1.
Factors Affecting the Adoption of E-Commerce among Small Medium
Enterprises (SMEs) In Tanzania:
An Interpretive Study of Arusha
By
Julius Noble Ssekazinga
November, 2015
The work contained within this document has been submitted by the student in
partial fulfillment of the requirement of their course and award

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FACTORS AFFECTING THE ADOPTION OF E-COMMERCE AMONG SMALL
MEDIUM ENTERPRISES (SMES) IN TANZANIA:
AN INTERPRETIVE STUDY OF ARUSHA
Author: Julius Noble Ssekazinga
Student ID: 6134819
Course Title: Masters of Business Administration in Information Technology
Module: Dissertation (MBAITM)
Date: 28th September, 2015
A Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of Masters of
Business Administration in Information Technology Management of Coventry University

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CERTIFICATION
I, the undersigned certify that I have read and hereby recommend for acceptance by Coventry
University the dissertation entitled: Factors Affecting The Adoption Of E-Commerce Among
Small Medium Enterprises (SMEs) in Tanzania _in fulfillment of the requirements for the
degree of Masters of Business Administration/MSc-ITM in Information Technology
Management offered in collaboration between Institute of Accountancy Arusha and Coventry
University.
…………………………………………………….
Mr. Kavuta
(Supervisor)
Date: ………………………………

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DECLARATION
I, Julius Noble Ssekazinga, declare that this dissertation is my own original work and that it
has not been presented and will not be presented to any university for similar or any other
degree award.
Signature…………………………………………
Date…………………………………

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COPYRIGHT
© Copyright
This paper should not be reproduced by any means, in full or in part, except for short extract in
a fair dealing, for research or private study, critical scholarly review or discourse with an
acknowledgement. No part of this dissertation may be reproduced, stored in any retrieval
system, or transmitted in any form or by any means without prior written permission of the
author or Coventry University.

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ACKNOWLEDGEMENTS
The research would like to be grateful to all the past studies that made any input in one way or
the other. I wish to acknowledge all the parties that made this research a great success. This
work would never be done on its own. I am grateful to my Supervisor Mr. Kavuta for the helpful
review and support that he provided throughout this Study.
I am grateful to my lecturers, fellow students and the administration of the MBA-IT program for
rendering an inspirational proficiency to share knowledge.
Special gratitude goes to Lawrence Mukwaya for the Support and encouragement throughout.
Helen Hillary and Maxwell Ndeoya your love and Support was remarkable and greatly
appreciated and God Bless you all.
I am thankful to the owners / Managers of SMEs that gave an opportunity to interact with them
and collect information for my research.
Exceeding all, I am thankful and fully obliged to God Almighty for offering me breath and
unceasing health to allow me to reach this point.
TO GOD BE THE GLORY

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DEDICATION
This study is dedicated to my Family Mum and Dad, Brothers and Sisters Cissy, Francis,
Aloysius and Denis for the love, support and encouragement always. Everything is possible.
God Bless You All.

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LIST OF ABBREVIATIONS
ATM Automatic Teller Machine
E-COMMERCE Electronic Commerce
EDI Electronic Data Interchange
EFT Electronic Funds Transfer
GDP Gross Domestic Product
ICT Information Communication Technology
IT Information Technology
ITT Information and Technology Telecommunication
OECD Organization for Economic Co-operation Development
SMES Small and Medium Enterprises
SPSS Statistical package for Social Sciences
TAM Technology Acceptance Model
TCRA Tanzania Communications Regulatory Authority
WTO World Tourism Organization
WWW World Wide Web

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ABSTRACT
The initiation of e-commerce offers considerable opportunities for large and small businesses
across to enlarge their customer base enter new products and justify their businesses by
competing in the global markets. Tanzanian SMEs have generally been slow to adopt and
evaluate electronic commerce. SMEs performance in Tanzania face a great challenge of how
to adopt and use ICT related technologies particularly e-commerce technology.
The study discovered that the variable knowledge of benefits derived from e-commerce and
infrastructure would enable businesses to actively pursue e-commerce. Additionally Tanzania
Communications Regulatory Authority (TCRA) should put in place policies that regulate
ecommerce businesses. Cost of e-commerce implementation within the business and technical
skills and IT knowledge amongst owners and employees would additionally encourage
businesses in venturing into e-commerce.
The findings show that, lack of ecommerce regulation, security anxieties, infrastructure issues,
organization culture, lack of ICT skills training, slow internet speed, leadership ecommerce
perception and lack of ICT Skilled personnel are major factors affecting e-commerce adoption
among SMEs in Tanzania.
Using the survey research design, the respondents were owners and managers selected from
the Municipal Council of Arusha City and the survey ensured that information gathering was
comprehensive. Interviews were also used for the investigation of factors affecting the adoption
of e-commerce among SMES in Tanzania
The researcher suggested that ecommerce regulating policies should be put in place by the
government. When it comes to the payment means, bank should avail cards that support online
transactions. The knowledge of benefits of ecommerce tools would drive an increase and
sustainable adoption of e-commerce among the SMEs sector in the country. Therefore, there
is need for further research to be done on other regions of Tanzania where the infrastructure
may differ since Arusha is a semi-urban, the factors silently differ in rural regions this will give
greater insights on the easier and faster adoption of e-commerce for greater growth of the SME
sector in Tanzania.

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TABLE OF CONTENTS
CERTIFICATION .....................................................................................................iii
DECLARATION.......................................................................................................iv
COPYRIGHT............................................................................................................v
ACKNOWLEDGEMENTS .........................................................................................vi
DEDICATION ........................................................................................................vii
LIST OF ABBREVIATIONS .....................................................................................viii
ABSTRACT.............................................................................................................ix
LIST OF TABLE .....................................................................................................xiii
LIST OF FIGURES..................................................................................................xiv
CHAPTER ONE: OVERVIEW .................................................................................... 1
1.1. Background of the Study.....................................................................................1
1.1.1. Small and Medium Enterprises (SMEs) in Arusha........................................2
1.1.2. Adoption of E-Commerce amongst SMEs....................................................3
1.2. Statement of Problem - The Rationale ...............................................................4
1.3. Scope of the Study ..............................................................................................5
1.4. The Research Questions......................................................................................6
1.5. Objectives of the study .......................................................................................6
1.6. Significance of the Study.....................................................................................6
1.7. Structure of the Research...................................................................................7
CHAPTER TWO: LITERATURE REVIEW .................................................................... 8
2.1. Introduction ........................................................................................................8
2.2. E-Commerce........................................................................................................9
2.3. E-Commerce Benefits .......................................................................................12
2.4. Adoption of E-commerce..................................................................................14
2.5. Reviewing E-commerce Adoption Factors in SMEs ..........................................16
2.5.1 Individual Factors........................................................................................16
2.5.2 Organizational Factors................................................................................18
2.5.3 Technological Factors .................................................................................21
2.5.4 Environmental Factors................................................................................22
2.6. Factors and challenges Influencing Adoption of E-commerce .........................23
2.6.1. Resources of the Enterprise.......................................................................24
2.6.2. Awareness of Benefits ...............................................................................24
2.6.3. Leadership Style.........................................................................................25
2.6.4. Influence of Infrastructure.........................................................................26
2.6.5. Cost of Implementation.............................................................................27

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2.6.6. Competition ...............................................................................................28
2.6.7. Technical Skills amongst Owners and Employees .....................................29
2.7. Challenges of E-Commerce...............................................................................30
2.8. Conceptual Framework.....................................................................................31
CHAPTER THREE: RESEARCH METHODOLOGY .......................................................33
3.1. Research Design................................................................................................33
3.2. Target Population .............................................................................................33
3.3. Sample Design...................................................................................................33
3.4. Data Collection..................................................................................................34
3.5. Documentary Review........................................................................................35
3.6. Data Analysis and Presentation ........................................................................35
CHAPTER FOUR: FINDINGS AND DISCUSSIONS......................................................36
4.1. Introduction ......................................................................................................36
4.2. General Information .........................................................................................36
4.2.1. Gender of the Respondents.......................................................................36
4.2.2. Age of the Respondents.............................................................................37
4.2.3. Management Level ....................................................................................37
4.2.4. Experience in Business...............................................................................38
4.2.5. Qualifications Levels ..................................................................................38
4.2.6. Use of E-Commerce, Internet and Other IT Tools .....................................40
4.3. Factors Hindering E-commerce Adoption.........................................................40
4.3.1. Lack of E-commerce Regulation ................................................................40
4.3.2. Skilled ICT Personnel..................................................................................41
4.3.3. Leadership Characteristics and Perception of E-commerce Adoption......41
4.3.4. Availability and Slow Speed of the Internet ..............................................42
4.3.5. Security Concerns ......................................................................................42
4.3.6. Access to Payment Facilities......................................................................42
4.3.7. Organizational Culture...............................................................................42
4.4. Factors Influencing Adoption of E-Commerce..................................................43
4.4.1. Benefits knowledge of E-Commerce in a Business....................................43
4.4.2. Infrastructure Issues ..................................................................................45
4.4.3. Cost of E-Commerce Implementation .......................................................47
4.5. e-Commerce Frequency of usage among SMEs ...............................................51
CHAPTER FIVE: CONCLUSIONS AND RECOMMENDATIONS....................................53
5.1. Introduction ......................................................................................................53

