Factors affecting the adoptiuon of an E- commerce model developed for small and medium enterprises in Viet Nam

FACTORS AFFECTING THE ADOPTION OF AN E-COMMERCE MODEL DEVELOPED FOR SMALL AND MEDIUM ENTERPRISESIN VIET NAM _ A DISSERTATION Presented to the Faculty of the Graduate School Southern Luzon State University, Lucban, Quezon, Philippines in Collaboration with Thai Nguyen University, Socialist Republic of Vietnam _ In Partial Fulfillment of the Requirements for the Degree Doctor of Business Administration _ By NGUYEN TIEN HUNG (FAT) December 2013 APPROVAL SHEET The Dissertation of NGUYEN TIEN HUNG entitled FACTORS AFFECTING THE ADOPTION OF AN E-COMMERCE MODEL DEVELOPED FOR SMALL AND MEDIUMENTERPRISES IN VIET NAM Submitted in Partial Fulfilment of the Requirements for the Degree DOCTOR OF BUSINESS ADMINISTRATION A program offered by Southern Luzon State University, Republic of the Philippines in collaboration with Thai Nguyen University, Socialist Republic of Vietnam has been approved by Oral Examination Committee WALBERTO A MACARAAN, EdD Expert CONRADO L ABRAHAM, PhD Expert MELCHOR MELO O PLACINO, PhD Expert TRAN DAI NGHIA, PhD External Panel CECILIA N GASCON, PhD Chairman Endorsed by: Recommended by: JOANNA PAULA A ELLAGA, DBA Adviser APOLONIA A ESPINOSA, PhD Dean Accepted in Partial Fulfilment of the Requirements for the Degree Doctor of Business Administration _ Date WALBERTO A MACARAAN, EdD Vice President for Academic Affairs ii CERTIFICATE OF ORIGINALITY This is to certify that the research work / dissertation entitled:"Factors affecting the adoption of e-commerce model developed for small and medium enterprises in Viet nam” orally defended/ presented under the DBA Program jointly offered by Southern Luzon State University of the Republic of the Philippines and Thai Nguyen University of the Socialist Republic of Vietnam, embodies the result of original and scholarly work carried out by the undersigned This dissertation does not contain words or ideas taken from published sources or written works by other persons which have been accepted as basis for the award of any degree from other higher education institutions, except where proper referencing and acknowledgement were made Researcher/Candidate iii ACKNOWLEDGMENT I would like to express my gratitude to Assoc Prof.Dr.Tran Chi Thien for being an outstanding adviser and excellent professor Your constant encouragement, support, and invaluable suggestions made this work successful You haveeverything that one could want from an adviser I would like to thank you for providing me ideas on the research methodology and valuable insights on financial management system I am also deeply indebted to Dr Nguyen ThanhHai and Ms Trinh ThiHieu -International Training Center, Thai Nguyen University of the Socialist Republic of Vietnam, for their enormous pursuit to provide the Vietnamese people an opportunity to grow through education Also, I would like to thank all the lecturers of DBA1 course for helping me to complete this dissertation in which I have been their student in for three years I am deeply and forever indebted to my family for their love, support, and encouragement throughout my entire life! NGUYEN TIEN HUNG iv DEDICATION I wish to dedicate this dissertation to my family and friends NTH v TABLE OF CONTENTS PAGE TITLE PAGE ……………………………………………………………… i APPROVAL SHEET ……………………………………………………… ii CERTIFICATE OF ORIGINALITY ……………………………………… iii ACKNOWLEDGMENT ……………………………………………… … iv DEDICATION ……………………………………………………………… v TABLE OF CONTENTS ………………………………………………… vi LIST OF TABLES ………………………………………………………… viii LIST OF FIGURES ……………………………………………………… ix ABSTRACT ………………………………………………………………… x CHAPTER I II III INTRODUCTION Introduction ………………………………………………… Background of the Study ………………………………… Objectives of the Study …………………………………… Significance of the Study ………………………………… Scope and Limitation of the Study ……………………… Definition of Terms ………………………………………… REVIEW OF LITERATURE AND STUDIES Related Literature and Studies………… …………….… 10 Conceptual Framework …………………………………… 29 METHODOLOGY Research Design …………………………………………… 31 Determination of Sample Size …………………………… 31 Sampling Design and Techniques …………………….