Grandon and Pearson (2004) found that only a small number of studies focused on the adoption and use of EC in SMEs. Brown et al. (2005) highlighted that little is known about the behaviour of SMEs with respect to Internet use. Finally, the available EC research in SMEs revealed that the adoption and the diffusion of information technologies in general and EC technologies specifically is problematic in the SME s context due to different contextual deficiencies (technological, organizational, environmental, individual) (Abell and Black 1997, Abell and Lim 1996, Deloitte 2000, MOED 2000a, 2000b, Poon 2000, Poon and Swatma 1995, 1997, 1998, 1999a, 1999b, PWHC 1999, Tan and Teo 1998). This research also pointed to the laggardness of the SMEs in adopting or in using EC more strategically in their businesses. In their review of the literature, Beckinsale et al. (2006) found that SMEs are generally unwilling to develop EC systems or to change current business models; SMEs are unlikely to follow a stages model, rather, they focus on the owners strategy for growth; and Internet development in SMEs may be slow, reflecting this approach to resource investment. In New Zealand (NZ), recent longitudinal research found that although the number of firms with websites had increased from 8.8% to 63.4% in one year only, most of these websites have provided lists of products and services (Chapple 2002). Only 20% of these sites could take orders, with only one in 12 taking payment online. Doolin et al. (2003) reported different drivers and inhibitors of EC adoption in NZ (Table 1). Other research in NZ pointed to similar findings and highlighted the laggardness of the SMEs in adopting EC or in using it more strategically in their businesses (Deloitte 2000, MOED 2000b, PWHC 1999). Therefore, addressing the EC adoption phenomenon in SMEs is of great importance to researchers, professionals and policymakers in NZ in the first place and to others interested in extending the research results to their countries (i.e., comparative studies). Such an approach Table 1. Drivers and inhibitors of EC adoption in NZ Drivers Inhibitors Internal factors: Internal factors: a. Logistical infrastructure a. Conservative management b. In-house technical expertise b. Lack if in-house IT expertise c. Parent company involvement c. Parent company involvement d. Opportunity to leverage brand d. Limited financial resources e. Acquiring Web retailing operation e. Inadequate IT infrastructure f. Product characteristics f. Channel conflict External factors: External factors: g. Overseas trends and firms g. Publicized Internet failures h. Availability of third party providers h. Market characteristics i. Customer perception or demand i. Customer characteristics

3 Electronic Markets Vol. 17 No could lead to more general insights and solutions to the reported confusion in EC research in SMEs. Accordingly, this research attempted to provide answers to the following research questions: (i) what are the factors that influence EC adoption? and (ii) how can those factors influence its success in SMEs in NZ? In addition, (iii) this research was interested in providing rich insights pertaining to the EC adoption criteria and to identify the different characteristics that separate adopters from non-adopters of EC in NZ SMEs. In the following and in response to question (i), the research introduces the theoretical framework section below depicting the different potential determinants of EC adoption. Explaining the impact of those factors on EC adoption (question (ii)) is detailed in the findings and the discussion sections. In response to the third question, this research adopts multiple methodology approach to provide such rich insights pertaining to EC adoption in NZ SMEs. THEORETICAL FRAMEWORK This research relied on the technological innovation theories and EC research in SMEs (Table 2) to develop a framework for EC adoption in SMEs. These studies examined the factors that determine EC adoption and use in SMEs and identified several technological, Table 2. Determinants of EC adoption and use in SMEs organizational and environmental determinants as shown in Table 2. In addition to the factors in Table 2, Wymer and Regan (2005) introduced the following factors as potential determinants of EC adoption: N change experience: employee experience with making major changes; N executive experience: experience of top executives with computers and the Internet; N innovativeness: your company s willingness to adopt new technology; N models: models of successful use in my industry; N need: perceived need for change or implementation of Web and Internet technologies; N prior experience: the company s prior experience with new technology implementations; N trust: trust or confidence in Web and Internet technologies; N understanding: understanding of available opportunities and options with e-commerce; N value: perceived value or relevance to the business; N employee reduction: resulting reduction in number of employees; N priority: priority relative to other projects that require existing resources and time; N profitability: projected profitability of e-commerce; N cost: cost to setup and maintain; Factors Found important Found unimportant Found most important Technological 1 Relative advantage (efficiency, effectiveness) 1, 2, 3, 4, 5, 7, 8, 9, 12, 14, 15, 16, 18,22 2 Compatibility 2, 4, 15, 16, 17, 18 3 Complexity 3 5 Organizational 1 Top management support and CEO s role 4, 16 2 Organizational readiness (size) (cost/financial and 1, 4, 5, 7, 8, 9, 10, 12, 17,22 4 1, 5, 9, 20 technical resources) 3 Information intensity and product characteristics 12, 14, 15 4, 18 4 Managerial time 4 Environmental 1 Industry pressure (competition) 1, 5, 6, 7, 8, 9, 10, 12, 16,22 4, 13, 18 1, 9 2 Government pressure 1, 5, 6, Consumer readiness 10, 12, 16,22 4 Support from technology vendors 12, 19,22 5 Supplier readiness 22 Notes: (1): Kuan and Chau (2001), (2) Beatty et al. (2001), (3) Riemenschneider et al. (2003), (4) Mirchandani and Motwani (2001), (5) Grandon and Pearson (2004), (6) Chang and Cheung (2001), (7) Mehrtens, Cragg and Mills (2001), (8) Iacovou et al. (1995), (9) Chwelos et al. (2001), (10) Zhu, Kraemer and Xu (2003); (11) Santarelli, E. and D Altri, S. (2003), (12) Doolin et al. (2003), (13) Kula and Tatoglu (2003); (14) Poon and Swatman (1997); (15) Poon and Swatman (1998); (16) Poon and Swatman (1999a,b); (17) Macgregor and Vrazlaic (2004); (18) Teo et al. (1998); (19) Abell and Lim (1996); (20) Levenburg (2005); (21) Beck et al. (2005); (22) Wymer and Regan (2005)

