CHAPTER ONE 1

CHAPTER ONE

1.1 Background to the study
The growth of the web application has brought about the evolution of business-to-consumer electronic commerce (B2C e-commerce). Consequently, the dawn of B2C e-commerce has altered the method that is used by the Small and Medium Enterprises (SMEs) in transacting businesses both online and offline with their customers. B2C e-commerce are used daily by many internet users globally in particular with SMEs stake holders, managers and online shoppers for selling, ordering and purchasing of goods and services and other purposes such as window-shopping via the internet. Even in everyday life, the internet has altered business processes and human-to-human interactions Barbrook and Cameron (2015).
The emergence of the world wide web (www) continues to interconnect computers worldwide and also provide the world with the environment that enables operations of interactive program for computers irrespective of their geographical locations, it is progressively becoming a known and a significant developing intermediate market environment for businesses (Hoffman & Novak, 1996). Closely link with the internet revolution, the it continues to sweep the globe whiles creating a new platform such as the Business-to-consumer electronic commerce (B2C e-commerce) which generally concentrate on the transactions that exist between the businesses and their perspectives customers (Duncombe & Heeks 2001). Similarly, the business-to-consumer electronic commerce had also emerged in diverse parts of the world. However, B2C e-commerce in Africa did not have much recognition let alone its adoption (Boampong, 2015). As a result of these, several researches have been conducted around the world in order to gain a better understanding of the demands, adoption and effectiveness of B2C e-commerce (Rayed & Nguyen, Ann, Jones, & Vicki, 2013).
In contrast, it is undeniable that the majorities of these studies were done in developed countries while only few were focused on the developing countries (Kurnia, Choudrie, Mahbubur and Alzougoo (2015). This confirmed in an assertion by Chowdhury (2003), which state “that, in this stage of information technology era, there are still some limited number of studies on the adoption of e-commerce technologies by developing countries”. It was further justified in a study by Tagoe (2015) that, there are no comprehensive documents to indicate e-commerce growth in developing countries. This goes to show how developed countries have realised the advantages of these new revolution (B2C ecommerce) and are moving forward at a very fast rate, while the developing countries on the other hand are left behind.
Netcraft (2015) assert that the global ecommerce (B2C) industries have seen an impressive growth in recent years.
The business-to-consumer electronic commerce paradigm has been extensively adopted and have subsequently been growing constantly since 1995. Surprisingly, B2C e-commerce adoption has not always been successful in developing countries such as Ghana, moreover, while many of the e-commerce benefits have been realised by organisations in developed countries, there are still some degree of uncertainty of its significance and merits for developing countries (Odedra-Straub, 2003; Raman & Yap, 1996). This indicate the need for Ghanaian’s SMEs stake holders and managers to attach some seriousness in adopting B2C e-commerce in business transaction without any option.

According to Tagoe (2015), developing country such as Ghana, some form of e-commerce (use of phones to place order for goods and services) became a reality in Ghana in 1995, when the country hooked on the internet bandwagon and opened itself up for on-line benefits such as e-mail, websites and research services among others. He further maintains that, with this new development, other players considered the opportunities that the Internet could offer them. At that point, Ghana, had a booming establishment of internet cafes and with it, the yahoo and hotmail era came. Buying and selling was still done offline with cash. In August 2009, Mobile Telecommunications Network (MTN) launched mobile money in the country. Soon after, paying for goods and services were gradually done online, via mobile phones. This was the beginning of B2C e-commerce in Ghana. Comparatively, Ghana still lags behind other countries such as South Africa in terms of e-commerce performance (Hinson ; Sorensen, 2007). This was also affirmed in a study by (Huff ; Yoong, 2000) that, the number of e-commerce issues studies in developing countries can be completely different from that of the developed countries. Moreover, Several SMEs in developing countries does not even achieve minimum levels of e-commerce adoption. This could be due to the fact that, most of the Ghanaians own SMEs sectors are not aware of the many benefits of B2C in business transaction. However, this lack of awareness of ecommerce critical prospective, is an important barrier to its adoption and remains a serious concern (Turban et al., 2008).

