Telematics and Informatics

Telematics and Informatics

journal homepage: www.elsevier .com/locate / te le

A structuration analysis of Small and Medium Enterprise (SME) adoption of E-Commerce: The case of Tanzania

http://dx.doi.org/10.1016/j.tele.2017.01.002 0736-5853/� 2017 Elsevier Ltd. All rights reserved.

⇑ Corresponding author. E-mail addresses: salah.kabanda@uct.ac.za (S. Kabanda), irwin.brown@uct.ac.za (I. Brown).

Salah Kabanda ⇑, Irwin Brown Centre for IT and National Development in Africa, Dept. of Information Systems, University of Cape Town, Private Bag X3, Rondebosch 7701, South Africa

a r t i c l e i n f o a b s t r a c t

Article history: Received 16 September 2016 Received in revised form 2 December 2016 Accepted 6 January 2017 Available online 16 January 2017

Keywords: E-Commerce Structuration theory SMEs Tanzania

There have been several studies on E-Commerce adoption in developing countries. However, few have investigated least developed countries (LDCs). Of those that have, their findings tend to be descriptive in nature – falling short of a theoretical contribution grounded in the sociocultural context. The purpose of this paper is to provide a theoretical analysis of E-Commerce adoption in an LDC, Tanzania. Specifically, the study seeks to iden- tify structural practices associated with E-Commerce in Tanzanian SMEs. Using structura- tion theory and following an interpretivist stance the findings show that Tanzanian SMEs enact three major E-Commerce structural practices: (1) Marketing and image-building through use of websites, (2) Transacting through extensive use of mobile technology (3) Technical problem-solving through establishing partnerships. These practices are informed by organisational and environmental factors that define the sociocultural, technological and economic contextual setting. Considerable evidence is found that SMEs use websites in a limited way, as they draw upon their understanding of websites as being incompatible with the Tanzanian cultural bargaining system, which is characterised by cash transactions and face to face bargaining. Websites are viewed primarily as a platform from which SMEs can portray a sophisticated image and advertise/market their products. SMEs use mobile technology extensively, as they draw on the technology’s ability to offer transactive capa- bility, mobility and communication. Findings also point to technological challenges which SMEs face from the environment, mainly from a lack of supporting industry and institu- tional support. SMEs hence establish partnerships with international organisations that can support them in overcoming technological challenges. Partnerships with large ICT organisations require stringent conditions, such as the requirement for SMEs to have cer- tification in order to be affiliated. The study gives practitioners a better understanding of how SMEs perceive E-Commerce in Tanzania amidst organisational and environmental opportunities and constraints, and in so doing practitioners can better design appropriate E-Commerce context-specific policies and interventions that address SME problems. This will ensure that available resources become utilised in a more effective manner without negative consequences.

� 2017 Elsevier Ltd. All rights reserved.

S. Kabanda, I. Brown / Telematics and Informatics 34 (2017) 118–132 119

1. Introduction

The discussion of ICT and development has tended to be skewed towards developing countries at the expense of least developed countries (LDCs) (Abbasi, 2007; Efendioglu et al., 2002; Panagariya, 2000; Salwani et al., 2009; Molla and Licker, 2005; Cloete, 2002). LDCs are a group of countries which have the ‘most vulnerable economies of the world, suffering from drastic economic and social problems, extreme poverty, hunger and inadequate levels of human development’ (Tekin, 2012). LDCs usually have low gross national income per capital, human asset index, and economic vulnerability index (UNCTAD, 2010). These characteristics have made LDCs face ‘more severe problems to be integrated in the world value chain’ (Goedhuys et al., 2013) and are therefore under researched due to ‘political instability within certain countries in the region, the poor collaboration of the private sector and the academics in tertiary institutions, which influences the potential for research, and the lack of requisite human and technical resources’ (Boateng et al., 2008). With these challenges in mind, LDCs are considered to be in need of the highest degree of attention on the part of the international community and all forms of assistance have been welcomed such as export-oriented development strategies and more open trade and investment regimes (Martinsons, 2008; Tekin, 2012). In response to this call – of paying attention to LDCs, some scholars are focusing their attention on how best to motivate Small and Medium Enterprises (SME) to use ICTs, specifically E-Commerce. This is partly because SMEs are central to socio-economic development in most LDCs (Erumi-Esin and Heeks, 2015); and also because of ‘the positive association between ICT usage and sales volume, profitability and market share’ (Boohene et al., 2015, 52). E-Commerce has long been identified as ‘one of the four key areas in Africa to exploit ICTs to best advance social and economic development’ (Esselaar and Miller, 2001, 2) and is expected to be one of the key weapons in the war against world poverty (Oreku et al., 2013). Governments who provide ICT incentives, and industrial partners such as ICT vendors, have joined researchers in encouraging SMEs to adopt new technologies such as E-Commerce that will supposedly not only make them competitive in the market but also sustainable (Ashrafi and Murtaza, 2008).

Despite these efforts to stimulate E-Commerce, most SMEs in LDCs have not reached the institutionalisation phase of hav- ing a full interactive, transactive or integrated E-Commerce capability (Molla and Licker, 2005). The SMEs’ lack of institution- alisation is perceived as a concern, firstly, because they are at the vanguard of LDC economies (Huff and Kelley, 2005) and, secondly, because institutionalisation is regarded as the most mature form of E-Commerce activity, which can facilitate the integration of LDCs into the global economy. Past studies, for example Kabanda and Brown (2015) and Molla and Licker (2005) have identified organisational and environmental challenges as reasons for LDC organisation’s lack of adoption and institutionalisation of E-Commerce. Organizational factors describe the organisation characteristics which hinder adop- tion and institutionalisation of E-Commerce, such as lack of awareness, finance, technology and expertise to adopt and use E- Commerce (Molla and Licker, 2005). Environmental factors hampering E-Commerce include ‘government laws and regula- tions, social structure, national policies, technical change and the natural environment that directly impact the companies’ (Lin et al., 2011, 6366).

