The initial research objective is to build and test a model of Internet adoption by small firms. The model will include the significant variables that have influenced the adoption of the Internet by small firms and identify relationships between these variables. The model, and accompanying descriptive data, will assist subsequent study of the business impacts of the Internet on small firms.
Reports about the Internet and small firms are already appearing in the popular press. However, much of this material to date has been descriptive and anecdotal. This study aims to add rigour to Internet research by using a theory driven approach, based on earlier research, to examine aspects of early experiences of the Internet.
The research will provide an understanding of the significant variables that have influenced Internet adoption by small firms. As such, the model will extend understanding of the use of computers by small firms. This understanding will provide researchers with a base for the study of subsequent stages of Internet implementation. For example, when Internet technology has become established within firms, the understanding will assist the study of the impacts and benefits of the Internet.
As little prior research has examined the adoption of Internet by small firms, this study will take a two phased approach. Phase 1 will start with a comprehensive review of the literature, followed by case studies that explore an initial research model. Phase 2 will consist of a questionnaire survey followed by statistical data analysis.
The literature review will be used to create a preliminary research model. This model will be used as a framework for the case studies. An interview guide will be constructed to investigate the constructs and relationships indicated in the preliminary research model. The initial interviews would consist primarily of open-ended questions. The responses to these questions could identify new adoption factors. These new factors would then be fully explored, along with the original set of variables, in subsequent cases. The literature would also be re-examined to gather further evidence on any new factors (Miles & Huberman, 1984; Yin, 1989). Data would primarily be collected using face-to-face interviews with one or more of the following individuals in each firm: the CEO, the individual who's area of responsibility was most affected by the Internet, the manager responsible for information technology, and a person who conducts daily Internet activity and/or support.
The revised research model would then be tested using data gathered in a survey of small firms. The sample is likely to be restricted to firms of the same type, for example manufacturing firms, who have already adopted the Internet. The data analysis will explore the relationships between the variables to determine which are statistically significant, and thus provide a final model of Internet adoption by small firms. Partial Least Squares (PLS) is the likely technique for this causal analysis.
The above questions relate to Cooper & Zmud's (1990) early stages of their six stage model of the IT implementation process, incorporating: initiation, adoption, adaptation, acceptance, routinization, and infusion. All six stages have relevance to the Internet and small firms. For example, the following are some of the many research questions that can be linked to the implementation process:
Initiation: who initiates the move to using the Internet, and why?
Adoption: Who makes the decision, what factors are taken into consideration, what factors influence adoption, which factors are specific to Internet adoption?
Adaptation: What procedures are revised and training undertaken when the Internet is made available?
Acceptance: is it easily accepted, and how does this compare with acceptance of other technologies?
Routinization: how long does it take for Internet to become a normal activity, and what are the impacts along the way?
Infusion: how does the use of the Internet spread to other parts of the organisation, and to what effect?
A major conclusion by Cooper & Zmud's (1990) study of MRP adoption and infusion was that task-technology interactions were important in adoption behavior, but less so in infusion. They examined a range of factors, all based on task-technology fit, and concluded that rational decision models could be most appropraite for adoption, but political and learning models better when explaining infusion.
A broader research question is whether classical diffusion theory helps to explain adopters v’s non-adopters of the Internet. Fichman (1992), after reviewing ten studies of organizational technology adoption concluded “In most cases, however, only weak or inconclusive support for classical diffusion predictions were found” (p.204). As a result, Fichman (1992) recommend that future studies should include factors additional to the classical diffusion factors of: characteristics of the technlogy, characteristics of adopters, the means by which adopters learn about and are persuaded to adopt the technology (Rogers, 1983). In particular Fichman suggested the following independent or control variables: absorbtive capacity (Cohen & Levinthal, 1990); extent of access to external support to lower knowledge barriers (Attewell 1992); adoptor expectations regarding critical mass (Katz & Shapiro 1986, Markus 1987); adopter industry competitive effects (Gatignon & Robertson 1989).
One implication from Damanpour (1991) is that studies must consider type of organisation. He conducted a meta-analysis of 23 studies of organisational innovations, involving 13 independent variables. He concluded that relationships tended to be stable, rather than unstable as indicated by others. He identified type of organisation and their scope as effective moderators, rather than type of innovation and the stage of adoption. This seems to be inconsistent with Cooper & Zmud (1990). Types could be considered by industry, sector, structure (eg, Mintzberg 1979), or strategy (eg, Miles & Snow 1978). Thus it may be important to control various aspects of type, eg, electronics only, as well as type of organisation, based on, for example, Miles & Snow (1978).
In a recent study of IT adoption by small firms, Thong & Yap (1995) examined adopters vs non adopters, as well the extent of adoption (infusion). Their study of adoption focused on the adoption of at least one major software application, excluding word-processing. Extent of adoption was based on the number of microcomputers (or terminals if a mini-computer). Thong & Yap (1995) concluded that small businesses that have more innovative CEO's, possess more positive attitude toward IT adoption, and are more knowledgeable about IT, are more likely to adopt IT (p. 11). The extent of IT adoption seemed determined mainly by the level of IT knowledge.
Thong &Yap (1995) made no attempt to control for type of firm. Such contextual factors can be explored within an initial research model, possibly based on Kwon & Zmud's (1987) five contextual variables, ie, individual, structural, technological, task-related, and environmental.
Thong & Yap’s (1995) paper also supports Attewell’s (1992) theory that know-how and organizational learning are potential barriers to adoption of innovations. Furthermore, other studies of small firms have identified IT knowledge as a barrier (Cragg & King 1993, Cragg & Zinatelli 1995). Thong & Yap (1995) found IT knowledge important for both adoption and infusion, while Cooper & Zmud (1990) indicated that organisational learning was probably more important for infusion rather than adoption.
Another recent study of an IT adoption by small firms focused on EDI (Iacovou et al. 1995). Their relatively simple model included three influencing factors: perceived benefits, organizational readiness, and external pressure. This third factor of external pressure may be specific to EDI, and may not yet apply to use of the Internet.
There is a growing literature on collaboration and new forms of business. The Internet is a potentail enabler of new forms of organisation, for example, alliances and networks, both within countries and internationally (Baskerville & Smithson 1995, Borman 1994, Ching et al. 1993, Narendran et al. 1995, Poon & Swatman 1995, Volery 1995). These effects have yet to be studied, and their impact could be considerable for small firms, particularly exporting firms. Various national and regional initiatives are encouraging collaboration. These may be encouraging small firms to make use of the Internet.
There is also a growing literature on business use of the Internet that provides evidence of motivations. Firms are expressing various reasons for using the Internet, including: research and development, and collaboration (Cockburn & Wilson, 1996); indirect advertising, accessing product information, passive benchmarking, and access to free software (Cronin et al., 1994); the wish to provide timely and inexpensive customer support, and to expand into new sales channels (I/S Analyzer, 1994).
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