Furthermore, SMEs employing B2C technologies show little evidence of engaging in their long-term strategic development, especially among less developed countries (Fillis et al., 2004). Nevertheless, relevant studies have been contradictory in their finding, a study by (Odedra-Straub, 2003), indicate that ecommerce marginalises developing nations and widen the digital divide.
The agility business community, and the need to survive in it, left the Ghanaian’s SMEs sectors, with no option than to adopt B2C e-commerce which is more innovative, profitable, and successful in the traditional and international markets.
The use of B2C e-commerce in transacting business is now a priority for many SMEs, as the global economy integrates and reduce it trades barriers, SMEs have the greatest opportunities to participate in regional and international markets. According to Frempong (2007), the Internet has become so important that its usage should form an integral part of SME operations in developing countries. Indeed, E-commerce can enhance the competitiveness of developing countries, and reduce poverty (Qureshi & Davis, 2007).

Several SMEs in developing countries does not even achieve minimum levels of e-commerce adoption. Furthermore, the adoption of business transaction processing on the internet that enable small businesses transaction, are not so much widespread as expected in developing countries (Zaied, 2012). This is to suggest that, the issues of B2C e-commerce adoption by SMEs in developing countries need further prominence study because SMEs plays some crucial roles to every nation’s growth. They generally represent the major proportion of established businesses in most countries.

1.2 Problem Statement

It was espoused by Smith and Taken (2011) that, electronic commerce, also called e-commerce, is increasing around the globe. However, Ghana is still recording low figures of e-commerce growth. Again, a study by Tawia (2015), indicated that, there are fewer e-commerce websites in Ghana, because his study could not locate 20 e-commerce sites to review and this goes to show though, many internet service providers have penetrated the country presently, a lot of SMEs are not taking advantage of e-commerce, this could be due to various perception the
SMEs stakeholders have for e-commerce. A survey by the Effutu Municipal Assembly (EMA, 2017) indicated that 351SMEs are registered.
This study discovered that even though there are some models of e-commerce in the Effutu Municipal, their level of adoption is low and this could result in poor business activities and ability to compete with other businesses domestically and internationally. A condition that may crumple some of the Ghanaians SMEs sectors in the nearer future. Thereby posing some threat to the Small and Medium
Enterprises. To reduce any of such occurrences, this study proposed a suitable B2C e-commerce framework for adoption by SMEs in Ghana.

1.3 Research Objective:

The general objective of the study is to propose a suitable B2C framework for SMEs adoption in Ghana. The specific objectives sought to:
examine the barriers to B2C e-commerce adoption by SMEs in the EMA
examine the effect that low awareness of B2C adoption have on SMEs
determine if B2C website quality could influence adoption by SMEs
propose a new B2C framework that best suit SMEs’ adoption in Ghana

1.4 Research Questions:

i. What are the barriers to e-commerce adoption for SME in EMA? ii. What effect does low awareness of B2C have on adoption by SMEs?
Could the Business-to-Consumer website quality influence adoption of
B2C by SME?
Could the new proposed B2C framework best suit SMEs for adoption in Ghana?

1.5 Scope of the Study
This study covers selected SMEs within the Effutu Municipal Assembly of the Central Region. It is expected to review some other business-to-consumer framework technologies and standard. It widely covers SME and the factors inhibiting the adoption of B2C e-commerce by SMEs.

1.6 Limitations of the Study
The study could have been done with selected sample throughout the country, but due to the large population of SMEs in Ghana and limited time associated with the study, this could not be achieved. Other factors such as low awareness of ICT levels and non-cooperation of SME owners are some of the constraints that were associated with this study.

1.7 Organisation of the Study
The study comprises five chapters. Chapter One which is the introduction, encompasses the background of the study, statement of the problem, purpose of the study, research questions, significance of the study, scope of the study and limitation of the study. A review of related literature on the subject is presented in
Chapter Two, while Chapter Three elaborates on the methodology for the study. Chapter Four discusses the data gathered for the study and presents analysis of the study results. Finally, the study concludes with a summary of findings, conclusions and recommendations in Chapter Five.

CHAPTER TWO
LITERATURE REVIEW

2.0 Introduction
The literature is reviewed under two main sub-headings, these are: the theoretical review and empirical review. The theoretical review focuses on theories propounded and views of experts in relation to the problem under investigation, information were solicited from online journals, published and non-published article and books. The empirical review will also focus on the findings of the studies similar to the one being undertaken. Also, since the study was to propose a framework, it will review the Technology Acceptance Model (TAM), the Halji model and Al-Ali and Al-Aliwe propose e-commerce framework standards and technologies.

