Institute For Development Policy And Management Management Essay

Small and Medium Enterprises are the footings that are used interchangeably to depict a group of concern organisations. It is a really heterogenous group because it embrace a broad assortment and diverse signifiers. It besides could run in really different markets and societal environments ( Zimmer & A ; Scarborough ( 2001:24 ) . The term SME covers a broad scope of definitions and steps, changing from state to state and changing between the beginnings describing SME statistics ( Gilaninia et al. 2011 ) . Harmonizing to Narain ( 2003 ) , the three parametric quantities that are by and large applied to specify SMEs are capital investing, figure of workers employed, volume of production or turnover of concern. Naturally, little and average concerns have a few employees and functionally influenced by a individual individual that is the proprietor or director of the concern ( Poon et al. 1996 ) . Harmonizing to US Government ( 2009 ) , IFAC has chosen to specify little and moderate-sized entities ( SMEs ) as “ entities considered to be of a little and average size by mention to quantitative ( for illustration assets, turnover/employees ) and/or qualitative features ( for illustration, concentration of ownership and direction on a little figure of persons ) . What constitutes an SME differs depending on the state ” . The definition of SME presented by EU is adopted “ Small and Average Enterprises ( SMEs ) , comprise of institutes which have less than 250 employees, their one-year turnover doesn`t exceed 50 million a‚¬ , and their one-year balance sheet entire is non more than 43 million a‚¬ ( EC 2005 ; Gilaninia & A ; Shahraki 2011 ) .

1.2 Definition of e-commerce

E-commerce is defined as concern minutess take topographic point via telecommunications webs, particularly the Internet, describes the purchasing and merchandising of merchandises, services and information via computing machine webs including the Internet and behavior of a fiscal dealing by electronic agencies ( Turban et al. 1999 ) .

The Internet engineering has brought a important impact in many countries such as making concern and many more ( Sharif et al. 2005 ; Omar & A ; Jusoh 2011 ) . It besides promotes the new manner of pull offing concern by enabling new system such as electronic commercialism ( e-commerce ) to the worldwide users including developed and developing states ( World Bank 2001 ; Phan & A ; Vogel 2011 ; Sharif et Al. 2005 ) . The e-commerce system provides minutess such as on-line payment, electronic cart shopping and online trailing ( Nikabadi & A ; Jafarian 2011 ; Sharif et Al. 2005 ; Bocij et Al. 2008: 47 ) . Bocij et Al. ( 2008 ) and Chaffey ( 2004:7 ) argue that e-commerce non merely involves electronic minutess but besides broad scope of associated activities such as after-sales support and logistics between an organisation and its external stakeholders.

1.3 Purposes and Aims of the essay

This essay aims to research the chances and jobs of following e-commerce in Small Business Enterprise from the positions of Batik concern industry in Malaysia.

1.4 Methodology – primary and lineation of the essay

The methodological analysis for this essay is from the primary beginning which is interview session held with the Batik proprietor in Kelantan, one of province in Malaysia. Another method of research is by analysing on the established diary and thesis from universities. The subdivision will be divided into four classs. It first gives an overview of SMEs and the factors that affect e-commerce success in SMEs. This is followed by critical analysis of the e-commerce acceptance in SMEs. Finally, it presents the contextual scrutiny of the function and restraints of SME and e-commerce in Malaysia.

Literature reappraisal

Role of little concern endeavor

Small and medium endeavors ( SMEs ) play a important function in the growing of the developing states ( Taiwo et al. 2012 ) . The Filipino authorities has embarked upon a comprehensive and incorporate scheme for the sustainable growing and development of SMEs in the state ( Leano 2006 ) . SME Unified Lending Opportunities for National Growth ( SULONG ) plan in Philippine has been created by spread outing the endeavor base by graduating micro, little and average endeavors to higher degrees of categorization by supplying them with more entree to authorities aid ( Leano 2006 ) . Harmonizing to Taiwo et Al. ( 2012 ) , SMEs helps in use of local natural stuffs, bring forthing employment, encourage of rural development, development of entrepreneurship, mobilisation of local nest eggs, linkages with bigger industries, proviso of regional balance by distributing investings more equally, proviso of avenue for self-employment and proviso of chance for preparation directors and semi-skilled workers.

