Relationship between the antecedents of ICT Adoption and the Business Performance of SMEs in the Colombo District, Sri Lanka

Abstract

ICT has influenced greatly in changing the business structures and communication processes along with aiding rapid globalization and spread of knowledge. The effect of ICT on the economy, social structures and even personal development has become an important topic on empirical studies in recent decades. Therefore, the purpose of this study is to gain a deeper understanding of how the antecedents of ICT Adoption influences the Business Performance of SMEs in the Colombo District of Sri Lanka. The study observes the association between the Business Performance and the three antecedents of ICT Adoption observed throughout the literature and used in various models such as the Technology, Organization and Environment (TOE) model, the Diffusion of Innovation model and the TAM Model. The three factors being Technological Factors (Relative Advantage and Complexity of ICT), Organizational Factors (Owner’s Knowledge of ICT) and Environmental Factors (Institutional Intervention and Competitive Pressures). The author surveyed 385 SME owners in the Colombo district using a structured questionnaire developed through the constructs of different adoption models. The findings showed a positive relationship between the three factors; Technological, Organizational and Environmental and the Business Performance of SMEs. Out of the three factors, Environmental factors show to have the highest level of relationship with Business Performance. This seems to indicate that Institutional Intervention and Competitive pressures have a higher influence on BP. The implications of these findings are presented in the study.