4 266 Nabeel Al-Qirim & E-Commerce Adoption in Small Businesses in New Zealand N EC technology: technology for selling products or services online; N infrastructure: access to network services or infrastructure to support Web and Internet technologies; N reliability: reliability of Web and Internet technologies; N security: security issues; and N technology availability: availability or adequacy of existing technology and tools. Wymer and Regan (2005) found the following factors as accelerating adoption: N need; N innovativeness; N competitive pressure; N value; N government; N reliability; N EC technology; N models; N prior experience; and N executive experience. They found the following factors as impeding adoption: N cost; N priority; N security; N capital; N market; and N partners/vendors. Beckinsale et al. 2006) identified five influence networks on Internet adoption in SMEs: expert (primarily in IT firms); industry-led SMEs (working in collaboration with sector organizations); and customer-led (driven by customer requirements). The drivers of these three networks are primarily strategic. These networks demonstrate the value of external relationships to the development of Web-based business. The other two networks, ICT 2 support (firms that have developed internal support systems and are investigating whether there are opportunities to be more customer-focused) and novice (firms that have little knowledge or experience of the value of ICT to their business), are driven by the SME owner, and are representative of SMEs for which ICT is a support tool and where customers show little interest in exploiting the relationship electronically. Their research demonstrates that government policies and strategies have little influence on Internet adoption in SMEs. Further, competitor pressure has little influence on Internet adoption while customer pressure is central. Additionally, IT suppliers may have a key influencing role. According to the above literature review, Table 3 highlights the guiding theoretical framework adopted in this research (Al-Qirim 2005). To extend an understanding of these determinants, it was decided to evaluate each in a survey and a focus group (FG) context. This is explained next. METHODOLOGY EC is multi-faceted and spans the different disciplines (Kalakota and Robinson, 2001) making the task of capturing its multi-faceted perspectives a difficult task. Accordingly, there was an increasing call from researchers for more pluralism (the use of different research methods in the same research) in the research methods in both the IS (Galliers 1991, Gallivan 1997, Myers 1997, Nissen et al. 1991, Smithson 1991) and the EC (Poon and Swatman 1999a, b) fields as one probable solution here. Hence, what one research method omits can be supplemented by the other (Orlikowski and Baroudi 1991). Gallivan (1997) indicated that in studying the impact of new technologies on organizations such as EC, the use of mixed-method studies provides opportunities to gather mixed-level data, which can be useful in linking the individual to the organizational level of analysis. This research highlights an approach based on survey and FG methodologies as shown in Figure 1. Figure 1 outlines the research procedure starting from the literature review, developing the research focus and ending with the formulation of the research s methodological procedure. The last FG research detailed in this research represents the concluding part of a research trilogy which started with a survey research (Al-Qirim Table 3. A theoretical framework for EC adoption in SMEs Innovation characteristics: The Environment: 1 Relative advantage 1 Competition from other companies in the business (Rivalry) 2 Compatibility 2 External pressure from Suppliers/buyers 3 Cost 3 External Support from Technology vendors Individual characteristics: Organizational characteristics: 1 CEO s EC innovativeness 1 Information intensity of products and services 2 CEO s EC involvement

5 Electronic Markets Vol. 17 No Figure 1. A methodological approach for this EC research 2005) and followed by an initial FG research (Al-Qirim 2006). Table 4 highlights some of the differences between the FGs and survey methodologies. One apparent difference between survey research and FG is that survey research produces more conclusive and generalizable results while FGs provides more interpretations and explanations. This is endorsed by direct quotes from the attendees in the FGs in this research. Since the outset, the small business literature has emphasized the need to do a lot of work in order to enhance the researcher s understanding of the small business and its owners (Blackburn and Stokes 2000). Still, EC research represents a very challenging area (Clarke 2001). In providing a link between the importance of conducting survey and focus group research here is the fact that quantitative techniques (i.e., surveys) play an important role in finding/isolating

6 268 Nabeel Al-Qirim & E-Commerce Adoption in Small Businesses in New Zealand Table 4. Comparison between FG, case study and survey research methodologies Criteria Focus group research Survey Speed of data acquisition Fast Medium Cost Low High Duration Shorter (unless several focus groups are required) Medium Synergy and new insights High Low Snowballing Yes (discussion thread) No Researcher involvement No (through a moderator) No Contaminating responses High possibility (certain members influence responses) No Scrutiny High (more observers, video-taped) High (scientific) Exploratory/Confirmatory Exploratory/confirmatory Confirmatory Interpretations Easy Difficult (confined to outcomes) Reality Subjective Objective Documenting behaviour Difficult (in a FG setting) (Mainly in documenting norms and meanings) High (well-designed measures) Concluding results The participants will do it for the researcher The statistical tool will or The researcher may use automated qualitative data -analysis tools, e.g. NUD.IST do it for the researcher Generalization Limited (unless a representative sample of participants is reached) High (large survey) Implementing Difficult Low difficulty Stimulating participants High Low Anonymity of participants Medium High Responses to sensitive topics 3 Social reflection (reflecting the research discussion and findings on the participants, social system) correlations and differences between variables. On the other hand, more attention is needed to explore process issues in SMEs where researchers like Blackburn and Stokes (2000) suggested the use of FGs as a viable methodology for bridging the cultural gap between researchers and the SMEs owners. Thus, shifting the power from the researcher (i.e., survey) to the owner of the SME (i.e., FG). Further, Clarke (1999b: 1) commented: situations arise, however, in which the opinions of the target population are difficult to extract. This is typically because the relevant people currently have limited information available to them about the topic, but maybe because the topic is highly multi-dimensional, or the opinions are polarized or fluid. In these circumstances, a FG can be a valuable tool. Other researchers confirmed the same and stated that qualitative data is useful as it forms a rich source of information to describe the EC (Internet) adoption phenomenon in order to substantiate the responses to the questionnaire (Tan and Teo 1998). Better than case studies, but often requires the researcher to practice utmost care in order not to impede the participants personal or social life. High Ancillary method High (however, cannot validate findings from other methods) Low Source: Blackburn and Stokes 2000; Bloor et al. 1998; Morgan 1997; Stewart and Shamdasani 1990 High (participants are anonymous) Low It is worth noting that direct comparison between methods is not possible and neither is validation by triangulation (Bloor et al. 2001); that is, contrasting the findings of one method with findings produced by another method, indicating that those findings are unlikely to be the result of measurement biases. This shifts the whole emphasis surrounding multiple methods from validation by triangulation to the type of data generated by each method and how the generated data from each method contributes to the understanding of the issues under investigation (without slaying the other method). Therefore, this research will not delve into methodological comparisons as such but focus more on finding rich insights concerning the phenomenon under investigation. Using multiple methods to demonstrate a supposed correspondence between the researcher s analysis and the research participants understanding of their social world is well justified here (Bloor et al. 2001). FGs are an extremely flexible research method (Morgan 1998) and researchers suggested its use in IS research (Clarke 1999a, 1999b, 2001). FG is a process of obtaining

7 Electronic Markets Vol. 17 No possible ideas or solutions to a problem from a group of participants by discussing it (Aaker et al. 1998, Blackburn and Stokes 2000, Bloor et al. 2001, Stewart and Shamdasani 1990). One important emphasis in this method is on the results of group interaction when focused on a series of topics introduced by a discussion leader (moderator not the researcher) (Aaker et al. 1998; Blackburn and Stokes 2000; Morgan 1997, 1998). It is an attractive medium for public participation in the research process. A FG can throw light on the normative understanding that groups draw upon to reach their collective judgement and provide a valuable resource for documenting the complex and varying processes through which group norms and meanings are shaped, elaborated and applied (Bloor et al. 2001). In the following, findings from the survey research are introduced first highlighting main determinants of EC adoption and implications in NZ SMEs. This is followed by showing the results of the initial FG research and how they relate to the findings in the survey research. Finally, the need for a second FG emerged in order to complete the research cycle and add more insights to the EC adoption criterion in SMEs in NZ. FINDINGS The survey research Determinants and deterrents of EC adoption. Al-Qirim (2005) (see Figure 2) introduced 10 factors as influencing EC adoption in SMEs in NZ alongside three categories of adoption (dependent variables): (1) starters (adopters of Internet and ); (2) adopters (adopters of any of the following EC technologies (ECIT): Intranet, Extranet/Virtual Private Network (VPN), Internet-based Electronic Data Interchange (EDI) and websites); and (3) extended adopters (the number of the adopted ECIT). These three categories were found by the literature to logically split adopters and users of EC. Hence, the survey research was interested in examining this adoption model in NZ SMEs. The factors that were found insignificant suggested that EC adoption in NZ SMEs was hindered by a perceived lack of business advantage, by a lack of support from technology vendors, by a shortage of suppliers and buyers operating online, and by a paucity of CEOs involvement. The factors that were found significant suggested that adoption of EC in NZ SMEs was fostered by the inexpensive nature of EC initiatives, the extent of CEO innovativeness and willingness to adopt EC, the need to remain competitive in the business environment, and the apparent compatibility of EC technologies with business needs. Organizational size emerged as a strong motivator for EC adoption and it was clear that larger SMEs were more capable at adopting EC and different EC technologies than smaller SMEs. Anomalies. On the other hand, Al-Qirim (2005) highlighted the following anomalies in their research: (1) the Figure 2. A framework for EC adoption in SMEs