Conversely, Edmiston ( 2007 ) argues that big houses offer better occupations on norm and contribute significantly to occupation creative activity and invention, research and experience suggest that efforts to enroll big endeavors to a specific community are improbable to be successful because of competition from viing communities. Some argued that SMEs enlargement boosts employment more than big steadfast growing because SMEs are more labour intensive thereby subsidising SMEs may stand for a poorness relief tools, by advancing SMEs and single states and the international community at big can do advancement towards the chief end of halving poorness degree by twelvemonth 2020 i.e to cut down poorness by half and going among 20 largest Universe Economies ( Taiwo et al. 2012 ) .

SMEs have been suggested to be given to be more hazardous than larger companies ( Brigham and Smith 1967 ; _ Ven and Poole 1995 ; Delone 1988 ) _ being capable to higher steadfast failure rates ( Cochran 1981 and King & A ; Kraemer 1984 ) . They have been besides found to maintain less equal records ( Lyytinen 1991 ; Rayport & A ; Jaworski 2002 ) _. Storey and Cressy _ ( 1994 ) _ besides qualify SMEs as holding small control over their environment and holding little market portions.

Meanwhile, a survey by the Federal Office of Statistic ( 2001 ) shows that 97 % of all concern in Nigeria employed less than 100 employees. Traveling by this definition of SMEs, an umbrella term for houses with less than 250 employees, it means that 97 % of all concerns in Nigeria and to utilize the term ‘Small Business ” . The SME sector provides an norm of 50 % of Nigeria ‘s employment, and 50 % of its industrial end product ( Ariyo, 2005 ) .In his ain part to the definition of the capable affair, Birch ( 1970 ) argued that little houses are peculiarly of import in occupation creative activity. He reported that over the 1970s, house with fewer than 100 employees generated eight out of every ten new occupations in America. This grounds was nevertheless rejected by a broad array of grounds in the survey conducted by Divine Brown ( 1990 ) , which revealed that big houses were dominant beginning of net occupation creative activity in the fabrication sector. UNCTAD ( 2001 ) affirms that states with a high rate of little industrial endeavors have succeeded in doing the income distribution ( both regionally and functionally ) more just. This is in bend a cardinal distribution to guaranting long term societal stableness by relieving export redistribution presume and by cut downing economic disparities between urban and rural countries ( Taiwo et al. 2012 ) .

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Factors that affect e-commerce success in SMEs

Ajmal & A ; Yasin ( 2012 ) states the internal and external factors which impacting e-commerce success in SMEs.

Organization factors besides known as steadfast internal factors, in general represented by size, quality of Information System, Management support and resources of endeavor ( Rashid et al. 2001 ) . The house size greatly influences the steadfast determination toward acceptance of e-commerce and few concern ‘s things they are excessively little to follow e-commerce in their companies. The same goes for endeavor resources as a little concern tend to believe they do non hold adequate resources to back up the e-commerce execution in the company ( Rashid et al. 2001 ; Ling n.d ; Tan 1998 ) . Enterprise resources consist of homo, fiscal and engineering ( computing machine, telephone lines, overseas telegram, etc ) ( Rashid et al. 2001 ; Huy & A ; Filiatrault 2006 ; Thong 1999 ) . The organisation sometimes feels that it will be irrelevant for concern and will be excessively much to implement and the cost will increase with clip to keep the system ( Ajmal & A ; Yasin ( 2012 ) .

The support and enthusiasm of direction are really of import for SMEs in successful acceptance of ecommerce. Poon and Swatman ( 1999 ) and Rashid et Al. ( 2001 ) found that director or CEO ‘s innovativeness, and IT knowledge has a positive consequence toward acceptance of e-commerce. Individual features such as age, instruction, experience, and physiological traits of CEO are indispensable portion toward acceptance of cyberspace engineering in SMEs. International web usage should dwell of linguistic communication and characteristic that follow harmonizing to regulations, ordinance and civilization that can non be violative to any web user ( Ajmal & A ; Yasin 2012 ) .

