Technology Organization Environment Framework applied in the Sri Lankan Context: An Empirical Investigation on ICT Adoption of SMEs

Abstract

Small and Medium Scale Enterprises (SMEs) have been widely recognized as one of the most important agents in any economy. Considered as the backbone of the economy, SMEs’ contribution in terms of employment creation, utilization of local resources, exporters and agents of regional development cannot be overstated. Despite this, it is observed that more than 80% of SMEs fail within the first 5 years of their operation due to a variety of factors. On another note, Information and Communication Technology (ICT) have been steadily developing throughout the recent past and have been largely adopted in all aspects of our lives. Businesses especially have been able to utilize its various productivity benefits to increase their productivity and in turn, profitability.
This paper aims to measure the impact of ICT on the Performance of SMEs in an attempt to provide enlightenment among SMEs who’s adoption of ICT has not been up to par with their large counterparts. The authors have surveyed 385 SMEs in the Colombo district of Sri Lanka and have discovered a positive relationship and impact on ICT adoption and Business Performance. A conceptual model has been developed through the review of literature based on the TOE (Technology Organization Environment) Framework by taking Technological Context, Organizational Context and Environmental Context and taking the dependent variable as Business Performance to measure the impact of the antecedents of ICT Adoption on the Business Performance of SMEs in the Colombo District of Sri Lanka.