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A practical model for e-commerce adoption in Iran


Nick Hajli Julian Sims Mohana Shanmugam
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To cite this document:
Nick Hajli Julian Sims Mohana Shanmugam , (2014)," A practical model for e-commerce adoption in Iran ",
Journal of Enterprise Information Management, Vol. 27 Iss 6 pp. 719 - 730
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Model for
A practical model for e-commerce e-commerce
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adoption in Iran adoption in Iran


Nick Hajli and Julian Sims
Department of Management, Birkbeck, University of London, London, UK, and
719
Mohana Shanmugam
Department of Information Systems, Universiti Tenaga Nasional (UNITEN), Received 13 September 2013
Selangor, Malaysia Revised 8 November 2013
Accepted 6 January 2014

Abstract
Purpose – Developing countries are still challenged by infrastructural and cultural issues related to
the adoption of e-commerce although with the emergence of social commerce, a new stream has been
introduced. Iran is a developing country, in which the adoption of e-commerce by small to medium
sized enterprises (SMEs) is challenged by such barriers; it is now applying models for the adoption of
new technologies by SMEs. The paper aims to discuss these issues.
Design/methodology/approach – This research attempts to develop a model, based on existing
models of e-commerce, which can be applied in Iranian conditions. The study uses data gathered by a
survey, together with existing models in this area, in order to propose a new model, which has been
empirically tested.
Findings – The results of this research demonstrate that e-commerce barriers in Iran are related to a
lack of awareness of the benefits of e-commerce adoption, as well as organisational issues related to
its application. The paper also discusses the results and implications of this research, which can
be applied to other developing countries. The paper also gives a better picture of Iranian market.
Finally the paper discusses possible future directions of this research, as well as its limitations.
Originality/value – This study contributes to the theoretical basis of IS and e-commerce adoption
studies by proposing and testing a pre-adoption model for e-commerce. The adoption of e-commerce
in SMEs in Iran has not been substantially investigated. This is despite the fact that SMEs play
an important role in all economies. The results demonstrate a significant relationship between
organisational readiness and the adoption of e-commerce. It also shows that there is a positive
relationship between awareness of e-commerce and its adoption.
Keywords Iran, e-commerce
Paper type Research paper

1. Introduction
E-commerce adoption in small to medium sized enterprises (SMEs) is governed by its
benefits (Kaynak et al., 2005). SMEs need to be aware of the benefits of e-commerce
before they invest money in e-commerce technologies. E-commerce is a marketing tool
for doing online business (Noyce, 2002). E-commerce can be an important tool for
growth in developing countries, and several authors have highlighted the potential
profits of e-commerce for such countries (Moodley and Morris, 2004; Molla and Licker,
2005; Kshetri, 2007; Datta, 2011) as the popularity of e-commerce is growing at a global
level (Datta, 2011). However, most developing countries are not aware of the benefits of
e-commerce (Kshetri, 2007).
The digital gap between developed and developing countries remains, even though
we now live in the twenty-first century. In this era, many businesses and customers are Journal of Enterprise Information
connected through new platforms or social networks. This development appears to be Management
Vol. 27 No. 6, 2014
the result of a new stream in e-commerce called social commerce (Hajli, 2013, 2014a; pp. 719-730
r Emerald Group Publishing Limited
Hajli et al., 2014), but it is not taking place in developing countries, as they are still not 1741-0398
using the appropriate systems and model for e-commerce (Kshetri, 2007; Datta, 2011). DOI 10.1108/JEIM-09-2013-0070
JEIM Most research into developing countries is descriptive, and does not have a sound
27,6 theoretical foundation (Kshetri, 2007; Datta, 2011). To fill the current gap in the literature
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of e-commerce adoption in developing countries, this study attempts to understand


existing barriers to e-commerce adoption in developing countries. It challenges the
current view of barriers, literature and models of e-commerce adoption in SMEs within
developing countries. The adoption of e-commerce is an important issue, particularly
720 for the SME sector. Small businesses are one of the greatest changing divisions of
e-commerce. Hence, the purpose of the study is to find a realistic framework which can
be applied in developing countries. This model needs to be investigated through an
examination into current barriers to e-commerce adoption in those countries.

