An empirical investigation of business‐to‐business e‐commerce adoption and its impact on SMEs competitive advantage: The case of Egyptian manufacturing SMEs
| Author | Hatem El‐Gohary,Haseba Hamad,Ibrahim Elbeltagi |
| Published date | 01 May 2018 |
| DOI | http://doi.org/10.1002/jsc.2196 |
| Date | 01 May 2018 |
RESEARCH ARTICLE
DOI: 10.1002/jsc.2196
Strategic Change. 2018;27(3):209–229. wileyonlinelibrary.com/journal/jsc © 2018 John Wiley & Sons, Ltd. 209
Abstract
Business‐to‐business (B2B) e‐commerce adopon by Egypan manufacturing SMEs is an
important tool to gain compeve advantage. It is important to understand the levels of B2B
e‐commerce adopon among Egypan manufacturing SMEs and the dierent factors that inu‐
ence each level of such adopon. The Technology–Organizaon–Environment framework fac‐
tors have a signicant impact on the dierent levels of B2B e‐commerce adopon by Egypan
manufacturing SMEs. Technology–Organizaon–Environment framework factors have an indi‐
rect impact on Egypan manufacturing SMEs compeve advantage.
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In developing countries as well as in developed countries, SMEs
makes a crical contribuon to the overall economy not only in terms
of employment and GDP (Ayyagari, Demirguc‐Kunt, & Maksimovic,
2011). In Egypt, 99% of registered enterprises are SMEs (Ghanem,
2013). Moreover, the SMEs sector is a major job provider, as it pro‐
vides around 75% of new jobs to the labor market. Moreover, Egyp‐
an manufacturing SMEs represent 99.7% of all manufacturing rms
within the country. However, despite aenon and iniaves from
academics, the iniaves taken by government and internaonal
organizaons to promote the adopon of e‐commerce, are sll very
limited as 68% of SMEs sll employ tradional and/or outdated lower
level technology, whereas 30% of SMEs use contemporary technology
and only 2% are on high‐level technology froner (El‐Mahdi, 2012).
By invesgang the related literature, it can be said that the study of
e‐commerce in Egypt, in general, is sll very limited and almost nonex‐
istent parcularly with regards to the dierent forms of e‐commerce
(e.g., business‐to‐business, B2B), e‐commerce and new technology
adopon (except from some studies related to e‐markeng and new
technology adopon by: Ahmed, Hay, & El‐Gohary, 2015, Eid & El‐
Gohary, 2013; El‐Gohary & Eid, 2012, 2013; El‐Gohary, 2009, 2010a,
2010b, 2011, 2012a, 2012b) and e‐commerce adopon and pracces
in manufacturing SMEs.
With regards to e‐commerce, it is dicult to nd one that is
well‐dened. For example, Baourakis, Kourgiantakis, and Migdalas
(2002) dene it as: “The trading of goods and informaon through the
Internet” (Baourakis et al., 2002, p. 581). Meanwhile, Zwass (1996,
p. 3) denes e‐commerce as an administrave and communicaons
tool: “The sharing of business informaon, maintaining business rela‐
onships, and conducng business transacons by means of tele‐
communicaons networks.” Meanwhile, Kim and Moon (1998, p. 2)
denes electronic commerce as “The delivery of informaon, products
and services, or payments via telephone lines, computer networks,
or any other electronic means,” Treese and Stewart (1998, p. 5) see
e‐ commerce as an opportunity in “The use of the global Internet for
purchase and sale of goods and services, including services and sup‐
port aer the sale.” More recently, Chaey (2007, p. 8) redenes it as
“All electronically mediated informaon exchanges between an orga‐
nizaon and its external stakeholders.”
According to Teeh and Burn (2001), regardless of how it is
dened, the main purpose of e‐commerce is to facilitate the exchange
Haseba Hamad123
1 Department of Administraon, Salahaddin
University, Erbil, Iraq
2 Plymouth Business School, Plymouth
University, Plymouth, United Kingdom
3 Faculty of Business, Law and Social
Sciences, Birmingham City University,
Birmingham, United Kingdom
Hatem El‐Gohary, Faculty of Business, Law and
Social Sciences, Birmingham City University,
UK ‐ College of Business & Economics, Qatar
University, Qatar ‐ Cairo University Business
School, Cairo University, Egypt.
Email: hatem.elgohary@bcu.ac.uk
* JEL classicaon codes: M10, M15 and M31.d
HAMAD et al.
210
of informaon and conducon of transacons. They also argue that
e‐commerce presents many opportunies for businesses regardless of
their size to improve its performance as well as its compeve advan‐
tage. It is also commonly recognized that e‐commerce is equivalent
to online buying and selling of products (goods and services). In the
narrow terms, e‐commerce focuses on conducng online transacons
between dierent pares over the Internet and/or other networks.
