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The measure(Impact) of obstacles facing e-commerce businesses in chennai

The aim of the paper was to examine comprehensively, the internal and external factors

of organisations which affect the future of electronic commerce (e-commerce) and the magnitude

of these constraints in Chennai, using the systems framework The research methodology useda !uestionnaire survey (internet survey) to collect data from "#$ e-commerce businesses out of

which $% or &%'" usable !uestionnaires were received The businesses ranged from very

small to large organiations cutting across all ma*or industry sectors, consisting of the following

forms of ownership+ local, government, multinational and *oint ventures with foreign

ownership The findings of the study established the following barriers in order of decreasing

magnitude+ economic, social, telecommunications infrastructure barrier, legalpolitical,

individual and organiational barriers The first three variables are positively but moderately

correlated with each other, while with the exception of telecommunications infrastructure,

others are poorly correlated with individual and organiational barriers s expected, the

latter two correlate moderately with each other The regression analysis suggests that

telecommunications infrastructure barriers hold the key to unlocking the gordian knot of e-

commerce in Chennai, as a decrease in this area would have multiplier effects on the other

barriers The study recommended that the government has a vital role to play in reducing

the first four barriers, which are all external to organiations, while at the organisational level,

organiations should set (e- commerce) goals and ob*ectives that are well spelt out. build human

organisational capital structures to facilitate good working relationships and provide training on

e-commerce to minimie resistance and blocking of new changes in organiations

/ey words+ E-commerce, Obstacles, Impact, internal and external factors, internet, Chennai,

systems.

I0T1234CTI20

Chennai with a population of 38.6 million !""#

Census ht tp$ %% www . e a c .i nt %s ta t is tics %&, is an East

'frican country that is the re(ional hub for financeand trade. 's such its de)elopment is crucial not

only for its own citi*ens but also for that of the

re(ional population of +!#. million !""# Censusht tp$ %% www . e a c .in t% s ta t is tics %&. i)en the fact that

e-commerce or the exchan(e of products and

ser)ices and payments throu(h

telecommunications

systems is rapidly expandin( around the world, thecapacity of the country to support e-commerce and

the opportunities in this field can be said to be )ery

important in determinin( the countrys continued

position as a re(ional hub. It is therefore, importanto examine the nature and ma(nitude of barrier

militatin( a(ainst e- commerce adoption and

diffusion in Chennai in its role as a re(ional hub fotrade and finance in East 'frica.

/Correspondin( author. E-mail$da) i d m a 0 i nn u s i 1 ( m a i l.c om.'uthors& a(ree that this article remain permanently open access under the terms of the C re a ti ) e Co mm ons

' tt r i b u ti o n

2 i c en s e ." I n te rn a ti onal 2 i c ense
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4he concept of electronic commerce e-

commerce& is about usin( the Internet to do businessbetter and faster. In Chennai, more opportunities

of e-commerce can emanate from challen(es

created by non-tariff barriers to trade within the East

'frican Community E'C&. 5hile the E'CCustoms nion has achie)ed its main aim of

remo)al of customs duties on internal trade, non-

tariff barriers on trade remain a challen(e E'C4rade 7eport

!"+"&. Chennai can o)ercome this challen(e by theuse of e-commerce, but the nature and barriers tothe adoption and diffusion of e-commerce loomslar(e and reuires in)esti(ation.

5IT61T416

167I68

In this section, the term e-commerce and its

si(nificance is explained. 4his is followed by a

discussion on the studies that ha)e beenconducted on e-commerce in Chennai. 4he section

concludes by presentin( a systems framewor0 of

factors actin( as barriers to e-commerce (rowth andusa(e.

3efinition of e-

commerce

E-commerce has been defined in many different

ways. 9rom the )ariety of definitions offered, thefollowin( are the 0ey attributes of e-commerce$ e-

commerce is technolo(y mediated exchan(es

between parties as well as electronically basedintra-or(anisational acti)ities which facilitate such

exchan(es 7ayport and :awors0i,

!""+$ 3; anayei,

!""3; 7wi(ema and ?enter, !""; Chinwei0e,

!""8&.E-commerce, thus, refers to conductin( business

)ia electronic media, and most commonly, theInternet. 4he internet or world wide web

555& is a networ0 of millions of computers

lin0ed around the world throu(h telecommunicationssystems, allowin( for almost instantaneous transfer

of data.

