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The Impact of E-commerce on Organizational and Financial Performance in SMEs: Evidence from Saudi Arabia

Author

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  • Hassan Almuwallad
  • Hamad Alhumoudi

Abstract

Purpose- Small and medium enterprises (SMEs) play a critical role in the growth and development of economies especially when it comes to E-commerce. Previous studies highlighted that the global business environment with SMEs occupies the largest number of companies and contributes up to 70% of the global GDP. However, in developing countries such as Saudi Arabia, E-commerce has not yet been embraced completely and management is still reluctant to adopt E-commerce, hindering organization’s ability to achieve full benefits from the technology. The purpose of this study is to examine the impact of E-commerce on organizational and financial performance in SMEs in Saudi Arabia. Methodology- The primary data were collected through a structured questionnaire distributed to 230 participants (SMEs owners and managers). The use of convenience sampling was imposed. The data collected were analyzed using SPSS. A descriptive analysis, correlation analysis and regression analysis were performed including testing the null hypothesis. Findings- The study found that the application of E-commerce systems in organizations is very critical, regardless of their size, either small or medium organizations. E-commerce systems improved the operations of the companies, the financial performance, and market-based performance, which led to the development of economic growth. Hence, it has been recommended that SMEs should adopt E-commerce to facilitate performance and ensure that it aligns with the firm strategies and structure. Originality- The paper is valuable in examining E-commerce's effects on SMEs’ organizational performance in a developing country context. It provides a unique opportunity for SMEs to relate organizational performance factors and in turn, to the degree of organizational volatility faced, thus enabling respondents to identify the most appropriate technology.

Suggested Citation

  • Hassan Almuwallad & Hamad Alhumoudi, 2024. "The Impact of E-commerce on Organizational and Financial Performance in SMEs: Evidence from Saudi Arabia," International Journal of Business and Management, Canadian Center of Science and Education, vol. 19(4), pages 1-1, July.
    • Handle: RePEc:ibn:ijbmjn:v:19:y:2024:i:4:p:1
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    References listed on IDEAS

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    1. Tran Thi Hue, 2019. "The determinants of innovation in Vietnamese manufacturing firms: an empirical analysis using a technology–organization–environment framework," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(3), pages 247-267, September.
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    4. Sara Abdullah Bakr & Christopher J. Napier, 2020. "Adopting the international financial reporting standard for small and medium-sized entities in Saudi Arabia," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 38(1), pages 18-40, June.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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