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5.2. Summary of Findings.........................................................................................53
5.3. Conclusions .......................................................................................................54
5.4. Recommendations............................................................................................55
5.4. Limitations of the Study....................................................................................55
5.5. Further Research...............................................................................................56
5.6. Policy Implications ............................................................................................56
CHAPTER SIX: CRITICAL EVALUATION OF THE STUDY............................................57
6.1. Introduction ......................................................................................................57
6.2. Experiences faced during the Study. ................................................................57
6.2.1. Positive Experience....................................................................................57
6.2.2. Negative Experience. .................................................................................57
6.3 Project management techniques.......................................................................57
REFERENCES: .......................................................................................................59
APPENDICES ........................................................................................................63
Appendix I: INTERVIEW GUIDE SAMPLE ..................................................................63
Appendix II: QUESTIONNAIRE SAMPLE....................................................................64
Appendix III: BREAKDOWN SCHEDULE ....................................................................69

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LIST OF TABLE
Table 4. 1 Gender and knowledge on benefits of E-commerce.......................................44
Table 4. 2 Education Level and Knowledge on Benefits of E-Commerce .......................44
Table 4. 3 Infrastructure and Electronic Commerce.......................................................46
Table 4. 4 Infrastructure for Successful Application of E-Commerce in Business..........46
Table 4. 5 Education and Infrastructure for E-Commerce Adoption...............................47
Table 4. 6 Costs Associated With Application of E-Commerce in Business...................47
Table 4. 7 Cost of Use of E-Commerce and Other ICT Tools..........................................48
Table 4. 8 Gender and E-commerce Implementation Cost .............................................49
Table 4. 9 Education and E-commerce Implementation cost..........................................50
Table 4. 10 Use of E-Commerce Tools...........................................................................51

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LIST OF FIGURES
Figure 2. 1. Export Performance of selected Goods and Services 2012 -2015..................8
Figure 2. 2 Conceptual Framework................................................................................32
Figure 4. 1 Respondents' Gender ..................................................................................36
Figure 4. 2 Age of the Respondents ..............................................................................37
Figure 4. 3 Experience in the Business..........................................................................38
Figure 4. 4 Management Qualifications..........................................................................39
Figure 4. 5 Use of E-Commerce, Internet and Other ICT Tools.......................................40
Figure 4. 6 Benefits of Application of E-Commerce in Business....................................43

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CHAPTER ONE: OVERVIEW
1.1. Background of the Study
Internet Commencement has delivered a window of dormant for small firms and entrepreneurs
to creatively involve in new value creating activities. Internet is increasingly extensively
accepted that it is important for business to encirclement e-commerce and to adopt Internet
technologies and apparatuses.
According to Fink & Disterer (2006), e-Commerce is defined as any economic or business
activity that uses Information Communication Technology (ICT) based applications to enable
the buying and selling of products and services and to facilitate the transaction of business
activities between and among businesses, individuals, governments or other organizations.
This includes using ICTs to strengthen a company’s internal operations, such as procurement,
logistics and human resource and contracts management, communication functions,
information and data administration and to facilitate the flow of products between businesses
and consumers, e.g. promotion, ordering, payment, distribution, and searching for suppliers
(McIvor & Humphreys, 2004).
E-commerce is a great way of conducting business and presents many opportunities for and
consumers companies. However despite the advantages that its powerful technologies and
practices offer, it has not been adopted as projected and has not stretched to its full potential in
Tanzania. With the initiation of Internet technology and its swift growth during the last few
years, e-commerce has become an accumulative reality.
Although e-commerce still comprises a small part of many country’s economies, it is seen by
many as an opportunity to condense cost and improve productivity. This is accurate as various
economies are shifting themselves into knowledge-based economies, where information and
innovation are competitive instruments (Chan and Al-Hawamdeh, 2002).
They are strained to adopt new and more innovative ways of maximizing the use of information
technology and the Internet in their business actions. Dropping cost, improving productivity and
enhancing customer support are some of the key competitive factors in any prosperous

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enterprise. Geographical locations and size of functions are no longer important factors, as
small companies are now able to sell their products and shrive on the Internet and penetrate
new markets in a very short time.
Nevertheless, Eikebrokk & Olsen, D. H. (2007), argue that most of the studies on ecommerce
adoption evaluation and benefits realization that have been done to-date have been carried out
in large organizations. According to Macharia (2009), there is limited systematic research into
the effects and challenges enterprises face in adopting ecommerce in developing countries and
in particular the SMEs in Tanzania. Hence this study sought to explore the factors that affect
adoption of electronic commerce among SMEs in Tanzania, through a survey of SMEs in
Arusha.
1.1.1. Small and Medium Enterprises (SMEs) in Arusha
Republic of Tanzania defines according to employment size, sector and capital investment.
Small-enterprises are those with 5 to 49 workers, while “Medium enterprises” have from 50 to
99 workers or employees. 2012 Censuses indicate that small-enterprises comprise the lion's
share of enterprises in Tanzania, while there are a few medium enterprises. The number
of employees engaged by the enterprises is the more commonly used unit of
measurement of the size of a business than the turnover, the degree of formality or legitimacy
of the enterprise; capital investment; and degree of skills per worker. (Tanzania SME
Development Policy, 2002)
Jeffcoate et al., (2002) elaborates that SMEs are said to face a "liability of smallness." Because
of their size and resource limitations, they are unable to develop new technologies or to make
vital changes in existing ones. Still, there is evidence that SMEs have the potential to initiate
minor technological innovations to suit their circumstances.
According to O'Dwyer, Gilmore and Carson, (2009), for SMEs to fully develop and use this
potential, they need specific policy measures to ensure that technology services and
infrastructure are provided. Further, research and development institutions that are publicly
funded should be encouraged to target the technology needs of SMEs. Previous studies
have indicated that significant benefits are achieved by those SMEs that adopt and use e-
commerce in their organizations. However, such benefits have not been hugely realized in
SMEs in developing economies like Tanzania owing to the slow adoption of e-commerce.

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Consequently, this paper sought to establish the positive relationship that exists between costs
of e-commerce implementation, Information Technology (IT) skills and training, with SMEs e-
commerce adoption.
1.1.2. Adoption of E-Commerce amongst SMEs
Adoption of e-commerce refers to the use of internet technology in business operations.
Although small businesses may not have the money and expertise to build a sophisticated web
presence, the adoption of e-commerce is important for their on- going survival. E-commerce
improves the ability of small businesses to compete with larger organizations, enables the
small business to operate on an international scale and e-commerce provide a cost-effective
way for small organizations to market their business, launch new products, improve
communications, gather information and identify potential business partners.
According to Marjolein C. J. Caniëls (2015) Internet use amongst SMEs may take many
forms, from simply using the web to purchase supplies to developing a website to sell
products and services. Ing-Long Wu and Shwu-Ming Wu, (2015) a hierarchy of levels of e-
commerce employment could be helpful for analyzing the uptake of e-commerce in SMEs.
According to Jones and Leonard, (2007) it is useful to differentiate between distinct e-
commerce activities, such as
i. Exchanging: swapping information between and amongst customers, partners or
suppliers;
ii. Publicizing: advertising and marketing goods and/or services is made by traditional
means;
iii. Transacting: as in ‘interacting’ but payment takes place online. Integrating – sales and
purchases are fully integrated into one, online operation.
The distinctions in the hierarchy of levels in e-commerce uptake are particularly important for
the small business sector. Unfortunately, according to Shwu-Ming Wu, (2015), it is not well
understood how SMEs can improve their performance with the use of Internet and associated
technologies. However, as a successful company grows rapidly, it will become increasingly
aware of the need to improve and extend its performance. SMEs' adoption of ICT (Information
Communication Technology) does develop, and these changes are made as the strategic
focus of the business changes.

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Implementation of Internet technologies in small businesses has been slow. Many small
businesses resist using Internet technologies and instead continue to use printed materials to
market themselves and use more traditional means to search for information and
communicate with others. It would be more difficult for a small business owner/manager to
envisage the benefits associated with using Internet technologies without being fair with the
Internet and World Wide Web (WWW).
SMEs owners/managers are unlikely to adopt sophisticated Internet technologies if
they are not familiar with more basic ones. Once a small business has adopted use of the
Internet on the adoption of entry-level, they can get familiar and comfortable with the Internet
and in time, move on to the adoption of more sophisticated Internet technologies like e-
commerce. Entry-level technologies can provide tangible benefits to small business users.
Despite the commonly accepted advantages of Internet, there is lack of any established criteria
for measuring the use of internet-based e-commerce.
1.2. Statement of Problem - The Rationale
Comprehending that digital technology has become a key factor of economic growth; e-
commerce has become one of the key interests for businesses. It is noted e-commerce use in
SMEs is still at its infancy despite the benefits indicated by different studies. This is because
there has been an explosion on technology in the recent past and business realize that they
stand to gain a lot if they maximized the use of ICT tools. E- Commerce is therefore important
to business in that the ICT tools will assist the SMEs to improve their productivity as this
provides an avenue in which business can market their businesses, launch new products,
improve communication and gather information. This study therefore sought to build on
the knowledge on rate of adoption and frequency of use of e-commerce amongst SMEs.
Arusha SMEs have over the years increased in numbers and incidentally some firms have
adopted the use of e-commerce in running their business and it is still not quite clear why
others have not adopted or are yet to adopt the same. Thus this study tried to explore and find
out what factors and challenges face SMEs’ adoption of e-commerce in Arusha town. The
SMEs operations cut across almost all sectors of the economy, and sustain a high percentage
of households in Tanzania. The SMEs also contribute to long-run industrial growth by
producing an increasing number of firms that grow up and out of the small sector and in turn