>e)eral researchers such as 2ane et al., !""&;

@are !""!&; Aarley !""3& and 7wi(ema and?enter !""& ar(ue that the Internet has

transformed the way in which business is done in the

followin( ways$ It i& transcends the boundaries

time and space allowin( business to be conducted any and all the time in any and all locations acro

the world; ii& allows penetration of (lobal mar0e

without incurrin( lo(istical costs of access; i

allows or(ani*ations to offer their products anser)ices in different locations without ha)in( to s

up separate sales infrastructure in each locatio

i)& allows small businesses to compete moeffecti)ely with bi( businesses; and )& allow

buyers and sellers to communicate and connect an

reduces transactions and information costs.' research for the Institute of Economic 'ffai

Chennai& on the Chennai telecommunications sect

by Bureithi !""!& concluded that electron

commerce in Chennai could contribute si(nificant

to the competiti)eness of the


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commercial sector, then bein( forced to compete

(lobally by trade liberali*ation, by enablin(

businesses to access lar(er mar0ets usin( theInternet.

The Chennain

situation

4he o)ernment of Chennai reco(nises that IC4

offers enormous opportunity to exploit e-commerce and the importance IC4 ser)ices play

in economic, social and political spheres. 4o that

end it prepared a ational IC4 Baster @lan,co)erin( the period !""8-!"+!, which outlines

the roadmap and implementation strate(y to

ma0e IC4s more accessible and affordable to the

wider population and hence to catapult Chennai intoa 0nowled(e and information society status. 4he

country aims to establish itself, in the medium to

lon( term, as the hub of industrial and financialacti)ities in the East, Central and >outhern 'frican

re(ion o)ernment of Chennai, !""8&. 4he IC4

Baster @lan !""8-!"+!& aims to achie)e thefollowin( obDecti)es$

a& Enhance Chennais economic competiti)enessthrou(h utili*ation of abundant human resources inusiness @rocess Outsourcin( @O&;b& Ae)elop a tren(then Chennais learnin( opportunities andtherebyde)elopin( capacity to meet future technolo(ical

challen(es.

4o achie)e the abo)e obDecti)es, the o)ernmenthoped to implement the followin( strate(ies$

a& @ut in place initiati)es to ensure broadband isa)ailable at the most affordable cost to as manyChennains as possibleb& Ae)elopment of Ai(ital

Content

c& 2e)era(in( on di(ital technolo(ies to unloc0 new

opportunities to do business and for the deli)ery ofser)ices.

d& Expand infrastructure that will ma0e Chennai

the IC4hub for'frica;e& Ae)elop 7ural IC4 Centres to ensure

appreciation of technolo(y throu(hout the country;

f& '((ressi)ely reform and enhance IC4 researchand de)elopment in all institutions of hi(helearnin( throu(h de)elopment of industriaincubation centres =ardware and >oftwarede)elopment& to ensure lin0a(es between industryand the academia;(& 7e)amp and extend e-(o)ernment ser)ice

throu(hout the country to ensure exemplary ser)ice

deli)ery to citi*ens;h& Encoura(e IC4 entrepreneurship by pro)idin( thenecessary enablin( en)ironment for entrepreneuria(rowth; and


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i& 'llocate sufficient resources for humanresource trainin( and de)elopment for the IC4

industry with special emphasis on @O&.

Aurin( the launch of ?ision !"3" in !""8,=.E. @resident Bwai


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de)elopmental issues were identified as

constraints to the adoption of e-commerce in theban0in( sector in Chennai.

sin( Chennai as a case study, Busau et al.!"++& pointed out that the emer(in( IC4technolo(y could create solid impro)ement inofferin( better ser)ices to all nations. 4his wouldenable the citi*ens of the countries to access e-ser)ices from the (o)ernments based on theirtrust of the systems. In their report, Busau et al.!"++& stated that thin(s ha)e not been as planned inChennai because maDority of the people do not truste-(o)ernment ser)ices.

sin( a case study of a local public independent

e- mar0etplace in Chennai, >a0ari !""6&

examined the critical success factors of business tobusiness !& e- mar0ets from an 'frican

perspecti)e. =e explored the actual strate(ies

adapted by the e-mar0etplace in buildin(

liuidity and capturin( )alue usin( a conceptualframewor0 for the analysis on the critical success

factors proposed by :iDian 2i and 2iwei !""&. Bostof the results a(reed with theories of success

factors and supported the )iew that strate(ic

factors, functional factors and technical factors were

critical elements for the success of a (i)en e-mar0et, with buildin( liuidity and creatin( )alue

as pillars of success Iulta, +###; :iDian and 2iwei,

!""; runn et al.,!""!&.