2. Literature review
In the first part of the study we review the relevant literature, although there is a
shortage of research in e-commerce adoption in developing countries to fully develop
this area. The aim of this phase of the research is to determine whether any patterns
can be discerned in e-commerce adoption within a developing country.
E-commerce is perhaps the most prevalent way in which economic growth can be
supported by information and communication technologies (ICTs) (Datta, 2011). In the
past, information and technologies adoption has been the subject of two corresponding
streams of research. The positivist school has mainly emphasised the alteration models
of diffusion and adoption and has treated them statistically and objectively.
Meanwhile, the interpretivist school has placed more emphasis on the comprehension
and construction of reality (Datta, 2011).
There are different definitions of e-commerce, although most emphasise the use of
the internet to process and facilitate business (DeLone and McLean, 2004). E-commerce
involves doing business and carrying out commercial activities through the internet.
It is argued that SMEs are in the front line of being able to take advantage of the
opportunities offered by the internet and e-commerce to reach out to the global market
(Kaynak et al., 2005). Additionally, e-commerce opens up new channels to communicate
with consumers, especially with recent advancements in ICT and the emergence of
social commerce.
E-commerce can be a beneficial channel to reduce transaction costs as well as a
means of offering certain goods at a price lower than the traditional market (Santarelli
and D’Altri, 2003). Most benefits derived from e-commerce are different factors such as
market development, efficiency of sales and promotion, ease of accessibility and cost
reductions (Kaynak et al., 2005). E-commerce can reduce SMEs’ market entry costs,
distribution costs and can help reach more customers in the global market (Santarelli
and D’Altri, 2003).
In the current literature of e-commerce adoption, many conceptual frameworks exist
which are mostly influenced by two main theories – the Technology Acceptance Model
(Davis, 1989), and the Theory of Planned Behaviour (Ajzen, 1985; Gefen et al., 2003;
Pavlou and Fygenson, 2006). Other research into e-commerce adoption is influenced by
the Theory of Emotion and other theories (Rodrı́guez-Ardura and Meseguer-Artola,
2010; Al-Qirim, 2007). However, other research has followed the main theories
concerning e-commerce adoption, and the authors have proposed their own research
frameworks. We would categorise them in two main areas to design our model:
organisational readiness and awareness.
SMEs are becoming increasingly aware of the potential benefits of e-commerce and
how it can increase their profits and market share. E-commerce requires work to
upgrade communication systems both at intra-organisational and inter-organisational Model for
levels. It is argued that the environment of communication has changed (Capozzi and e-commerce
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Zipfel, 2012) as new technologies has emerged (Hajli, 2014b). Adopting e-commerce is
one of the key issues for SMEs in different countries, as is redesigning the relationship adoption in Iran
between customers and businesses and re-engineering the business processes (Daniel
et al., 2002). SMEs can use e-commerce and new developments in this area, such as
social commerce, to improve relationships with their customers, many of whom are 721
active in social platforms such as online communities (Hajli, 2014b).