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contribute immensely to the growth of the GDP of the country. It has been observed that SMEs'
activities form a breeding ground for businesses and employees, and provide one of the most
prolific sources of employment. This study therefore unearthed some of the factors
influencing adoption of e-commerce and consequently would be useful for the government and
academicians in coming up with strategic policies and procedures.
1.3. Scope of the Study
The scope of this study involves the adoption and utilization of ICT to enable the buying and
selling of commodities and the exchange of information that brings business value to SMEs in
Arusha. Thus, any electronic transaction that involves the Internet and e-mail, with or without
the web, does constitute e-commerce in this study. Other than using personal computers for
business transactions, participants in e-commerce may employ various other devices and ICT
applications (Ngai & Wat, 2002) that are mobile, thus encompassing mobile commerce.
Although most e-commerce transactions usually revolve around the website, other transactions
may be generated by an individual or corporate client through other media such as social
networking sites, blogs, and other platforms, from any location on the globe.
The scope of e-commerce in this study extends the description given by Jain & Jain (2011) in
the Indian context which ‘consists of transactions for which Internet acts as a medium for
contracting or making payment or for consuming the service/product by the end user.’
Furthermore, they state that three alternate combinations of these activities include:
a) paying online and consuming online,
b) paying offline but consuming online, and
c) Contracting and paying online but consuming offline.
This study incorporates the use of email and the Web as a means of enhancing business
communication through features such as marketing, ordering or payment processes. Thus
emphasis is placed on the means of achieving business value through e-commerce than the
technology that facilitates the process, although in some cases it becomes useful to explain the
ICT that facilitates e-commerce to be able to classify the type of e-commerce being used, such
as mobile commerce.

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1.4. The Research Questions
Objective of this study is to explain contextual factors affecting SME e-commerce adoption in a
Tanzania basing on the few studies and theories done on developing countries.
1. How frequently is e-commerce adopted and influenced among SMEs in Tanzania?
2. What Factors and Challenges affect the adoption of e-commerce among SMEs in
Tanzania?
3. What are managerial characteristics and perceptions of e-commerce adoption in
Tanzania?
1.5. Objectives of the study
The objectives of the study were as follows:
(i.) To assess the frequency usage of e-commerce among SMEs in Tanzania
(ii.) To Identify the challenges the factors and that influence adoption of e-commerce
among SMEs in Tanzania
(iii.) To determine how managerial perceptions, resources, infrastructure and eduction
level influence adoption of e-commerce among SMEs in Tanzania
1.6. Significance of the Study
The growth of SMEs in Tanzania is increasing and the Government could use the study to
create favorable policies to ensure that the growth of the SMEs Sector and increased use of
technology. Through identifying the major facilitators and inhibitors, this study may help
government and industry bodies to provide appropriate information and support and thus
enhance e-commerce technology adoption by small businesses.
The study will be a reference point for stakeholders in the technology industry. The study
would guide them on the factors and challenges that influence technology adoption and will
help the stakeholders understand what measures and strategies they need to adopt to ensure
that SMEs will be able to easily use the technology presented to them. Further to this they
would be able to customize the technology to suit the demand of SMEs in Tanzania
The study will be of importance to the owners-managers of SMEs in Tanzania, as it would help
them understand the factors that influence the adoption of electronic commerce and how they
can overcome the barriers. It can also guide them in the strategies they should adopt in
relation to technology based on the trends in the industry. This is also useful to other

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researchers who are interested in SMEs and adoption of Internet technologies, intellectuals
and the general community.
1.7. Structure of the Research
A snapshot of the chapters and sections that are covered in this research is provided below.
Chapter 1 Introduction and Rationale: This chapter provides the introduction to the research
and the problem area. It introduces the reader to the research context by discussing pertinent
issues regarding SMEs and e-commerce adoption in the global world as well as in developing
countries.
Chapter 2 Literature Review: This chapter sets out to review related literature on e-commerce
adoption in SMEs. Picking up from the first chapter that defined the research questions and
objectives, the first sub-section in chapter 2 provides a brief history of e-commerce and also
lays the foundation for the classification of SMEs, the potential benefits of engaging in e-
commerce.
Chapter 3 Research Methodology: the research was carried out as a survey design using
target population, research design and sample design.
Chapter 4 Findings this chapter discusses the findings of the research. Firstly, a summary of
findings for presented SMEs. This is followed by a discussion on the several factors, their
manner of impact and how they emerge in each of the selected SMEs. The interaction of
factors is discussed and how they influence the level of e-commerce adoption in the selected
SMEs.
Chapter 5 Conclusions: This is the last chapter in the thesis. It provides a summary of the
major research findings based on the research questions. A section on the research
contribution is provided reflecting on aspects of research and practice
Chapter 6 Critical Evaluation of the Study: This section gives the depth and critical analysis on
what happened when doing the research.

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CHAPTER TWO: LITERATURE REVIEW
2.1. Introduction
Tanzania’s economic performances in the last ten years were highlighted, with an average
yearly GDP growth of 6.8%, something that has attracted international capitals doubling the
Foreign Direct Investment (FDI) net inflows to the country from USD 935 million in 2005, to
USD 1,872 million in 2014 according to the World Bank (WB).
Tanzania economy is developing economy with agriculture and Tourism being the chief
economic activity. Most of the people in Tanzania work in the agricultural sector. Some
practice subsistence farming, while a very small number practice large-scale farming. For those
who practice small scale farming, their source of income is mainly from the sale of the farm
produce. Some are in small businesses like selling of agricultural goods in market places while
others trade in livestock and selling of milk and art and crafts business, which targets mostly
tourists.
Figure 2. 1. Export Performance of selected Goods and Services 2012 -2015
Tanzania has also launched the Tourism Destination Portal, an online tourism promotional tool
aiming at connecting the Small and Medium Tourism Enterprises (SME’s) in the country, with
the international tourism markets and supported by the United Nations Development
Programme (UNDP) which currently manages 35 projects and a budget of USD 44 million in
the country. (Tirabassi, 2015)

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2.2. E-Commerce
The origin of Internet was in 1969 as a Department of Defense experiment that involved
networking four computers to facilitate communications in the event of a nuclear war (Martin &
Matlay, 2001).
Until about 1993, the Internet remained an obscure computer network with few commercial
applications. By 2003, Internet users numbered 390 million worldwide because the growth was
facilitated by the introduction of technology that provided access to World Wide Web (Barkakati
and Maurer, 2010). Internet has four functions; communication, information, entertainment and
electronic commerce which is composed of electronic exchanges, extranets and private
exchanges, electronic storefronts, online ticketing and auctions (Thanasankit, 2003). Tourism is
ranked among the world‟s largest industry, with a global GDP of 11%, and also the largest on-
line industry (Roger, 2012). Africa, with its great wealth and unique resorts, can benefit from
the ever-increasing population of the Internet particularly in the USA and Western Europe
where most of the tourists to Tanzania come from (WTO, 2001). O'Dwyer, Gilmore and Carson,
(2009) undertook a survey to find the nature and extent of electronic commerce adoption by
tourism organizations from South Africa, Kenya, Tanzania and Uganda, which are all popular
tourist destinations in Eastern and Southern Africa.
According to Simpson and Docherty (2004), e-commerce is the paperless exchange of
business information using electronic data interchange (EDI), e-mail, electronic bulletin
boards, fax transmissions, and electronic funds transfer. E-commerce involves the buying
and selling of products and services by businesses and consumers through an electronic
medium. Simpson adds that E-commerce is widely considered the buying and selling of
products over the internet. The Internet has created a new economic ecosystem, the e-
commerce marketplace, and it has become the virtual main street of the world. It provides a
quick and convenient way of exchanging goods and services both regionally and globally; e-
commerce has boomed.
E-commerce has developed over the years and will continue to shift and change the future.
The term ‘electronic commerce’ was coined in the early 1990s when Internet became
commercialized and users began flocking to participate in the World Wide Web (WWW). E-
commerce applications were then rapidly expanded. Turban et al.,(2006) narrated more that
taking things that your company is already doing in person, through the mail, or over the
telephone, and doing those things in a new place i.e. on the Internet . Turban et al (2006) aslo

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found out that although e-commerce is still a relatively new term within the society, it actually
has been around for several decades.
According to Bauknecht, Madria and Pernul (2000), The first e-commerce application,
Electronic Funds Transfer (EFT), was developed in the early 1970s to allow funds to be
routed electronically between financial institutions. As an extension to EFT, Automatic
Teller Machine (ATM) was introduced in the early 1980s, to enable financial transactions
to be carried out over a computer network (Dyerson and Barnes, 2008). Then Electronic Data
Interchange (EDI) was developed later in 1980s to enable a wider application of e- commerce
across industries. It allows structured business documents to be exchanged electronically
between different computer systems without human intervention (Bauknecht, Madria
and Pernul, 2000). In 1990s, the Internet was commercialized and the term e-commerce was
introduced. With the availability of the Internet and the popularity of the World Wide Web to
access the Internet, e-commerce has grown significantly in the last few years.
According to Kula and Tatoglu (2003), the concept of e-commerce is all about using the
Internet to do business better and faster. It is about giving customers controlled access to your
computer systems and letting people serve themselves. It is about committing your company to
a serious online effort and integrating your Web site with the heart of your business. The
Internet’s role in business can be compared to that of the telephone. It is a way for people to
communicate with each other. It is also a way for a consumer to communicate with a
company’s computer systems without human intervention. The opportunities and situations in
which online business is possible are limitless.
Turban et al. (2006 ) revealed that e-commerce is not only limited to buying and selling over
the Internet, but it is also concerned with transferring or exchanging products/services and
information via computer networks, including the Internet, Extranet and Intranet. E-commerce
is important for an economy’s growth because it assists businesses with many levels of current
business transactions, as well as creating new online business opportunities that are global in
nature. According to Jeffcoate, Chappell and Feindt (2002), businesses can do things with e-
commerce that would be prohibitively expensive or logistically difficult to do through older
channels of commerce.