2.1 Definition of B2C E-Commerce

B2C e-commerce is a web base model which enables business and service to be done virtually. B2C e-commerce provides an organisation with the system that allows them to deliver buyers to the merchants and gain from the commission provided by the merchants. It applies to businesses that want to market their goods or services to consumers virtually (Raheja & Kumar, 2012). Furthermore, B2C E-commerce is also referred to the innovation that involves the retails of goods and services transactions by the use of the internet, it is unlimited to proximity, irrespective of the traditional “brick and mortar”. Therefore, B2C is the
Technical evolution of selling goods and services virtually (Hellen, 2013). However, having access to the B2C e-commerce will require the individuals’ customers to visit an organisations’ website before they can buy a product or order any services. They do this by clicking on an online shop link which navigates them directly to a list of some online merchants. The purchase is made as if the customers had gone to the merchant directly. The goods purchase or the services requested is sent to the buyer and the referring organisation gets a commission on every sale. B2C e-commerce provides SMEs with the platform that allows them to deliver buyers to the merchants and gain from the commission provided by the merchants (Raheja, 2012).

2.2 B2C e-commerce Usage and Advantages

According to Uzoka (2004), ICT has become the driven force in the development of human activities and in advance, gaining a major place in the global market environment. In the next decade, it is estimated that, the activities of e-business would be the main source of foreign exchange, which is the key indicator of national development. However, this could be achieved by transacting business in many countries by working with various partners such as procurements, suppliers, dealers, exporters, importers, and sales companies, to coordinate a successful business in competitive environment (Ahu et. al, 2010).
At present, B2C e-commerce model is becoming popular for selling of goods and services to online consumers and also allows vendors to get access to customers globally (IWS, 2006). This new innovation offers SMEs with immense merit. According to ComScore, (2006), B2C e-commerce helps businesses to make higher income and improve the quality of customer services. It is generally known that e-commerce technology offers countless potential return such as reduced cost, increased sales, increased productivity, reduced time processing, extend market reach and increased customers’ loyalty (Turban, 2010). Again, it has been studied that the advantages offered by e-commerce are believed to be one of the factors that have made it popular among businesses and this can be seen from the significant growth of e-commerce user’s year by year. In 2009, 624 million internet users had made online purchases with revenue nearly 8 trillion US dollars in total, and that number was predicted to have increased by the end of the year 2013 to more than 16 trillion US dollars of transactions, (Gens et al, 2011). Ecommerce represented 14.8% of the total retail sales in the fourth quarter of 2017, compared with 13.2% in the same quarter of 2016, a marked increase of 11.6% in 2017 (Ali, 2017). However, such significant growth is also seen in Asia, and this is also indicated in the report by the internet World Statistics (IWS), which shown that the number of internet users have increased dramatically, from the year 2000 to 2015, the number of internet users was only 114 million whiles in the year of
June 2016 there were 1.56 billion people in Asia using the internet (IWS, 2015). Furthermore, the Global B2C e-commerce report (2016) indicated that around 2.5 billion consumers in the world found their way to the internet, and the majority of them purchased goods and services online for a total amount of 2671 billion USD.
Asia-Pacific and North America are among the top regions for the highest positions, as the total B2C e-commerce turnover of 1057 billion and 644 billion USD, respectively in 2016. In 2015, the Vietnamese e-commerce market was worth 4.07 billion USD, and it is expected to rise up to 20 % in the year 2020 to reach 10 billion USD. According to Vietnam e-commerce and Information Technology Agency. The B2C e-commerce market has been more and more crowded year by year, therefore, the potential user of B2C e-commerce must not only be convinced of the relevant advantages of e-commerce but also have a positive attitude towards its adoption (Harris, 1999). Adopting B2C e-commerce is considered a means of enabling SMEs to compete globally through improved efficiency and closer customer and supplier relation-ships (Chong et al., 2001). Furthermore, e-commerce is changing the shape of business competition, streamlining interactions and payments from consumers to companies and from companies to suppliers, while making electronic market more flexible and accessible, lengthening business hours across the world (Hagel & Lansing, 1994).