… 32 Data Gathering Procedure………………………………… 32 Research Instrument ……………………………………… 33 Data Processing Method ………………………………… 33 vi IV RESULTS AND DISCUSSIONS ………………………… V SUMMARY OF FINDINGS, CONCLUSIONS AND 34 RECOMMENDATIONS Summary of Findings ……………………………………… 75 Conclusions ………………………………………………… 77 Recommendations ………………………………………… 79 BIBLIOGRAPHY ………………………………………………………… 81 APPENDICES …………………………………………………………… 87 Questionnaire ………………………………………………………… 87 CURRICULUM VITAE …………………………………………………… 90 vii LIST OF TABLES TABLE PAGE Success Factorsfor SMEs …………………………………… 15 Internet Accessibility in Viet Nam …………… 19 Business Areas ……………………………………………… 52 Statistical Tables the Number of Businesses Using the Web …………………………………………………………… 55 KMO and Bartlett’s Test ……………………………… …… 56 Rotated Component Matrix………………………………… 57 Reliability Statistics (H1) …………………………………… 60 Item-Total Statistics (H1) …………………………………… 61 Reliability Statistics (H2)……………………………………… 61 10 Item-Total Statistics (H2) …………………………………… 62 11 Reliability Statistics (H3) ……………………………………… 62 12 Item - Total Statistics (H3) …………………………………… 62 13 Reliability Statistics (H4) …………………………………… 63 14 Item - Total Statistics (H4) …………………………………… 63 15 Reliability Statistics (H5) …………………………………… 63 16 Item-Total Statistics (H5)……………………………………… 64 17 Omnibus Tests of Model……………………………………… 65 18 Model Summary ……………………………………………… 66 19 Classification Table…………………………………………… 67 20 Variables in the Equation …………………………………… 68 viii LIST OF FIGURES FIGURE PAGE Research Model (Grandon and Pearson, 2004) …………… 14 Proposedmodel for assessing e-commercesuccessin SMEs …………………………………………………………… 15 Proposed Electronic Commerce Adoption Model for Smalland Medium-sized Enterprises ……………………………… 17 Internet Model …………………………………………………… 18 B2B Business Model …………………………………………… 24 B2C Business Model …………………………………………… 27 C2C Business Model …………………………………………… 28 C2B Business Model …………………………………………… 29 Research Model ………………………………………………… 30 10 Business Areas ………………………………………………… 53 11 Business Areas and Firm Utilize E-Commerce ……………… 53 12 Number of the Firms Have Internet …………………………… 54 ix ABSTRACT Title of Research : FACTORS AFFECTING THE ADOPTION OF AN E-COMMERCE MODEL DEVELOPED FOR SMALL AND MEDIUM ENTERPRISES IN VIET NAM Researcher : NGUYEN TIEN HUNG (FAT) Degree Conferred : DOCTOR OF BUSINESS ADMINISTRATION Name and Address of Institution : Southern Luzon State University Lucban, Quezon, Philippines and Thai Nguyen University, Socialist Republic of Vietnam Adviser : Dr.Tran Chi Thien Year Written : 2013 Throughout this research, the author has studied the factors that influence the development of electronic commerce in the world through the development model of their e-commerce and based on the index information commerce in Vietnam (EBI INDEX) Based on the information, the author determined the factors affecting the development of e-commerce in small and medium enterprises in Vietnam A model of e-commerce adoption for SMEs in Vietnam was created out of the findings Implications of this research study can be divided into implications for managers and implications for government In this research, the author proposed and validated a predictive model for managers that suggest four determinant factors for e-commerce adoption in Vietnam SMEs These factors, according to the rank order of importance, are: organizational readiness; compatibility; ease; and usefulness x 77 contributed significantly to the prediction (p=0.000 and B=2.56); Ease of use and Usefulness also have certain influence to the analysis results We have an equation from the regression coefficient:  P(Y = 1)  Log e   = - 1.690 + 4.801 H1 + 2.560 H + 1.051 H3 + 1.022 H4 P(Y = 0)   H1 Organizational Readiness affects e-commerce adoption H2 Compatibility of e-commerce for the value, work practices, and technology in the firm affects e-commerce adoption, affects predictions.5 H3 The ease of use affects e-commerce adoption H4 The usefulness affects e-commerce adoption Conclusions Throughout this research, the author has studied the factors that have influenced the development of electronic commerce researchers in the world through the development model of their e-commerce and based on the index information commerce in Vietnam (EBI INDEX) Based on that, the author has determined the factors affect the development of e-commerce in small and medium enterprises in Vietnam From those factors, a model of e-commerce adoption for SMEs Vietnam was proposed Implications of this research study can be divided into