Solving the small business paradox: E-commerce strategies for entrepreneurs

Abstract

Background: Entrepreneurial orientation is an important construct in determining value-creation activities and firm growth. Developing digital capabilities should be a crucial part of an entrepreneurial process. Resource limitations have forced small- and medium-sized enterprises (SMEs) to do things reactively and responsively, without incorporating them as an integral part of their entrepreneurial process toward creating competitive advantages.

Aim: This study examines the indirect effects of entrepreneurial orientation on firm performance mediated by implementing e-commerce among Indonesian SMEs.

Setting: This study is a quantitative study using a cross-sectional survey of SMEs in Indonesia who operate online businesses.

Methods: This quantitative study uses a cross-sectional survey of 560 SMEs who operate online businesses. Seven research variables were measured using indicators adapted from previous studies. The data were analysed using SmartPLS 3 and SPSS 26.

Results: Entrepreneurial orientation drives e-commerce integration for SMEs without considering perceived benefits. Resource limitations have compelled small businesses to develop more innovativeness and risk-taking approaches, instead of proactiveness in applying digital technology.

Conclusion: This study shows that e-commerce implementation is determined by entrepreneurial orientation and is not significantly affected by the intention to adopt e-commerce. SMEs should incorporate digital technology adoption as a part of the entrepreneurial process in their business strategies.

Contribution: The theoretical implications of the results of this study show that SMEs, in realising their desire to adopt digital technology, are not only determined by perceived usefulness and perceived ease of use but also by their entrepreneurial orientation.