South African SMME owner/manager's perceptions of e-commerce related risks

Abstract

E-commerce, as one of the applications of the Internet, has been considered as a possible channel for small businesses to be benefIted. However, due to their nature, it is challenging to involve e-commerce in small businesses; some new risks arise that typically are not adequately addressed in SMMEs' (Small, Micro and Medium Enterprises) established risk management programs. Therefore, to obtain the benefits from e-commerce adoption, SMME owner/managers need to identify and manage these risks. Identifying SMME owner/managers' perceptions of e-commerce related risks, and how they manage them is crucial for ascertaining the factors that affect the successful small business e-commerce adoption, as their perceptions influence their decision-making process. This research identified South African SMME owner/managers' perceptions of e-commerce related risks, and their effects on e-commerce and SMMEs' development. The investigation was conducted by using a quantitative research methodology, drawing on the data obtained from a sample of 50 questionnaires, and the 17 interviews out of the 50, by using qualitative research methodology to achieve the research objectives. The SMME owner/managers' perceptions imply that they are unaware of e-commerce related risks, they lack risk management attention to and skills in e-commerce related risks and their businesses, which can affect the development of e-commerce adoption and SMMEs. The perceptions also exhibited the SMME owner/managers' attitudes to risk-taking; the research provides a platform for SMMEs to understand their risk management performance. On the other hand, the perceptions reflect the orientations of developing SMMEs' e-commerce adoption such as: how to provide SMMEs with a better understanding of obtaining the benefits from e-commerce adoption? How to help SMMEs to manage e-commerce related risks? In conclusion, this research study proposed a model to assist SMMEs to understand e-commerce related risks in order to obtain the maximum benefits of e-commerce adoption.