2.1 E-commerce adoption in SMEs in developing countries


Scholars and policy makers have agreed that e-commerce is a crucial tool for
socio-economic progress in developing countries (Sahay and Avgerou, 2002). There is
a gap between the developed and developing countries in terms of research in
the information technology (IT) sector (Harbi et al., 2009). This gap is influencing the
adoption of e-commerce by SEMs in developing countries. It is important to investigate
developing countries as almost 80 per cent of the world’s population live in developing
countries and these countries are rapidly adopting e-commerce to develop business
(Molla and Heeks, 2007). In fact, SMEs are important for any country’s development,
but especially so in developing countries (Fathian et al., 2008).
E-commerce adoption is influenced by a variety of factors, notably perceived
usefulness, perceived ease of use, organisational readiness and external pressure (Gefen
and Straub, 2000; Grandon and Pearson, 2004). However, different factors are found in
developing countries. Research conducted in the Tunisian ICT sector, a developing
market, shows that the lack of a strong financial sector can partly be attributed to risk
within its ICT sector. This has had a negative effect on the development in this area
(Harbi et al., 2009). This research highlights the role of risk and the need for support
systems to deal with this risk. Large companies are leaders in e-commerce adoption
because of their IT resources (Thatcher et al., 2006). In fact, e-commerce adoption by
SMEs is limited; regardless of the many prospective benefits that e-commerce can bring
(Moodley and Morris, 2004; Grandon and Pearson, 2004). One of the possible reasons
for this is that SMEs do not possess the required level of resources to invest in
sophisticated technologies (Datta, 2011; Moodley and Morris, 2004; Molla and Licker,
2005). The maturity of IT in an SME can influence e-commerce adoption (Oh et al., 2012).
Organisational factors, including awareness, human resources and business
resources, influence initial e-commerce adoption to a greater extent than environmental
factors in developing countries (Molla and Licker, 2005). Many benefits and conditions
exist for adopting e-commerce in developing countries, at a time when the benefits of
ICT are unavailable to many (Datta, 2011). However, there are different research
arguments that the adoption of e-commerce can bring many benefits to developing
countries, but little empirical evidence in this field (Molla and Heeks, 2007). The benefits
are a substantial return on investment in ICT (Fathian et al., 2008).

3. Theoretical foundations and the model of research


To propose the model, we undertook a literature review related to e-commerce adoption
in developing countries. The model of the research is shown in Figure 1.

3.1 Organisational readiness


The term “organisational readiness” encompasses issues such as the quantity of IT
employees and the ICT infrastructure in a company, as well as on a national level,
JEIM
27,6
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Organizational
readiness

722
e-Commerce
Adoption

Figure 1.
E-commerce Awareness
pre-adoption model in
developing countries

internet penetration in society, technological readiness and e-banking infrastructure,


among others. The success of IT adoption has often been predicted by the level of
sophistication of both IT infrastructure and organisational readiness (Thatcher et al.,
2006; Scupola, 2009). However, business cultures in many countries do not support
innovation, and so organisational readiness is not high, something which is true of
Iranian SMEs (Fathian et al., 2008). Organisational readiness for e-commerce comprises
four elements: awareness, governance, commitment and resources (Molla and Licker,
2005). Awareness denotes the organisation’s understanding of the advantages and
risks of e-commerce.
One of the more challenging issues related to e-commerce adoption is the lack of
infrastructure in the ICT and financial sectors, which includes a lack of e-banking in
developing countries (Molla and Licker, 2005). In the case of Iran, this is particularly
difficult as internet availability and network speed is not adequate for SMEs (Fathian
et al., 2008). Indeed, the adoption of e-commerce requires SMEs to have easy access to
the internet, as well as a strongly supportive industry. The absence of these factors can
form a barrier affecting organisational readiness in SMEs. As a result, technological
and environmental issues, as shown in previous research (Datta, 2011; Grandon and
Pearson, 2004; Kshetri, 2007), have a fundamental effect on the adoption of e-commerce
throughout the world, and particularly in developing countries. Accordingly, our first
hypothesis is that:

H1. Organisational readiness is positively related to e-commerce adoption in


developing countries.
3.2 Lack of awareness
The term “lack of awareness” refers to cognitive issues in SMEs, as well as factors
including lack of knowledge of e-commerce benefits, lack of ICT literacy, lack of
English language skills, lack of local language availability and poor managerial
perceptions. Issues such as cognitive components play a major role in the initial
adoption of e-commerce in developing countries (Kshetri, 2007). Lack of awareness is
one of the important factors which produce cognitive barriers (Molla and Licker, 2005).
Cognitive barriers include lack of awareness, lack of local language availability, lack of Model for
ICT literacy and lack of English language skills (Kshetri, 2007). e-commerce
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In the case of Iranian SMEs, the lack of English language skills and of ICT literacy
are key determinants of the use of e-commerce, as is the case in other developing adoption in Iran
countries. Senior managers also play an important role when they have positive
perceptions of e-commerce adoption and determine that it can bring strategic value to
their companies. This is true in developed countries, as well as in developing countries 723
(Grandon and Pearson, 2004). This perception requires awareness of the business
benefits of e-commerce in developing countries (Molla and Licker, 2005). Our second
hypothesis is therefore that:

H2. Awareness is positively related to e-commerce adoption in developing


countries.