8 270 Nabeel Al-Qirim & E-Commerce Adoption in Small Businesses in New Zealand compatibility of EC with the SMEs business environment was found to influence adoption positively not negatively, as it was hypothesized originally in the survey research model and (2) support from technologyvendors seemed to influence EC adoption negatively not positively, as was originally hypothesized. The survey research provided substantial evidence about statistical differentiators between adopters and non-adopters alongside the three categories of adoption. With the exception of the CEOs involvement and SMEs business size, the survey research highlighted that the triviality of important factors like the relative advantages of EC, support from technology vendors, pressure from suppliers and buyers operating online and CEOs involvement suggested the weakness of the adoption phenomenon in NZ SMEs. Hence, making the adoption decision in the hand of larger SMEs and who have innovative CEOs. Beyond the simple adoption of EC technologies, those SMEs failed to progress their current simple EC initiatives any further to show significant differences between them across the different research factors and adoption categories. It is important to note here that due to the cross sectional nature of survey research, it was not possible to provide detailed justifications for such significant and insignificant results and anomalies highlighted above. The technological innovation adoption and EC literature provided some plausible justifications to such findings in the survey research but they were not conclusive as such (Al-Qirim 2005). More evidence was needed to support such conclusions from the SMEs perspective in NZ. This need highlighted the importance of introducing more research that could help to introduce more interpretations and justifications to the above suppositions. Of course, this needs to be done using a representative sample of the three categories of adoption highlighted (above) in the research model in the survey research. Initial FG research The initial FG was selected from the same sampling frame of the survey research (Al-Qirim 2006). The FG ran with six participants from six different SMEs. The FG supported the survey findings and the justifications made by the technological innovation and EC literature above. However, more insights were provided from the NZ SME s context as shown in Table 5 and explained next. The results from this FG research suggested that the current adoption and use of EC in SMEs was not sophisticated as such. Interestingly, the research findings highlighted two main issues pertaining to EC adoption in NZ SMEs. First, at the low level (referred to as low adopters as well) of adoption (i.e., adopting and Web page), none of the research factors seemed to Table 5. The views of the different participants about EC adoption factors Sl./No. Context Influence EC adoption direction 1 Technological context a Relative advantage: - Current low level EC initiative (+) - Envisaged advance EC initiatives (+); highly significant b Cost: - Current low level EC initiative (2); But not significant - Envisaged advance EC initiatives (2); highly significant c Compatibility: - Current low level EC initiative (2); But not significant - Envisaged advance EC initiatives (2); highly significant 2 Organizational context a Information Intensity - Current low level EC initiative (+); But not significant - Envisaged advance EC initiatives (+); highly significant 3 Environmental context a Buyers pressure (+) Suppliers pressure (I) b Competitors: - Current low level EC initiative (+); But not significant - Envisaged advance EC initiatives (+); highly significant c Support from technology vendors: - Current low level EC initiative (2) - Envisaged advance EC initiatives (2); highly significant 4 Individual context a Manager s innovativeness (+) b Manager s involvement (+) Notes: +: positively, 2: negatively, I: irrelevant influence the adoption decision of EC as such. In adopting simple EC technologies such as a website (which turned out to be a simple Web page) and , cost and compatibility would not impede the adoption decision of SMEs. The suggested drivers (Table 5) for adopting these simple technologies were not highly significant although an indication about the direction of their influence is shown in Table 5. Second, it was at the envisaged advanced levels of EC (referred to as high adopters as well) initiatives (i.e., adopting fully functional and interactive websites) that the participants started to raise (perceptions of) the importance of the different factors on their adoption decision of EC. These views suggested the weakness of the EC phenomenon in SMEs in this research. The participants highlighted the importance of being present in the EC field as a strategic necessity. However, the participants showed reluctance in investing their scant resources on perceived risky advanced EC initiatives. This FG has helped in providing more details into the justifications made in the survey research.

9 Electronic Markets Vol. 17 No Therefore, a second FG was viewed as necessary to complement the first FG and to satisfy the following limitations which were beyond the control of the researchers: 1. In the first FG session, most of the discussion among the different participants concentrated on the adoption of simple websites, i.e., a Web page. The survey research looked at website in general and did not go into details concerning the sophistication levels of the SMEs websites. Hence, future survey research needs to take this finding into consideration and split the website technology into different categories of sophistication (i.e., web page, information based website, interactive website, taking payments online, etc.); and 2. Despite the extensive promotion to attract as many participants as possible to the first FG, only six SMEs showed up. Thus, there was a need to attract more SMEs to add more richness to the insights generated by the first FG and at the same time, to attract SMEs that had sophisticated Web initiatives. Second FG research Sample selection. The UBD Business Information Services provided 100 randomly selected businesses from the Auckland region which were contacted by telephone and screened for the size factor (SMEs falling under the 100 full-time-equivalent employees (FTEs)). Accordingly, 23 businesses were discarded. The researcher explained the research purpose and objectives to the remaining SMEs and stressed the importance of the study to NZ SMEs. Of the 77, only 18 showed interest in attending the FG session. Their contact details and addresses were taken. The inability to reach the manager of the business and speak with him or her directly was one of the reasons for such a low response rate. Convincing the managers of the SMEs in the second FG to allocate part of their time to attend the session and to commit to a date was difficult and this contributed to a low level of acceptance. The researcher had to work with some specific dates and times for the second FG session to match the SMEs preferences (either Mondays or Tuesdays). Once an SME accepted an invitation to attend the FG session, they were sent a confirmation together with the details of the venue and the broad format of the meeting. Accordingly, 16 SMEs agreed on a certain date and time. In the week the FG session took place, only 12 confirmed their attendance. Seven participants managed to attend the FG session. This response rate was acceptable by FG researchers (Blackburn and Stokes 2000; Clarke 1999b; Stewart and Shamdasani 1990). The different SMEs were complete strangers and did not know each other. The session took place at one of the conference facilities at Auckland University of Technology on 11 November The meeting lasted from 5:30 pm until 10:20 pm (the same duration as the first FG). There were several breaks and the session started with snacks so that the participants could sustain the long evening session. The participants completed a basic demographic questionnaire (blinded) about their organizations before starting the FG session (Table 6). The initial FG attracted 6 participants (A F) and the second FG attracted 7 participants (G M). The session was videotaped, notes were taken and the websites of the participating SMEs were reviewed for content and level of sophistication. In the review of the participants profile, the participants varied in terms of the industry they belonged to, annual turnover, and their sophistication with technology and computers. However, they all had been in the marketplace for a long time and were managed by the owner of the business. All of the participants were senior executives and owners of the business, except for participant F who was the chief technology officer of that company, participant K who was the helpdesk manager and participant M was one of the owners of the business. Most of the business models of the participating SMEs were predominantly B2B except participants C, D and K where they were found to maintain a blend of B2B and B2C. There were more technology vendors in the second FG session than the first one. After identifying and defining the research problems and questions and the FG participants, the third step in the FG design involved identifying the moderator (facilitator) for the FG sessions. The moderator is the key to assuring that a group discussion goes smoothly. He or she promotes interaction that ensures that the discussion remains on the topic of interest. The FG moderator is generally well-trained in group dynamics and interview skills. It is not necessary to recruit the moderator at the early stages of the project and he or she may not even be selected until the research agenda has been established and a preliminary interview guide has been drafted (Stewart and Shamdasani 1990). Both individual and situational factors distinguish an effective FG moderator from a less effective one. These factors include personal characteristics, educational background and training, amount of experience as a moderator, and situational characteristics such as the sensitivity of the topic, the scope and depth of coverage required, the conduciveness of the physical settings, and time constraints. The same moderator in the first FG session was not available for the second one. Therefore, a senior lecturer from the researcher s school accepted an invitation to moderate the session. He did not have moderation experience but had great knowledge of EC research. He was provided with the overhead slides and agenda. It was necessary to explain to the moderator the