2.3 Impediments to B2C adoption by SME

Despite the several opportunities and benefits presented by B2C e-commerce, there are some major challenges that affect the wider adoption of B2C by SMEs in Ghana. Some of the factors identified where the lack of human resources, internal resistance, unready customers, lack of IT support for SMEs, security issues, unready business partners, internal constraints, and lack of IT resources, (Dubelaar et al., 2005). However, a study by Jahanshahi and Zhang (2013), indicates that, security and privacy issues, lack of knowledge and understanding of e-commerce and high maintenance cost, were the main impediment faced by SMEs in three developing countries (Iran, Malaysia and India) in adopting ecommerce. A further study by Kotelnikov (2007), also reveal that, poor communication infrastructure, the lack of ICT knowledge, lack of IT resources, the lack of financial resources and poor legal infrastructure are some factors that lead to the low adoption of ICT by SMEs in developing countries. This could contribute to the low level of B2C adoption by SME in Ghana. According to (Odedra-Straub 2003; Raman & Yap 1996), B2C e-commerce technology adoption has not always been successful in developing countries due to several factors. This is in line with an assertion by Chaffey and White (2010) which indicated that researchers have identified many inhibiting factors to the adoption of e-commerce by SMEs, particularly in developing countries. This situation must be taken seriously, hence, it requires attention from all stakeholders including researchers and support from government, given the important role SMEs play in the economic development of a country specifically Ghana. The small and medium enterprises contribute to job creation and poverty reduction (Ayyagari et al., 2011; Neumark et al., 2011; Wit & Kok., 2014; Kotelnikov., 2007). Therefore, the development of SMEs in a country could have a positive impact on it economic growth and vice versa.

A research by the (Internet World Stats, 2017) indicate that, although Ghana has 29,463,643 internet users, getting information for the on-line purchase in Ghana is nil. This could suggest that, SMEs adoption by B2C e-commerce is very low in Ghana as compared to other countries. It cannot be denied that, e-commerce technology was originally developed to meet the needs of large enterprises in developed countries, however the application of e-commerce is still suitable for SMEs in developing countries. However, there has been some doubt about the relevance of e-commerce for developing countries and with limited number of studies on e-commerce adoption (Kunia, 2003).

2.4 B2C Website Quality

The evaluation of the quality of Websites based on customer perception is fundamental to obtaining and maintaining success over the Internet. Improving the quality in the eyes of the customer is rewarding to the companies (Lovelock & Wirtz, 2006). Based on this information, companies may direct their efforts toward better service to their targeted customers, offering adequate products and services based on significant information (Olsina & Lafuente, 2000; Peppers, 2001; Barnes & Vidgen, 2002).
The B2C e-commerce website quality presents the various guide line that may enable managerial implications and recommendations for SMEs adoption to B2C, and also assist the on-line retailers in expanding their customer margin base and improving their profitability. However, the B2C e-com website could be of good quality if it satisfies the following conditions:
Visually appealing, polished and attractive it is far more likely to generate a positive impression and keep visitors on site.

The colour scheme should contain 3 primary colours that blend well and create a proper tone to avoid the website colours from distracting over hue. This will project the written contents of the websites.

Meaningful graphics, the graphics have visual variety and appealing and the written context have meaning to the content. The page is loaded with several of on-line stores goods and services images.
Quality photography: High quality photography is used to improved products images are especially for its on-line retailers.

Simplicity:
Simple and allow for adequate white space. Uncluttered layouts allow viewers to focus on message. Site design, animation and effects are impressive to viewers.
Content
Along with style, the site has substance. Because the on-line customers are looking for information that will help them makes decision therefore, it should be informative and relevant. This could increase visitor confidence, knowledge and competence of the B2C on-line shops.

Organized copy:
Clearly label topics and break text with small paragraphs to prevent visitors of borderless. Time less than 10 seconds is considered to hook visitors or potential customers up. B2C web content needs regular update. This is because customers may deem it unpleasant reading the same thing over and over again. Dead or static content will not bring customer to the website.

2.5 B2C E-commerce elements
B2C e-commerce consist of various elements which includes cataloguing, order planning and generation, cost estimation and pricing, order fulfillment and delivery, product maintenance, category management, and finally the order and credit card processing. Each of these stages is necessary for the complete processes for online transaction of products and services.

? Cataloguing
Cataloguing is the process of displaying items from a database based on categories and sub categories selected by the customer. It creates a very simple ecommerce system that allows customers to navigate and select products or services for purchase from their respective online shop catalog. Cataloguing is a major operation used in the B2C e-commerce. Some B2C catalog describes the quality, price and brand of the products or services.

