A Resource-Based Technological View in the Adoption of an E-Procurement System: Evidence From Textile Sector SMEs

A Resource-Based Technological View in the Adoption of an E-Procurement System: Evidence From Textile Sector SMEs

Muhammad Naeem, Ahmed Hamed Abdullah Al Sulaimani, Sohail Anwar
Copyright: © 2021 |Pages: 21
DOI: 10.4018/IJEBR.2021040103
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Abstract

The large organizations are more interested in adopting new technology because these organizations have more financial resources, human capital, technological competencies, employees, and organizational support. On the other hand, small- and medium-sized enterprises (SMEs) have more challenges with respect to suppliers, organizational contextual factors, technological competencies, and financial resources which negatively influence the adoption rate of e-procurement system. The present study aims to identify these challenges with the purpose to understand the adoption capabilities that can help SMEs to adopt e-procurement systems in the perspective of a developing country. To achieve this aim, the researcher data had gathered from the internal and external stakeholders of five SMEs of textile sector. Findings highlighted that SMEs are facing many challenges such as complexity and formalization, formal and informal linking structures, financial and strategic integration, industry characteristics, and technology infrastructure. The adoption of e-procurement systems can improve the employee abilities, motivation, opportunities, interconnectedness and system openness, inventory system, purchasing process, and organizational capabilities.
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Introduction

At present, top management, researchers, and business leaders are more interested to bring business technologies that can reduce the overall costs and employee efforts (Alrousan, et al., 2020; Benabdelhafid & Boufaida, 2015). The adoption and implementation of e-commerce technologies have improved the strategic confidence, organizational capabilities, communication, and decision making (Benabdelhafid and Boufaida, 2015; Ramcharran, 2013). For example, the adoption of e-procurement can improve supply chain management, strategic confidence, SMEs capabilities, purchasing and ordering process, transparency, accountability, and relationship with suppliers (Gunasekaran, et a al. 2009; Hassan, et al., 2014; Eei, et al., 2012). Compared to large organizations and SMEs of developed nations, it is found that the SMEs of developing countries have more challenges such as lack of employee skills, high resistance, limited financial resources, and lack of employee and organizational support (Altayyar et al., 2016; Rahayu, & Day, 2015; Elsmani, et al., 2017). Therefore, the adoption rate of e-procurement system is slow in developing countries (Rahayu, & Day, 2015; Elsmani, et al., 2017).

Aslam et al. (2018) have stated that employee motivation, skills, and intention to get new opportunities may vary between developed to developing countries that can influence the technology adoption rate. Many SMEs are still following the traditional procurement system which can reduce the employee learning opportunities and skills, knowledge sharing, effective utilization of resources, competitive advantages, and profitability rate (Gunasekaran et al., 2009; Rahayu, & Day, 2015; Faisal & Talib, 2017). Researchers have highlighted that traditional procurement system have many challenges such as unimportant paperwork, time consuming, more repetition of tasks, low transparency and accountability, more administration costs and employee efforts (Gunasekaran et al., 2009; Rahayu, & Day, 2015; Faisal & Talib, 2017). Therefore, those SMEs which are following traditional procurement unable to create competitive advantage, human and intellectual capital, technological competency, profitability and growth (Altayyar et al., 2016; Rahayu, & Day, 2015; Elsmani, et al., 2017). Conversely, it has found that e-procurement system can improve the ordering process, employee learning and motivation, inventory system, and relationship management with stakeholders (Alrousan, et al., 2020; Rahayu, & Day, 2015).

The existing literature has highlighted that level of e-procurement adoption and employees support vary between private to public organization, developed to developing countries, and large organizations to SMEs (Gunasekaran et al., 2009; Rahayu, & Day, 2015; Faisal & Talib, 2017). Some studies have highlighted that SMEs of Asian countries have more challenges to adopt e-procurement due to low level of human capital, financial resources, and technological competencies (Rahayu, & Day, 2015; Faisal & Talib, 2017). There are many institutional, government, organizational, individual, and financial factors which may negatively influence the adoption of e-commerce technologies in Pakistan (Aslam et al., 2018; Muqadas et al., 2017). It is found that low level of knowledge sharing, lack of reward, limited investment in training and development, high level of organizational politics, workplace injustice, collectivism and resistance to change are some of factors which decreased the technology adoption rate in Pakistan (Aslam et al., 2018; Aslam et al., 2016). According to Aslam et al. (2018), local context, level of employee education, level of employee motivation, training and reward are the main factors which can technology adoption rate in Pakistan.

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