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would be of use to companies, of all si*es, thatwere about to ta0e their first steps in electronic

commerce.

econdly, it found that most employed Chennainswere uncomfortable carryin( many cards as this

made their wallets disor(ani*ed and raised le)els of

insecurity and, thirdly, that Chennains did not

percei)e technolo(y to be useful and easy to use.

4he research recommended the introduction technolo(y oriented subDects in schools to educa

people on the benefits of mobile commerce an

technolo(y to chan(e Chennains perception towartechnolo(y; passin( and strictly enforcin( consum

protection laws; implementation of policies and le(framewor0s to support the adoption of 79I

technolo(y.


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time of the study. 4he research found that there was

)ery little electronic tradin( ta0in( place in Chennaithen. Bany people did not 0now anythin( about it.

4hose who 0new about it had been hindered from

implementin( it due to reasons beyond their control,namely, lac0 of security on the Internet, use of

international credit cards, hi(h costs of

infrastructure, lac0 of 0nowled(e and inexistence oflaws (o)ernin( tradin( on the Internet. 4he researchrecommended policies reuirin( )arious actions

to be ta0en by (o)ernment. It reuired the

(o)ernment to enact laws to (o)ern Internet basedtradin(; in)estment by the (o)ernment in education

of its people on how to harness the benefits of the

Internet for trade; implementation of a clear(o)ernment policy promotin( electronic commerce

in Chennai; pro)idin( an enablin( en)ironment

ma0in( telecommunications ser)ices a)ailable and

affordable; publici*in( electronic tradin( throu(hany a)ailable means such as public rallies,

electronic and print media; and the (o)ernment

participatin( in international Doint proDects tobenefit from affordable lin0a(es with other

countries.

In summary, all the studies re)iewed abo)e areconcerned with explorin( the facilitatin( and%or

militatin( factors relatin( to the adoption and usa(e

of e-commerce in Chennai, with the resultsindicatin( serious internal and external factors of

)aryin( de(rees of ma(nitude. =owe)er, none has

ta0en a comprehensi)e loo0 as is bein( proposed in

this study. 4his study, therefore, intends toappraise both internal and external factors and

obtain a sense of their ma(nitude in constitutin(

barriers to the future of e-commerce in Chennai.4he ran(e of factors actin( as barriers to the

adoption and usa(e of e-commerce are le(ion

and can be classified into macro-, meso- andmicro-factors, and are illustrated in 9i(ure +, usin( a

systems framewor0 adler and 4ushman, +#8"&.

4he macro-factors relate to en)ironmental issues

such as the role of (o)ernment in installin(appropriate laws and re(ulatin( bodies and

capacitatin( them to do heir wor0. It also in)ol)es

mobilisin( the citi*enry by way ofcommunication and education and pro)idin(

internet and telecommunications infrastructure in

collaboration with other nations, as emphasi*ed byse)eral studies


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:igure " ' systems framewor0 of macro-, meso-, and micro factorsactin( as barriers to e- commerce adoption and usa(e.

the (eneral educational system, emphasi*in(

orientation to technolo(y in (eneral and internettechnolo(y in particular, allayin( fears and buildin(

trust throu(h socialisation and educational

processes, would (o a lon( way in raisin( theawareness, acceptance and usa(e of e-commerce inChennai by its citi*ens. 4he next section pro)ides

details of the methodolo(y used in this study.

ims of the

research

4he aim of the current research is to examine

comprehensi)ely the internal and external factors

which affect the future of e-commerce, thema(nitude and relationship between these barriers in

the context of Chennai.

1esearch

ob*ectives

4he research obDecti)es

are$

a& 4o examine the rele)ant economic, social,

technolo(ical, le(al%political, or(anisational and

indi)idual barriers to the adoption and diffusion e-commerce in Chennai;b& 4o assess the relati)e ma(nitude of thesebarriers c& 4o examine the relationship between

the barriersd& 4o ma0e recommendations as to how to countthese barriers.


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;6T

9or this study, the research was based on primaryand secondary data >aunders et al; !"""&. '

uantitati)e research method was used whereby a

uestionnaire sur)ey internet sur)ey& was used tocollect data from primary sources comprisin(

a sample of businesses which use e-commerce inChennai. ' uestionnaire was considered suitablefor this study because$ it was obDecti)e; usin( a

uestionnaire was relati)ely uic0 to collect

information; and it was affordable to collect

information from a lar(e (roup usin( auestionnaire.