? Order Planning and Generation
The order planning and generation life circle enables initiation of the orders individually as well as block orders or block services in a flexible manner. The orders and services requested from the consumer go through a complete life cycle either individually or as a block. The various status (initiated, validated, validated with warning, sent or cancelled) in this life circle indicates the stage an order or services resides.

Cost Estimation and Pricing
Pricing is the bridge between customer needs and company capabilities. Before setting the pricing, there must be a complete study of cost estimation. Pricing at the individuals order level depends on the value of product and services that is generated by the customer. B2C e-commerce permits the online customers to make cost estimation, and then set the pricing procedure after ordering.

Order Receipt and Accounting
When price setting is over, an accountability of the products and their cost is maintained. It is the basic and major step in the accounting system. After an acceptable price quote, the customer enters the order receipt and entry phase of ordering. Order receipt is necessary for the billing of the different products or services.

Order Selection and Prioritisation
After setting the price of the product, the major operation is order selection and to set the priority for the selection of the final goods.
Customer service representatives are responsible for choosing which orders to accept and which to decline.

Order Scheduling
In this phase, purchase orders get slotted into an actual production or operational sequence. After completion of order scheduling, the next step is to fulfill and deliver the order.

Order Fulfillment and Delivery
Finally, the overall processes of fulfilling orders such as receiving orders from online web store, picking, and shipping to customers or to their final destination end the circle of the B2C online transaction.

2.6 Definition of SMEs
Small and Medium Enterprise definition varies from one form to another and this make SMEs definition very amorphous. Having a single accepted term for SMEs is almost impossible, there is no single uniformed acceptable definition of SMEs
(Storey, 1994). No single definition can capture all the dimensions of ‘small’ or ‘medium’ business size, International Labour Organisation (ILO, 2013). However, the Ghana Statistical Service, 1987 Ghana industrial census considered firms employing between 5 and 29 employees and with fixed assets not exceeding $100,000 as small scale, while those employing between 30 and 99 employees as medium scale category Hayford (2012). SME is the small-scale enterprise in Ghana using an employment cut off point of 30 employees Osei et al, (1993). The National Board of Small Scale Industries (NBSSI, 1990) which is the regulatory body for SMEs in Ghana applies both the fixed asset and number of employees? criteria to define SMEs. This regulatory body defines SMEs as firms with not more than nine (9) workers, has plant and machinery (excluding land, buildings and vehicles) not exceeding one thousand Ghana Cedis (GH¢ 1000). Ones again, there is no universal definition for SMEs since the definition depends on who is defining it and where it is being defined. The numbers of staff, nature of business among others are sometimes used as a measure for determining what small and medium enterprises are, according to Paul (2012), the issue of what constitutes a small or medium enterprise is of major concern, different authors have usually given different definitions to this category of business.

SMEs have indeed not been spared with the definition problem that is usually associated with the concepts which have many components. Again, the definition of firms by size varies among researchers. Some attempt to use the capital assets while others use the skill of labour and turnover level. Others define small and medium enterprises in terms of their legal status and method of production. Storey (1997), define the status of a firm by stating that in some sectors all firms may be regarded as small, whilst in other sectors, there are possibly no firms which are small. In the majority of small firms, the business is operated by a single owner/manager, and in many cases falls under the European Union definition of a microenterprise, employing less than ten people.
(UNIDO, 1999) also defines SMEs in terms of numbers of employees by giving different classifications for industrialised and developing countries as, SMEs in industrialised Countries as Large as 500 or more workers or a Medium firm with 100-499 workers and small-firms with 99 or fewer workers in the developing countries. According to UNIDO, industrialised countries, firms with 500 employees are describe as large, those with 100-499 employees are described as Medium whilst firms with fewer than 100 workers are defined as small.
Therefore, it is clear that there is no general consensus on what constitutes a SME. According to an assertion made by Baafi et al, (2014), stated that, in Ghana, readily available data on SMEs is scarce but statistics from the Registrar Generals’ department suggests that 92% of companies registered are micro, small and medium enterprises.

The Ghana Statistical Service (GSS, 2007), define firm less than 10 employees as small and medium scale enterprises.
SMEs in this twentieths century seems to dominate the industrial landscape and they also exhibit great potential in accelerating economic development and had led to wealth creating and poverty reduction. (UNIDO, 1999) definition is adopted for the purpose of this study therefore, SMEs were defined as companies with a work force of between 5 and 29 employees.