Ndyali (2013) identifies technical barriers such as internet security, legal and regulatory barriers, and limited use of Inter- net banking as obstacles. Oreku et al. (2013) note that for E-Commerce to kick start in Tanzania, there needs to be a strong positive national image of E-Commerce so as to bring in the element of trust and discipline. Although these prior studies have investigated the E-Commerce phenomena in the LDC context of Tanzania, none have presented a theoretical analysis of their findings that is grounded in this context. Heeks (2006) points out that most scholars produce findings that are descriptive in nature and not analytical. That is, they fail to provide a theoretical elaboration embedded in the sociocultural context that can enrich understanding of the complex world of lived experience from the point of view of those who live it (Schwandt ,1994, p. 118). The issue of context for LDCs is of paramount importance when advocating for ‘technologies and organisational practices which were originally designed and proved useful in other socio-organisational contexts because their potential value, their fit in the local socio-organisational conditions and feasibility of use cannot be taken for granted’ (Avgerou, 2001, 44). To understand why SMEs fail to adopt and institutionalize E-Commerce successfully, researchers need to be more analytical by immersing themselves in the context of SMEs with the intent of understanding how specific social practices lead to various behaviors (Alvarez, 2002) such as the adoption and institutionalisation of E-Commerce. Studies in LDCs need to move away from being merely descriptive in nature, and start providing a theoretical explanation as to how an innovation such as E-Commerce becomes socially constructed by those who use it in the LDC context.

To contribute towards an analytical understanding of E-Commerce adoption and use in SMEs in Tanzania, this study adopts structuration theory as a lens. Structuration theory is used to study social phenomena with the purpose of under- standing how institutional behavioral practices are produced and reproduced over time (Giddens, 1984). These practices, when routinised over time, eventually determine how social realities come about and how a social system works (Brooks, 1997. Structuration theory offers several benefits as an analytical lens. Firstly, it has the power to illuminate ‘how sociological-biographical realms interact in the study of ICT-related practices’ (De Vaujany, 2008, 2). Secondly, it provides ‘an appropriate foundation for the investigation of how institutional or organisational factors influence individual initiatives and, thereby, the assimilation of web technologies’ (Chatterjee et al., 2002,68). Thirdly, structuration theory has been advo- cated for in the study of interorganizational systems (IOS) such as electronic data interchange (EDI), electronic funds transfer, electronic forms, electronic messaging, and shared databases which provide the foundation for electronic business (Gregor and Johnston, 2000, 1). The use of structuration theory in this study ‘is an occasion for structuring’ (Barley, 1986) – that is, it provides opportunities for changes in the social order (Greenhalgh and Stones, 2010); and the theory offers the possibility of

120 S. Kabanda, I. Brown / Telematics and Informatics 34 (2017) 118–132

understanding the innovation process in its specific sociocultural context (Jones et al., 2000). Finally, there have been few studies that have focused on the ‘the multi-level dimensions and often paradoxical links between agency and structure in studies of innovation in SMEs (Edwards et al., 2005). Against this background, the objective of this study is to provide a the- oretical explanation as to how E-Commerce adoption and use becomes socially constructed by SMEs in the Tanzanian socio- cultural context.

This study is arranged as follows: Section 2 presents related work pertaining to E-Commerce in LDCs. Section 3 introduces the theoretical basis of the research and particularizes the theory in the context of E-Commerce. Section 4 describes and dis- cusses the methodological approach used to carry out the study. The research findings and discussion of the findings are doc- umented in section 5 and 6. Section 7 concludes and provides recommendations and future research work related to this study.

2. E-Commerce in developing countries

A common thread among researchers in developing countries is that E-Commerce is a form of innovation in which parties interact electronically to perform one or more of the following functionalities depending on their contextual resources and constraints: (i) communication, such as delivering information, products/services, or payments via telephone lines, com- puter networks, or any other means; (ii) the application of technology towards the automation of business transactions and workflow; (iii) the meeting of the desire of firms, consumers, and management to cut service costs while improving the quality of goods and increasing the speed of service delivery; (iv) the provision of the capability of buying and selling products and information on the Internet and other online services (Boateng et al., 2008; Ngai and Wat, 2002). The benefits of E-Commerce have been well documented in literature (Ojukwu et al., 2007). However, there has been little reported on the success of SME adoption and institutionalisation of E-Commerce in developing countries (Ghobakhloo et al., 2015), and in LDCs in particular. This is partly due to the limited number of studies conducted in these regions that can provide insights about sociocultural contextual imperatives. Table 1 although not exhaustive, shows the various studies that have been con- ducted on E-Commerce in developing countries for the period 1990–2013. Studies that were conducted involved: the diffu- sion, adoption, behavioral influences, Electronic-Banking and e-Government Diffusion. Studies on mobile commerce were also included. It is evident that most of the studies have been in the more developing countries of Africa, Asian, and Latin America. For example, in developing countries there were a total 67 studies in comparison to 31 for LDCs. 75% of the studies in developing countries were on Internet E-Commerce with 7 African countries represented. Studies that focused on LDCs were minimal specifically in Africa. For example, in Africa, only 4 African countries were investigated for E-Commerce speci- fic studies; and 5 countries investigated Mobile Commerce. This is a negligible number given that there are 34 LDCs in Africa. The majority of these studies were positivistic in nature, following an objective approach. The typical theories used were the Technology Acceptance Model (TAM), Theory of Planned Behavior, Unified Theory of Acceptance and Use of Technology (UTAUT). Only a few studies used theories that address contextual issues, such as social relational and group theory (Mwangi, 2006), change agent theory (Duncombe and Molla, 2006), the Technology-Organisation-Environment Framework (Kurnia and Peng, 2008; Gibbs et al., 2002), an E-Commerce readiness framework (Molla and Licker, 2005), innovation dif- fusion theory (Alghamdi et al., 2011; Windrum and de Berranger, 2002), and culture theory (Vatanasakdakul et al., 2004). Attention to sociocultural context is important as it shapes ICT usage processes and reveals the underlying causes of ICT related failures (Lamb and Kling, 2003; Sawe and Simbo, 2002).

