Understanding SME Intention to Use the Internet for Managing Supplier Information

New England Journal of Entrepreneurship, Dec 2011

There is strong consensus that the Internet has the potential to positively impact firms, and SMEs in particular; however, not all firms have realized benefits from adoption. The present study extends research in the area by addressing the need to examine the “chain” of variables explaining Internet adoption. We do this by exploring SME owner/manager Internet-related usefulness and ease-of-use cognitions and intention to use the Internet for supplier information management. We also explore the influence of behavioral norms and two broader strategic perspectives, market and learning orientation, on the Internet-related cognitions. Findings have implications for researchers and practitioners by identifying factors that contribute to effectively leveraging the Internet in an important area for SMEs.

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Understanding SME Intention to Use the Internet for Managing Supplier Information

New England Journal of Entrepreneurship Understanding SME Intention to Use the Internet for Managing Supplier Information Kevin Celuch 0 1 2 0 Part of the E-Commerce Commons, Entrepreneurial and Small Business Operations Commons 1 University of Southern Indiana , USA 2 Grand Valley State University Follow this and additional works at: https://digitalcommons.sacredheart.edu/neje - Article 3 here is strong consensus that the Internet has the potential to positively impact firms, and SMEs in particular; however, not all firms have realized benefits from adoption. The present study extends research in the area by addressing the need to examine the “chain” of variables explaining Internet adoption. We do this by exploring SME owner/manager Internet-related usefulness and ease-of-use cognitions and intention to use the Internet for supplier information management. We also explore the influence of behavioral norms and two broader strategic perspectives, market and learning orientation, on the Internet-related cognitions. Findings have implications for researchers and practitioners by identifying factors that contribute to effectively leveraging the Internet in an important area for SMEs. Keywords: Internet use; supplier information; normative influence, strategic issues The Internet has changed today’s business landscape. With compound annual growth rates for U.S. users of 5 to 6 percent between 2005 and 2010 and growth rates for global users of 10 to 11 percent over the same time period, predictions place the impact of the Internet as greater than the combined influence of the phone, TV, and PC over the next 10 to 15 years (eTForecasts, 2009). As a further testament to the potential of this business tool, 99 percent of medium to large companies and 85 percent of small firms are connected to the Internet (Internet retailer, 2009) . Indeed, internationally, across industries, small to medium size enterprise (SME) Internet adoption has been linked to financial benefits (Johnston et al., 2007) . With the total worldwide value of goods and services of business-to-business (B2B) e-commerce well into the trillions of dollars, it is procurement that is driving the vast majority of transactions in this sector with between 80 to 90 percent of U.S. companies expecting to purchase online (Internet retailer, 2009) . Research on SME adoption of IT and, by extension, Internet adoption has been relatively clear as to the ultimate reasons why SMEs use the Internet. For example, SMEs have generally acknowledged the potential importance of information sharing and relationship building in order to improve supply chain performance (c.f., Robeiro and Love, 2003) . With respect to SME use of the Internet for supply chain management, some evidence suggests that SMEs rely on the Internet primarily for communication purposes while very small firms (i.e., 10 or less employees) rely on the Internet primarily for research purposes (Levenburg, 2005) . Indeed, some support has been found for the idea that SME Internet use related to obtaining and communicating information can enhance market knowledge and relationships throughout the supply chain from suppliers to customers (Caskey et al., 2001; Robeiro and Love, 2003; Nieto and Fernandez, 2005; Servais et al., 2007) . Despite fairly strong convergence as to the ultimate purpose of Internet usage, less clarity exists as to the specific factors that determine usage. Factors that have been identified in the literature as significantly influencing SME IT adoption, with particular focus on Internet adoption, include owner perception of benefits, organizational readiness, owner innovativeness, organization size, customer pressure, competitive pressure, supplier pressure, support from IT vendors, information intensity of products, and low business volumes (Mehrtens et al., 2001; Belussi, 2005; Al-Qirim, 2005; 2007; Beckinsale et al., 2006;Archer et al., 2008) . However, some of these same studies find few significant differences between SME adopters and nonadopters (Belussi, 2005) as well as no support for the influence of suppliers, competition, IT vendor support, and size (Al-Qirim, 2007; Beckinsale et al., 2006; Archer et al., 2008) . Clearly, there is a need for continued development of our understanding of the factors affecting SME Internet usage. Potential benefits of Internet adoption notwithstanding, SMEs are left with significant questions that point to the importance for examining Internet use. First, not all firms have realized benefits from IT adoption (Dehning and Richardson, 2002; Santhanam and Hartono, 2003) .This is particularly critical for small firms as, relative to larger firms, they do not possess slack resources that allow them to over invest in technologies (Celuch et al., 2007a) . Second, many SME owner/managers have relied heavily on traditional brick-andmortar “mental models” in developing and maintaining supplier relations. Further, SME owner/ (...truncated)


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Kevin Celuch, Anna Walz, Carl Saxby, Craig Ehlen. Understanding SME Intention to Use the Internet for Managing Supplier Information, New England Journal of Entrepreneurship, 2011, pp. 3, Volume 14, Issue 1,