Technological constituents involve of the assorted cyberspace engineerings such as COBRA, package agents, nomadic agents ; and mark-up linguistic communications such as HTML, XML, HTML and programming linguistic communication like Java, ASP ; and net development tools such as dream spectator, Photoshop and multimedia, etc ( Ajmal & A ; Yasin 2012 ) . Network Technology is a lower degree includes TCP/IP that is a protocol used to make and reassign information package across the cyberspace ; HTTP is set of regulations for reassigning files over the cyberspace ; and POP, SMTP, IMAP manages electronic mails and web direction issues like quality of service ( QOS ) . Support systems include determinations support system and distributed application and algorithm/methodology that aid, enhance or better EC application ( Ngai et al. 2002 )

Peoples consider most of import portion toward acceptance of e-commerce in SMEs. The single factors consist of client, staff, and direction of concern as they are the 1s greatly affected by the acceptance of e-commerce ( Ajmal & A ; Yasin 2012 ) . The instruction and consciousness of these people consider being most of import, before and after execution of e-commerce. Many organisations delay the acceptance of e-commerce because deficiency of internal endeavor ( Tan and Teo 1998 ) . Therefore, instruction and consciousness along with IT accomplishment and expertness is necessary for any organisation toward acceptance of e-commerce as execution of new techniques may necessitate alter employees work attitude, making, public presentation, cognition of e-commerce. If employees have already known about the e-commerce, the organisation will be more fain to follow e-commerce ( Huy & A ; Filiatrault 2006 ) .

There is a demand of a good operation web site as an execution factor ; a key to successful concern is a professional web site that can aim a niche market and pull the right client to company merchandises and services. There are several things that are needed to see when developing website, e.g. web site should be attractive with easy to utilize characteristics, with the right sum of in writing and text ( size, colour, background ) and, appropriate/clear information on merchandise and services, less website download clip. Customers can register and pass on with concern to order merchandise and services and can pay from a recognition card or other payment system all from a web site. There besides need to hold forums on a web site that can be filled-up by clients to execute these maps or can be able to direct electronic mails ( Ajmal & A ; Yasin 2012 ) .


Competitive force per unit area has positive influence toward acceptance of engineerings ( Dholakia and Kshetri 2004 ) . As more and more houses utilizing the cyberspace for selling and client service will impact the fight and speed up the SMEs toward acceptance of e-commerce. Government support is necessary for acceptance of e-commerce as authorities can simplify regulations and ordinance ; supply proficient substructure toward acceptance of ecommerce in SMEs ( Ajmal & A ; Yasin 2012 ) . Degree of authorities support and substructure vary from state to state together with the civilization. Cultural differences that exist between assorted states may impact the organisation ability to use and follow e-commerce ( Chong 2001 ) .

A portion from quality of the site and its contents ; e-commerce usage and satisfaction could be affected by client temperament toward security and privateness issues ( Molla and Licker 2001 ) . Customer trust on web site usage and its merchandise & A ; services is of import for successful e-commerce system ( Ajmal & A ; Yasin 2012 ) . E-loyalty is an economic and competitory necessity as geting new clients is highly expensive ; and unless those client ‘s sticks around and do a batch of purchases over the twelvemonth, net incomes will stay elusive ( DeLone and McLean 1992 ) .

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[ issue e-commerce ] hypertext transfer protocol: // // E-COMMERCE IN DEVELOPING COUNTRIES: ISSUES AND INFLUENCES

hypertext transfer protocol: // //E-COMMERCE: IMPACTS AND POLICY CHALLENGES1

hypertext transfer protocol: // // E-COMMERCE, WTO AND DEVELOPING COUNTRIES

hypertext transfer protocol: // // The Impact of E-commerce on Developed and Developing Countries Case Study: Egypt and United States

Application e-commerce on SMEs: a theoretical overview

Application e-commerce on SME: a theoretical overview

File theoretical overview SMEs and e-commerce

Figure 1: Theoretical Model

Beginning: Fernando Alonso Mendo and Guy Fitzgerald ( 2005 ) , from Theoretical Approaches to Study SMEs eBusiness Progression

Critical reappraisal – What is function of adopted e-commerce in SME/ any restraint?