3. Theoretical basis of the study

Structuration theory is used to study social phenomena with the purpose of understanding the interrelationship between individuals and society (Giddens, 1984). Individual practices, when routinised over time give rise to collective social rules and resources (termed structures) that determine how a social system works (Brooks, 1997). These structures are hence pro- duced and reproduced by individual actions, such actions being shaped by the very same structures they produce in a duality (Ogden and Rose, 2005).

To conceptualise the theory, Giddens recognizes social structures as those ‘‘traces in the mind” that enable or constrain individual agent action and interactions, consciously or sub-consciously. The production and reproduction of structures takes place through what are termed modalities – interpretive schemas (the ‘frames’ through which we view the world, cognitive knowledge concerning language/nonverbal codes), facilities (the capability to allocate resources or influence others) and social norms (roles, values, ethical codes that govern individuals in encounters). Corresponding to these modalities are three types of action/interaction executed by individuals (agents), these being communication, power, and sanctions.

Structuration theory provides Information Systems researchers with a theoretical approach that allows information sys- tems to be conceptualized as social systems in which ICT is a key element implicated in organisational and individual action and interaction (Walsham et al., 1988; Pozzebon and Pinsonneault, 2005). McFarland and Hamilton (2006, 442) advise researchers to particularize theory in the context of a study so as to ‘substantially obtain stronger results’. Following this recommendation, this study particularizes structuration theory concepts within the realm of E-Commerce use by SMEs in Tanzania, and presents the particularized framework in Fig. 1. The framework defines E-Commerce applications used in

Table 1 Studies in developing countries vs least developed countries.

Region Total papers

Focus Method Underlying Theory Geographic Coverage and Reference

Least developed country (31)

11 & E-Commerce diffusion & E-Commerce Adoption & Behavioral influences on E-Commerce & Electronic-Banking; & e-Government Diffusion

& Survey based through a questionnaire & Literature review analysis & Qualitative and interpretive approach –

unstructured and semi-structured face- to-face interviews, web-site analysis, observation and document analysis

& Multiple regression analysis, Exploratory factor analysis, Principle component analysis, Feature investigation method

& Study social relational and group theories

& The technology accep- tance model (TAM)

& Parsimonious evaluation framework

& Country readiness for the networked world

& Change-agent theory & Theory of planned

behavior & Unified Theory of Accep-

tance and Use of Tech- nology (UTAUT)

Africa (6) Shemi and Proctor (2013), Worku (2010), Asiimwe and Lim (2010), Uzoka (2008), Weerakkody et al. (2007), Uzoka et al. (2007), Uzoka and Seleka (2006), Duncombe and Molla (2006), Mwangi (2006)

20 & Implementation Challenges of Mobile Commerce

& Appropriation of mobile telephony at the bottom of the pyramid and Agricultural Markets

& Social and Economic Implications of Mobile Telephony and Opportunities

& Consumer use of mobile ICT & Mobile Phone Usage among Women Entre-

preneurs; in rural livelihoods and poverty reduction

& Ethnographic & geospatial approach & Survey based & questionnaire, face to face interviews and

focus group discussions & Online Questionnaire & secondary data

collected from books, academic journals, articles from the conferences, internet and newspapers

& Technology Appropriation

& Theory On Price Dispersion

& Activity and Gender Theories

& Theories of Technology Acceptance and Tech- nology Transfer

& Sustainable Livelihood Framework

& Capability Approach to Livelihood Status.

& Technology–Organiza- tion–Environment (TOE) Model

& Task-Technology Fit (TTF) model.

Africa (6); Asia (2) Meso et al. (2005), Mtingwi and Van Belle (2012), Donner (2007).

Developing countries (67)

50 & E-Commerce adoption, intentions accep- tance and success

& Diffusion of ICTs and E-Commerce in manu- facturing SMEs

& Perceived benefits and management com- mitment to e-business usage, Growth and usage of E-Commerce

& E-Commerce Strategy and Performance & Adoption and effectiveness of electronic

banking and the adoption of more sophisti- cated ICT solutions

& E-Readiness in E-Commerce Adoption; infrastructure and policy on e-business

& Cross-Sectional Survey; & Measures of Central Tendency, Disper-

sion and Correlation Analysis. & Survey Based Through a Questionnaire & Case Study Approach Utilising Semi-

Structured Interviews, Observation and Document Review

& Literature Review Analysis & Advanced Multivariate Modeling & Partial Least Squares Analysis & Multiple Regression Model & Fuzzy Preference Relations

& Resource Base View theory

& Diffusion of Innovation (DOI)

& Innovation Decision Pro- cess (IDP)

& Technology Acceptance Models (TAM)

& TOE & Internet and EDI adop-

tion models; & Transaction cost theory

and strategic manage- ment perspectives

Africa (7:25); Asia (10:17); South America (4); Arab nations (2:4). Abdulghader et al. (2011), Grandón et al. (2011), Ghobakhloo et al. (2011), Datta (2011), Bansal (2011), Zhai (2011), Alghamdi et al. (2011), Abbasi et al. (2010), (2008) Boateng et al. (2008)

(continued on next page)

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Table 1 (continued)

Region Total papers

Focus Method Underlying Theory Geographic Coverage and Reference

& Perceived Organiza- tional E-Readiness (POER) And Perceived Environmental E-Readi- ness (PEER)