10 Table 6. Demographic details about the interviewed SMEs in the second FG Organizational details Participants SME 1 G SME 2 H SME 3 I SME 4 J SME 5 K SME 6 L SME 7 M The number of personal computers (terminals) at your organisation. The number of computer servers at your organization. Do you have a local area network (LAN): Yes Yes Yes Yes Yes Yes Yes The total number of staff who have access to the Internet. The person attending the FG meeting (title). Managing director Managing director Managing director General manager Helpdesk manager Managing director Chief operating/ financial officer Is the organization managed by the Yes Yes Yes Yes Yes Yes Yes owner or one of the owners: Mention the number of full-time equivalent staff (FTEs) of your business. What was your annual turnover last 1.5 Million 1 Million 800, Million 1 3 Million 8 Million (Consolidated) financial year (approximately, in NZ$) How long has your company been in business (years)? The Business models of participants B2B B2B B2B B2B B2B/B2C B2B B2B Merchandising/ Selling educational Publishing of Develop and host Internet Services Jobbing/ Graphical engineering construction Supply and installation of different polyethylene pipes and fittings for different construction projects. books to schools weekly newsletter to the travel industry (making profits from ad s) websites (Commerce services provider CSP) Provider (ISP) Manufacturing (Textile sample books) and sales configuration software development for the window and door fabrication industry 272 Nabeel Al-Qirim & E-Commerce Adoption in Small Businesses in New Zealand

11 Electronic Markets Vol. 17 No objectives of the research and the FG methodology as well as the importance of not influencing responses or intervening in the FG discussions. DISCUSSION According to our need for the second FG, as outlined above, the analysis followed an approach in that similar views from both focus groups are showed in this research in order to support and justify the importance/unimportance of the research factors in the survey research. Any different insights emerging from either FG are reported as well. The adoption profile of the SMEs in the FGs In reviewing the participants responses concerning the adopted EC technologies, Table 7 summarizes these EC technologies alongside the depicted three categories of adoption in the survey research (Figure 2): starters, adopters, and extended adopters. Other issues emerging from the different technologies are summarized in Table 7 as well. It was observed that some of the participants highlighted the use of other EC technologies such as Internet banking and electronic funds transfer (EFT) and credit card payments. The findings in this research have implications for both theory and practice and this is discussed next. Professional implications A continuum of EC adoption. The second FG added another dimension of understanding to the adoption criteria of EC in this research. The participants in both FGs retained three perspectives pertaining to EC adoption (Figure 3): 1. low adopters represented here by adopters of simple EC initiatives such as Internet, and simple websites (Web page); 2. advanced EC initiatives as envisioned by the low adopters of EC; and 3. high adopters in the second FG represented here by the adopters of interactive websites, Intranet and Extranet. At the low end of adoption, EC is used as a pointer to the company s location (Web page) and is used as a means of communication. For example, participant I commented, we use fax (not ) broadcasting to send our weekly newsletters to 650 travel agents, the helps us in reducing the turnaround in producing the ads where earlier we had to courier them several times between us and the customer till they take a final shape. Now we receive the ads in different forms, word documents, PDF, etc. At the high end, EC is used to provide rich information to customers or to sell products and collect money online. Participant M commented, we are profit-driven, and the Internet made us much bigger and more profitable. Now we have an effective presence in different countries all over the world and the Internet makes it very easy to communicate and run operations across different countries. The Internet gives us a whole lot of opportunities, we have demo software on our websites where our potential customers overseas can download the demo and five or six companies around the world are sitting there looking at the same screen watching the software demonstrated to them... another thing is that our customers can download software upgrades and PDF files and us their error logs but you cannot actually conduct business on it and pay us money. Other EC technologies such as Intranets and Extranets were adopted to provide efficient and better services to customers (e.g., member log-in, remote access to databases through Extranet, secure file exchange through VPN, remote demonstration). However, their use in business was not extensive. The classification of high versus low adoption in the FGs suggested that the research model (Figure 2) was appropriate in terms of dividing the different adopters according to the adopted EC technologies (starters, adopters, extended adopters). The exception was the Web page technology, as this research suggested moving it from the adopters category to the starters category. Web page technology emerged as a variation to the websites in the survey research and hence, could not be considered as an innovative technology part of the adopters category: it is not so expensive to acquire and, above all, its impact on SMEs business was almost negligible as shown above. At the low level of adoption, the FGs suggested that there were not many marked differences between adopters and non-adopters of EC. This further suggested the survey findings about the starters category being an elementary starting stage towards EC (Internet and external and introducing the simple Web page). Participant F commented, I think in the moment we are all adopting and Web page, that s why such initiatives are not that expensive up to this point... you can choose not to open your or Web page (to survive without them), I am talking about the next point such as adopting interactive websites where the big decision will take place. It was highly unlikely to find many SMEs that can sell products and collect money online (MOED 2000b). Indeed, participants D and K emerged as exceptions in the FG research. Participant D, for example, developed and sold online videos, CDs and DVDs that included promotional information about tourism in NZ. These were highly attractive to international tourists interested in visiting NZ. Indeed, the Web initiative of participant D represents a success story for EC, although participant