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A Website is naturally a 24-hour-a-day operation, unlike a traditional 8-to-5 company. It is much
easier to keep a Web site up to date with all your company and product information than it is
to do the same thing with print materials. The interactivity and completeness of an e-
commerce Website can engage customers more directly, giving them a feeling of
empowerment and control that is difficult to duplicate through other methods of doing business.
Cloete et al., (2005), argues that businesses today are using e-commerce to open their doors
to the entire world. People are getting more exposed to the world of instant response that e-
commerce makes possible, they are starting to expect that kind of connection with more and
more of the businesses with which they deal. For instance, people prefer booking their travel
online rather than talking to a travel agent or buying their theatre tickets over the Internet rather
than standing in line at a box office. These people welcome the ability to evaluate and buy
products on their own schedules rather than on someone else's.
Nevertheless, Bauknecht, Madria and Pernul (2000) reported that not every business will be
able to take full advantage of e-commerce right away. Few companies have built their existing
data systems with the idea that it would be necessary to give the outside world access to any
part of those systems. Busy small companies may find it difficult to set aside the time
necessary to define and implement e-commerce in a way that makes sense for the way they do
business. Companies should keep the possibility of future electronic commerce plans in mind
when they start new initiatives or products.
In the business world, whether you are doing business online or in the real world, you have to
have a product to sell or a service to offer and a place from which to do business. In the
traditional world of commerce this can be a physical store or, in a more figurative sense, a
catalogue or phone number. In the world of e-commerce the place from which you do business
is your Web site. Poon and Swatman (1997) also acknowledged that technology is no longer
an afterthought in formulating business strategy, but the actual cause and driver. E-
commerce is about structural transformation i.e. revolution of the rules of business. The
ability to streamline the structure and to influence and control the flow of information is
dramatically more powerful and cost-effective than moving and manufacturing physical
products. E- Commerce is enabling companies to listen to their customers and become
the cheapest, the most familiar or the best.

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2.3. E-Commerce Benefits
Molla, (2005) argues that the concept of e-commerce is fast becoming advantageous for both
the business and consumer in today's fast moving and electronically-connected world. For
many businesses, e-commerce is becoming the only option, as companies become more and
more interested in expanding their operations online. E-commerce has many benefits and
advantages not found in the typical brick and mortar location, and therefore, explains why so
many businesses are flocking to the web. Datta, (2010) noted that e-commerce offers
advantages that include the ability to expand into global markets with a minimum of expense,
thus allowing firms to reach narrow market segments that are geographically scattered.
Internet being a cost effective medium of delivery, the main advantage of online ecommerce is
its cost efficiency. The reason behind this is that e-commerce decreases the cost of creating,
processing, distributing, storing and retrieving paper-based information. High mailing and
printing costs are also lowered or, in many cases, completely eliminated as the buyer most
often pays for the shipping of the products that they buy. The cost of marketing of promotional
material also drops radically.
Another major advantage that most companies see is the increase in sales e-commerce brings,
and increased sales typically mean increased profits as well. Additionally the advantage of
moving a business online is that it allows the flexibility to target market segmentation, which in
turn allows business to focus on a select group of customers, thus having a competitive
advantage in giving them what they want and satisfying unique needs. (Utomo and Dodgson,
2001)
This benefit ties in with the advantage of ‘customer customization,” in which the concept of
'built-to-order', allowing for inexpensive customization of products and services and provides a
competitive advantage for companies who adapt this strategy. Molla, (2005) noted that e-
commerce removes barriers of global trading due to the fact that the Internet is a zero-cost
delivery channel, and thus, many products and services, which are generally delivered as a
physical object or service, are now delivered virtually in the form of data. This removes barriers
such as time, distance and of course cost.
E-commerce marketing also allow for real-time communications and the interchange of data in
the supply chain, making the supply chain more effective. By having better visibility across the
supply chain, company inventory levels can be reduced, as supplies are more predictable.

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With lower inventory levels, costs can once again be automatically decreased (Jones and
Leonard, (2007). It also allows information to flow freely between cooperating businesses,
making it easier and simpler for organizations to share information.
Janet Wylie, (2000) found that the cost savings and efficiencies from sharing and economies of
scale can have a profound effect on the profitability of any online business. As a result this
has led to the development of collaborative working practices around the world, as
collaborating businesses manage, share, and enhance project work regardless of location. It is
important to consider, however, that buyers or customers also benefit from doing their buying
online. As sales opportunities expand for the business, they also increase the buying
opportunities and power for the buyer. Belew and Elad, (2009) noted that many buyers
choose to shop online as it provides them with an almost unlimited variety of choices
from many different products and services from a wider variety of sellers
Consumers also benefit from less expensive products and services as e-commerce allows
customers to shop the convenience to shop from any location and at any given time of the day.
E-commerce offers buyers maximum convenience. They can visit the web sites of multiple
business round the clock a day to compare prices and make purchases, without having to
leave their homes or offices from around the globe. In some cases, consumers can
immediately obtain a product or service, such as an electronic book, a music file, or
computer software, by downloading it over the Internet.
Furnell and Karweni (1999) noted that for sellers, e-commerce offers a way to cut costs and
expand their markets. They do not need to build, staff, or maintain a physical store or print and
distribute mail order catalogues. Automated order tracking and billing systems cut additional
labor costs, and if the product or service can be downloaded then e-commerce firms have no
distribution costs involved. Since the products can be sold well over the global Internet, sellers
have the potential to market their products or services globally and are not limited by the
physical location of a store. Internet technologies also permit sellers to track the interests and
preferences of their customers with the customer's permission and then use this information to
build an ongoing relationship with the customer by customizing products and services to meet
the customer's needs.

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According to El-Nawayi and Ismail (2006) the Internet is a huge resource center for any
business information; suppliers, resellers, distributors, importers, exporters, products and
services. Enterprises can get any kind of business information from all over the world right from
their computers. The Internet achieved fast, secure and useful access of information. Today,
information being a power in the business environment, the integration of ICTs and Electronic
commerce is a crucial step for every developing nation. Reduced advertising cost is one of the
major benefits E-commerce gives to enterprises. Websites serve 24 hours a day and 7 days a
week all over the world. Besides, the cost of owning a website is much less compared to the
benefits they provide (Kaynak et al., 2005).
Udo (2001), notes that people buy and sell online in the simplest and easiest ways. Buyers
have whatever they need right on their computers and sellers can reach their customers
wherever they are just right from their tables. Besides, the process of buying and selling goods
especially that of digital goods is a matter of minutes no matter where sellers or buyers are
located. There are no middle men needed, no limit or border. The process will end between
the seller and the buyer just in minutes saving much time and energy. E-commerce knows no
boundaries. Geographical limits do not seem to exist. Enterprises can reach markets that can
be found in their opposite corner of the world in no time. This is one feature of E-commerce;
making our globe a very small village.
Customers are treated well enough through enterprise websites. They can get whatever
information they need, view products of their preference, compare prices, get in contact with
vendors, and buy simple and easy. Hu and Plant (2001) argue that the adoption of E-
commerce in the developing nations is becoming mandatory since the world is becoming a
global village and for maximum benefits, local business are encouraged to link up with the
international firms to expand their horizons.
2.4. Adoption of E-commerce
According to Chan and Al-Hawamdeh (2002) define adoption as the up-take of something new,
in this case new technology. Economic globalization and the development of
information and communications technology are the two principal trends, which have dictated
the shape of business and industry in the second half of the 20th century and beginning of the
new millennium. According to Soliman and Youssef (2003) the level of adoption of Information

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and Telecommunication Technologies (ITT) for accessing the Web, and implementing “e-
Commerce for Buying” and “e-Commerce for Selling” increases over the time.
Obviously a much higher proportion of businesses are adopting the technologies for simply
accessing the Web for e-Commerce. Some of the factors influencing a firm’s decision to adopt
these technologies are: the price of ITT, firm size, network externalities, and learning
externalities. At the same time there are different types of unobserved factors, at the regional,
temporal and firm level, which influence a firm’s decision to adopt the technologies.
Sambamurthy et al. (2003) found that implementing e-commerce applications to enable
a competitive edge has become a core and important strategy in most contemporary
corporations. Adoption of e- commerce plays a fundamental role in a firm's ability to enhance
output.
According to Agarwal and Sambamurthy (2002), contemporary firms are making significant
investments in e-commerce to align business strategies, enable innovative functional
operations and provide extended enterprise networks. These firms have adopted information
technology to foster changes in managing customer relationships, manufacturing,
procurement, the supply chain and all other key activities and to enhance their
competitive capabilities. Firms implement information technology to enhance and/or enlarge
the scope of their products and services. As many innovation activities involve adding new
services, expanding existing ones and/or improving the service delivery process, the success
of an organization hinges on how well it implements its service innovation to create new
markets.
According to Bowles and Wilson (2002), adoption of Ecommerce is the new way of doing
business. It is highly changing and affecting the whole way of global business transactions.
Nations need to integrate this technology in order to compete and secure their survival in the
global market. In the course of integration of E-commerce there is a huge divide called the
digital divide which divides the world nations into two categories. The first are the developed
nations, with high E-commerce and ICT integration hence getting tremendous benefits from the
global competition, and the others are the developing nations with low integration of E-
commerce and loosing benefits of the global market competition.