& Analytic Hierarchy Pro- cess (AHP)

& A Culture Theory 17 & mCommerce Adoption, Adoption of Mobile

Payment Systems, Evidence On Mobile Use by SMEs, Mobile Phones and Financial Ser- vices, and the informal Economy

& Determinants of Internet and Cell Phone Banking Adoption, Consumers’ attitudes towards online and mobile banking

& Trust and Risk in M-Commerce & Comparative Analysis of Mobile Phone

Usage among Women Entrepreneurs

& A Survey Approach/Questionnaires, & Face to Face Interviews & Focus Group Discussions & Systematic Review Methodology & Case Study Interviews and Secondary

Data Analysis

& Activity and Gender Theories

& TAM UTAUT & Innovation Diffusion

characteristics & Decomposed theory of

planned Behavior & Consumer Behavior, atti-

tude and motivation, subjective norm, control factors

& Innovation System con- ceptual framework

Africa (5:12); Asia (2:5) Duncombe & Molla(2009), Joubert and Belle, 2009, Dörflinger et al. (2009); Jagun et al. (2008), Min et al. (2008); Essegbey & Frempong (2011); Hughes & Lonie (2007)

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118– 132

Fig. 1. Conceptual framework.

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practice as rule-resource sets that constrain/enable SME business interactions. These practices (structures) are then produced and reproduced by SME social interactions within the SME context via the modalities of interpretive schemas, facilities and norms. The rule-resource sets being invoked in E-Commerce use are partly embedded in the SMEs and partly within the larger sociocultural and technological context external to the SMEs. There has been limited research conducted to investigate contextual phenomena and, perhaps more importantly, the notion that ‘the outcomes of using the technology are largely dependent on the structural properties of the social system’ (Lyytinnen and Ngwenyama, 1992, 31). The invoked rule- resource sets arising from ongoing SME use of E-Commerce are continually evolving, being reinterpreted and renegotiated (Lyytinnen and Ngwenyama, 1992). They are not stagnant but may evolve as technology is used or changed through improvisation in ways not even anticipated by the designers (Orlikowski, 2000, 270). When changed, enacted structures which we hereby term ‘E-Commerce applications in practice’ are affected. Different practices are enacted or reproduced with time depending on how knowledgeable the SME is about E-Commerce (see Fig. 1).

4. Methodology

Structuration theory advocates understanding and interpreting a social phenomenon, hence this study employs an inter- pretivist approach (Ngwenyama and Lee, 1997) and, in so doing, focuses on understanding why people [in SMEs] behave as they do [with respect to E-Commerce] within their specific sociocultural contextual settings (Alvarez, 2002). This is impor- tant because while ‘communities may have some broad similarities, each community has specific social interactions that constitute a unique interpretative context’ (Jarzabkowski, 2004, 10).

Data was collected using interviews and observations which allowed the researcher to be immersed in the sociocultural context of the study because ‘immersion in context is a hallmark of qualitative research methods and the interpretive per- spective on the conduct of research’ (Kaplan and Duchon, 1988, 572). Based on the particularization set out in Fig. 1, an inter- view with open-ended questions was constructed. The research instrument used to elicit the data was developed from literature on factors that affect organisational E-Commerce adoption – specifically organisational and environmental factors (Molla and Licker, 2005). These questions were framed around the lens of structuration theory and as such the particular- ization of Fig. 2 was quite useful. Data collection started from SMEs in Dar-es-Salaam – the region in Tanzania with the high- est urban population and the cultural and economic hub of the country with about one half of the country’s manufacturing sector being located there. It is also the region with the highest presence of ICT use and therefore does serve as a represen- tative sample of Tanzanian SMEs. The Tanzania Bureau of Statistics was contacted via email and later in person to obtain the names of all SMEs in Dar-es-Salaam so as to provide the initial sampling frame. It did not have a database of SMEs operating in Dar-es-Salaam. The researcher was referred to the Swedish International Development Cooperation Agency (SIDA) which strives to ‘create and sustain an indigenous entrepreneurial base through the promotion of and support to the development

Fig. 2. Limited-use technology-in-practice enacted By Tanzanian SMEs.

124 S. Kabanda, I. Brown / Telematics and Informatics 34 (2017) 118–132

of SMEs by providing them with Business Development Services and Specific Financial Services on demand (SIDA, 2007). SIDA provided the researcher with a list of 130 SMEs all of which were contacted via emails accompanied with the question- naire survey. Ninety per cent of the emails bounced back. The researcher therefore had to physically visit the 130 SMEs and ask for their participation in the study. Although the main target was SME managers, it was not possible, on account of avail- ability, to interview only managers/owners of the SMEs, so technicians and employees not necessarily in an IT role were interviewed when the SME owner was absent. A total of 32 SMEs gave consent to participate in the study. All SMEs were in line with the Tanzanian’s government definition of an SME: each of them was an ‘enterprise with between five and ninety-nine employees, with a capital investment in machinery of between five and 800 million Tanzanian shilling’ (Tanzania Ministry of Industry and Trade, 2002) Fig. 3.

For triangulation purposes, data was collected from SME environmental stakeholders so as to obtain corroborating evi- dence: Government institutions (1 respondent) – from the Department of Trade and Industries; and supporting industries – the banks (1 respondent) and educational institutions, specifically their ICT departments (1 respondent). These participants were regarded as key informants who needed to be included because they connect with the wider sociocultural context within which SMEs operate. The targeted duration of each interview was set at thirty minutes to ninety minutes to ensure that participants were not under pressure in responding to the interview, thereby ensuring the credibility of the information supplied. Note taking and digital recording were used to record each interview. A total of 35 interviews were conducted (32 from SME, and a single interview from government, bank and education institution).

