Determinants of e-business and ICT adoption among SMEs in Macedonia - An application of TOE Framework

Abstract

Research has demonstrated that firms using e-business culminate with considerablereturns through efficiency improvement, inventory reduction, sales increase,customer relationship enhancement, new market penetration, and ultimatelyfinancial returns. However, there is little systematic research in terms of e-businessadoption patterns in firms using TOE (Technology-Organization-Environment)framework. This paper illustrates the potential of adoption and use of ICT and ebusinessapplications in small and medium sized enterprises (SMEs) in Macedonia.In the paper we present preliminary results of a survey of around 60 SMEs. In thisstudy we explore several factors enabling or impeding the successful adoption anduse of e-business and ICT by Macedonian SMEs. Based on technologyenvironment-organization (TOE) theory, three aspects influence e-business adoption: technological context (we explore technology integration among firms,more specifically the type of ICT adoption and applications), organizational context(we try to discover the motivations to invest in ICT, the benefits and barriers of ICTand e-business in particular) and environmental context (here we investigate trusted sources of IT advice, challenges of implementations and competitive pressure). Wefind that SMEs are generally satisfied with their investment in ICT but they are concerned about the cost of such investments and are uncertain about the business benefits, failing to recognize ICT's strategic potential to increase business flexibility, to increase productivity and to support globalization. Besides the concern about the ICT related cost, other major obstacles in adopting ICT were lackof internal ICT capabilities and lack of information about selecting, implementing and evaluating suitable ICT solutions. Our findings have important implications for policy aimed at ICT adoption and use by SMEs and will provide a foundation forfuture research by helping policy makers to understand, assist and support the SME sector.