Factors impeding the acceptance of e-commerce

hypertext transfer protocol: // = Slow Adoption of Electronic Commerce by SMEs of Taiwan

Harmonizing to Muhammad et Al. ( 2010 ) , Malaysia is holding its ain challenges in e-commerce sector which is Recession, Global sourcing, Lack of province authorities support, Relationship between transnational corporations ( MNCs ) and SMEs, Intellectual belongings and bankruptcy issue, Legal issues in planetary concern, Decision procedure and R & A ; D landscape in SMEs and besides Branding the merchandises in the planetary market, Government policies and enabling environment and Policies towards SMEs.

The use of e-commerce applications among the SMEs in Malaysia is even lower. Harmonizing to a recent study ( Economist Intelligence Unit, 2001 ) , merely approximately 30 % of the Malayan SMEs have adopted e-commerce applications, which is surely low compared to the about 80 % in Europe. While the above statistics could supply some penetration about the use of e-commerce in Malaysia, more current and elaborate information sing commercialism acceptance particularly among the SMEs is required as e-commerce is a quickly altering phenomenon. Therefore, there is a demand to transport out extra research to obtain the latest tendency and statistics in the above country. The ground why SMEs are of peculiar involvement here is because SMEs form an of import sector of a state ‘s economic system ( Daniel et al. 2002 ; Tse et Al. 2003 ) and any extremist alteration in the manner concerns are conducted in this sector would hold profound a impact on a state ‘s economic growing ( hypertext transfer protocol: // ) .

Figure 1: Barriers to adoption e-commerce

Beginning: Love et Al. ( 2001, p.37 )

Mention: Love, P.E.D. , Irani, Z. , Li, H. , Cheng, E.W.L and Tse, R.Y.C ( 2001 ) , ‘An empirical analysis of the barriers to implementing e-commerce in small-medium sized building contractors in the province of Victoria, Australia ‘ , Construction Innovation, vol.1, pp.31-41

[ from Constraints and potencies of handcraft industry in

developing part of Malaysia ]

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[ Barriers to ecommerce in developing states ]

hypertext transfer protocol: // read “ Analysis of the State of E-Commerce Adoption by the SMEs in Northern Malaysia and Factors that Might Hinder its Adoption: An Empirical Survey ”

Best pattern for the e-commerce in SME

[ from barriers and chances in the development Of rural industries: instance survey of batik Kelantan ]

Case survey

Case survey / practical position [ hypertext transfer protocol: // ] // CASE STUDIES OF E-COMMERCE ACTIVITY IN RURAL AND SMALL TOWN BUSINESSES



hypertext transfer protocol: // // The Application of E-Commerce Among Malaysian Small Medium Enterprises

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Malayan SMEs ‘ furniture industry

The Application of E-Commerce Among Malaysian Small Medium Enterprises Small and Medium Enterprises ( SMEs ) Competing in the Global Business Environment: A Case of Malaysia

Background of Malaysia / SME in Malaysia / context of e-commerce in mlysia in sme

In order to last in today ‘s challenging environment, it is imperative that SMEs be competitory and resilient. Towards SMEs and E-Commerce this terminal, SMEs need to continuously beef up their capacity and capableness to bring forth high quality merchandises and services at competitory monetary values ( BNM, 2005 ) .

Harmonizing to Obadan and Agba ( 20070, the authorities of Malaysia is extremely committed to the development of SMEs and operates under the doctrine that the sector needs to be supported in order to “ heighten the capacity and capablenesss of SMEs in supplying world-class services and merchandises to big companies or MNCs and their operators universe broad ” . The bureau that performs this function is the “ Small and Medium Industries Development Corporation ” ( SMIDEC ) . Established in 1996, the SMIDEC was borne out of the acknowledgment that the enabling environment must be made to develop in tandem with globalization. For case, the authorities was cognizant that “ the handiness of right and timely information is one of the of import elements that facilitates concern development ” . Thus the SMIDEC established the SME Information and Advisory Centre equipped with toll-free lines, web enabled information content every bit good as regional offices. It is necessary to observe that the corporation emphasizes manufacturing-based SMEs which are defined as “ companies supplying fabrication related services with one-year gross revenues turnover non transcending RM 25 million and full clip employees non more than 150 ” . The vision and mission statements of SMIDEC, leave no 1 in uncertainty as to their raison d’etre. They are severally to construct the SMEs as “ a dynamic and built-in portion of the Malayan industrial community linked to the international supply concatenation ” ; and “ to heighten the fight, efficiency and productiveness of SMEs ” .