12 Table 7. Adopted EC technologies by SMEs in the FGs E-commerce technology Adopting company Advantages/applications Disadvantage/deterrents (non-adopters) Starters Internet+Internal A, E, F, I, J, K, L, M Convenient, efficient, transfer of documents, and communication across remote offices. No network, few employees, all on one site and no need for it, can shout, and impersonal. Internet+External All Convenient, efficient, formal mean, cheaper than fax/tel., record management of correspondence, legitimate Viruses, spam, employees misuse, the need to adjust and cope with incoming traffic (customer enquiries) from the Internet. use of informal language, open 24 hours 7 days a week. Adopters Web page (simple, passive) B, C, E, F, H, L. G has no Web presence Becoming the yellow pages on the Internet, image enhancement, and simple electronic company brochure. Web page (more than Internet presence) (interactive) A, D, I, J, K, M Nature of the business facilitates having detailed website, market outreach to international markets, and product catalogues. Lazy, large product range to put into websites, needs big learning curve, needs continuous update, expensive to retain (marketing it through traditional media and search engine). Extended adopters Adopters +Extranet I, J, K, M Customer relationship management: allow members to log-in to the website through usernames and passwords to read the weekly newsletter (I), access certain parts of internal databases (M). Secure VPN connection with our representative in Sydney (J) Adopters +Intranets J, K, M Sharing centralized resources for project management (J, M), helpdesk and call centre integration with databases and websites (K). Limited integration and not fully functional Intranet. Other technologies Internet banking/electronic fund transfer (EFT) Credit card payment tool on the websites A, D, E, I, K, L, M Convenience, fast and efficient payments of accounts, 2467, monitoring financial and transaction movements conducted by the accountant, and up-to-date financial information. D, K Facilitates Internet sales in comparison with the paper system. Too lazy to do it, security threats, lack of signature (needs two managers to sign the cheques). Fear and perceived security threats and misusing the credit card number by the merchant nationally or/and internationally. However, credit card companies are responsible for any damage pertaining to fraudulent activities over the Internet. Eventually all the companies indicated that this is only a perceived threat. 274 Nabeel Al-Qirim & E-Commerce Adoption in Small Businesses in New Zealand

13 Electronic Markets Vol. 17 No Figure 3. The adoption profile of the different participants in the two FGs with respect to the three categories of adoption in the adoption model in the survey research D retained a simple EC infrastructure (no LAN and the company website was hosted by an ISP). High adopters in the FGs were investigated from within the remaining categories of adoption in the research model (adopters and extended adopters). The advanced EC initiatives as envisioned by the SMEs in the first FG were used here to link the views of low and high adopters in both FGs. This taxonomy has further shed more light into our understanding of the research factors in the survey research, in terms of their significance or non-significance. Most of the FG discussions centred around three main themes. First, at the lower levels of EC adoption little seemed to impede the participants from adopting EC. Second, when the low adopters discussed the envisaged advanced levels of EC, they showed higher reluctance and uncertainty, driven mostly by organizational, technological and environmental deterrents. Issues such as cost, risks, incompatibilities, and the applicability of specific products or industries to EC were frequently highlighted as concerns amongst low adopters. Participant F continued, generally if you are adopting a technology, it is definitely an advantage to the business. However, being a leader in adopting new and emerging technologies is highly risky and possibly disadvantageous to the business due to financial commitments and risks... payback, technology risk... choosing the wrong platform or technology. Adopting and Web page is not risky and everybody uses it in business. Other participants (H, L) confirmed this point as well. High adopters, those who adopted interactive websites and more ECITs technologies (Intranet and Extranet), represented the third theme here. Those adopters viewed EC positively and provided further insights into industry/product specifics (industries possessing products with high information content were more likely to adopt EC than others), market scope (local vs. international), competition (rivalry), and pressure from suppliers and buyers. Conflicting views. Low adopters in the FGs highlighted the following perceived impediments of EC adoption: long EC learning curve, lack of knowledge about EC as a technology and as a business model, time and resource scarcity and EC represents a risky project grey area. There was some evidence to suggest that some of the low adopters were not strategic thinkers (i.e., lazy) in relation to EC and refused to be at the forefront of technology adoption as shown in Table 7. In view of this opinion, those SMEs/managers would adopt EC to the level that do not impose any danger to their scarce resources. For example, participant J commented, The reality with average businesses is that they do not want to miss with technology. Several hundred millions of dollars is spent on EC in NZ...itwill take hundreds (implying for a long period of time) of years before those guys (referring to some of the participants; G, H, I and L) buy into unnecessary technology and do only what is required. Participant K disagreed with participant s J comments and indicated that EC is not that far away. However, participant K also commented, for small business I would definitely place most of my value in the very simplest to do with EC such as getting your website out and and some of the EC solution ware. Participant J commented, in the modern economy most of the business is service-based, the maximum you can do is use for exchange of information and the rest is face-to-face. Participant K responded, even for a small team, EC can really have a great impact.

14 276 Nabeel Al-Qirim & E-Commerce Adoption in Small Businesses in New Zealand There were compatibility issues with EC among low adopters in the FGs where they retained negative perceptions about security, viruses, privacy and legal issues. Interestingly, most of the high adopters pointed to these concerns as misconceptions and should not be considered as threatening as such. Recent research in NZ confirmed this point and referred to the following excuses mentioned by SMEs (Chapple 2002): SMEs know the terminology (EC) and they have a reasonable idea of what it might do... But they can t see where the value would come from, they are not sure how to analyse an addition to value and then they put up the barrier of time and say they don t know enough... the attitude of we re too busy or we ll address that next week needs to change, we ve got to get the message out that it s not good enough. High adopters in the FGs explained how low adopters (in a discussion during the FG) could overcome most of these concerns (costs, security, time, viruses, hackers) by incorporating certain EC tools (virus scanners, firewall) to combat their threats. Later in the FG session, low adopters seemed to accept such suggestions. Thus, introducing more training programmes aiming at addressing these issues could prove very useful to none or low adopters. Some of the high adopters even suspected that the EC initiatives of low adopters could exceed the adoption of and simple Web presence. High adopters stressed the need for low adopters to investigate and justify the true effectiveness of EC to their businesses, and not to judge EC on its face value, mostly based on misconceptions. Recent research confirmed this weakness and slowness in adopting EC among SMEs in NZ (Chapple 2002) and indicated a lack of knowledge about EC, concerns about security, confusion and fear about adopting EC. Hence, exploring the multifaceted nature of EC and its benefit to business was stressed highly by the FG participants in general and by high adopters more specifically. This could allow SMEs to strategically assess the applicability of EC to their environmental and organizational setting. The significance of the entrepreneurial perspective in this research was expected, as it was clear from both the survey and the FGs that anything relating to the small business was in the hands of its CEO. Faceless EC. It was found that most of the FG participants agreed on the importance of seeing customers in person. That will always be the case, regardless of the complexity and sophistication of the developed EC initiative. This finding was consistent among low and high adopters. Qualifying and profiling customers cannot be done through EC interfaces. Being a technology vendor is definitely a good driver for adopting EC, as it entails having technological experts and expertise in-house to develop and have EC capabilities. Indeed, most of the high adopters in the FG research were technology vendors. Most participants reported concerns about the enforceability of legal contracts over the Internet. They stressed the need to complement the online activities with physical meeting and signing paper documents with ink signatures. However, participants D and K, at the high end of the adoption continuum, were completely satisfied with EC and saw it as compatible with them. Product/industry specifics. The different FG participants described specifics pertaining to the industry they belong to and to their products. For example, participant G commented, other than which we use... it is a lot better than anything else... with due respect to the rest of the gentlemen here most of the stuff (other EC technologies) you spoke about over there (projected on the whiteboard), they (SMEs) don t even know about... or they don t want to use them. At this point participant K (ISP vendor) addressed participant G s argument by indicating, I would actually say from what you have said... from your industry, I would actually not recommend a lot of the technologies over there (for you)...idon t think they relate to you in any way. This industry/product specific has been reported by the literature as well. Kula and Tatoglu (2003) found that the SMEs use the Internet for external communication purposes and for searching relevant information about the market and products. Their SMEs showed willingness to do business electronically (B2B and B2C). They also attempted to identify five categories of firmand industry-specific factors that influence the extent of Internet adoption by SMEs: 1. amount of resources allocated for export development; 2. international experience of the SME; 3. relative strength of the SME in the sector; 4. technology intensiveness of the sector; and 5. competitive intensity of the sector. Of these five categories they found the first four (with the first 2 being the most important) important and the last one insignificant. Generally, SMEs in their study retained a positive view regarding Internet use. These issues are discussed in detail next. EC Knowledge and vision. Driven mostly by their technical knowledge and expertise in EC, high adopters like participants J, K and M (technology vendors) were in a better position than low adopters to know what EC technology to adopt. It was suggested in this research that the experience of high adopters with EC exceeded that of low adopters and hence, such experience removed many of the misconceptions surrounding EC, such as incompatibility of EC in business and the cost factor. Despite the perceived low benefits and use of EC, most of the technology vendors adopted different ECIT technologies. This suggests that working in the technology field leads to adoption and to the adoption of more