4. Research methodology
4.1 Research design
The primary objective of this research is to develop a pre-adoption model for
e-commerce, and to test the model using its constructs. In order to achieve this
objective, we pose three research questions, which are shown in Table I.
We select a quantitative approach in order to test the model empirically. In this
study, which had a non-experimental design, data is collected using a paper survey.

4.2 Case of Iran


This research selects the case of Iran to investigate the proposed model as Iran is a
developing country in terms of ICTs. The main reason for deciding to spend a few
months in this country is that the authors have an IT background in this country
making it easier to collect data. Additionally, Iran has a good geopolitical situation in
the Middle East and the present political situation in the country makes the case
interesting. It is also the case that less empirical research has been conducted in Iran
(Fathian et al., 2008), another justification for selecting this country for study.
In 2002, the state government introduced a comprehensive ICT programme
to involve all government organisations in the first step in ICT development and to
encourage them to come online (Fathian et al., 2008). An e-government plan,
deployment of ICT in training, ICT in culture and art, ICT in social services, ICT for
higher education and ICT to support SMEs were objectives of the government in the
plan in 2002 (Fathian et al., 2008). At the present time, ICT development in Iran, due to
the present sanctions, has many problems. The e-banking system means that banks
cannot transfer money to other countries and as SMEs receive a lot of their money from
the global market, they are hit hard. The speed of the internet in Iran is not good,
another barrier in SMEs adopting e-commerce. Albeit, the country has highly skilled
IT workers in society but there is not an adequate number of IT employees in SMEs.
In general many Iranians like new technologies, but SMEs invest cautiously as the risk
to their investments is high.

RQ1. What are the barriers to e-commerce adoption for SMEs in developing countries?
RQ2. Do cognitive issues for SMEs, such as lack of awareness and knowledge of the benefits
of e-commerce, or lack of computer literacy, influence their level of e-commerce adoption? Table I.
RQ3. Does organisational readiness influence adoption of e-commerce by SEMs? Research questions
JEIM SMEs in Iran are categorised as companies with between five and 49 employees. The
27,6 population of the research in this paper consists of those SMEs in the IT sector which
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we were able to investigate. According to the literature and document review which we
carried out in Iran, Iranian SMEs lack awareness of e-commerce, and are also
challenged by problems of infrastructure. It is consistent with other research in Iranian
SMEs in IT sectors, that ICT infrastructure, high network speed, internet availability
724 and the quality of IT employees employed are the critical issues for SMEs (Fathian
et al., 2008). Although previous governments have had specific plans to develop ICT
throughout Iran and among SMEs in particular, the trend of e-commerce adoption is
not positive in this country. However, they have recently reconsidered their need for a
digital economy and have attempted to join the online marketplace. This study will
investigate the barriers to the use of e-commerce in Iran.

4.3 Participants
When we conducted our research in Iran, we chose to target SMEs, because, in general,
they have a crucial impact on the economies of developing countries, and they
form a large part of these economies. To focus our research, we selected SMEs in the
Iranian IT sector. The reason the authors selected Iran as the case for research in
developing countries is that they were an experienced research team in this country
and authors had access to relevant data enabling them to collect the data more easily
than from other countries. Although Iran is a developed country in different sectors, the
IT sector has been unable to expand in recent years. Research shows that development
in IT can bring huge benefits to developing countries (Harbi et al., 2009) and help
these countries to reduce digital gaps. In the case of Iran, the IT sector is one of the
most innovative industries that has recently used e-commerce in the business process.
The other reason for selecting the IT sector is that the association of Iranian IT SMEs
collaborated with this research in the data collection phase. They supported the
research by inviting their members to participate in this work. Therefore, it is easier for
us to collect the data. It is an important factor as it is difficult to attract people to
participate in a survey.
It is also essential to mention that IT in Iran is being affected by different issues,
especially with the sanctions faced by the country at the time of the research. The state
government is in control of this sector, although this sector is privatised. Finally, the
other reason for selecting the IT sector is that these SMEs are more familiar with
the language used and activities related to “e”. SMEs in the IT sector are pioneers in
e-commerce in Iran (Fathian et al., 2008).