Understanding the data was the first step of analysis. To accomplish this, the audiotape recordings were listened to prior to transcription with the purpose of obtaining grounding in each interview session. Following this process, each qualitative interview script was transcribed verbatim, taking into consideration contextual information and nonlinguistic observations, such as facial expressions, body language, setting descriptions, vernacular expressions, and emotions (McLellan et al., 2003). Interview scripts in Swahili were translated into English by the researcher before transcription. After each interview was transcribed and typed in MS Word, it was printed for easier reading and soft backups were made. The researcher then went through a process of repeated reading of the data to identify list of ideas about what is in it, and what is interesting in the sociocultural context of the E-Commerce phenomena – specifically, on identifying structures underpinning factors that affect E-Commerce. Following a thematic approach, the corpus of data was subjected to a rigorous pattern identification process of reviewing the corpus, making notes, and sorting the data into more structured categories that can explain the data (Braun and Clarke, 2006).

Fig. 3. Frequent mobile use technology-in-practice enacted by Tanzanian SMEs.

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5. Findings

5.1. E-Commerce adoption in SMEs

Thirty-two SMEs participated in this study. The findings show that the SMEs can be grouped into three major adoption categories derived from Molla and Licker (2005) (see Table 2). The first category is SMEs with no web-based E-Commerce (these were 7). These were mainly situated in the Insurance, Transport and Laundry industries. The second category con-

Table 2 E-Commerce maturity level per SME.

E-Commerce maturity level Industry Total [32]

No web based E-Commerce (Mobile) Have not considered E-Commerce. SME1,16,32,33-Insurance 5

Initial adopters Email/Mobile Have considered E-Commerce but only connected to the Internet with email but no web-site.

SME15-Transport 20 SME11,12 – ICT SME14 – Engineering SME28 – Financial SME29 – Tourism and entertainment

Static websites/Mobile/ Email

Have a static website that publishes basic company information on the web without any interactivity.

SME2,19,22,23,31 – Tourism and entertainment SME5,8,10,17 – ICT SME6,25 – Media, marketing and consulting SME7,9 – Engineering SME13 – Protection and safety SME30 – Manufacturing

Institutionalised Interactive websites/Mobile/ Email

Have an interactive web presence. SME3,4,20,26 – Tourism and entertainment

7

SME18,21 – Manufacturing SME24 – ICT

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sisted of initial adopters who were characterised into two groups: those who were connected to the Internet with email but no website (these were 5) and those with a static web-site that published basic company information on the web without any interactivity (these were 15). The final category was the 7 SMEs that had institutionalised E-Commerce – they had an interactive web presence that accepted queries, email and form entries from users (but not financial transactions).

5.2. Environment and organisational factors affecting E-Commerce adoption in SMEs

The findings show that E-Commerce in Tanzania is influenced by both organisational and environmental factors. Organ- isational factors of business resources and mobile technology use are perceived to be conducive for E-Commerce while those perceived to be hindrances to E-Commerce are firstly SME owners’ perception that E-Commerce is the use of mobile tech- nology and a static website, which translated into management providing support for mobile technology, but minimal sup- port for web-based E-Commerce. Secondly, there is a lack of technological and human resources necessary to implement fully interactive and transactive E-Commerce.

SMEs in this study are able to use mobile technology as a strategy for governance – as it provides a means of governing most business activities. Further, a business resource shown to be important for E-Commerce adoption and institutionalisa- tion is business partners in developed economies. Most SMEs that had such partnership saw it as an opportunity, because such business partners have the capabilities of alleviating web-based challenges like ensuring that there is continuous man- agement of servers (deemed impossible in Tanzania due to electricity cuts) and lack of local expertise in web design and development.

Environmental factors that limit SMEs in adopting and institutionalising E-Commerce include: those factors identified by Molla and Licker (2005) – the market readiness (e.g. customers and partners) institutional readiness (e.g., government poli- cies and regulation), industry support for E-Commerce (e.g. banks and telecommunications providers). An emergent influ- encing factor was the socio-cultural business setting of Tanzania (e.g. desire for traditional face to face bargaining). Although SME owners perceive these as challenges, they did indicate the market was ready and amenable to the use of mobile technology for transactive purposes and that there was higher industry support for mobile technology than there was for traditional web-based E-Commerce. These factors are regarded as opportunities for all SMEs, regardless of the matu- rity level of E-Commerce adoption.

6. Discussion

The findings identified three main structures that were enacted by SMEs in their ongoing use of what they considered to be E-Commerce: (1) Limited use of websites – primarily for marketing, (2) Mobile technology use for transactional purposes (3) Partnerships for technical problem-solving. All SMEs made limited use of websites (if at all) preferring mobile technology payments systems for transactions. SMEs that were aiming to institutionalize E-Commerce established partnerships with foreign firms to assist with technical problem-solving associated with E-Commerce. Each structure will be discussed in turn.

6.1. Limited use of websites

Fig. 2 provides a view of how the ‘‘limited website use” structure, and other related structures are produced and repro- duced through the actions and interactions of SMEs with respect to E-Commerce, and is further elaborated next.

The assumptions about, and meanings assigned to web-based E-Commerce by SMEs were that of a traditional website (either static or interactive but not necessarily having transactive functionality). SME owners’ felt there was a need to have an online presence for advertising and marketing their products and services. Websites were associated with a prestigious and sophisticated image. There was a general appreciation that Tanzania was a cash economy country that used bargaining as a means of conducting any business transactions. For example, SME1 indicated: ‘it could be advantageous to adopt and insti- tutionalize. . .but you see we know it’s not compatible with our way of operations. . . and so I don’t support it. Our form of E- Commerce is through the phone as it avoids all the financial and technology challenges I would have to face”. SME29 shared similar sentiments: ‘‘to begin with, I try to provide the necessary support for E-Commerce but my vision of E-Commerce has not yet been communicated to the rest of the organisation. Why this is so is because I doubt whether E-Commerce will be compatible with us and especially how our local clients do business –they like bargaining in everything. How will they do that online, given that they can’t even communicate in English?”