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Zhu et al. (2003) noted that while Internet retail sales have increased tremendously in the past
decade, they still represent a relatively small share of total retail sales. There are many retail
firms that do not transact over the Internet yet. Better insight into entry determinants can help
companies in improving their strategies and coping with the impact of new entry. Therefore,
awareness of the industry evolutionary dynamics is important both for new entrants and
incumbents.
2.5. Reviewing E-commerce Adoption Factors in SMEs
E-commerce adoption factors can be described as those that motivate or inhibit the adoption of
e-commerce (Cragg and King, 1993). This review adopts a four dimension framework for
reviewing the factors affecting e-commerce adoption and use in SMEs that has been slightly
modified from the Tornatzky and Fleischer (1990) model. According to Tornatzky and
Fleischer, the process by which a firm adopts and implements technological innovations is
influenced by the technological context, the organisational context, and the environmental
context. Thus, the factors will be based on the organisational, environmental, technological,
and individual dimensions.
2.5.1 Individual Factors
Issues surrounding individual persons are an important aspect of the adoption of ICT and e-
commerce in any organization. In SMEs, the position of individuals matters a lot as they are
supposed to be generalist (Drew, 2003) in performing their functions. Most SME personnel are
either in key managerial positions or are classified in a unit or function that performs a certain
task or numerous tasks. Most SMEs are run by a manager who is usually an owner of the
organization (Demirbas, Hussain, & Matlay, 2011). The following sub-sections describe
owner/manager and other individual aspects affecting e-commerce adoption.
2.5.1.1 Owner/Manager Characteristics
Literature continues to recognize the significance of the owner or manager in the adoption and
use of ICT and e-commerce amongst SMEs (Caldeira and Ward, 2002; Charterjee et al., 2002;
Looi, 2005; Stockdale & Standing, 2006; Bharati and Chaudhury, 2006). Owner/manager
factors relate to executive decisions that the SME owner /manager must make, what financial
commitments to take relating to the overall direction of the firm, acquisition of new e-commerce
infrastructure, whether the SME must consider e-commerce adoption or not, their appreciation
or non-appreciation of ICT and new technological developments, and the like. This could be
expected since the owner and manager is the full driver of all business undertakings in the

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organisation (Riemenschneider et al., 2003). The challenge comes when the manager is
reluctant to push for e-commerce developments. A vibrant SME owner and/or manager usually
transform the SME objectives to grow the organisation further (Karakaya and Shea, 2008).
Where the owner or manager of the small enterprise slumbers and does not appreciate the
value of ICT innovation, there is stifled growth in the firm. Extant studies have further
established that a combination of owner/manager perspectives and attitudes towards ICT
adoption and use, play an important role in the development of internal ICT competencies, and
provide an important contribution to the development of an environment that enables ICT
adoption and use (Wilson et al., 2008; Caldeira and Ward, 2002; Cloete et al., 2002).
2.5.1.2 Level of Education
It is also necessary that the owner/manager and other key personnel in SMEs attain an
acceptable level of education in order to drive e-commerce activities in their firm. Research
studies have found that one of the criteria for successful e-commerce adoption amongst SMEs
is the level of education (Thong, 1999; Sarosa & Zowghi, 2003). A basic level of education
such as General Certificate of Education (GCE) or its international equivalent is critical as it
allows easy communication and appreciation of business terms in global business. Most SME
owner/managers, especially in developing countries, are unable to communicate in
international languages that give access to global markets. A general acceptable level of
education would be a high school ordinary level certification, although higher business
qualifications are better.
2.5.1.3 Level of ICT and E-commerce Knowledge
Another individual factor is the level of ICT and e-commerce knowledge. It is expected that an
acceptable level of ICT and e-commerce knowledge of the owner or key manager, and other
key decision making personnel can assist the SME to adopt appropriate e-commerce activities
in their business (Teo & Ranganathan, 2004; Meso, Musa & Mbarika, 2005; Looi, 2005). A
higher level of appreciation of ICT and e-commerce principles by the owner or key manager will
directly influence considerations for further e-commerce uptake in the business. Due to the
availability of resources and ease of entry into the business sector, SMEs in 40 developed
countries have a better knowledge of ICT than those in developing countries (Eriksson et al.,
2008). In a comparative study of how SMEs in the US and Canada manage information
technology (IT), Montazemi (2006) found that SMEs in US make better use of ICT and are
better guided in managerial decisions-making. Karakaya and Shea (2008) depicted a high
satisfaction of e-commerce initiatives in US companies which has resulted in expected levels of

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e-commerce success. In most developing countries, a low literacy level amongst SMEs is
prevalent (Mollar and Licker, 2005a). This makes it difficult particularly for owner/managers to
appreciate and comprehend ICT and e-commerce opportunities on the market.
Some SME owner/managers lack the zeal and creativity to act beyond their environment
(MacGregor, 2004; Lawson, Alcock, Cooper, & Burgess, 2003; Shemi and Magembe, 2002). In
most cases, especially in developing countries, SME managers would do just the barest
minimum to make themselves abreast with technology. Many who have complained about the
cost of technology for e-commerce set-up have not explored other inexpensive ways of
accessing global markets, such as open source software, short message service (SMS)
facilities and other new generations of ICT (Scupola, 2010).
Previous studies (Mutula & Van Brakel, 2007; Ssewanyana & Busler, 2007) emphasise the
importance of ‘skilled ICT personnel’ within the organisation or from outsourcing firms to assist
in deploying and using e-commerce. Wilson et al., (2008) found that skilled ICT personnel were
crucial for e-commerce progression in the UK SMEs. They further argue that this factor is more
important than financial ability.
2.5.1.4 Social and Cultural issues
Researchers have stated the need to consider social and cultural factors in the adoption of e-
commerce in developing country contexts (Vatanasakdakul et al., 2004). They further argue
that social and cultural factors are often disregarded when e-commerce technology is
transported from developed countries to developing countries where it is implemented.
2.5.2 Organizational Factors
Organizational factors are those that are defined from the nature and characteristic of the firm
itself, usually making it unique to the firm. A number of factors have been cited that hinder or
motivate e-commerce adoption within the boundary of an organization. These are discussed in
the following sub-sections:
2.5.2.1 Security and Privacy Concerns
Issues of trust, security and privacy are amongst the most critical determinants to the success
of e-commerce adoption for online consumers (Lawson et al., 2003; Humphrey et al., 2003).
According to Choudhury (2008) security can be described in two categories: protection of
transactional detail of the customers and privacy of the personal information of the

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respondents. Security concerns have allowed partial application of e-commerce where only
electronic mails are accepted online without electronic payments (Burgess, Sellitto and
Karanasios, 2009). In many developing countries, the Internet and the networking jargon are
still being regarded as complex phenomena by many SMEs who may presume them to be
predators for their data (Tan et al., 2007).
The absence of an e-commerce regulatory framework is a drawback to SMEs should security
be breached during e-commerce transactions. Most developing countries are yet to enact laws
for e-commerce governance and any delays on this aspect means that e-commerce initiatives
in SMEs are curtailed. Lawson et al., (2003) noted that most SMEs have no financial ability to
secure their systems after viral attacks.
2.5.2.2 Financial Ability and Cost Implications
Amongst the challenges that hinder development in e-commerce in SMEs is the issue of
finance as it relates to the amount of financial resource that a firm can utilize for setting-up,
buying necessary ICT for e-commerce implementation, consultancy fees and training
personnel and maintenance of websites and other infrastructure (Lee et al, 2003). However, in
a UK study by Simpson and Docherty (2004), it was found that cost was not an inhibitor to e-
commerce adoption amongst SMEs. In most developing countries, SMEs have little or no
financial resources to acquire ICT infrastructure or to venture into e-commerce initiatives
(Burgess, Sellitto and Karanasios, 2009).
2.5.2.3 Size of the Organization
According to it has been found that the size of the organization can influence the decision to
adopt e-commerce (Bharati and Chaudhury, 2006). Larger businesses are known to have
plenty of resources at their disposal, especially with supply chain management (SCM) systems
(Burgess, Sellitto and Karanasios, 2009) that link with suppliers. A small firm will find it very
challenging to acquire such a system due to the high cost of set up. In the US context, Bharati
and Chaudhury (2006) studied the extent and nature of ICT adoption in SMEs in the Boston
area. They found that firm size has a significant impact on what technologies are employed.
Further, they found that simple technologies, including Web and accounting packages, were
used widely across all firm sizes, whereas complex technologies such as Customer
Relationship Management (CRM) and SCM were minimally employed. Recently, the impact of
size has generally been found to be an insignificant influence on e-commerce adoption

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(Karakaya and Shea, 2008), possibly because the playing field has been levelled with better
and easier logistics to deploy e-commerce systems.
2.5.2.4 Perceived benefits of ICT
The perception of benefits to be derived from e-commerce adoption and use is another factor
that is cited in literature (Chibelushi and Costello, 2009 ;). Most SMEs in developing countries
are unaware of what technologies, including e-commerce, can be of benefit to them due to lack
of education and sometimes ignorance. They often assert that perceiving the good of the
technology before actually using it is rather difficult. Another barrier similar to this is the
‘negative mindset’ regarding the technological/regulatory environment (Burgess, Sellitto and
Karanasios, 2009).
2.5.2.5 Organizational Culture
Organisational culture has been identified in the literature as a key issue affecting the adoption
and use of e-commerce SMEs (Montazemi, 2006; Thatcher et al., 2006; Tan et al., 2007).
Hofstede’s (1984, 1993) work has been useful to describe the role of culture in IS/IT adoption
research. Some cultural dimensions are described below:
a) Power distance: The extent to which the members of a society accept that the power in
organisations is distributed unequally.
b) Uncertainty avoidance: The degree to which members of a society feel uncomfortable
with uncertainty and ambiguity.
c) Individualism versus collectivism: The extent to which a person sees herself as an
individual rather than part of a group.
d) Masculinity versus femininity: Preference for achievement, heroism, assertiveness and
material success as opposed to feminism, which refers to a preference for
relationships, caring and quality of life.
e) Time orientation: The relative importance of the here and now versus the future.
In their study in South African SMEs, Humphrey et al (2003) found that SME managers were
more interested in establishing face to face business meetings than web-enabled business
discussions. This corroborates earlier studies by Duncombe & Heeks (1999, 2002) who found
that SMEs and rural micro-entrepreneurs in East Africa relied on informal, social and local
information systems.
Thatcher et al., (2006) found that Taiwanese culture had an influence on e-commerce adoption
and that this was further differentiated depending on industry affiliations.