4.4 Data collection


The research sampling method made use of purposeful sampling. To make sure that
the research sample was sufficiently representative, we used random quota sampling
based on different issues, such as age and geographical factors. We collected data
using a paper questionnaire in Tehran. Before the main survey, a pilot survey involving
a small number of businesses was undertaken in order to “debug the instrument” (Bell,
2010) – ensuring that the wording of the questions was clearly understood by the
respondents. Our sample consisted of 59 SMEs in Iran. The questionnaire items in this
survey used a Likert scale to measure the data. The scale ranged from 1 ¼ strongly
disagree to 5 ¼ strongly agree. We also reviewed the literature related to e-commerce in
Iran to research barriers to the use of e-commerce in Iranian SMEs in order to
determine the barriers facing them ensuring content validity.
4.5 Data analysis Model for
In this part, we report the research finding. e-commerce
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4.6 Findings adoption in Iran


In data analysis phase, we initially performed tests of reliability and validity.

4.7 Reliability 725


The reliability of a survey is the stability of the measures it uses (Sapsford, 2006).
The aim of this stability is the production of consistent results from repetitive
measurements. To measure the reliability of this research, we tested its internal
consistency, which was calculated using Cronbach’s a. Cronbach reliability coefficients
need to be 0.70 or higher, this research has the value of Cronbach’s a 40.70 as shown in
Table II, indicating adequate internal consistency.
To improve the reliability of the test, we also amended the questionnaire after the
pilot test, as the reliability of the research depends on the “piloting of the instrument”
and the wording of the questions (Bell, 2010).These two types of reliability tests
ensured that we could analyse the data from the survey.

4.8 Validity
In seeking content validity, we are attempting to ensure that the measures of the
questionnaire are drawn from all the potential measures of the material under
investigation (Straub, 1989). To obtain a high content validity, we undertook a
substantial literature review in the area of e-commerce and piloted it using a small
number of SMEs. Moreover, some of the constructs – for cognitive and organisational
readiness – are taken from the existing literature, and have frequently been shown to
demonstrate evidence of strong content validity. It is evident that such constructs drew
their items from different validated sources, something which improved the validity of
this research with regard to the measurement of the constructs. However, we also
considered the face validity of the research by simply showing the survey to lay people,
in order to ensure that the questions were fully comprehensible. We conducted the main
survey after taking these steps.

4.9 Demographic characteristics


The proportion of participants in this research is 82 per cent male and 18 per cent female.
In all, 58 per cent of the participants have a first degree, and 32 per cent a postgraduate
degree. In total, 55 per cent have a degree in a subject related to ICT. The average age of
the participants is 35.

4.10 Testing of hypotheses


To test the relationship between e-commerce adoption, organisational readiness and
awareness, we used Pearson’s correlation. This method takes two research variables
and measures their linear dependency. It is one of the most important forms of
correlation measurement, and has had a major influence on research methods (Rodgers
and Nicewander, 1988). The range of the coefficient is from 1 to 1. When a correlation

Cronbach’s a Cronbach’s a, based on standardized items No. of items


Table II.
0.850 0.851 44 Reliability statistics
JEIM is close to 1, a negative relationship between variables is indicated, while a
27,6 correlation closer to 0 denotes a non-existence relationship between the two variables
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(Rodgers and Nicewander, 1988). Therefore, a correlation close to 1 means that Y