2.7 Role of SMEs
Small and Medium Enterprises have an important role to play in a country’s economy. Globally, they contribute eighty per cent to a country’s economic growth (Bodorick et al, 2002). For example, out of the 3.7 million businesses in the UK, 99.2 per cent are defined as small businesses (Denby, 2001).
Furthermore, SMEs employed 57% of the workforces. (Yeo, 2002). However, in Ghana, SMEs provides jobs for both the youth and their older counterpart and also serve as a second source of employment for some public sectors employees, this is confirmed in an assertion made by Sowa et al (1993), which state that, even for some public employees, SMEs provide a useful supplement as a second job. Therefore, it is important to examine how SMEs can take advantage of ICT and adopt its use to facilitate their business activities. According to (Steel and Webster, 1991; Aryeetey, 2001) SMEs in Ghana are said to be a characteristic feature of the production landscape and have been noted to provide about 85% of manufacturing employment in Ghana. SMEs are also believed to contribute about 70% to Ghana’s GDP and account for about 92% of businesses in Ghana. SMEs in Ghana do not have the choice to take advantage of integrating ICT into their businesses. According to (Frempong, 2005), it is becoming increasingly important that internet usage should form an integral part of the operations of the SMEs. He further maintains that the Internet has become a persistent phase of ICT, which is drastically changing the traditional forms of trade and providing global opportunities that enterprises, especially those from developing countries, can exploit (Frempong, 2007).

2.8 B2C Benefit to SMEs
In order for SMEs to realised their ability to respond rapidly and appropriately to the business environmental evolution challenges, they will largely depends on B2C, which offers so many advantages globally. According to Cela (2005), there are more benefits that SMEs may get from B2C e-commerce. Some of these
benefits are as follows:
Improve efficiency and efficacy of operations (Brady et al., 2002).
Enhances the acceptance of original managerial, tactical and decision-making models, facilitate the admittance to fresh surroundings including production of fresh operations and business models, (Johnston & Lawrence, 2008). ICT, plays a crucial role in helping small and medium-scale enterprises to design and deliver new products and services with unique features, redirecting and redesigning their business processes to meet current changes (Attom, 2008). Small and mediumscale enterprise require information technology infrastructure to provide a solid platform on which their business processes can be built to meet the dynamic business environment they find themselves.

2.9 Support for B2C e-commerce

Due to the advantages B2C e-commerce offers SMEs and it contribution to job creation in developed and developing countries, there should be the need for government support in this area of businesses. The UK government had done this by putting in place initiatives that will provide support for SMEs, (Bennett & Robson, 1999). Furthermore, several government initiatives such as the Aupport Agencies Advice Centres (AAAC) have been advised to encourage SMEs to seek advice and stimulate demand for B2C e-commerce advancement. These initiatives are believed to increase and change the business success (Beaver, 2002). The most notable of these UK government initiatives to support SMEs in adopting ecommerce, is the Business Link (BL), a support agency that was developed in 1992 to provide SMEs with a network of local businesses advice centre (Bennett et al., 2001). E-commerce transaction is focused on high profile element of the SMEs revolution the use of electronic commerce networks to integrate transaction processes, and collaborate in business markets (Berranger & windrum, 2003). SMEs in Ghana do not have the choice to take advantage of adopting B2C ecommerce since it is becoming a very important factor in developing businesses traditionally and internationally (Mohamad & Ismail, 2009). Africa has no option than to take advantage of this new innovation. Africa should incorporate the use of ICT and other new technologies for there to be a speedy realisation of its developmental agenda (Dzidonu, 2010).

2.10 Factors Affecting B2C adoption by SMEs

This study looks into some of the factors that could affect the B2C e-commerce adoption by SMEs, it was found that though, internet access was majorly distributed in urban areas thus un-limiting the growth of the online businesses to expand nationally for development, low awareness and lack of distribution of infrastructure were discovered as impediments to SME adoption by B2C ecommerce (Mureithi, 2000). A majority of SMEs would decide to implement ecommerce if the level of adoption in the industry was high enough (Castleman & Chin, 2002). E-commerce adopters do so to keep up with the times and with shifts in industry practices.