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In the Chinese context, Martinsons (2008) describe an e-commerce scenario that is
relationship-based, and culturally driven by a Chinese term, called ‘guanxi’.
2.5.3 Technological Factors
Technological factors are those that are obtained from the nature and characteristic of the ICT
that the SME employs or intends to use for e-commerce adoption (Scupola, 2009). These
factors are discussed as follows:
2.5.3.1 Availability and Slow Speed of Internet
In many developing countries, the availability of Internet in SMEs has greatly contributed to the
delay in adopting e-commerce (Uzoka et al., 2007; Molla and Licker, 2005a; Magembe and
Shemi, 2002). Further, the slow speed of Internet does not motivate or promote e-commerce
adoption as well (Oreku et al., 2009; Mutula & Van Brakel, 2007).
2.5.3.2 Complexity of Technology
The complexity of ICT can be considered a key factor affecting e-commerce adoption in SMEs.
Some organisations have been sceptical to adopt e-commerce technology because of
concerns about data management issues between the old and new ICT applications (Forman,
2005).
2.5.3.3 Lack of Payment Facilities
The lack of payment facilities such as credit cards has prevented the completion of e-
commerce transactions as reported by Mercer (2005) in Tanzania.
2.5.3.4 Lack of Reliable Power Supply
Another situation affecting e-commerce adoption is the unreliable supply of power or electricity
to operate ICT equipment. In Tanzania (Mercer, 2005) and Botswana (Magembe & Shemi,
2002), previous studies found that the lack of power or electricity prevented small businesses
especially in rural areas from adoption e-commerce.
2.5.3.5 Language Barrier
Previous studies have pointed out that language barrier deters many people in developing
countries from participating in e-commerce (Vatanasakdakul et al., 2004). They further note
that ICT and e-commerce applications are developed in the western countries with English as
the main language of communication and so it is taken for granted that users in other parts of
the world must automatically understand the language, which may not be applicable in other
contexts.

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2.5.4 Environmental Factors
The external environment of the SME organization also impacts some challenges to e-
commerce adoption. It describes the realm of business engagement of the firm (Scupola,
2009). This describes factors such as government role; business partner affiliation and
preferences; nature and characteristic of value chain; logistics and telecommunications
infrastructure; economic and political instability; human-rights issues; business culture; macro-
economic policies; natural disasters; floods; and earthquakes. A brief review of each of these
follows:
2.5.4.1 Government Support
The role of government in providing various forms of intervention has been cited as a catalyst
for the development of e-commerce in SMEs (Thatcher et al., 2006; Martinsons, 2008).
Government support can come in the form of facilitating policy for SME operations in the
country, institutional support for providing financial and technological assistance, improving e-
commerce infrastructure, and enacting favourable e-commerce laws (Scupola, 2003).
Researchers (Dunt and Harper, 2002; Chan and Al-Hawamdeh, 2002, Martinsons, 2008) noted
that developed countries’ ability to adopt and use e-commerce and e-business at advanced
levels has been greatly enhanced by their government’s proactive role in providing the enabling
infrastructure for e-commerce to thrive. Unfavourable government and regional policies stifle
creativity among SMEs, threatening the existence of this sector in the economy.
2.5.4.2 Business Partner Affiliation
Another factor that influences the adoption of e-commerce in SMEs is the business partner
(Parker and Castleman, 2009) who may be suppliers or customers (Wilson et al., 2008).
Business partner relationships are usually portrayed from the suppliers or customer’s
perspectives. SMEs will usually want to develop and deepen a business relationship with the
aim of establishing a long-lasting business partnership (Castleman, 2004). This idea works well
if the business partner recognizes the strategic value and competitive advantage that this can
bring to both organizations.
2.5.4.3 The Nature and Characteristic of Value Chain
In the B2B market place, social relationships between buyers and sellers can open up room for
e-commerce adoption or close opportunities for growth. The closed nature of industries like
horticulture does not necessitate the need to undertake business on the open Internet, as all
stakeholders are within a closed market system (Humphrey et al., 2003). Any decision to adopt

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e-commerce will have to be considered alongside other stakeholder’s position in the market
system.
2.5.4.4 Economic and Political Instability and Human Rights Issues
Economic and political instability prevents SMEs from freely trading in the country and their
regional groupings due to several uncertainties. Related to this is the human rights situation
that may hinder SMEs participation in e-commerce.
2.5.4.5 Business Culture
The prevailing business culture in the SME environment has been cited as crucial for the
development of e-commerce (Martinsons, 2008; Thong, 1999). This has been found to be
different from country to country even amongst developed countries (Scupola, 2009). For
example, most SME managers in East Africa in particular, can be said to have low uncertainty
avoidance and low individualism, meaning that people can easily interact and share ideas with
friends or relatives without much consideration of losing individual identity.
2.5.4.6 Macro-Economic Policies
The presence of macro-economic policies in developed economies has been a catalyst for e-
commerce growth (Martinsons, 2008; Molla and Licker, 2005a). In their study on the role of
institutions in the diffusion of e-commerce, Molla, Taylor, & Licker (2006) found that during the
early stages of e-commerce penetration, public and external institutions play ‘key roles in
creating conducive conditions and in providing the impetus necessary for e-commerce to
spread.’ In less developed economies, other forms of regulatory policies may have to be
pursued to enable e-commerce adoption using various types of technologies to complement
efforts made by their governments.
2.6. Factors and challenges Influencing Adoption of E-commerce
E-commerce has become so convenient, that we don't spend much time thinking about the
disadvantages of e-commerce. As the twenty-first century unfolds, the Internet and electronic
commerce have become increasingly important to the business world (Maswera & Edwards, 2008).
In particular, small to medium sized businesses (SMEs) can now overcome some of their major
disadvantages, such as size, limited financial, technological and human resources, and limited
exposure to the global marketplace, by adopting Internet technologies (Cooper & Burgess,
2000; Riquelme, 2002). There are a number of theoretical Models that seek to explain
electronic commerce adoption by SMEs. The literature reviewed in this research include the

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Change Agency Theory (Mao & Palvia, 2008), the Stage Model, Internet Adoption Model
(Mehrtens, Cragg and Mills (2001) on perceived benefits and organizational readiness
Technology Acceptance Model (TAM) (Cooper & Burgess, 2000). Based on the theories, the
study has independent variables elaborated below.
2.6.1. Resources of the Enterprise
In an enterprise, the financial, human and technology resources such as computers, telephone
lines, cables among others play a very important role in the adoption of new technologies
(Rashid & Al-Qirim, 2001). In the case of SMEs in particular, even if the managers perceive the
adoption of new technologies and electronic commerce as important, the enterprises often do
not have sufficient resources to adopt them (Thong, 2001). This is a major obstacle to the
integration of new technologies and electronic commerce in SMEs. Severe organizational
constraints on financial, technological and human resources often cause businesses in
developing countries to lag behind their counterparts in developed countries in using electronic
commerce (Huy & Filiatrault 2006).
2.6.2. Awareness of Benefits
Cloete et al. (2005) discovered that several studies have researched the benefits of the
adoption of e-commerce in an organization. While the potential benefits have been
established, a number of inhibitors to the adoption of these new business models still exist.
For small and medium businesses the advantages of e-commerce adoption are often
perceived to be applicable and few success stories are available to convince owners of such
firms that e-commerce offer as real benefit to their organizations. Van Akkren and Cavaye
(1999) unearthed that e-commerce and internet technologies could benefit an organization
through improving the SMEs' ability to compete with larger organizations and operate on an
international scale. They also found that e-commerce can deliver the tools to provide cost
effective ways for SMEs to market themselves, launch new products, improve communication,
gather information and identify potential business partners, the aim being to extend their
capabilities to higher turnovers and larger markets.
Conversely, according to Cloete et al. (2005), despite these potential benefits of e- commerce
to an SME, there seem to be a perception by owners by of SMEs that there is a lack of
business benefit, if the input is weighted against immediate returns. Due to the fact that the
ownership of a decision making power in an MSE is held by just one or two people, adoption of