increases when X does.
We computed the correlation between our variables using SPSS software.
The results of the hypothesis testing are shown in Table III.
726 According to these results, there is a positive relationship between awareness and
adoption of e-commerce among SMEs. The result of this hypothesis is supported at
a level of 99 per cent confidence. Accordingly, greater awareness of the benefits of
e-commerce adoption can make e-commerce adoption more likely among SMEs in
developing countries. This highlights the roles played by awareness, local language
availability, ICT literacy, perceptions of managers and English language skills for staff
and managers or owners in SMEs.
The results of testing the second hypothesis are also supported at a 99 per cent
confidence level. The relationship between e-commerce adoption and organisational
readiness is both strong and positive. This relationship demonstrates the importance
of the role played by organisational readiness in e-commerce adoption. Relevant issues
include the number of IT employees and ICT infrastructures, both within a company
and at the national level; internet penetration within society; technological readiness;
and the e-banking infrastructure, among others.
These results therefore show a positive correlation between our hypotheses and
e-commerce adoption. The results are consistent with those in previous literature,
which indicates that adoption of e-commerce is positively related to both
organisational readiness and lack of awareness among SMEs in developing
countries. The strong correlation and good R2 were positive enough outcomes for us
to decide against testing the model using other methods, such as regression.

5. Discussion, implications, limitations and future research


5.1 Discussion
A study in Iran was conducted in order to seek e-commerce adoption in developing
countries. The study demonstrates the important role played by organisational
readiness and awareness in the adoption of e-commerce in SMEs in developing
countries. Organisational factors play an important role in the adoption process within
developing countries. Results of this empirical research indicates that barriers to
adoption include the low number of IT employees and ICT infrastructures in SMEs,
low internet penetration within Iran, environmental law and technological readiness in
the country, and the e-banking infrastructure. These factors are mostly controlled by
the state with the central government playing an important role in creating a better
environment for development.
The other factors – lack of awareness, including lower levels of knowledge about the
advantages of e-commerce, lack of local language availability, lack of ICT literacy and

Variables Hypothesis r-value p-value Results at 99% confidence level

Awareness H1 0.368(**) 0.002 Supported


Table III. Organizational readiness H2 0.557(**) 0.000 Supported
Results of
hypothesis testing Note: **Correlation is significant at the 0.01 level (two-tailed)
lack of English language skills in SMEs – have their own impact on e-commerce Model for
adoption. The study shows that organisational readiness in terms of infrastructures, e-commerce
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internet availability and network speed is a key factor in obtaining benefits from
e-commerce for SMEs. In fact, development of SMEs in Iran is being challenged by adoption in Iran
some basic issues such as lack of English language and lack of awareness in
management to the benefits of e-commerce.
Having established these two key factors through our research, we developed and 727
tested our model. The present research has employed some local researchers who were
familiar with the environment along with the experience gained from a few months’
residence of the team leader in Iran. This has ensured that the data collected reflects the
real situation in this country. We would like to propose it as an action plan for
developing countries, when they take pre-adoption steps as part of the e-commerce
process. These variables should be carefully considered, so that developing countries
are ready to adopt e-commerce.
It is important for SMEs in developing countries to re-structure their attitudes and
knowledge about e-commerce. The world is now adopting social commerce as a new
stream in e-commerce, where businesses and consumers interact on the internet
through social technologies. However countries such as Iran are still challenged with
low internet penetration and organisational readiness to employ IT in SMEs. In fact,
sanctions for the country were one of the main issues in preventing the development in
e-commerce. Iranian SMEs face additional difficulties when they make a strategic plan
to connect to the world wide digital market. There are a variety of problems and
barriers that the model of this research has uncovered. The problems are mostly
organisational readiness. Some of these are linked to the environment and cannot be
controlled by SMEs, but some of them are in control of SMEs. For instance, there is lack
of awareness by management to the benefits of e-commerce in SMEs. These are mostly
related to the business structure and culture of established SMEs.

5.2 Implications
This study could be a basis for further rigorous research into e-commerce in
developing countries such as Iran. The research introduced the pre-adoption model for
e-commerce, and contributed to the theory of this topic by investigating pre-adoption
models in developing countries using multisource data. The study shows that the
development of e-commerce is continuing, and that the adoption of e-commerce is an
on-going issue in IS research. In terms of practical and policy implications, the research
highlights the need for development in ICT in Iran. This should include internet
availability and network speed, employing skilled IT workers in SMEs and supporting
a programme to increase the awareness of SME managers. It is also crucial for the
government to investigate more in the e-banking system and the issues related to
linking them to global banks. As has been mentioned, the Iranian SMEs also have
problems in sending and receiving money worldwide because of current sanctions.

