Exploring E-commerce Benefits for Malaysian SMEs
Added on 2019-09-30
30 Pages8731 Words268 Views
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Table of ContentsChapter 1: Introduction ..................................................................................11.1 Background of the research ................................................................................................................31.2 Research Variable ...................................................................................................................................41.3 Problem Statement .................................................................................................................................41.4 Research Questions ................................................................................................................................51.5 Research Objectives ...............................................................................................................................61.6 Significance of the research.................................................................................................................61.7 Limitations of the research .................................................................................................................71.8 Scope of the research ............................................................................................................................71.9 Feasibility of the research...................................................................................................................71.10 Summary.................................................................................................................................................8Chapter 2: Literature Review............................................................................92.1 Introduction ..............................................................................................................................................92.2 E-commerce (EC)....................................................................................................................................102.3 SME’s in Malaysia .................................................................................................................................102.3.1 Financial performance of SME’s in Malaysia.....................................................................112.4 E-commerce awareness in SME’s....................................................................................................122. 5 Level of EC adoption in SME’s ......................................................................................................122. 6 Support by management towards EC adoption ......................................................................132.7 Conclusion ...............................................................................................................................................13Chapter 3: Research Methodology.....................................................................143.1 Introduction ...........................................................................................................................................14 3.2 Research Framework..........................................................................................................................14 3.3 Research Hypotheses ..........................................................................................................................151
3.4 Research Design..............................................................................................................................15 3.5 Data analysis method ...................................................................................................................15 3.6 Sampling ...........................................................................................................................................16 3.7 Research Instrument ..................................................................................................................16 3.8 Questionnaire Design ...................................................................................................................16 3. 9 Results ..............................................................................................................................................173.9.1 Pilot testing ............................................................................................................................173.9.2 Response rate ........................................................................................................................173.9.3 Response format ..................................................................................................................173.9.4 Reliability tests.....................................................................................................................183.9.5 Regression analysis .............................................................................................................19 3.10 Conclusion.......................................................................................................................................20 ReferencesAppendix2
E-commerce adoption and how it affects financial performance of Malaysian SME’s. AbstractE-commerce (EC)has been predicted to be a new driver of economic growth for developingcountries. The SME sector plays a significant role in its contribution to the national economyin terms of the wealth creation and employment. The scope of this research focus primarilyon the adoption EC and how it affects financial performance of Malaysian SME’s. Manyfactors could be responsible for the low usage of EC among the SMEs in Malaysia. Thefinding of the research indicated that adoption factors such as EC awareness, level of ECadoption and support by management towards EC adoption are positively related to ECadoption in Malaysia SME. Also, findings implied that more efforts are needed to help andencourage SMEs in Malaysia to speed up EC adoption, particularly the more advancedapplications and how it affects financial performance. The result was found consistent withthe outcome from former researches in similar area. Hence, such generalization from theresult of the research particularly in Malaysia SMEs can be measured as suitable andapplicable in view of the existing financial competitive marketing environment that demandsa better way of managing business as compared to the traditional means.3
E-commerce adoption and how it affects financial performance of Malaysian SME’s. Chapter 1: Introduction1.1-Background of the research:Small and Medium Enterprises (SME’s) rapid expansion has put a great contribution to theeconomy world-wide, either directly or indirectly, through developing practical knowledge orgrowth of different types of businesses (Nejadirani, Behravesh, & Rasouli, 2011). Additionally,SME’s contribute to approximately 35% of the country’s entire GDP in 2011, accounting for99% of all registered establishments, employing approximately 60% of the workforce (SMEMaster Plan 2012, 2012).Furthermore, the importance of SME’s to the Malaysian economy manifests in numbers, as in itwas estimated that in 2013 SME’s employed 65% of the workforce, and contributed to thecountry’s GDP by at least 50%, accounting for half what the entire country made (Khan, 2014),which makes developing those SME’s vital for economic growth, and stimulating the economy.Electronic Commerce (EC) adoption is perceived to be important for SME’s in Malaysia as theyhave several advantages, it was reported that adopting E-commerce in SME’s helps reduce costs,thus increasing profitability, helps making operations streamlined and standardized, and enhancethe company’s market reach, and new market penetration. Research also indicates that ECadoption in SME’s help them establish relationships with both customers and prospects, whichhelps increasing productivity and enhance the overall performance of the enterprise (Kinfack,2012). SME’s performance was also reported to benefit from EC through making operationsmore efficient, which help in reallocating resources available to SME’s, which could be limitedsometimes to optimize operations for maximum growth.It was also reported that EC adoption in SME’s improves job performance amongst employees ofSME’s, as well as efficiency enhanced with increased levels of EC adoption in SME’s. Costreductions associated with EC adoption were also reported to allow stakeholders access toinformation relative to performance of the establishment, which in turn enhances communication4
both internally and externally aiding in strategic planning for SME’s growth and expansion(Seow, 2006).This research will attempt for the aforementioned reasons to analyze the relationship between ECavailability and adoption in Malaysian SME’s and performance from a financial point of view,an analysis that requires the definition of different and most important factors which mayobscure awareness of EC to business growth, or the inefficient implementation of EC towardsachieving the organization objectives.1.2-Research Variables:The dependent Research Variable is: Financial performance of SME’s.The first Independent Variable (IV1) is: EC awareness by SME’s.The second Independent Variable (IV2) is: level of EC adoption by SME’s.The third Independent Variable (IV3) is: support by management towards EC adoption.1.3-Problem Statement:It was found that EC adoption affects the performance of SME’s as a whole, which are usuallymeasured by four main indicators; productivity, profitability, cost, and sales. Additionally, manyfactors have that influence EC adoption in SME’s have been studied, and mostly related to fourmajor indicators in large firms. On the other hand, few studies have examined how EC adoptioncan affect the performance of SME’s if it is applied, and if it is already applied how aware andsupportive the management would be. As well as how can EC influence the enhancement andoptimization of operations, and add new ones such as customer service and E-marketing, whichopens up new business opportunities to SME’s (Sidik, 2012).This research will attempt to understand the relationship between EC adoption and financialperformance enhancement, as it is thought that there are two factors that may influenceperformance in SME’s; internal and external (Ates, 2013), and EC adoption is considered one of5
the internal factors with external influence, as in general SME’s may ignore, intentionally orotherwise the importance of utilizing EC in order to enhance financial performance.Furthermore, the level of EC adoption in Malaysian SME’s is not completely understood (Khan,2014), which makes understanding this issue in this research a step to be built on for furthermore detailed research to analyze how performance of SME’s can be developed using EC as abase for market expansions, increased profitability, customer retention, and increase in marketshare. On the other hand, several factors were deemed important when relating EC adoption toperformance, such as technological infrastructure, top management support, and organizationalstructure adaptability to EC (Kinfack, 2012).1.4-Research Questions:This research will attempt to answer the following questions:1-How does EC adoption influence the financial performance of Malaysian SME’s?2-What is the level of awareness of the importance of EC for business growth by MalaysianSME’s?3-What is the level of EC adoption in Malaysian SME’s?4-How does top management support the change towards EC adoption to enhance thefinancial position and performance of the enterprise?6
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