implications for managers and implications for government In this research authors have proposed and validated a predictive model for managers that suggest four 78 determinant factors for e- commerce adoption in Vietnam SMEs These factors, according to the rank order of importance, are: organizational readiness compatibility easeness usefulness Therefore, managers who wish to adopt e-commerce should consider these factors in making their decision about adoption and try to improve those factors that are within their control By increasing financial resources for adopting, implementing and supporting e-commerce, and providing more technological infrastructure within their organization, improving computerrelated skills , author will achieve the organizational readiness for adopting e-commerce In addition, the adoption of e-commerce are affected by consistency of e-commerce with preferred work practices, business requirements in the organization, value of organization and culture organization therefore Construction business environment, work environment and enterprise culture fit with e-commerce is very important in the strategic application of ecommerce and business operations of the enterprise The adoption of ecommerce are affected by the managers who can decide e-commerce applications in the enterprise Thus, interventions toward changing managers’ perceptions about e-commerce can be devised in order to increase the 79 adoption/utilization of e- commerce by SMEs This is also an important implication for government in order to improve e-commerce utilization among Vietnam organizations Recommendations Based on the above finding results, this research yields some following recommendations for the development of electronic commerce in small and medium enterprises in Vietnam Although the impact of the development of information technology in Vietnam and the world is very strong, Vietnam enterprises gradually applied ecommerce in the business activities of enterprises but most of the small and medium Vietnam enterprises has not really invested in electronic commerce due to limited knowledge or not know to investment in e-commerce development in enterprises of their own Develop corporate culture consistent with ecommerce: in order to develop e-commerce in small and medium enterprises in Vietnam, leaders need to build corporate culture which is adaptable with ecommerce comprising: Focus on recruiting high qualified staff at computer: Company to build manpower recruitment strategy, in which the elements stored in the level of knowledge of information technology and English Encouraging laborers in enterprises to use email for communication: In the business of a company should develop the habit of using the network, email exchanges exceptional work habits and must be initiated from the top management of the enterprise 80 Play game shows involved with internet, computer application: To organize contests using information technology in business operations Reward the employees who have the skills in business information technology efficiently Improve and upgrade the technology infrastructure in the enterprise: To build an enterprise who use e-commerce for their business and the best effect when applying e-commerce in their business they need a good technology infrastructure This factor strongly helps enterprise reduce risks in implementing business on internet Training employees improve their business information: Annually, enterprises need to organize practices for staff or send them to the ecommerce training course to improve their skill as well as upgrading new technologies or new methods to business The financing for the operation of e-commerce systems is guaranteed: Financial issue is important; it guarantees operations of e-commerce It provides payment for operators, stable internet system… To achieve this business need to extract a certain amount of financial security for all maintenance, maintenance and operation of the network; must have a financial amount to invest in new technology updates to meet the strong development of information technology in recent years; have the financial amount to invest in training staff in skills development ecommerce a more professional manner 81 REFERENCES Adams, W (1972) New Role for Top Management in Computer Applications Financial Executive Adams, G & Schvaneveldt, J (1991) Understanding Research Methods, New York, Longman Agarwal, R (2000) Individual Acceptance of Information Technologies IN ZMUD, R.W (Ed.) 