The view of e‐commerce as phenomena focusing on buying and selling
acvies is sll one of the most accepted views about e‐commerce
among researchers, business owners, marketers, and praconers
(El‐Gohary, 2010a, 2010b). E‐commerce plays a major role in today’s
economy and it is changing markeng and business pracces in a
dynamic way.
The purpose of this research is to add to the current knowledge
in the eld through lling one of the gaps in the literature by con‐
strucng and tesng a framework that claries the dierent factors
that aect B2B e‐commerce adopon as well as the dierent levels of
adopon and its impact on Egypan manufacturing SMEs compeve
advantage.
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The main problem movang this research study is the need to
invesgate and examine the dierent factors that aect B2B e‐com‐
merce adopon by Egypan manufacturing SMEs. Both the technol‐
ogy–organizaon–environment (TOE) framework and the levels of
adopon model were used as underpinning theories to explain the
compeve advantage in manufacturing SMEs in Egypt. Structural
equaon modeling is used to validate the conceptual framework
through its applicaon on survey data regarding 260 manufacturing
Egypan SMEs.
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Dissimilar to new ICT innovaons which oen happen suddenly, the
adopon and/or diusion of any new technology appear to be con‐
nuous and slow processes (Hall & Khan, 2003). Some researchers
have suggested that the most important factors to explain the adop‐
on of dierent forms of ICT in SMEs are the TOE factors (Chen,
Huang, & Lu, 2005; Kuan & Chau, 2001). As such, the TOE framework
had been employed and examined in many empirical research studies
and it was branded by its ability to explain the impact of the dier‐
ent factors that might aect IT adopon by SMEs in developing coun‐
tries (Ghobakhloo, Arias‐Aranda, & Benitez‐Amado, 2011; Lip‐Sam &
Hock‐Eam, 2011).
Accordingly, this research adopts the TOE framework as the
starng point theorecal framework to invesgate the dierent
factors aecng B2B e‐commerce adopon in SMEs in Egypt, with
a focus on the factors aecng each level of the adopon levels.
Moreover, in order to add more depth to the invesgaon, the study
examined the indirect relaonship between technological, organiza‐
onal, and environmental contexts and its relaon with and impact
on SMEs compeve advantage through the mediang role of B2B
e‐ commerce levels of adopon to idenfy which factors lead to which
type of compeve advantage.
B2B is considered as one of the main forms for e‐commerce.
Goodley and Lauchlan (2000), Kesselya (2000), and Torris, Condon,
and Omwando (2000) believed that B2B is not only the largest propor‐
on of the e‐commerce market but it also will acquire the majority of
the predicted future growth. Moreover, Chen (2001) illustrated that
B2B generates more revenue than business‐to‐consumer. This can
be both supported and jused by the benets that business rms
can acquire from B2B applicaons. With regard to B2B denion, it
is noted that it had been dened from many dierent points of view.
Within this regard, while the business diconary denes it as “trad‐
ing between rms characterized by relavely large volumes, com‐
peve and stable prices, fast delivery mes, and oen on deferred
payment basis” (Business Diconary, 2008a, p. 1), Baghdadi (2004,
p. 190) denes it as “businesses selling goods and services to other
businesses.” Moreover, Pinkston (2008, p. 1) denes B2B as “the pro‐
cess of employing informaon and communicaon technologies to
support the whole company value chain from suppliers through the
rm to customers.”
Both the technology–organizaon–environment (TOE) frame‐
work and the levels of adopon model were used as under‐
pinning theories to explain the compeve advantage in
manufacturing SMEs in Egypt.
Several studies invesgated the e‐commerce adopon (Pickernell
et al., 2013). There is a belief that the adopon of e‐commerce makes
a contribuon to the development of SME businesses in developing
countries (Ghobakhloo et al., 2011). This is because of its ability to
provide many benets including reducing costs, facilitang links to
global markets, and improving operaonal eciency. The WTO (2013)
reported that SMEs in developing countries would miss out on oppor‐
tunies in both protability and eciency if they did not employ IT in a
sucient and eecve way. It was idened that studies invesgang
the adopon of electronic commerce in SMEs were conducted in both
developed and developing countries. However, there was a higher
availability of literature in developed countries.
The research output in e‐commerce has been concentrated in
four main countries: Australia, the UK, Sweden, and New Zealand
(with a percentage of 15% of the total number of studies) (Tables 1–3).
These four countries had an early adopon for the Internet and web
technologies.
It was idened that studies invesgang the adopon of
electronic commerce in SMEs were conducted in both devel‐
oped and developing countries. However, there was a higher
availability of literature in developed countries.
Meanwhile, El‐Gohary (2009, 2010) reviewed arcles focused on
electronic commerce, electronic business, and Internet markeng (as
the largest of research areas covered by researchers and praconers
in the eld) and published from 2003 to 2009 (Table 4).
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