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Chapter 4 E-environment 237

Larger organizations typically already compete in the global marketplace, or have the finan-
cial resources to achieve this. But what about the smaller organization? Most governments are
looking to encourage SMEs to use electronic commerce to tap into the international market.
Advice from governments must reassure SMEs wishing to export. Hamill and Gregory (1997)
identify the barriers to SME internationalization shown in Table 4.7. Complete Activity 4.5 to
look at the actions that can be taken to overcome these barriers.
More recent research suggests SMEs have been relatively slow to adopt the Internet.
Research by Arnott and Bridgewater (2002) suggests limited usage of the Internet. The
authors test the level of sophistication by which SMEs are using the Internet (see stage
models in Chapter 5). They find that the majority of firms are using the Internet for infor-
mation provision rather than interactive, relationship-building or transactional facilities.
They find that smaller firms are using significantly fewer Internet tools than their larger
counterparts. Quayle (2002) has assessed issues considered by SMEs to be strategically
important. In the UK 298 SMEs were surveyed. Issues of marketing, leadership and waste
reduction were given highest priority and supplier development, financial management,
time to market and supply chain management were medium priority. Perhaps unsurpris-
ingly, the lowest priority was given to technology, research and development, e-commerce,
customer management and purchasing – all closely related to e-business. In further research,
Meckel et al. (2004) analysed e-business adoption by several hundred SMEs in the NW of
England and found that fewer than 15% had formal, documented e-business strategies
which is also limiting adoption.

Activity 4.5 Overcoming SME resistance to international e-commerce

Purpose
To highlight barriers to exporting amongst SMEs and suggest measures by which they
may be overcome by governments.

Activity
For each of the four barriers to internationalization given in Table 4.7 suggest the
management reasons why the barriers may exist and actions that governments can
take to overcome these barriers. Evaluate how well the government in your country
communicates the benefits of e-commerce through education and training.

Table 4.7 Issues in SME resistance to exporting

Barrier Management issues How can barrier be overcome?

1 Psychological
2 Operational
3 Organizational
4 Product/market

Source: Barriers from Hamill and Gregory (1997) and Poon and Jevons (1997)

Answers to activities can be found at www.pearsoned.co.uk/chaffey