15 Electronic Markets Vol. 17 No EC (sophisticated information-based websites, Intranets and Extranets/VPN). The high adopters ( adopters and extended adopters ) in the survey research were mostly from IT/communications, Internet services, wholesalers, and manufacturing sectors. Adopters of two ECITs came from different industries in the survey, with the wholesale industry emerging as the first followed by the IT and communications industry. It should be reiterated here that knowing about EC is absolutely essential. However, that does not necessarily lead to further adoption if EC proves to be of less or no use to the business. This should not undermine the innovativeness of such potential adopters (Rogers 1995). What is stressed here is the ability of the SME to explore the full potential of EC and whether EC is useful or not to the business of the SMEs, and then to make the adoption or rejection decision. B2B EC. Working in a B2B scenario entails adopting different EC technologies (Extranet, Internet EDI) than those who operate in a B2C scenario (mostly adopters of websites). The survey research reported the significant effect of suppliers in influencing Internet-EDI adoption. Most of the participants in the FGs worked in a B2B scenario with their customers. Those participants reported no effect of their suppliers on their EC adoption decision. There was also no evidence from the participants in the FGs to suggest that those B2B adopters were interlinking or using their Extranets and VPNs extensively with their buyers. Indeed, although most of the technology vendors in the FGs retained a level of sophistication in their websites and the other adopted ECITs technologies (Intranets, Extranets), their use in business was not that extensive (not strategic). The participants emphasized the need to see customers in person (to qualify and profile customers, develop rapport, finish deals, etc.). Technologies such as Intranets and Extranets were used infrequently to drive efficiencies in operations (communications, reduced costs, sharing resources). However, their use supplemented the regular business channels. Only a few participants provided retailing services, leading this researcher to suggest that working in a B2C scenario could lead to the adoption of websites. Participant C did not adopt effective websites due to his non-strategic outlook and admitted lazy tendencies. This is discussed next (Table 7). Laziness in exploring EC benefits. The analysis of in the FG data suggests that the gap between the simple EC initiatives of low adopters and the envisioned advanced and high EC initiatives was large. Some of the low adopters were clear about what they wanted to do next but most of them seemed to be content with their current EC initiatives and were not interested in exploring deeper issues pertaining to EC. This suggests that some of the SMEs might not be inclined to go into EC, simply because their business is doing well in its current form or lacks an innovative perspective. Previous research points to this uncritical perspective occurring in the managers of small business in relation to IS in NZ (Cragg and King 1993). Engaging with enormous (perceived) issues introduced by EC seemed daunting and very risky to some of the SME s managers in the FGs. It was much easier for them not to bother about such issues unless EC progressed easily alongside their stretched and relaxed learning curve. That essentially was what appears to separate innovators from laggards in this research. For example, participant C indicated earlier that he was happy to run his business selling firearms and ammunition without bothering about the Internet or investigating it any further. Being lazy in not considering the strategic importance of EC to the survivability of the SMEs could have a drastic effect on those SMEs in the long term when EC converges and becomes a viable business tool for both businesses and individuals. Market scope and distance and time differences from western markets. On the other hand, the limited local market scope in NZ, and distance and time differences from western markets and the lack of knowledge about international markets and opportunities could have further aggravated this finding: only a limited number of participants were found actively engaged in selling products and services online to international markets. Recent research in NZ suggested the same (Chapple 2002, MOED 2000b). Chapple (2002) commented, SMEs could be zooming down the information highway, but instead many NZ SMEs seem happy to trundle along a country road. For some, the day-to-day grind of running the business leaves little time or inclination to research information technology. It is true that with more Internet convergence and increased numbers of buyers, suppliers and competitors online, the number of adopters may increase (Peters and Paynter 1999). However, it is only those who adopt innovations (such as EC) earlier than others who reap most of the benefits (Rogers 1995). Establishing a Web presence on the Internet is becoming more of a strategic necessity than a strategic advantage to the SMEs in this research and thus, for some non-adopting SMEs ignoring EC could have drastic effects on their businesses in the long term. Theoretical significance In discussing the theoretical contribution of this research vis-à-vis the technological innovation literature and EC research in SMEs, the following is highlighted. Determinants of adoption. Adoption factors such as relative advantage, information intensity, international markets, buyers pressure, and support from technology vendors were stressed highly and positively by high