The sociocultural and technological contextual peculiarities of Tanzania became the basis of which SMEs founded their perception that web based E-Commerce was not compatible with Tanzania’s business practice and that the market was not ready for web based E-Commerce. This is not surprising, given that most people still rely on public ICT facilities such as telecenters, cybercafés, and information access points, which make the access possible, because of the more affordable cost associated with sharing as compared to individual home ownership of ICTs and individual network use fees (Colle and Yonggong, 2002). Thus although websites were associated with a positive image, symbolising social status, they were also perceived as complex and therefore did not often feature in SMEs’ everyday business transaction practices. With this realisation, SME owners made an informed choice to forego investment in transactive web-based E-Commerce and chose to invest in mobile technology. The understanding that web-based E-Commerce was associated with a website that ranges

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from static to interactive and not necessarily transactive, became entrenched to form a blue print which SMEs used to under- stand E-Commerce. The blue print (structure) enabled and constrained business interaction within the organisation as well as with trading partners; and in so doing, produced and reproduced this structure.

Although websites were perceived as complex to implement due to the lack of technological resources and expertise, a website presence was a resource considered to improve an organisation’s image even though it did not necessarily bring con- sumers to it (SME6). SMEs with a website were perceived to be more ‘‘sophisticated” (SME8) than those without. They were also able to exercise their power in the Tanzanian market by exploiting the minimal benefits websites offered them, such as advertising/marketing of products and simultaneously putting up a perceived appearance of sophistication within the indus- try. In so doing, websites (static to interactive) became the basis from which some SMEs acquired power during interaction by drawing on the website as a resource (structure) to influence their interactions with (potential) trading partners.

SMEs that did not have a website were put under pressure to have one, ‘even though they have no idea on how they will get their benefits’ (GOV1). The website, therefore, became a norm (structure) which SMEs interpreted and verbalised as a means of indicating an acceptable level of sophistication and social status. It became one of the means SMEs used to legitimise their level of sophistication and social status. SMEs without a website were looked down upon while those with a website were perceived favorably by consumers.

6.2. Mobile technology use practice

Fig. 3 provides a view of how the ‘‘mobile technology use” structure, and other related structures are produced and repro- duced through the actions and interactions of SMEs with respect to E-Commerce, and is further elaborated next.

SME assumptions about, and meanings ascribed to E-Commerce were strongly associated with the use of mobile technol- ogy and, as previously described, minimal use of web based E-Commerce. SMEs indicated that they saw no need to invest in transactive web based E-Commerce because mobile technology, especially mobile payment services, were already fulfilling their transactional needs. The communicated understanding (structure) was that E-Commerce was mainly the use of mobile technology for business purposes. Mobile technology provided SMEs with the means of conducting transactive E-Commerce. SME owners provided Internet quotas and credit quotas, so that employees could use the mobile phones for business pur- poses. As SME15, an employee, stated: ‘Yes, we do get support; we are given credits to use in our mobiles every morning before starting work’. SME owners’ lukewarm commitment towards active website use and enthusiastic embrace of mobile technol- ogy conveyed a powerful signal of mobile technology as being the bedrock of E-Commerce. By championing the use of mobile devices for business operations, SME owners participated in the production and reproduction of a mobile technology use practice (structure). This structure constrained other forms of communication such as traditional email, and even face- to-face communication, since mobile technology was regarded as the most readily available and affordable means of communication.

A mobile technology device was perceived as a resource in its own right that required a lesser learning curve compared with technology required for transactive web-based E-Commerce. It needed less investment from the SME; and reduced the challenges associated with fixed line Internet such as bandwidth limitations and electricity cuts (SME11). SMEs were able to use mobile technology for business communication and transactions without being constrained by the inadequacies of E- Commerce infrastructure. This resulted in the enactment of new and improved business practices. For example, SMEs were able to leapfrog traditional E-Commerce practices, and exploit mobile payment technology for transactions. With employees having mobile phones, flexible working arrangements were made possible, as employees were always contactable.

By deploying mobile technology in business transactions, SMEs unconsciously created new rules and practices which became institutionalised by management. Although not formally articulated, mobile phone use became an informal rule (structure), a socialisation practice and tradition that was used to coordinate repeated SME business interactions. The airtime quota that management provided employees defined the boundaries of expectation of an employee’s use of the mobile phone for work. Employees who ‘finished their quota before lunchtime without making it last the entire business day were sanc- tioned’ and ‘labelled as bad managers. . .. none of us wants to be called a bad manager you know – we need our jobs’ (SME33). To avoid sanctioning, employees used their personal mobile devices and airtime quota for organisational work and, in so doing, reaffirmed the rules set by management. Employees perceived themselves powerless and thereby opted to reaffirm the rules (structure) so as to avoid sanctions by conforming to the acceptable behavior of utilising organisational airtime quota throughout the entire business day even though it included the use of a personal quota to top up in some instances. This outcome revealed an unintended consequence of the mobile technology becoming a tool of exploitation of workers by man- agement, a phenomena explained by structuration theory (Lyytinnen and Ngwenyama, 1992; Crowston et al., 2001; Chu and Smithson, 2003).