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Yes No Does your firm have a web site? Yes No Does your firm utilize e-commerce? Yes No The following questions ask you about your assessment of the readiness to adopt ecommerce in your firm 1- Financial resources for adopting, implementing and supporting e-commerce 2- Technology infrastructure supporting e-commerce 3employee's technical expertise for adopting, implementing and supporting ecommerce 4- Logistical capability adopting e-commerce for -Sufficient inventory of products in order to give better services to the customers 6- Level of employee resistance against e-commerce adoption 7- Consistency of e-commerce with culture of organization 8- Consistency of e-commerce with value of organization 9- Consistency of e-commerce with preferred work practices Very low Low Medium High Very high 88 Very low Low Medium High Very high 20-30 31-40 41-50 51-60 Over 60 Diploma Higher national diploma Bachelor Master PhD Strongly disagree Disagree Uncertain Agree Strongly agree 10- Consistency of e-commerce with business requirements in the organization 11- Management’s awareness about strategic importance of ecommerce 12- Management’s enthusiasms about e-commerce adoption The following questions ask you about your manager: Year old 13- Age of your manager Education 14- Education of your manager The following questions ask you about your perceptions of adopting e-commerce 15- Learning to operate ecommerce would be easy 16- e-Commerce is flexible to interact with 17Interaction with ecommerce is clear and understandable 18- It is easy to become skilful at using e-commerce 19- e-Commerce is easy to use 20- Using e-commerce enable the organization to accomplish specific task more quickly 21- Using e-commerce improve job performance 89 Strongly disagree 22Using e-commerce enhance effectiveness on the job 23- Using e-commerce make it easier to the job 24- Reduce cost of business operation 25- Improve customer service 26Providing customer shopping experience 27- Existence of technological and security-related infrastructures in the country 28- People computer-related skills and knowledge 29- People trust in using ecommerce 30- E-commerce applicability of company’s competitors Disagree Uncertain Agree Strongly agree 90 CURRICULUM VITAE I PERSONAL INFORMATION Full name: NGUYEN TIEN HUNG Sex: Male Date of birth: May, 13th 1977 Birthplace: Ha Noi capital, Viet Nam Civil status: Marriage Children: Nguyen Tien Thach, male, 12 years old Nguyen Tien Lam, male, years old Contact address: - Current residence: No.43 Tran Duy Hung street - Hanoi – Vietnam - Phone: 09-36-350-089 - Email address: hungdhldxh@gmail.com II EDUCATIONAL QUALIFICATION Date from - Date to Degree(s) or Diploma(s) obtained The Phuong Dong University, Vietnam 1996-2000 Degree of Bachelor of Information technology The National Economics University, Vietnam 2002-2004 Degree of Bachelor of economic management The Le Quy Don Technical University, Vietnam 2007-2009 Degree of Master technology Institution of Information III EXPERIENCES Date from to 2001- 2011 Company/Project The University of Labor and Social Affairs (ULSA) Position Lecturer in informatics Description Teaching in informatics 91 Date from to 2011 Up to now Company/Project The University of Labor and Social Affairs (ULSA) Position Associate Dean of the School of Graduate Studies Description Management Training I, the undersigned, certify that to the best of my knowledge and belief, this data correctly describes me, my qualifications and my experience Date …………… ……………………………… Nguyen Tien Hung ... using e -commerce model for small and medium enterprises in Vietnam Significance of the Study This study can help small and medium enterprises in Vietnam for this research will support the enterprises. .. through the development model of their e -commerce and based on the index information commerce in Vietnam (EBI INDEX) Based on the information, the author determined the factors affecting the development... adoption in Viet Nam SMEs In order to so Grandon and Pearson e -commerce adoption model is applied in the Vietnam context (Grandon and Pearson, 2004) Grandon and Perason's model factors that influence