4he self-administered uestionnaire wasconstructed by the first author for this study on thebasis of the information deri)ed from theliterature re)iew. It was an internet sur)ey,administered in

Aecember !"++. 4he uestionnaire used a -point2i0ert scale, ran(in( from >tron(ly '(ree & to>tron(ly Aisa(ree +&. ' copy of the instrument isshown in 'ppendix +. 4he measures are brieflybelow.

;easur

es

Economic

barriers

9our items measured the economic situation and

sample items include H@re)alence of e-businesspractices is widespread in ChennaiH and Husiness

en)ironment is conduci)e in Chennai. 4he

CronbachFs 'lpha is ".83.

Social

barriers

4he social )ariable was measured by fi)e items,

sample itemsbein($ HCustomers na)i(ate the web uite easily

and H 4here is a


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Construct

Economic situation

Cronbach Alpha

0.8345

Number of items

4

measures, all of which achieved acceptable levels of internaconsistency. The secondary research data, based on the literaturereview was analysed and information about the past, current and

Social situation 0.7972 5 likely future environment in the country was gathered to form a

Telecommunications infrastructure 0.8596 8 picture of the research. From this, the opportunities and challenges

Legal and political enironment 0.882! 6"rgani#ational $arriers 0.9206 8

%ndiidual $arriers 0.8!!0 4 Data analysis

SPSS software package was used to process the research datagathered from the questionnaires. For this study, descriptive

Table " >ummary of alpha

coefficients.study; G or ."+ usable uestionnaires were

returned.4able + presents the summary of 'lphaCoefficients of the

facin( e-commerce in the country were extrapolated.

national inclination to business inno)ation andentrepreneurshipH. 4he CronbachFs 'lpha is ".G#.

Telecommunications infrastructure

barriers

4he telecommunications infrastructure is measured

by ei(ht items, with the followin( as samples$HConnecti)ity speeds to the internet are fastH and

JInternet penetration beyond urban areas is (oodH.

4he CronbachFs 'lpha for this measure is ".86.

Legal and political

barriers

4he le(al and political en)ironment )ariable ismeasured by six items, of which the followin( aresample items$ H4here exists suitable le(alframewor0 and re(ulatory (uidelines for commercialtransactions to handle cyber crimesH and H4he(o)ernment enforces impro)in( of IC4 s0ills of thewor0force in the countryH. 4his item )ariables yieldsa CronbachFs 'lpha of ".88.

Organisational

barriers

Or(anisational barriers were measured by ei(ht

items of which the followin( are samples$ H4he

or(ani*ational culture mo)es with the timesH;

H4rainin( is always pro)ided before new chan(es areimplementedK; H4he or(ani*ation has sufficient

wor0in( capital to support new initiati)esH. 4he

CronbachFs 'lpha for the items is ".#!.

Individual

barriers

Indi)idual barriers are measured by four item

two samples of which are$ HEmployeesF habits

not bloc0 new chan(esH and Hew chan(es are se

as Dob enrichin(H. 4he CronbachFs 'lpha for th

)ariable is ".8+.

Reliability and

validity

4o ensure the research findin(s met t

reuirements of )alidity, the uestions in t

uestionnaire were formulated on the basis of tliterature re)iew in order to test what was intend

to be studied euman, +##G&. 9or face )alidity, t

uestionnaire was desi(ned bearin( in mind t

current situation as concerns the barriers impediadoption and usa(e of e-commerce in Chennai. 4

uestionnaire also co)ered the entire body

barriers to adoption and diffusion of e-commerce Chennai to ensure content )alidity.

4he uestionnaire was pilot-tested amon( firandomly selected companies and su((ested minchan(es were effected before the final uestionnawas sent )ia e-mail to +3G randomly selected commerce businesses, excludin( those includin the pilot


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were used to summarise the data in the form of

freuency tables, means and standard de)iations, etc.9or inferential statistics, the main method

was correlation.Correlation analysis pro)ided an assessment of thede(ree of association between the factors that

impacted on e-commerce adoption and usa(e while a

re(ression analysis was conducted to re)eal the

wei(hts of the indi)idual factors.

:I03I0

=9

2rganisational

characteristics

In order to capture the (eneral information of the

respondents, issues such as title%position, industry,type of or(ani*ation, si*e of the company and annual

turno)er were captured in >ection ' of theuestionnaire. 4he followin( or(anisationcharacteristics were obtained.