4.2 If there is organisation, obtain instance analyze – what challenge / chances

4.3 Brief debut of the e-commerce on SME acceptance, history, mission, aims

4.4 Role and restraints of SME and e-commerce

4.5 Finding / consequence of research [ happening about sme accommodating e-commerce/ challenges/ analyze the fnding ]

4.6 Analysis of happening


Brief sum-up of the essay

Strong concern and competitory force per unit area are driving the acceptance of e-commerce in SMEs. This paper with a comprehensive reappraisal of literatures and related resources covering the subject, develop the theoretical account for acceptance of B2C e-commerce in SMEs. The theoretical account consists of factors that can be used by SMEs to measure the success of e-commerce. Further research will be done for formalizing and through empirical observation proving the theoretical account. On a farther note, the theoretical account will be implemented in assorted SMEs to cipher the success of factors and its sub-factors. Based on the analyses and sentiment of those SMEs the theoretical account will be farther modified.

5.2 Best pattern of e-commerce and SME acceptance

5.3 Suggestion and recommendation

5.4 Lessons learned and new model for capacity-building of SMEs in developing states

Competitiveness as a long-run scheme, Public-private sector duologue, Private sector support services, Absence of support webs ( Narain 2003 )

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Competitiveness as a long-run scheme

A chiseled long-run fight scheme is a must to better the structural place of any state in the planetary economic system by upgrading current activities and integrating new accomplishments and capital-intensive activities. A “ national vision ” should hence be based upon a consensus among the national stakeholders and an consciousness of both the national ends and the stairss that have to betaken to accomplish them. This should get down with stock-taking of the strengths and failings of bing policies, programmes and constructions at all degrees, and be based on the lessons learned. States should plan policies and programmes that add value to their national economic growing. Taking advantage of the cross-country experiences would be a measure in the right way.

Public-private sector duologue,

An effectual policy model for SMEs should get down with placing existent restraints and possible solutions. A utile manner of placing such restraints is through public-private sector interaction and duologue, therefore making an enabling environment and fosterage policy coherency. Governments need to acknowledge and accept the function and position of the private sector as joint spouses in development and as interpreters for private endeavors. States that have operated with this doctrine have gained well

Private sector support services

Most of the first attempts to develop support systems have involved the puting up of a major cardinal SME development bureau that is government- or publicly-owned and staffed. The supply-side attack of such centralised establishments proved to be flawed and it is by and large acknowledged that such establishments achieved far less than anticipated, for the outgo involved and reached far fewer donees than envisaged. This lesson calls for suited encouragement for private sector intercession. One of the key jobs faced by private sector organisations in developing states, which affects their ability to supply good-quality services, is a deficiency of resources. Activities such as preparation, supplying consultancy and information every bit good as the everyday operations of such organisations in Fieldss such as buttonholing require staff and this can be expensive. Private sector organisations in developing states are either voluntary or compulsory, but in any instance rank fees have to be kept comparatively low if they are non to discourage endeavors from going members. Governments and private sector organisations, considered to hold the possible to develop good-quality support services, should work out, with the support of givers, some agenda for upgrading and reassigning the needed SME services to private sector organisations and hold on how this can be financed. A German assistance programme in the Philippines has been engaged in such a undertaking since 1990. It started with screen from donor financess stand foring 50 per cent of the cost of operating services ; it was reduced to 20 per cent after five old ages after which the local organisation was expected to finance the operation entirely. However, although local opposite number organisations ( by and large regional Chamberss of industries ) were able to develop some matching support, the sum was non plenty to replace the German assistance financess.

Absence of support webs

The troubles in developing a suited support “ web ” for SMEs in developing states should non be underestimated. In most developing states establishments are loath to collaborate with each other. A high and overdone grade of individuality permeates most establishments and their direction. Further, there is intense competition for support, particularly from Governments and givers. Constructing cooperation between establishments in the public and private sectors, between R & A ; D establishments and the concern universe and between big and little endeavors is hard. At times it may be necessary for Governments, givers and regional governments to strip establishments that refuse to collaborate with other bureaus.