5.3 Limitations and future research


In our initial literature review, we only examined a certain number of studies in order to
find patterns within the literature. We were not able to look at all the research in this
area because of the limited time and resources at our disposal. The other main problem
in conducting research within businesses is that it is difficult to persuade managers to
participate. This is especially the case in developing countries. In the case of Iranian
SMEs, more research needs to be undertaken, as we were only able to investigate
JEIM 59 SMEs in that country. Moreover, the model has only been tested in Iranian SMEs in
27,6 the ICT sector, and so should be expanded to encompass more SMEs, in order to
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further investigate e-commerce adoption in SMEs within developing countries. We


concentrated our investigation on Iranian SMEs. The results were not sufficient to
generalise the outcomes, and so more research in other developing countries is
required. Recent sanctions have made development difficult in Iran, and SMEs in that
728 country face many problems when attempting to globalise. Additionally, some key
infrastructures, such as e-banking, have an influence on e-commerce adoption in that
country.
The results indicate that opportunities exist for the discussion of e-commerce
adoption in developing countries. One future direction for this research would be to
continue investigating this model in other developing countries, and to test the model
in SMEs in industries other than ICT. This could improve the validity of the model, and
produce a better method of generalising the results. It is also important to locate any
other existing barriers to the adoption of e-commerce.

6. Conclusion
This study contributes to the theoretical basis of IS and e-commerce adoption studies
by proposing and testing a pre-adoption model for e-commerce. The adoption of
e-commerce in SMEs in Iran has not been substantially investigated. This is despite the
fact that SMEs play an important role in all economies. The results demonstrate a
significant relationship between organisational readiness and the adoption of e-commerce.
It also shows that there is a positive relationship between awareness of e-commerce and
its adoption. The discussion presented above shows the importance of organisational
readiness and lack of awareness in the pre-adoption process for e-commerce in SMEs
within developing countries. The model has been tested in a single case study in
developing countries, using multiple data sources, collected through interviews,
secondary data and surveys of Iranian SMEs.
The majority of Iranian SMEs do not use e-commerce properly. The reason for this,
as indicated in this paper, is that they are not aware of the benefits of e-commerce, and,
as a result, are not ready to adopt it. It is important, therefore, to increase both
knowledge and understanding of e-commerce within SMEs in developing countries,
so that they are aware of its benefits and can prepare their organisations to participate
in the contemporary digital economy. The study shows that the issues related to
e-commerce adoption in Iran have multi dimensions. Initially, the government has a
strong influence on organisational readiness of IT SMEs. There are a number of key
factors that are controlled by the central government, such as the infrastructures in
ICTs and e-banking services. These are areas that are vital in encouraging SMEs to
adopt e-commerce in Iran. The other dimension is the present sanctions, which
prevents Iranian SMEs to trade freely with their global partners. Finally, SMEs
themselves need to take more steps to become familiar with the benefits of e-commerce
for their business and future business plans. Although new business plans throughout
the world for e-commerce consider social commerce, SMEs in Iran are struggling with
the infrastructure or some cognitive issues such as managerial perspectives and lack of
awareness of the benefits.
The factors influencing adoption which have been demonstrated by this research –
organisational readiness and lack of awareness – can be improved through support
from government, as has been demonstrated by other research which shows the
importance of the governmental role (Kshetri, 2007). Governments of developing
countries can improve awareness of e-commerce within their borders, and can also play Model for
a key role in the development of their countries’ infrastructure. This is clearly e-commerce
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demonstrated in Iran, as the telecommunications, IT and banking systems in that


country are all controlled by central government. adoption in Iran
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Corresponding author
Dr Nick Hajli can be contacted at: m.hajli@mbs.bbk.ac.uk

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