The Dynamic of Technology, Organization and Environment Model in the Halal Certification Adoption Study: A Conceptual Paper

Increasing halal hub business trade has always been the focus of the government of Malaysia. It has also become one of the National Key Result Area (NKRA) agenda towards an elevated income and improving the wellbeing of society. To meet the agenda, small and medium enterprises (SMEs) are essential to encourage economic sustainability. The demand for halal-certified products has increased significantly and has become the source of sustainable competitive advantages for companies to increase their business performance. However, the adoption rate for Malaysian Halal certification among SMEs manufacturer, especially in east coast states is not as strong as expected. The purpose of this conceptual article is to model the relationship between Perceived Benefits, Organizational Readiness, Customer Pressure and Halal Awareness towards SMEs’ intention to adopt Halal Certificate in Terengganu and Kelantan. This paper chooses Technological, Organizational and Environmental (TOE) framework since it explains how the factors influence adoption decisions in the framework. The demand for halal-certified products has increased significantly and has become the source of sustainable competitive advantages for companies to increase their business performance. Previous research found that all elements of TOE have significant relationships which would increase the adoption rate in Halal certification.