Although using employee’s personal phones for business endeavours was not always welcomed by employees, it did make business sense to SME owners because (i) SMEs are small with limited resources and unable to afford to buy mobile phones for employees for work purposes; and (ii) SMEs in Tanzania operate in a culture of sharing, a culture where mobile phones are often divided or shared among people (Pfaff, 2010; James and Versteeg, 2007). Scott et al. (2004) indicate that ‘the poor in Africa tend to use public access facilities and to share phones, so low teledensity figures can mask the extent to which the poor access telecommunications services’. Dholakia and Kshetri (2004) report on groups of small farmers in remote areas of Côte d’Ivoire who share mobile telephones so they can follow hourly fluctuations in coffee and cocoa prices. Attewell and Savill-Smith (2004) also found that ‘many young adults share mobiles, perhaps among family members or with friends’. Thus

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sharing of mobile phones is reflective of a collectivist norm in LDCs and developing country societies (Sinha, 2005). The strong culture of sharing mobile phones is therefore a custom that Tanzanian SME owners have extended into their business. SME owners however fail to recognise that mobile devices are technology artefacts which if used in a business need to be governed by fair and just rules that will not result in worker exploitation.

6.3. Partnerships problem-solving technolozgy-in-practice

Fig. 4 provides a view of how a ‘‘partnership problem-solving” structure, and other related structures are produced and reproduced through the actions and interactions of SMEs with respect to E-Commerce, and is further elaborated next.

There was considerable evidence of SMEs, specifically those in the ICT, Tourism and Entertainment industries engaging in partnerships for technology problem-solving given the lack of ICT expertise, reliable electricity supply, and Internet band- width in Tanzania. Partnerships with foreign companies allowed some SMEs to transcend from simple E-Commerce adoption (e.g. email) to the interactive stage of E-Commerce. The services provided by partners included continuous management of servers which was deemed impossible in Tanzania due to un reliable power supply (SME23); training and advice due to the lack of local expertise (SME6,13); and the provision of financial capital (SME13). For example, respondent SME6 elaborated the importance of foreign partners in his business:

‘‘the other website at head office was developed formally by a staff member in-house but it was later modified by our German partners who also provide us with specific training. Our webserver is also in Germany because (1) we have our part- ner there (2) for security reasons; (3) they have a good infrastructure which isn’t available here. So we decided to host it there”.

The understanding (structure) that such partnerships were a necessity constrained how web-based E-Commerce was employed by most SMEs because few SMEs could create or maintain such partnerships. SMEs that were not able to establish such partnerships chose not to transcend to transactive web-based E-Commerce; and in so doing, reproduced existing struc- tures that associated transactive web-based E-Commerce with the need for effective ICT business partners from developed countries.

Foreign partners, who provided the necessary assistance were seen as resourceful agents that SMEs could draw on to transform their interactions with trading partners. SMEs that had access to this resource were able to acquire power during these interactions by drawing on the partnership resources (e.g., ICT training and advice, financial capital, web design and development services). In so doing, such SMEs were able to acquire the capacity to effect positive change in their business. The SMEs’ need for partnership collaboration is not a new phenomenon because firms gain access to new resources by part- nering with others who might provide those lacking resources (Kim and Kiyoshi, 2007). The empirical findings show that SMEs in the ICT industry were the ones that formed most partnerships. These findings confirm those of Li and Qian

Fig. 4. Partnerships problem-solving technology-in-practice enacted by Tanzanian SMEs.

S. Kabanda, I. Brown / Telematics and Informatics 34 (2017) 118–132 129

(2007) who found that partnerships may be an effective prescription for SMEs in technology industries, but not necessarily for those in traditional industries. These technology SMEs were able to acquire scarce resources which are associated with positive firm performance and international experience. These included external advice in fields such as business strategy (Robson and Bennett, 2000), external exposure and the opportunity to understand the host business environment which Reuber and Fischer (1997) indicate is important for establishing foreign strategic partnerships. Partnership, therefore, pro- vided Tanzanian SMEs with the power to exploit the contextual business opportunities and constraints to their advantage.

Few SMEs had the ability to acquire such partnerships because of some of the stringent regulations imposed by the for- eign company on the SME. For example, ICT SMEs that acquired certification from accredited international ICT companies such as Microsoft were perceived by customers and trading partners to provide quality – not ‘grey’ or ‘pirated’ products. They were deemed to possess more know-how than SMEs without such certification (SME6,9,13). Such SMEs had a positive repu- tation and were often contracted by large companies and the government (the largest user of ICTs in the country). SME9 explained that certification was important to them because ‘the market depends on people like us who are trusted advisors. Yes, I believe in trust and I know we are the trusted company in our business. You will find that we have many certificates outside the entrance’. By being a ‘trusted advisor’, SMEs with certification gained respect and were thought to have the authority in ICT skills. SMEs with accredited certification courses utilised the perceptions attached to such certification as a resource from which they were able to acquire power during their interactions with trading partners. These certification courses were, however, seen as difficult to acquire due to their high costs (SME3, 9). SMEs that were unable to meet these requirements were unable to exploit the available resources (partnership possibilities) which provided the necessary specific skill sets and technological infrastructure required to for institutionalisation of E-Commerce. Thus although partnership programmes assisted SMEs, few could afford to have a partnership with foreign firms which tended to have more influential power in dictating how the relationship between themselves and the SME would be conducted. SMEs that were unable to conform to the protocols of such foreign firms tended to partner with willing smaller foreign organisations. Other SMEs were able to harness the advantages of social networking forums – a resource that was perceived to alleviate the lack of ICT expertise, specifically for SMEs in the Communication, Electronics, Computer, Tourism and Entertainment industries. These SMEs were inclined to perform in-house software development and website design. Social networking forums were perceived to be cost effective and resourceful because overhead training costs such as travel, accommodation and stipends were avoided. By exploiting social networking forums SMEs exercised power to address their need for technical support (Willmott, 1981; Crowston et al., 2001).