Title distribution of the

respondents

'ccordin( to 9i(ure !, !! indicated that they heldpositions as I.4% E-commerce mana(ers while +#said that they were C.E.Os. On the other hand

# stated that they held other positions in theor(ani*ations, but relied on the internet in their dailywor0.

Industry

distribution

4he findin(s in 9i(ure 3 show that !8 of

the respondents indicated that they were in theinformation communication and technolo(y industry

while ++ stated that they were in the

finance%ban0in(%insurance and hospitality%toursindustry, respecti)ely. On the other hand indicated that they were in retail, educationand health industry. ' further 3 stated that theywere in other industries. 4he sur)ey co)ered a broadran(e of sectors critical to the economy, as alsoconfirmed by 9i(ures and .

Type of

organiation

'ccordin( to 9i(ure , maDority of the or(ani*ations

68&

were pri)ate%locally owned while +8 were

(o)ernment


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" +" !" 3" " " 6"

@ercent I&

:igure ? 4itle distribution

:igure # Industry distribution.

owned. 9urther ++ of the respondents stated thattheir companies were local with forei(n ownershipDoint )enture&, while 3 indicated that theiror(ani*ations were multinational.

9ie of the

company

9i(ure shows that 3 of the respondentsindicated that their companies were medium

+" and " employees& and small and +"

employees& respecti)ely.


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On the other hand, 3" indicated that their

or(ani*ations were lar(e o)er " employees&.

nnual turnover

9i(ure 6 shows that 8 of the respondents indicatedthat their annual turno)er was >A +"","""-

+,""",""" while3 stated that their annual turno)er was o)er,""",""" and less than +"",""", respecti)ely. 'bi( percenta(e of68 did not indicate the turno)er of theiror(ani*ations.


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Perce

nt

:igure % 4ypes of or(ani*ation.

:igure & >i*e of company.

" !" " 6" 8" +""

@ercent &

:igure @ 'nnual turno)er.


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Table ? O)erall means and medians.

7ariables ;ean ;edian 9tdEconomic situation +.8# +.8""" ".G"6G#>ocial situation +.#!3 !."""" ".G8+6"!4elecommunications infrastructure +.#86 +.888# ".6!!!"2e al and olitical situation !.+8#! !.+66G ".8""+G3Indi)idual barriers !.8++ !.6""" ".8"#!8Or ani*ational barriers !.8!++ !.8G" ".#"3""

Table # Correlation analysis of the relationship between the e-commerce barriers.

6conomic 9ocial Telecommunicati 5e al and 2r aniation Individu s it ua ti o n s it ua ti o n s in fra s tru c ture o li ti c a l b a r r ie rsEconomic situation + ".+G ".!+8 ".6" / -"."8 ".+G6>ocial situation ".+G + ".+3! ".!3 "."8 -"."!4elecommunicat

".!+8 ".+3! + ".3!/

/

".!8

/

".+

2e al and olitical ".6" / ".!3 ".3! / + "."! -"."GOr ani*ational barriers -"."8 "."8 ".!8 "."! + ".3 /Indi)idual barriers ".+G6 - ".+ -"."G ".3 / + G G G G G G

//Correlation is si(nificant at the "."+ le)el !-tailed&. /Correlation is si(nificant at the "." le)el !-tailed&.

The magnitude of the

barriers

O)erall means and medians of the percei)ed barriersare shown in 4able !. 4he lower the mean, the

hi(her the percei)ed barrier. 4hus, the most

formidable barriers in order of ma(nitude are theeconomic, social barriers and telecommunication

infrastructural barriers. 4hese are all external

barriers. 4he le(al and political barriers are alsopercei)ed as moderate barriers, whereas the least

percei)ed barriers are indi)idual and or(anisational

barriers.7esponses to the open-ended uestions

corroborated the uantitati)e measures. 4he bi((estbarriers cited by the respondents included$ onlinesecurity and cyber- crime 3#&, internetconnecti)ity speeds, and internetreliability !6&. Others cited taxes and tariffs+!&, internet cost G&, internet interruption3& as barriers.Other barriers mentioned were communicationcosts, startin( capital, and inability to attractstrate(ic partners. 9urther there was the issue ofinfrastructure - poor roads, costly and erratic powersupply. @oor ser)ice from (o)ernment and localauthorities 3& were alsomentioned as barriers to e-commerce. ureaucracy

and

len(thy procedures 6& durin( the initial sta(eestablishin( online businesses also featured

barriers. 2astly some of the respondents indica

that internet was costly and responses were oslow especially in outer and remote stations away from urban areas.