16 278 Nabeel Al-Qirim & E-Commerce Adoption in Small Businesses in New Zealand adopters in the FGs as influencing their EC adoption decision. Some of the participants in the FGs retained standard products (of known features to customers) and hence, selling products and collecting money online was a logical extension to their business (emerged from the Internet side). Thus, standard products represent a further driver for the business to adopt EC and sophisticated websites. However, such a perspective is limited to the adoption of transaction-processing websites. Depending on the information content in their product, different SMEs could add more functionality and complexity to their websites to supplement the selling of their products. The products of some of the FG participants were still physical ones (DVDs, Videos and CDs) but the websites were used effectively to supplement the selling of these physical products. Issues emerging from the other ECIT technologies were not clear in this research and undertaking more FGs by any future research could yield more insights pertaining to the remaining ECIT. As for competition, there was not much evidence to suggest its influence on adoption. Most of the participants in the FGs did not keep an eye on their competitors as such. Only participant K reported competition had significantly influenced his EC adoption decision. Strategic necessity was stressed more than strategic advantage by most of the participants in the FGs. In addition to the previous NZ study (Chapple 2002), a Canadian study of SMEs (CICA 2001) found the same and showed that the SMEs were slow to adopt EC: despite the fact that 77% of the Canadian SMEs expected the Internet to have a positive impact on their business over the next two years, only 32% had developed an Internet strategy. There were high adoption rates for websites (more than 50%), however the websites were used to provide information about the company s product (61%) and to communicate information about the company (58%) to customers. This further confirms the survey research findings with respect to the high adoption rate of websites (64.6%) and the fact that most of the websites were used as a pointer to the brick-and-mortar presence. Longitudinal research in NZ found the same and reported that the number of firms with websites had increased 8.8% in the past year (2001) to 63.4% (Chapple 2002). However, most websites provided lists of products and services, and 68% have company data. Only 20% of the sites could take orders, with only one in 12 taking payment online. Adopters of Internet, and simple websites (Web pages) (low adopters) in the FGs believed that more work could be done with EC but emphasized the need for experts in the field to analyse their business needs and to introduce new EC opportunities (i.e., success stories from other businesses/countries) for them. They reported negative perceptions about technology vendors and were suspicious of resorting to them for any EC help, as they might charge high prices or provide inadequate services to them. The Canadian study (CICA 2001) suggested the same. It reported that the two most significant barriers to establishing a Web presence were obtaining strategic EC advice and locating appropriate suppliers. This might justify the negative perception about technology vendors among the SMEs in this research. Mounting evidence against technology vendors in NZ suggests their significant negative effect on EC adoption. There was evidence to suggest that some of the FG participants resorted to low-end vendors (individuals, students and friends). The participants excluded resorting to high-end vendors as they found them unaffordable. There was some evidence in the second FG to suggest that vendors resort to peculiar ways of attracting business from SMEs where they may exploit a lack of knowledge in EC to their benefit. Surprisingly, recent research found that the majority of SMEs develop their own websites or utilize amateurs (friends or students) (Walczuch et al. 2000). This further suggests the uncritical and non-strategic approach to EC among the participants as well as the weakness of their EC initiatives. It also highlights the insignificance of support from technology vendors as a factor in the starters and in the adopters categories in the survey research. The participants initiatives were very simple or they did not resort to professional technology vendors. More research tackling this issue could shed some light on outsourcing practices of SMEs and the effectiveness of vendor s processes in providing adequate services to SMEs. Comparing between findings across the FG and the survey research. There was a need to review the findings of the first FG and the survey research in the light of the second FG to further support the survey findings and the envisaged advanced EC initiatives found in the first FG (Table 8). It was suggested earlier that at the low levels of adoption, nothing seemed to impede the FG participants from adopting simple and inexpensive EC initiatives such as and Web pages. However, according to the survey analysis, the CEO s innovativeness was needed to guarantee the move to the starters category. None of the research factors seemed to influence the adoption decision significantly at that level. Technological factors. There were not many tangible advantages reported by low adopters. The advantages reported by low adopters did not exceed the marketing approach of pointing potential customers to their physical locations and those were not extensive as such. It was in the envisioned high EC initiatives that low adopters started to indicate the importance of the different factors to their EC adoption decision. Issues like costs, time, compatibility and technology vendors could impede adoption. On the other hand, factors such as the relative advantage, information intensity of

17 Table 8. Summary of the theoretical significance of the research model Sl./No. Low adopters High adopters Context Starters Adopters Extended adopters 1 Technological context (innovation) a Relative advantage Not significant. Not significant. Not significant. Hypothesis H1a Perceived similar positive advantages in the survey. Perceived similar positive advantages to non-adopters. Perceived similar positive advantages to low adopters. Survey results (Higher positive perceptions by Extranet adopters). Focus group results Not many reported advantages in the focus No important and/or tangible benefits. No important and/or tangible benefits. groups, as Internet and were not used extensively in business. (Higher positive perceptions by participant D in the focus groups). (Higher positive perceptions by participant K in the focus groups). b Cost Not significant. Not significant. Not significant. Hypothesis H1b Perceived similar positive effects not Perceived similar positive effects not negative as hypothesized. Perceived similar positive effects not Survey results negative as hypothesized. negative as hypothesized. Focus group results Not costly in the focus groups Not costly in the focus groups should be assessed in the light of its advantages. Not costly in the focus groups should be assessed in the light of its advantages. c Compatibility Not significant Significant Significant Hypothesis H1c Survey results Focus group results Perceived similar positive effects not negative as hypothesized. Fear of viruses, spam, security, hackers, not seeing customers in person. Adopters perceived EC compatible with them in comparison with non-adopters. Compatible with the participants. Participants pointed to the fears of low adopters in the previous category as misperceptions. Perceived higher significant compatibility than lower adopters in this category. Compatible with the participants. 2 Organizational context a Size Not significant. Highly significant in the survey. Perceived the highest significance Hypothesis H2a Survey results Focus group results Irrelevant. Size does not resemble a Size encourages adoption. according to the survey results. Size encourages adoption. barrier for such low adoption. b Information intensity Not significant Not significant Not significant. Hypothesis H2b Perceived positively Perceived similar positive effect to non-adopters. Survey results (Significant at website adoption only) Focus group results Products are suitable for websites. Products are suitable for websites. Products are suitable for websites. 3 Environmental context a Pressure from suppliers or buyers: Not significant Not significant Not significant Electronic Markets Vol. 17 No 4 279

18 Table 8. (Continued.) Sl./No. Low adopters High adopters Context Starters Adopters Extended adopters Hypothesis H3a Perceived similar positive effect to non-adopters Perceived similar positive effect to non-adopters Perceived similar positive effect to non-adopters Survey results (High significant and positive perceptions of suppliers on EDI adopters) Focus group results: - Buyers pressure - Perceived positively and equally to low adopters. - Perceived positively and equally to low adopters. - Perceived positively and equally to low adopters. - Suppliers pressure - Irrelevant. - Irrelevant. - Irrelevant. b Competitors Not significant. Not significant. Significant. Hypothesis H3b Perceived positively Perceived similar positive effect to non-adopters. High significance according to the Survey results (Higher significant positive perceptions by Extranet adopters) survey significance. Focus group results Low adopters perceived it positively. Perceived similar positive effect to low adopters. Perceived highly by participant K only. c Support from technology vendors Not significant. Not significant. Significant. Hypothesis H3c Survey results Perceived similar effects to non-adopters but negatively not positively as hypothesized. Perceived similar effects to non-adopters but negatively not positively as hypothesized. (Higher negative perceptions by Extranet (significant) and EDI) Higher significant negative perceptions among high adopters Focus group results Negative perceptions. Negative perceptions. (Not very clear in the focus groups) 4 Entrepreneurial Context a CEO s innovativeness Significant Significant Significant Hypothesis H4a High positive perceptions Higher positive perception according to the survey significance Highest positive perceptions according to the survey significance Survey results (websites specifically) Focus group results Very important role. Very important role. Very important role. b CEO s involvement Not significant Not significant Not significant Hypothesis H4b Perceived positively Perceived similar positive effect to non-adopters Survey results (Higher positive perceptions by Intranet adopters) Focus group results Important. Important but not necessarily involved in every aspect concerning the adoption decision. Important but not necessarily involved in every aspect concerning the adoption decision. 280 Nabeel Al-Qirim & E-Commerce Adoption in Small Businesses in New Zealand