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e-commerce into such an organization is held heavily reliant on these people’s acceptance
of a technology.
These benefits are classified into ‘direct’ and ‘indirect benefits (Cloete et al. 2005). Direct
benefits are quantifiable by using customers as a result of e-commerce implementation.
Indirect benefits are not easily measured but rather have a positional effect on the business,
for example customer loyalty and goodwill as a result of e-communication
implementation.
The authors found that perceived benefits formed a key reason why participants adopted and
continued to use the Internet. They put forward a framework for perceived benefits related to
Internet use based on the classification into short terms and long term, direct and indirect.
Their findings indicated that small and medium businesses were not reaping significant short-
term benefits from the internet.
The Internet based e-commerce generates revenues by providing customers access to their
accounts, transactions and orders. The level of satisfaction for those customers interacting
electronically will undoubtedly rise. By receiving information about competition through the
internet, it is possible to develop a competitive strategy much faster than using old-style
methods.
2.6.3. Leadership Style
Kraemer,(2006)conceptualizes leadership in terms of commitment at the top; thorough analysis
of a company’s electronic commerce position where the company must evaluate its position
regarding electronic commerce; significant financial investment which must make resources
available and cultural transformation which must make sure the firm culture adapts. With those
a firm begins developing and implementing electronic commerce initiative (Caldeira & Ward,
2003). In SMEs, it is the owner/manager who initiates, participates in project electronic
commerce and establishes a clear goal for their ventures (Decker & Lorentz, 2004).
To move forward owner/managers need to be enthusiastic, passionate and a firm believer of
the benefits of electronic commerce and must be committed to considering as playing
electronic commerce a significant role in the organization (Jones, 2004). Owner/Manager in
SMEs needs to combine elements of both leadership and management in their role during the

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entire implementation cycle of implementing electronic commerce in their ventures (Rashid &
Al-Qirim, 2001).
2.6.4. Influence of Infrastructure
Understanding technology infrastructure and thus understanding what is and is not achievable
is essential to formulating SME’s vision and strategy (Wang & Cheung, 2004). The capital
infrastructure relates to how to secure funding for an electronic business and subsequently
value that business (WTO, 2001).
The media infrastructure is an important issue for all electronic commerce managers because
the Internet is a mass communication platform (Daniel, Wilson, & Myers, 2002).
According to Mirchandani & Motwani, (2001), there may be a case for promotional
interventions at a national level as national infrastructure. The infrastructure of a country
positively influences the adoption of new technologies (Ling, 2001; Chieochan et al., 2000). In
countries with good technological support and a sound infrastructure, adoption is more marked
(Tan & Teo, 2000).
E-commerce is still in an early stage and a number of related issues are not yet solved like
security, privacy, data protection, and encryption, copyright and intellectual property. The
constantly evolving policies and rules governing the Internet and its operations will affect the
future of global e-commerce. Given the enormous economic opportunities at stake for all
companies across the world, developing countries should be involved as equal partners in the
development of the growing body of Internet governance (Davis and McCarthy, 2002).
Hartman and Walsh (2004), argues that the development of a web presence requires
sophisticated technology and a supporting infrastructure. e-business requires an extensive
infrastructure that must be designed and maintained properly to ensure reliable
performance, particularly as customer expectations of reliable, on-demand access becomes
the norm. They further defined infrastructure as consisting of an Internet connection, internal
networks, computer hardware and power and data backup system. Failure of any of these
systems takes the e-business offline.
Intranets Development and linking into extranets will allow small firms to exploit the business
benefits of Information and Communication Technology (ICT), (Janet Wylie, 2000). They noted

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that small organizations may be less likely to be exposed to unproven technology, unlike larger
organizations. However, the personal computer has made computing accessible to business
of all sizes. Further to this, they also noted that technical advances have made computers
more powerful and less expensive.
According to Aljifri, Pons and Collins (2003), the infrastructure is the backbone or supporting
complexes that are in place to promote implementation, communication and usage of
networks. A resilient infrastructure is needed for e-commerce to flourish. Unfortunately,
developing countries like Tanzania typically lack a good communication infrastructure. A
flexible, manageable and maintainable integrated IT infrastructure can lead to differentiation
and therefore competitive advantage. Existing IT infrastructure of an organization is a factor
that affects the introduction of EAI, as the needs of the infrastructure often stimulate the
process for adoption integration (Puschmann and Alt, 2001).
The Economic Recovery Strategy Paper 2003, as cited in Republic of Tanzania Sessional
Paper No 2 (2005) has identified poor infrastructure as a critical factor that constraints
profitable business in Tanzania. Infrastructural problems include inaccessibility to
land, workspace, feeder roads, electricity and other utilities. Limited access to electricity by
SMEs is compounded by the fact that the SMEs are expected to obtain an approval from local
authorize before a connection can be made. In addition, energy costs in Tanzania are
extremely high and have a negative impact on all businesses, large and small scale alike. This
constraint limits SMEs' technologies capacity thereby adversely affecting the competitiveness
of their products and services (Tanzania SMEs Development Policy 2002).
2.6.5. Cost of Implementation
Janet Wylie, (2000) argues that a major constraint for small firms in the area of e-business may
be their inability to make the necessary investment to take advantage of the new
concepts and ICT. They may have to rely on outside consultants, which are problematic,
as most small firms cannot afford to employ private consultants. SMEs have special
needs because of their limited resources in terms of personnel, finance, and knowledge
pertaining to management, marketing, commercialization, or information technology. Some
smaller supplier businesses have suffered because large customers have started buying online
on a global basis resulting in downward and sometimes unsustainable price pressures. It is
now critical for smaller suppliers to compete internationally or regionally and they often lack

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knowledge and expertise about international trade issued and foreign markets (Dawn, Bodorik
and Dhaliwal, 2002)
Costs of implementation of e-business can be a serious barrier for SMEs. Although limited
resources are a distinguishing characteristic of SMEs and thus a barrier for them to compete
in the global e-business sector, there are also many counter- balancing advantages as
well. An obvious advantage is that SMEs are usually more entrepreneurial and willing to
experiment and innovate in terms of business models and operations than larger
organizations with established hierarchies. Thus, government initiatives aimed at
increasing the e-business readiness of SMEs can result in a higher level of national
competitiveness in this crucial sector (Dawn et al., 2002).
The cost of setting up an e-business includes preliminary planning, procuring hardware
and/ or software tools (installation, training and subsequent reorganization, continuous
maintenance, servicing costs and telecommunication charges. Kaynak et al. (2005) noted that
SMEs are highly concerned with the start up costs of developing e-commerce in-house. They
found that there are four basic components of the cost involved with e-commerce as significant
impediments to e-commerce adoption of SMEs. These include connection cost to the Internet,
the cost of adequate hardware/software, set up and maintenance costs.
MacGregor and Vrazalic (2005) found out that high costs as a barrier to the adoption of e-
commerce by SMEs arises from the fact that small businesses faces difficulties obtaining
finance, unlike their larger counterparts. According to Agarwal and Prasad (2000), the
associated high risk of IT investment could discourage some owner/manager to adopt IT for
their company.
2.6.6. Competition
A number of authors have studied the possible influence of the intensity of competition on the
adoption of new technologies or of electronic commerce (Iacovou et al., 1995; Robertson &
Gatignon, 2000).
By contrast, Thong (1999) found out that competition influences the adoption of new
technologies or electronic commerce very little in small enterprises, while Premkumar and
Roberts (1999) findings were contrary; that the pressure of competition is a factor that

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influences adoption. Intensity of competition can be measured by the number of competitors
and the policies of adoption of electronic commerce in these enterprises. Finally,
Lertwongsatien and Wongpinunwatana (2003) have found that there is a relationship between
the intensity of competition in an industry and the degree of adoption of electronic commerce.
According to Kinyanjui and McCormick (2002) ensuring competition and entry opportunities for
other market players, particularly smaller ones, must be an ongoing policy priority.
Auger, BarNir and Gallaugher (2003) observe that while Internet commerce provides SMEs
with opportunities to participate in new supply chains and markets, they may compete and
conflict with established channels and established market structures. There may be explicit or
implicit pressures from leading firms to maintain existing channel structures and networks or to
refrain from participating in new channels (Chong, 2006). Competition authorities need to
monitor possible anti-competitive behavior as the electronic marketplace evolves.
Technological factors also come into play (Dixon, Thompsons & McAllister, 2002).
2.6.7. Technical Skills amongst Owners and Employees
Janet Wylie, (2000) noted that there are a wide range of Internet applications that SMEs have
at their disposal. However, whether they are actually using them fully to gain competitive
advantage is not clear. Lack of resources and skill in both the technical and business areas,
makes the introduction of e-business unworkable in its current format. Simpson and Docherty
(2004) found that ignorance surrounding technology is fuelling concerns about security, costs
and legislation.
Lawson, Alcock, Cooper and Buegess (2003) notes that diffusion of new technology can take
decades, and involves more than simply reproducing distributing the technology. Indeed
making full use of new technologies will rely on the IT skills for staff within the organization.
Intense competition and rapid technological developments are accelerating the change in skill
requirements across almost all industries. The ability to learn continually and update skills is
becoming more and more important (McCole, Marrow, Ponsonby and Kelly, 2001). One of
the key aspects of SMEs must consider when embracing technological advances is the need
to develop skills and competencies, technological changes demand a new set of skills. Rapid
movements require that companies possess skilled and competent employees to function, let
alone compete.