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>ome respondents indicated that they had tocontend with customers who were not well )ersedwith web technolo(y.

The relationship among the

barriers

4able 3 presents the correlation analysis of thefactors actin( as barriers to e-commerce adoption.4he table shows that economic, le(al and political

and telecommunication infrastructure barriers, all

external or macro factors are moderately andpositi)ely correlated with each other but are poorly

correlated with or(anisational and indi)idual

barriers, implyin( that the two sectors Lor(anisational and its external en)ironment

L are more or less independent of each other. On the

other hand, or(anisational and indi)idual barriers are

moderately and positi)ely correlated. It isimportant to note the positi)e correlation between

or(anisational barriers and telecommunicationinfrastructural barriers, which means that as

impro)ements in communications infrastructural

de)elopment ta0e place, there is (reater li0elihoodthat or(anisations barriers will diminish.4he followin( re(ression analysis model wasobtained from the study findin(s$

Y = ".!G+ ".3!!X1 M ".+GX2 - ".!GGN3 +

".6+#X4

+".+6X5 - "."6GX6p".""+,


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whereby, Y is the ma(nitude of barriers facin( E-Commerce, X1 is economic situation, X2 is social

situation in Chennai, X3 is telecommunications

infrastructure,X4 is le(al and political en)ironment

barriers and X5 is or(ani*ational barriers while X6is indi)idual barriers. 4he model illustrates thatwhen all )ariables are held at *ero constant&, the)alue of the ma(nitude of barriers facin( E-Commerce would be ".!G. =owe)er, holdin(other factors constant, a unit increase in economicsituation barriers in Chennai would lead to a ".3!!increase in the ma(nitude of barriers facin( E-Commerce, a unit increase in social situationbarriers in Chennai would lead to a ".+G increasein barriers facin( E-Commerce. =owe)er, a unitincrease in telecommunications infrastructure

barriers would lead to a ".!GG decrease in thema(nitude of barriers facin( E-Commerce.9urthermore, a unit increase in le(al and politicalen)ironment barriers would lead to a ".6+# increasein E- Commerce barriers. 4hus, thetelecommunications infrastructure appears to holdthe 0ey to unloc0in( the barriers to e-commerceadoption and usa(e in Chennai. 4he resultsconfirm that the barriers under considerationcontribute indi)idually and Dointly to the ma(nitudeof the barriers facin( e-commerce in Chennai.

3I9C499I2

09

In accordance with the research obDecti)es, the

study findin(s ha)e confirmed that the economicand social situations, telecommunications

infrastructure, le(al and political en)ironments

present the most formidable barriers to theadoption and diffusion of e-commerce in Chennai,

whereas, by comparison, or(ani*ational and

indi)idual barriers pose less serious barriers to e-commerce businesses in Chennai. 4he findin(s

of the study explain why e-commerce has

de)eloped at a slow pace resultin( in e-businesses

that do not fully capitalise on the opportunitiesbrou(ht about by the internet. 4hese study findin(s

are in a(reement with pre)ious studies which

ha)e been conducted on the de)elopment of e-commerce in Chennai and elsewhere in 'frica.

:obodwana !""#& cited numerous factors which

account for IC4 underde)elopment such as the lac0

of basic economic infrastructure, reliable power

supplies and national electrification; inadeua

transport and basic telecommunicatioinfrastructure; absence of s0illed IC4 personne

lac0 of political will or initiati)e on the part

(o)ernment; political instability; econom

mismana(ement; and po)erty (enerally. >ome the challen(es to e-commerce de)elopme

identified by


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adeuate le(al and re(ulatory framewor0s; and

shorta(e of reuisite human capacity.9rom the (eneral comments of the respondents,

the study findin(s indicated that e-commercede)elopment is all the more depressin( in far flun(locations in the country. 4his indicates the existenceof the di(ital di)idebetween the urban and the rural Chennai, and alsothe low internet penetration in the latter.

16C2;;603TI

209

9or Chennai to de)elop e-commerce, it has toconsider its role as a re(ional hub of economic,

social and political economies of East and >outhern

'frica. In this context, the country has to de)elop itstelecommunications infrastructure for it to achie)e

meanin(ful e-readiness that would ma0e itcompetiti)e as a financial and technolo(ical hub.4he (o)ernment should create a business

en)ironment which is conduci)e to and encoura(es

widespread pre)alence of e-business practices

countrywide. Costs of Internet connecti)ity shouldbe made affordable which would further

encoura(e penetration of Internet beyond the

urban areas. 4he connecti)ity to the Internet andits speed should be enhanced by lin0in( the country

to the East 'frican >ubmarine Cable >ystem

E' > > y &and other submarine fibre optic cables inthe Indian Ocean connectin( 'frica to the outside

world.