2.11 Theoretical Framework

This study discusses some various theories which includes: Technology Acceptance Model (TAM), Diffusion of Innovation Theory (DTI), Hajli Ecommerce pre-adoption model and by Al-Ali & Al-Alawi A proposed model of ecommerce adoption by SMEs.

2.12 The Technology Acceptance Model

The TAM is an information systems theory that studies how users come to accept and use a technology, the model posit that Perceived Ease of Use (PEOU) and Perceived Usefulness (PU) are the two fundamental determinants of user acceptance of a technology, Perceive Ease of Use (PEOU) is defined as “the degree to which a person believes that using a particular technology would be free from effort” (David, 1989). Therefore, evaluating TAM with a new information system could provide the developers with information on how to enhance user’s acceptance of the specific Information System (IS). For example, the first impression of a consumer visiting any B2C e-commerce website is to perceive, that the site may be easy to use or could be free from too many navigation struggle, therefore if the information provided by the B2C e-commerce website is difficult to understand whiles navigating demand several attempts, then, user could render that B2C e-commerce website un-useful.
For a user to find any new technology useful then that technology must be easy to use and it should also enhance the user job performance. When users found a technology easy to use, they perceive that, the technology is useful. Therefore,
PEOU and PU have direct effect on the actual system usage (Gefen et al. 1997).
In line with this assertion, it could be suggest that, TAM has direct effect on any IS model and for that matter, B2C e-commerce adoption by SMEs is directly relative to the TAM.

2.13 The Diffusion of Innovation Theory (DTI)

The Diffusion of Innovation Theory (DTI), proposed by Rogers (2003), has been cited as the key components of adoption in diffusion literature. DIT posits two factors (Diffusion and Innovation) that determine user adoption of any new technology. Diffusion is ‘the process by which an innovation is communicated through various processes and channels over time among the members of the social system, while adoption is a decision to make full use of an innovation. This is to suggest that, for any new information system to be adopted by a user, it must be discussed among members of the same social group after which the user can decide to adopt the new technology, therefore DTI have direct effect on B2C adoption by SMEs.

2.14 A proposed model of e-commerce by Al-Ali & Al-Alawi

The theory posits that organizational, technological factors and environmental factors could lead to B2C adoption by SMEs.

H1:
Organisational
factors

H2:
Environmental
factors

E

Commerce
Adoption by
SMEs

H3: Technological factors

H1:
Organisational
factors

H2:
Environmental
factors

E

Commerce
Adoption by
SMEs

H3: Technological factors

Figure 1: A proposed model of e-commerce adoption by SMEs
Source: (Al-Ali & Al-Alawi, 2015)

2.15 The Hajli Integrated Model for E-Commerce Adoption

Hajli (2012), theory refer mainly to two main factors namely organisational readiness and Awareness as favourable conditions and technical opportunism for e-commerce adoption in developing countries to expand their presence in the domestic markets, and it was view that organasational readiness and awareness factor play some very important role in the adoption process.

Organisational
Readiness

Awareness

E

Commerce

Adoption

Organisational
Readiness

Awareness

E

Commerce

Adoption

Figure 2: E-commerce pre-adoption model
Source: Hajli (2012)

2.16 Empirical Review

The empirical review focuses on the findings of theories and also provide some necessary critiques, this will enable the researcher make fair judgment to the reason why the proposed B2C framework for SMEs adoption is necessary. It begins with TAM, which state that the success of a system can be determined by the user’s acceptance which is usually measured by three main factors (perceived usefulness (PU), perceived ease of use (PEOU), and attitudes towards usage (ATU)) of the system (Davis et al, 1989). Though these factors have been proven to be liable by most Information System (IS), it does not provide other factors that could enable IS adoption in Ghana. Therefore, TAM alone is not enough to justified users’ acceptance, though it contributes to the adoption of B2C e-com by
SMEs to some extent.

The Diffusion of Innovation Theory (DTI), proposed by Rogers (2003), DIT posits two factors (Diffusion and Innovation), that determine user adoption of any new technology. This theory seems to be true in that the longer any new IS go through various communication channels over a period time within members from the same social system, the faster it is adopted, this is to suggest that the more any new system is communicated through a particular social system, the fastest it adoption whiles adoption is a decision to make full use of the new innovation.