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The lack of technical skills amongst owner-managers of SMEs places a heavy reliance on
external advice and support; however reliance on external advice does not necessarily
have to be from experts (Simpson and Docherty, 2004). Taylor and Murphy (2004) found that
many SMEs lack the necessary IT skill base to engage with the digital economy. Some may
have ICT enthusiasts as owner-managers, but the majority of firms do not. They noted that
the lack of staff to implement IT is a separate aspect of this same restraint. It may be difficult or
too expensive for an MSE to hire people with the necessary technical expertise to pursue an IT
strategy.
The constrains limiting the availability and accessibility of relevant technology to SMEs are
further compounded by the general low investment in research and Development (Tanzania
Sessional Paper No.2, 2005).
2.7. Challenges of E-Commerce
According to Bowles and Wilson (2002), it has taken e-commerce a few years to get
established. It also took customers a few years to feel safe about typing in their credit card
information and also there wasn't always an alternative means of paying if one didn't have a
credit card.
In most developing countries, there is lack of proper infrastructure in place and accessibility to
the internet for majority of the people. Thus this poses a huge obstacle since customers in
some cases have to travel large distances to gain any access to the internet. Agarwal and
Prasad (2000) found that non-standardized protocols for certain processes, insufficient
telecommunications bandwidth and ever- evolving software tools, are some of the technical
issues that contain e-Commerce from being a seamlessly integrated component of the
contemporary organizational IT systems.
Simpson and Docherty (2004) emphasize that whereas technical limitations are completely
resolvable, non-technical issues including people’s resistance to change and lack of trust for
faceless and paperless transactions, is bound to take its due time before it completely erodes.
There are tangible privacy and security issues that keep people on guard as they face a
dilemma each time they need to divulge highly personal information online as and when
they transact online.

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E-commerce poses a threat of a customer overspending on credit cards, especially if the client
is not careful and does not manage their finances well. Therefore e-commerce requires
discipline of the customer to avoid running into debt (Taylor and Murphy, 2004). Online
furniture businesses, for example, have failed for the most part because customers want to test
the comfort of an expensive product before they purchase it. Many people also consider
shopping a social experience. For instance, they may enjoy going to a store or a shopping mall
with friends or family, an experience that they cannot duplicate online (Blackburn and Athayde,
2000).
Barr and Milner (2002) noted that e-commerce lacks the touch and feel aesthetics that come
with it. This can especially be of concern when what we are buying carries a significant price
tag. An image on the computer screen can't always capture the true look of any product and
certainly not the feel. It isn't at all unusual to order a product and find the color just isn't what
we were expecting. One can't also try on the product or service before ordering it either. Chan
and Al-Hawamdeh (2002) found that products vary in sizes. This can be especially
troublesome with personal products items like clothing.
Lawson and Kapurbandara (2006), identified that SMEs are not often keen on ICT adoption
when internal and external barriers, related to infrastructure, legal, political, social and cultural
factors, come their way. Barriers include: lack of skills, lack of awareness about possible return
on ICT spending, little support and policies for SMEs from the government, lack of suitable
software standards and low internet penetration.
2.8. Conceptual Framework
According to Viitakangas (2006), conceptual framework explains either graphically, or narrative,
the main things to be studied, taking into consideration the main factors, constructs or variables,
and the presumed relationships among them.
A conceptual framework was developed to capture elements from extant e-commerce adoption
literature that are defined in the research question. Data collected from selected SMEs was
analyzed to present the findings based on the research questions.

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Figure 2. 2 Conceptual Framework
Factors
Affecting e-
commerce
Adoption in
Tanzania
Research
Question 1
Research
Question 2
Research
Question 3
Literature
Review
Research
Implementation
E-commerce influence
and Usage
Reviewing e-commerce
Adoptions factors
E-commerce adoption
Challenges
Managerial e-commerce
perception
Influence of Leadership
style, Infrastructure,
Implementation
Findings,Summaries,DiscussionsandConclusion

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CHAPTER THREE: RESEARCH METHODOLOGY
3.1. Research Design
Research design is the blueprint that enables the investigator to come up with solutions to
problems and guides him in the various stages of the research (Nachmias & Nachamias,
2004). The research used survey research design as it was helpful in indicating trends in
attitudes and behaviors and enable generalization of the findings of the research study to be
done (Kuter & Yilmaz, 2001).
This design was considered appropriate for this research because it saves time, expenses and
the amount of quality information yielded is valid, while interviewer bias is reduced because
participants complete identically worded self-reported measures (Mellenbergh & Hand, 2008).
And since the data set is smaller it is possible to ensure homogeneity and to improve the
accuracy and quality of the data. This is mainly because the research covered various SMEs
in Arusha Town, and the survey ensured that information gathering was comprehensive.
3.2. Target Population
According to Cooper and Schindler (2001), population is the total collection of elements, which
the researcher wishes to make inferences. The target population of the study comprised all
Small and Medium Enterprises in Arusha town. A population is defined as a complete set of
individuals, cases or objects with some common observable characteristics (Mugenda, 2003).
Dencombe (2007) defines a population frame as “an objective list of the population from which
the researcher can make his or her selection.” A population frame must thus contain an up-to-
date list of all those that comprise the target population. The survey defined SME’s as
enterprises employing between 5-99 workers.
According to Arusha City Municipal Council, a total of 1,141 SMEs are registered in Arusha.
These SMEs included Crafts Shops, beauty shops, general shops, entertainment
establishments, grocers, chemists and computer shops amongst others.
3.3. Sample Design
The study used simple random sampling procedure to select a sample that represents the
entire population. Simple random sampling is a probabilistic sampling technique which ensures
each subject, object or respondents to have an equal chance of representation (Tillé, 2006). A

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simple random sample is used when a population is heterogeneous making it the most
appropriate sample to come up with the target sample.
For small populations, the general rule-of-thumb is that one needs to have at least 30
respondents but for bigger populations, a representative depends on the mode of selection and
according to Clark (2007) a sample of 10% is representative.
The sample frame for the study was the list of 1,012 registered as per list from Municipal of
Arusha City. A sample frame as a list that includes every member of the population from
which a sample is to be taken (Moore and Shah, 2014). A sample size of 105 SMEs was
selected to participate in the study. The researcher used Simple Random Sampling technique
in the survey.
3.4. Data Collection
Questionnaires, incorporating both open-ended and closed-ended questions items and
interview Questions were used to gather the study’s data. According to Clark,( 2007), the
questionnaire is conveniently used because it is cheaper and quicker to administer, it is above
researcher’s effect and variability, and is highly convenient for the respondents as they could fill
them during free times or when workloads are manageable. The instruments incorporated
Likert scales to measure perception, attitude, values and behavior. The questionnaires were
self-administered.
The main respondents of the questionnaire and Interviews were either the owners or managers
of the business. Primary data was collected through interviews and using self-administered
questionnaires (by drop and pick’ method upon completion). Each respondent was given a
questionnaire, requested to fill it in and then collected immediately or after a few hours as
agreed upon.
The questionnaire generally constituted of Likert scale and was sub-divided into several
sections as follows; general information, e-commerce applications and factors Affecting and
influencing adoption of e-commerce. The section on factors influencing adoption of e-
commerce was broken down into knowledge of benefits derived from e- commerce,
infrastructure, cost of e-commerce implantation and IT skills and training.

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3.5. Documentary Review
The research collected data from relevant reviews, journals, articles and earlier studies on the
same area in order to enough information and proof of the factors affecting the adoption of
ecommerce.
3.6. Data Analysis and Presentation
Quantitative data was edited to eliminate inconsistencies, summarized and coded for easy
classification in order to facilitate tabulation and interpretation descriptive statistics was used in
describing the sample data in such a way as to portray the typical respondent and to reveal the
general response pattern. These statistics were generated with an aid of the computer
software, Statistical Package for Social Sciences (SPSS) which offers extensive data handling
capability and numerous statistical analysis routines that can analyze small to very large data
statistics (Altman, Gill and McDonald, 2004).
According to Clark, (2007) the graphs and diagrams are used to summarize the information
based on the subject at hand. Data analysis was done on the basis of the three study
objectives which were to determine the factors that affect and influence adoption of e-
commerce; and to determine the frequency of use of e-commerce by SMEs in Arusha,
Tanzania.

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CHAPTER FOUR: FINDINGS AND DISCUSSIONS
4.1. Introduction
This chapter contains the findings of the study and discussions on the findings. The data
obtained from the research instruments was analyzed by use of SPSS and was then presented
in form of tables and figures date July to September 2015. The study sought to investigate the
factors that affect adoption and frequency of use of e-commerce by small and medium
enterprises in Arusha, Tanzania.
The target population consisted of 1,012 enterprises, out of which a sample of 105 traders was
selected and 67 responses were received which represented a 63.8% response rate.
According to Clark, (2007) a sample size of at least 10% or
20% of the population is considered reasonable for the findings of the study to be valid.
4.2. General Information
Demographics regarding the enterprises studied are presented in this section. The profile of
the respondents, which included; position or ownership in the business, gender, age, the
number of years having worked in the business, level of education and business qualification
were surveyed. The forms of the enterprises under study and their utilization of e-commerce
in their business transactions were studied.
4.2.1. Gender of the Respondents
Sex of the respondents was investigated.
Figure 4. 1 Respondents' Gender

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Figure 4.1 indicates that most of the respondents were male. 45 Male (67%) and 22 Female
respondents participates (33%)
4.2.2. Age of the Respondents
Findings show that young people between 22-30 years adapt to technology than the older
generation, and the vacillating nature of the industry demands constant interest of the users.
Figure 4. 2 Age of the Respondents
Figure.4.2 shows that most of the respondents were between the ages of 22 to 30 years and
other age bands had an almost equal illustration in the respondents sampled.
4.2.3. Management Level
The respondents were spread into 3 different levels of Management these were upper level,
middle level and low level managers. Majority of the respondents were in the middle and upper
management with 43.3% and 36.7% response respectively whereas 16.7% were in the lower
level management. This means that the responses represent the levels of management in the
SMEs. This is important in this study due to the electronic adoption for different purposes
across the different levels of management of an organization. This is in line with (Du Plessi and
Boon, 2004) who states that electronic commerce managers must be responsible for web
design and digital content.
0
10
20
30
40
50
60
Below 21 years 22 – 30 years 31 – 40 years 41 – 50 years
Frequency
Percent