19 Electronic Markets Vol. 17 No products, competition, suppliers in general and buyers specifically, could encourage adoption. The second FG provided further insights from the high adoption side. This clarified many of the issues highlighted by low adopters and their envisioned high EC initiatives. However, it was suggested that most of the participants were not adopting EC strategically. The participants who were making money out of their Web initiatives were referred to as exceptional cases in this research (product specifics, market scope). The other participants were either low adopters, with limited reported benefits from their initiatives or high adopters such as technology vendors. High adopters reported some efficiency in internal operations but these were not significant as such as the ECITs were not used extensively in business. Above all, the FG participants all stressed that they did not consider EC to be a strategic priority in their business. This may suggest the insignificance of the relative advantage and cost across the three categories of EC adoption in the survey research. High adopters did not report any cost impediments and this might suggest its insignificance in the survey research at the adopters and at the extended adopters categories. The participants stressed the need to assess this factor in the light of the EC advantages, which could further contributed to its insignificance. Most of the participants in the survey research rejected the notion that EC is expensive. This could be further justified on the basis that adopting and a simple Web page was not that expensive. At the low adoption level, it was suggested that low adopters did not witness any incompatibilities with their simple and initial initiatives. This makes the perceptions of adopters comparable to those of non-adopters in the starters category. At this level of and simple websites (Web pages) adoption, it is suspected that low adopters and non-adopters in the starters category were not witnessing any incompatibilities with EC. Low adopters suggested in the FG that compatibility could influence adoption negatively from the envisioned high EC initiatives, as they raised legal and privacy concerns. Indeed, compatibility appeared as significant in both the adopters and extended adopters categories in the survey research. However, high adopters in the FGs pointed to these negative perceptions reported by low adopters as misconceptions and unfounded. This might be used to further suggest the apparent difference in significance between adopters and non-adopters alongside the adopters and extended adopters categories in the survey research. Organizational factors. It was suggested in the participants discussions regarding the size factor that larger SMEs were in a better position to adopt EC than smaller ones (Davies 1979, Levy and Powell 2002). The survey analysis gave solid evidence about the significance of the size factor in the adopters and extended adopters categories. Thus, larger SMEs can afford to trial and experiment with the technology more than smaller ones. According to the FG analysis, it was suggested that the information intensity of products was more applicable to website adoption only. All the participants in the FGs viewed their products and services as suitable for the Web. This might be used to suggest the insignificance of this factor in the three categories of adoption, as the adoption categories looked at websites from the perspective of other EC technologies (adopters and extended adopters). The FG research raised issues pertaining to industry specifics (B2B vs. B2C) and to product specifics (standard products vs. supplementary channel), which could speed up the adoption or rejection of EC. Participants with standard products were more likely to adopt more sophisticated websites and to provide online transaction processing tools to collect money online. Earlier innovation literature endorses the notion that those firms for whom an innovation is most profitable become early adopters (Davies 1979). Environmental factors. Most of the participants did not monitor their competitors as such. They indicated that they all, including their competitors, adopted the same EC technologies, which might be used to suggest the insignificance of competition in the starters and adopters categories. However, few participants indicated that they adopted different EC technologies to compete in the marketplace and that it was very important for them to adopt these technologies to maintain that market lead. This might be used to suggest the significance of competition in the extended adopters category. The presence of only one such participant in the FGs was not sufficient to conclude its significance. Support from technology vendors was viewed negatively by most of the participants. This might be used to suggest its insignificance as an adoption factor in the starters and adopters categories. However, it appears significant in the extended adopters category. As most of the high adopters in the FGs were themselves technology vendors, it was very difficult suggesting its significance in the extended adopters category from the high adopters side in the FGs. The CEO. From the discussions in the FGs, it was suggested that the participants highly rated the CEOs innovativeness as a factor in EC adoption. There was an apparent difference between low and high adopters with regard to the CEOs innovativeness. The CEOs involvement did not attract much attention compared with the CEOs innovativeness, and this might be used to suggest its insignificance in the survey research. Thus, the suggestion is that the presence of innovation champions inside adopting firms (CEO) would increase

20 282 Nabeel Al-Qirim & E-Commerce Adoption in Small Businesses in New Zealand the chances of adoption taking place earlier on (Attwell 1992). The entrepreneurship literature is vast. This study s review of it was, therefore, limited to the characteristics of the entrepreneur only, and even those were limited to the effect of the entrepreneur s involvement and innovativeness on EC adoption. Other aspects such as the entrepreneurial process, other personal characteristics of the entrepreneur such as self-financing, starting from scratch, parents serving as role models and owning their own business, previous experience with a similar venture, motivation, path to ownership and prior experience could be subjects for future research looking into the vital role of the owners of SMEs in diffusing EC in their organizations. CONCLUSION At the theoretical level, the four contexts in the developed adoption model have substantiated the earlier argument between researchers that Rogers (1995) model is not sufficient alone to detect for adoption. The results in this research show that the main drivers for adoption relate to organizational, individual, technological and environmental contexts. Factors such as the size, the compatibility, the CEOs innovativeness, the competition, and the support from technology vendors are needed to complete the adoption criteria of EC in SMEs in NZ. The factors adapted from the previous technological innovation literature have introduced important social and cultural insights pertaining to the adoption criteria in SMEs in NZ. Thus, the technological innovation theories have assisted this research in highlighting unique characteristics within each category of adoption, across the different adoption categories, and in the adoption context of SMEs in NZ. This research used different methods to look into the adoption phenomenon of EC in NZ SMEs from different angles. The survey findings targeting large representable sample of the SME population in NZ, showed more generalizeable results and reported limited significant differences between adopters and non-adopters of EC alongside the three adoption categories of the different EC technologies suggesting the weakness of the EC phenomenon in NZ SMEs. Also, there was a need to address the implications arising from the survey research and to introduce more interpretations where the FG methodology was introduced here as one of the possible solutions. Indeed, this research achieved this task using two consecutive FGs. In addition, the FGs provided rich insights pertaining to the factors influencing EC adoption in SMEs in NZ and resolved many of the vagueness that surrounded the significant/insignificant factors and implications in the survey research. For example, this research found that the limited use of EC in NZ SMEs in the FGs assisted in clarifying the insignificant factors found in the survey research, i.e., the relative advantage, cost, information intensity (specific to certain products/industries), CEOs involvement and pressure from suppliers/buyers. The insignificance of these important factors mostly leads to a conclusion that suggested the weakness of the EC phenomenon in NZ SMEs. The drivers for EC adoption were size, CEOs innovativeness, competition and the compatibility of EC in business. Thus, the main impediments were the small scope of the NZ market, the lack of detailed knowledge about the strategic importance of EC and online business models, the lack of online buyers and suppliers, the lack of international opportunities available to many of the domestic-based businesses, the lack of support from technology vendors, and the unsuitability of products for EC. This approach is important to many researchers interested in conducting multiple research methodologies as it showed clearly the complexity of the EC field. In line with the EC literature, the findings in this research seemed to support the literature in highlighting the laggardness of the SMEs in adopting EC and revealed more specifics pertaining to the adoption phenomenon in NZ SMEs. However, the implications concerning the uniqueness of the adoption context in NZ SMEs are twofold: 1. What was unique to the adoption context in NZ SMEs was the consistent significance of the CEO s innovativeness in adopting EC, which raises the importance of addressing the features of the innovative CEO that motivate the adoption decision and of attempting to combat the features which could hinder adoption. Expanding on this task could be a suitable focus for any future research. Another factor was the negative perception about the performance of technology vendors in NZ in providing adequate advice and services concerning EC to SMEs, which needs to be further addressed as well in any future research. Finally, adopting SMEs viewed EC as compatible with them and hence, this positivism in the adoption culture among those SMEs should be populated among non-adopters in SMEs in NZ. Addressing these significant issues is of great importance to the success of EC in NZ SMEs in the long term. 2. In rationalizing the adoption culture of EC in NZ SMEs, its worth mentioning here that the market structure and the economy are quite unique in NZ. Such uniqueness stems from several facts: that 84% of the NZ sector is dominated by micro-enterprises employing up to five employees only (MOED 2000a); from the country s geographical isolation and from the time differences which separate NZ from the rest of the developed countries in the northern hemisphere specifically. The population in