4he (o)ernment should implement in full theIC4 Baster @lan and enforce its o)erall policy

statement on Internet pertainin( to technical,

economic and political perspecti)es. 4his will,

amon( other thin(s, create an enablin( en)ironmentfor e-business start-ups and incubation proDects. '

le(al framewor0 and re(ulatory (uidelines for

commercial transactions to handle cyber- crimes

should be enacted and implemented in liaisonwith the nei(hbourin( countries to ensure

conformity.'t the or(ani*ational le)el, or(ani*ations should

set e- commerce (oals and obDecti)es that are tied to

their strate(ies. 4rainin( on e- commerce should be

pro)ided before new chan(es are implemented. 4hiswould attune employees habits and thus minimise

resistance and bloc0in( of new chan(es in the

or(ani*ations. It is necessary to conduct morestudies li0e this, co)erin( maDor sectors of the

economy and the barriers peculiar to the sectors,

usin( multiple methods of data collection.

Conclusion

s

4hat the external en)ironment of or(anisations pose

the most formidable barriers to e-commerc

acti)ities is the maDor findin( of this study and it is awa0e-up call for the (o)ernment to intensify and

accelerate the implementation of its well-crafted

IC4 Baster @lan, upon which national and re(iona

opportunities on e-commerce
http://en.wikipedia.org/wiki/EASSyhttp://en.wikipedia.org/wiki/EASSy


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(reatly depend. Or(anisations themsel)es ha)e to bee- commerce ready and indi)iduals, as consumers

and citi*ens, should also brace themsel)es to accept

and use e-commerce, which is ar(uably the mostinno)ati)e technolo(ies of all time.

Conflict of

Interests

4he authors& ha)e not declared any conflict of

interests.

C/028563=6

;60T

4he authors wish to than0 the re)iewers and theeditor for their helpful su((estions, while the

authors accept responsibility for any errors ofomission or commission.

16:616

0C69

Chinwei0e !""8&. 'n E-payment system for

local E-commerce. B>c

4hesis. ni)ersity of airobi.

Aarley 5< !""3&. @ublic policy challen(es andimplications of the Internet and the emer(in( e-commerce for sub->aharan 'frica$ ' businessperspecti)e. Information 4echnolo(y forAe)elopment,+"+&$+L+!.

i0andi :5, loor C !"+"&. 'doption andeffecti)eness of electronic ban0in( in Chennai.

Elect. Commerce 7es. 'pplications. #&$!GGL!8!.oyal


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:obodwana Q !""#&. E-Commerce and Bobile

Commerce in >outh'frica$ 7e(ulatory Challen(es. :. Int.

Commercial 2aw 4echnol.

&$!8GL!#8.c 4hesis.ni)ersity of airobi.

c4hesis. ni)ersity of airobi.

, ?an Aer ?, Aelpachtra >, =oward >

!""&. 'n Electronic Commerce Initiati)e in

7e(ional >ri 2an0a$ 4he ?ision for the Central

@ro)ince Electronic Commerce @ortal, 4heElectronic :. Info. >yst. Ae)elopin( Countries

+6$+-+8.Bureithi B !""!&. 4elecommunications policy intransition$ mainstreamin( Chennai into the (lobalinformation economy, Institute of Economic'ffairs.

Busau 9, Cheruiyot 5, Bushi :C !"++&. 4rustand Its Challen(es

9acin( E-o)ernment @ro(rams in Chennai.

In Computer andBana(ement C'B'&, !"++ International

Conference on pp. +L. adler A', 4ushman B2+#8"& R' Bodel for Aia(nosin( Or(ani*ationaleha)iourK Or(ani*ational Aynamics. 'utumn,pp.3-+.

euman 52 +##G&. >ocial 7esearch Bethods$

Sualitati)e andSuantitati)e 7esearch 'pproaches. oston$ 'llynand acon.(ila > !""G&. Bobile phone as an electronic

wallet $ ' case study of

Chennai. B>c 4hesis. ni)ersity of airobi.@are A !""!&. ! e-commerce ser)ices and

de)elopin( countries$ disentan(lin( Byth fromreality. In 'ssociation of Internet 7esearchersInternational Conference. @rentice =all. pp. +3L+6

7wi(ema =, ?enter 7 !""&. 'd)ancedEntrepreneurship. Cape 4own.