SMEs understood that partnerships with ICT foreign companies allowed them to avoid sanctions that were meted out to SMEs that did not meet customer service expectations. SMEs that had collaborative links with well-known ICT brands such as Microsoft, CISCO and IBM were perceived to be trustworthy and reliable. Such foreign partners required SMEs to attend courses that provided training in the ICT vendor’s products. SMEs that successfully became accredited and affiliated with these large ICT brands employed branding practices such as ‘preferred partners and trusted advisors’ (SME9). ICT SMEs sought to maintain the status of being ‘trusted advisors’ by regularly upgrading. As stated: ‘. . .with the rapid changing in technol- ogy. . .we upgrade ourselves in these [ICT] training by going to R.S.A or Kenya and sitting for these online exams here’ (SME9). By engaging in these upgrades, SMEs produce and reproduce structures that legitimize the practice of certification to main- tain foreign partnerships. Such practices become the means of defining acceptable behavior in the partnerships so as to avoid sanction (Giddens, 1984; Hardcastle et al., 2005). The fear of not conforming to norms ‘is likely to engage some sort of pun- ishment from the referent group, directly or indirectly. . .because a norm is not a norm unless there is some form of sanction for its violation’ (Prietula and Conway, 2009, 148). Such a sanctioning system designed to promote trustworthiness reduces the attractiveness of not being accredited or affiliated. SMEs without affiliation and accreditation became consciously and unconsciously ignored and subsequently sanctioned by consumers as being untrusted. By adhering to the same practices of attending certification courses SMEs build these structures of legitimation.

7. Conclusion

7.1. Summary

The purpose of this paper was to contribute towards an analytical understanding of ICT adoption and use in SMEs. A call has been made by scholars from developing countries who postulate that studies in this realm lack analytical understanding of the phenomenon under investigation. As a response to this call, this paper adopts structuration theory as a sensitizing lens to understand how SME E-Commerce adoption from an LDC context such as Tanzania can be better understood.

The findings show that SMEs enact three main structures as they make sense of and engage with E-Commerce: Limited use of websites, Mobile technology use, and a partnership problem-solving practice. The first two structures were enacted as a result of SMEs conceptualisation of E-Commerce as the use of mobile technology for communication and transactive pur- poses, and minimal use of websites for advertising and image-building. The mobile technology structure was evident regard- less of the E-Commerce maturity level of the SME. With the recurrent use of mobile technology, SME owners have developed an extensive mobile use practice for E-Commerce to achieve functionality such as for business communication, and buying and selling activities. Constraints occasioned by the inadequacy of website and E-Commerce infrastructure were thus avoided. SMEs therefore engaged in a limited-use practice of websites. The limited-use practice of websites for E-

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Commerce was legitimised by socio-cultural norms such as the need for face to face bargaining, a culture of mistrust, and language barriers. Due to the environmental factors that hinder E-commerce adoption and institutionalisation, some SMEs became aware of the importance of partnerships with foreign organisations. These SMEs pursued the formation of partner- ships and, in so doing, made it a norm. This normalised Behavior contributed positively to the adoption of E-Commerce because through partnerships SMEs were able to acquire the necessary ICT expertise, training, advice and reliable server maintenance, all being crucial for E-Commerce.

7.2. Managerial and policy implications

The study gives practitioners a better understanding of how SMEs perceive E-Commerce in Tanzania amidst organisa- tional and environmental opportunities and constraints. With this understanding, practitioners can better design appropri- ate E-Commerce policies and interventions for SMEs in Tanzania, thereby avoiding the development of policies, strategies, and business practices based on the assumption of universal imperatives which have high risks of misguiding and frustrating local efforts to make sense of and appropriate new technology.

Practitioners at national level are able to develop national ICT and telecommunication policies that support E-Commerce adoption and institutionalisation from the SMEs’ understanding. This is important, given the limited resources in LDCs. Prac- titioners at an organisational level can also devise policies that address organisational barriers to the adoption of E- Commerce. For example, because E-Commerce was perceived as having a static web presence with heavy reliance on the mobile device, results pertaining to the unintended consequences resulting from the extensive mobile use practice call for a policy on mobile usage in the organisations, specifically for rules and regulations as to how personal phones are to be used for work purposes. Managers who fail to recognise that mobile devices are technology artifacts which have to be invested in, just like any other organisational resource, are at a risk of having employees with low morale. By developing context-specific policies that address SME problems, available resources become utilised in a more effective manner without negative consequences.

7.3. Theoretical implications

This study strongly recognised the importance of the sociocultural context in which the E-Commerce phenomena is being studied to be as important as the phenomena itself. To appreciate the sociocultural contextual understanding, the study is grounded in an interpretivist philosophical approach. Using structuration theory, it investigates how contextual (environ- mental and organisational) practices influence the social constructions of E-Commerce in SMEs in LDCs. This is the first time, as far as the researchers know, that structuration theory has been used as a lens to study the E-Commerce phenomena in LDCs. The use of structuration theory and an interpretivist approach has yielded new understanding of the study of E-Commerce from the SME owner’s perspective – an understanding that associates E-Commerce consistently with mobile technology, thereby making mobile technology an important feature of E-Commerce. It also indicates the importance of business partners who could provide alternative solutions to contextual challenges such as technological and resource prob- lems. With such partners, SME owners envision that E-Commerce institutionalisation beyond the interactivity maturity stage is possible.

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  • A structuration analysis of Small and Medium Enterprise (SME) adoption of E-Commerce: The case of Tanzania
    • 1 Introduction
    • 2 E-Commerce in developing countries
    • 3 Theoretical basis of the study
    • 4 Methodology
    • 5 Findings
      • 5.1 E-Commerce adoption in SMEs
      • 5.2 Environment and organisational factors affecting E-Commerce adoption in SMEs
    • 6 Discussion
      • 6.1 Limited use of websites
      • 6.2 Mobile technology use practice
      • 6.3 Partnerships problem-solving technolozgy-in-practice
    • 7 Conclusion
      • 7.1 Summary
      • 7.2 Managerial and policy implications
      • 7.3 Theoretical implications
    • References

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