Hajli (2012), theory refer mainly to two main factors namely organisational readiness and awareness as the two favourable factor for B2C adoption by SMEs.
This study could suggest that almost every SMEs in Ghana, are willing to adopt B2C e-commerce therefore, the factor “readiness” does not have any link with adoption issues in the contest of this study however, awareness could be considered in this study as a factor that could contribute to low adoption of new technology. Though B2C e-commerce, had existed for years, the researcher is of the view that it is still new in the mind of many SMEs managers and stakeholders, therefore much awareness of the B2C e-commerce needs to be created among
SMEs to enable its adoption by B2C.

2.17 Theory Adopted for the Study

Despite the numerous theories discussed, this study adopted a model proposed by (Al-Ali & Al-Alawi, 2015). Their empirical study was to investigate some factors that are affecting e-commerce adoption among SMEs in Kuwait. In order to achieve this, they proposed a model (see figure 1) for e-commerce adoption by SMEs and it was used to survey questionnaire that was design base on previous related studies. The questionnaire consisted of part “A” and part “B”. In part “A”, participants were asked to respond to five demographic questions to serve as the respondents general information, whereas the part “B”, enquire from participants some possible factors that could enable e-commerce adoption among SMEs, on the five Likert scale ranging from “1 as strongly disagree to 5 as strongly agree”. Their study also made use of hypotheses testing, to determine the influence of three contests, namely: the organisational factors, the technological factors and finally the environmental factor toward the adoption of e-commerce among SMEs in Kuwait. A pilot study was done to pre-test the questionnaires.
2.18 Proposed B2C e-commerce Framework for Adoption by SMEs

This research adopted the Hajli model (figure: 2) his study proposed three factors
(Organisational Readiness, Awareness as the dependent factors and E- Commerce
Adoption as the independent factor) for the adoption of e-commerce (B2C) by SMEs. However, a study by Anukis (2009) provides six factors for his e-business model adoption whiles others provide five and four among others depending on the type of situation that is being address. According to Roe, (2007), E-adoption theory topology theory, there are some key characteristics that are described as factors which could determine technology adoption, and these include: agility, competitive and successful business plan, integrating technology across business and the process to improve performance for adoption. (Al-Alawi & Al-Ali, 2006) provide three factors in their proposed e-commerce model for adoption among SMEs. In line with this, the researcher proposes three factors in his framework, to test if it could be the favourable condition for adoption of B2C e-commerce among SMEs in Ghana.

B2C
Awareness

B2C

Bargaining
power

B2C

E

commerce
Adoption

B2C
Website
Q
uality

B2C
Awareness

B2C

Bargaining
power

B2C

E

commerce
Adoption

B2C
Website
Q
uality

Figure 3: A proposed B2C frame work
Source: Field Data, 2016

Figure 3 above present three factors (B2C Awareness, B2C Website Quality and B2C Bargaining Power) that are dependent on one factor which is the independent factor. The dependent factors are B2C awareness (adopted from figure 2), B2C Website Quality and B2C Bargaining power (adopted from survey). The independent factor is ”B2C E-Commerce Adoption” which is also adopted from Hajli (see figure 2). Though B2C E-Commerce had been in existence for some years now, it is still assumed to be new among some SMEs managers and other stake holders. Furthermore, the known ones left some gab that could tailor B2C to meet the requirement of both the Ghanaian SMEs and their consumers’ specific needs. Therefore, the proposed B2C e-commerce framework is expected to bridge these gabs by the introduction and integration of it factors that would tailor the traditional SMEs market and their consumers’ requirements to suit their specific needs and encourage SMEs to adopt B2C e-commerce. It is important for SMEs to adopt e-commerce in order to gain a strategic perimeter over competitors (Markus, 1987). This will enable the small and retail businesses to also gain the needed place in the global market (Anukis, 2009).
2.19 Summary and conclusion on chapter

This chapter highlighted on some studies of the topic: a propose B2C framework for SMEs adoption. The chapter covers basic knowledge about the definitions of B2C e-commerce, SMEs, merit and their contribution to business and economy growth of a country respectively. It also made known that, SMEs in developing countries are not really taking advantage of e-commerce, and this posed some threat to SMEs in Ghana, since they may not be able to meet business agility and compete with others on the global market, thereby causing them to crumple in the near future. To prevent such future occurrences, a propose framework was reviewed and the impediment to e-commerce adoption by SMEs were uncovered. In conclusion, these factors would undergo investigation and further study in the methodology.