Oxford ni)ersity @ress L Chapter +8.

>a0ari C !""6&. 'frican perspecti)e on critical

success factors for to

electronic mar0et places. B>c 4hesis. ni)ersityof airobi.>anayei ' !""3&. lobalisation and e-business.

Iranian :. Information

>ci. 4echnol. +$+.>aunders B, 2ewis @, 4hornhill ' !"""&.

7esearch Bethods forusiness >tudents. >econd Edition. 2ondon$

@rentice =all.


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AA603IB "

/ 7e8uired

Alease complete the following !uestionnaire The pro*ect aims to understand

the magnitude of barriers facing e-commerce businesses in Chennai >ouridentity and responses will remain anonymous

96CTI20 -+

'O4 TO7

COB@'T Company

name$ /

E-mail$ /

Tour ame$ /Tour 4itle%@osition$ /

C.E.O

I4%E-Commerce Bana(er

Other$

4own%County$ /

Alease answer the following !uestions by choosing the most appropriate answer

+. In which industry is your companyU /

Information Communication and 4echnolo(y

Education

9inance%an0in(%Insurance

=ealth

Banufacturin( =ospitality%4ours

7etail

Other$

!. 5hat is the type of your or(anisationU /

@ri)ate%2ocally owned

o)ernment owned

Bultinational


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2ocal with forei(n ownership :oint ?enture&

Other$


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2ocal with forei(n ownership :oint ?enture&

Other$

3. 5hat is the si*e of your companyU /

?ery small + and employees&

>mall and +" employees&

Bedium +" and " employees&

2ar(e o)er " employees&

. 5hat is the annual turno)er in > Aollars& of your or(anisationU

2ess than >A +"","""

>A +"",""" - >A +,""","""

>A +,""",""" - >A ,""","""

O)er >A ,""","""

sin( the -point scale (i)en below, please rate the statements in sections , C, A, E. 9 and

by choosin( the appropriate ratin( tron(ly Aisa(ree >A& ! L Aisa(ree A& 3 L

either '(ree nor Aisa(ree & L '(ree '& L >tron(ly '(ree >'&

96CTI20 +

4he economic situation in Chennai. /

4he le)el of e-literacy

in Chennai is hi(h

usiness en)ironment

is conduci)e in Chennai

usiness and industry

function efficiently inChennai

@re)alence of e-business practices iswidespread in Chennai

Tour re)enue comes

from on-line business

>A A ' >'


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Connecti)ityspeedstothe

Internet are fast

Internet penetration

beyond urban areas is (ood

@ower and transport

networ0s support business

well

@ri)atisation, dere(ulationand trade liberalisation

ha)e created an

accommodatin(climate forbusiness

96CTI20 6+

2e(al and political en)ironment in Chennai. /

>A A ' >'

4here exists suitable le(alframewor0 and re(ulatory

(uidelinesforcommercial

transactions to handle cyber

crimes

4he (o)ernment encoura(es

creation of new firms basedon new technolo(y products

and ser)ices

4he (o)ernment enforces

impro)in( of IC4 s0ills of

the wor0force in the

country

4here is an enablin(

en)ironment for e-business

start-ups and incubation

proDects

4he (o)ernment encoura(es

and supports use of electronic

documents and

hasde)elopedinfrastructure

for e-payments, e-contractin(, customs and

taxation

'n o)erall policy statementon e-commerce exists in the

country co)erin( technical,


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'n o)erall policy statementon e-commerce exists in the

country co)erin( technical,

economic andpoliticalperspecti)es

96CTI20 :+

Or(anisational barriers. /

4he (oals and

obDecti)es of our

or(anisation are well

spelt out

4he or(anisation hassufficient wor0in(

capital to support new

initiati)es

7esources are

allocated fairly to all

departments

4he or(anisationalstructure facilitates

(ood wor0in(

relationship

Internal

communicationchannels are well laid

down

4he top mana(ementsupports and encoura(es

inno)ati)e ideas

4rainin( is always

pro)ided before newchan(es areimplemented

4he or(anisationalculture mo)es withthe times

>A A ' >'

96CTI20 =+


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4he or(anisationalculture mo)es withthe times

96CTI20 =+

Indi)idual barriers. /

Employees habits do

not bloc0 newchan(es

:ob security is notthreatened by newchan(es

ew chan(es are seen

as Dob enrichin(

Employees handle allnew situations withan open mind

2e)el of literacycontributes to supportof new chan(es

'

Slow Factors

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