Determinants of Technology Adoption Among Malaysian SMEs: An IDT Perspective

Authors

  • Thurasamy Ramayah School of Management1,Universiti Sains Malaysia 11800 USM, Penang, Malaysia
  • Osman Mohamad Graduate School of Management, Multimedia University 63100 Cyberjaya, Selangor, Malaysia
  • Azizah Omar School of Management1,Universiti Sains Malaysia 11800 USM, Penang, Malaysia
  • Malliga Marimuthu School of Management1,Universiti Sains Malaysia 11800 USM, Penang, Malaysia
  • Jasmine Yeap Ai Leen School of Management1,Universiti Sains Malaysia 11800 USM, Penang, Malaysia

DOI:

https://doi.org/10.32890/jict2013.12.6

Keywords:

Small and medium enterprises, SMEs, technology adoption, innovation diffusion theory, partial least squares

Abstract

Traditional competitive advantages such as raw material availability, inexpensive labour and proximity to local markets are fast losing their importance to other factors such as technology adoption. In order to survive, it is imperative that organizations incorporate technology into their daily operations. Still, technological adoption and information and communications technology penetration among the Malaysian SME industry is yet to reach a much desired level. Hence, this paper aims to reveal the factors that drive technology adoption among SMEs in Malaysia using the perceived innovation characteristics outlined in the Innovation Diffusion Theory (IDT). Data was gathered from manufacturing and manufacturing-related services; SMEs scattered throughout the country and analyzed using the partial least squares technique. The analysis revealed that innovation characteristics such as perceived relative advantage, observability and image are positively-related to the adoption of a technology while compatibility and ease of use do not influence adoption. Interestingly, though trialability was found to have a significant impact on adoption, its effect turned out to be a negative one instead of a positive hypothesized relationship. The findings are further discussed and elaborated.

 

References

Abdullah, M.A. (2002). An overview of the macroeconomic contribution of SMEs in Malaysia. In C. Harvie, & B.C. Lee (Eds.), The role of SMEs in national economics in East Asia. United Kingdom: Edward Elgar.

Anderson, J.C., & D.W. Gerbing. (1988). Structural equation modeling in practice: A review and recommended two-step approach. Psychological Bulletin, 103(3), 411-423.

Andreev, P., Heart, T., Maoz, H., & N. Pliskin. (2009). Validating formative partial least squares (PLS) models: Methodological review and Journal of ICT, 12, 2013, pp: 103– empirical illustration. Proceedings of the Thirtieth International Conference on Information Systems. Phoenix, Arizona.

Agarwal, R., & J. Prasad. (1997). Role of innovation characteristics and perceived voluntariness in the acceptance of information technologies. Decision Sciences, 28(3), 557-582. http://jict.uum.edu.my/

Aggarwal, S. (1995). Emerging hard and soft technologies: current status, issues and implementation problems. Omega: International Journal of Management Science, 23(3), 323-339.

Al-Gahtani, S. S., Hubona, G. S., & Wang, J. (2007). Information technology (IT) in Saudi Arabia: Culture and the acceptance and use of IT. Information & Management, 44(8), 681-691.

Arts, J.W.C., Frambach, R. T., & Bijmolt, T.H.A. (2011). Generalizations on consumer innovation adoption: A meta-analysis on drivers of intention and behavior. International Journal of Research in Marketing, 28(2), 134-144.

Bagozzi, R. P., & Yi, Y. (1988). On the evaluation of structural equation models. Journal of the Academy of Marketing Science, 16(1), 74-94.

Benham, H. C., & Raymond, B. C. (1996). Information technology adoption: Evidence from a voice mail introduction. ACM SIGCPR Computer Personnel, 7(1), 3-25.

BNM. (2011). Economic and Financial Data for Malaysia. Bank Negara Malaysia. Retrieved from http://www.bnm.gov.my/index.php?ch=

Bollen, K. A., & Lennox, R. (1991). Conventional wisdom on measurement: A structural equation perspective. Psychological Bulletin, 110, 305-314.

Chin, W. W. (1998). The partial least squares approach to structural equation modeling. In G.A. Marcoulides, Mahwah (Eds.), Modern business research methods. NJ: Lawrence Erlbaum Associates.

Da Silveira, G. (2001). Innovation diffusion: R agenda for developing economies. Technovation, 21(12), 767-773.

Diamantopoulos, A., & Winklhofer, H. M. (2001). Index construction with formative indicators: An alternative to scale development. Journal of Marketing Research, 38, 269-277. Journal of ICT, 12, 2013, pp: 103–

Fornell, C., & J. Cha.(1994). Partial least squares. In R.P. Bagozzi, (Ed.), Advanced methods of marketing research (pp. 52-78). Oxford: Blackwell.

Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of http://jict.uum.edu.my/ Marketing Research, 18(1), 39-50.

Gefen, D., Straub, D. W., & Boudreau, M. C. (2000). Structural equation modeling and regression: Guidelines for research practice. Communications of the AIS, 4(7), 1-79.

Hair, J.F., Black, W.C., Babin, B.J. &., Anderson, R.E. (2006). Multivariate data analysis. Upper Saddle River, NJ: Pearson Prentice-Hall.

Hussain, Z., & Phatak, R. D.(2002). A technology management perspectives on collaboration in the Indian automobile industry: A case study. Journal of Engineering Technology Management, 19(2), 167-201.

Iacovou, C. L., Benbasat, I., & Dexter, A. (1995). Electronic data interchange and small organizations: Adoption and impact of technology. MIS Quarterly, 19(4), 466-485.

Islam, M., & A. Karim. (2011). Manufacturing practices and performance: comparison among small-medium and large industries. International Journal of Quality & Reliability Management, 28(1), 43-61.

Kendall, J. D., Tung, L. L., Chua, K. H., Ng, C. H. D., & Tan, S.M. (2001). Receptivity of Singapore’s SMEs to electronic commerce adoption. Journal of Strategic Information Systems, 10, 223-242.

Kwon, T. &., R. W. Zmud, R. W.(1987). Unifying the fragmented models of information systems implementation. In R. J. Borland, Jr., & Hirschman (Eds.),Critical issues in information systems (pp. 227-251). R.A. New York: John Wiley.

Lefebvre, L., Harvey, J., & Lefebvre, E. (1991). Technological experience and the technology adoption decisions in small manufacturing firms. R&D Management, 21(3), 241-249.

Mackenzie, S. B., Podsakoff, P. M., & Jarvis, C. B. (2005). The problem of measurement model misspecification in behavioral and organizational Journal of ICT, 12, 2013, pp: 103– research and some recommended solutions. Journal of Applied Psychology, 90, 710-730.

Mehra, S., & Agrawal, S. P. (2003). Total quality as a new global competitive strategy. International Journal of Quality & Reliability Management, 20(9), 1009-1025. http://jict.uum.edu.my/

Meuter, M. L., Bitner, M. J., Ostrom, A. L., & Brown, S. W. (2005). Choosing among alternative service delivery modes: An investigation of customer trial of self-service technologies. Journal of Marketing, 69(2), 61-83.

Moore, G. C., & Benbasat, I. (1991). Development of an instrument to measure the perceptions of adopting an information technology innovation. Information Systems Research, 2(3), 192-222.

Petter, S., Straub, D., & A. Rai, (2007). Specifying formative constructs in information systems research. MIS Quarterly, 31(4), 623-656.

Rogers, E. M. (1983). Diffusion of innovations (3rd ed.). New York: Free Press.

Rogers, E. M. (1996). Communication technology: The new media society. New York: Free Press.

Ringle, C. M., Wende, S., & Will, A. (2005). SmartPLS 2.0 (beta). Retrieved from www.smartpls.de.

Saleh, A.S., & Ndubisi, N. O. (2006). An evaluation of SME development in Malaysia. International Review of Business Research Papers, 2(1), 1-14.

Tan, M., & T. S. H. Teo. (2000). Factors influencing the adoption of internet banking. Journal of the Association for Information Systems, 1(5), 1-42.

Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2-3), 172-194.

Tornatzky, L. G., & Klein. L. G. (1982). Innovation characteristics and innovation-implementation: A meta-analysis of findings. IEEE Transactions on Engineering Management, 29(1), 28-45.

Van Slyke, C., Lou, H., & Day, J. (2002). The impact of perceived innovation characteristics on intention to use groupware. Information Resource Management Journal, 15(1), 5-12.

Downloads

Published

23-04-2013

Issue

Vol. 12 (2013): Journal of Information and Communication Technology (JICT) Vol. 12, 2013

Section

Articles

How to Cite

Ramayah, T., Mohamad, O., Omar, A., Marimuthu, M., & Yeap Ai Leen, J. (2013). Determinants of Technology Adoption Among Malaysian SMEs: An IDT Perspective. Journal of Information and Communication Technology, 12, 103-119. https://doi.org/10.32890/jict2013.12.6

Research impact

Harvested 2026-09-06
0 citations recorded so far

Counts differ between services because each indexes a different body of literature. None of them is the whole picture.

Identifiers DOI 10.32890/jict2013.12.6