E-Readnesse valuation at medium and large enterprises in Thai Nguyen province, Vietnam

E-READINESS EVALUATION AT MEDIUM AND LARGE

ENTERPRISES IN THAI NGUYEN PROVINCE, VIETNAM

A DISSERTATION PAPER

Presented to

the Faculty of the Graduate Program of

the College of Business and Accountancy

Central Philippine University, Philippines

in Collaboration with

Thai Nguyen University, Vietnam

In Partial Fulfillment of the Requirements for the Degree

Doctor in Business Administration

By

TRAN CONG NGHIEP

DECEMBER 2020

i

ACKNOWLEDGEMENTS

I would like to take this opportunity to express my thanks to those who helped me

with various aspects of conducting research and the writing of this thesis.

First and foremost, Dr. Lee Song Kun for his guidance, patience and support through￾out this research and the writing of this thesis.

His insights and words of encouragement have often inspired me and renewed my

hopes for completing my graduate education.

I would also like to thank my family for encouraging and supporting me to finish my

dissertation.

I would additionally like to thank my friends and staff at TUEBA who help and con￾tinuously encouraged me to complete the work.

ii

DECLARATION OF AUTHORSHIP

I, TRAN CONG NGHIEP, declare that this dissertation titled, “E-Readiness Evaluation

at Medium and Large Enterprises in Thai Nguyen Province, Vietnam” and the work

presented in it are my own. I confirm that:

• This work was done wholly or mainly while in candidature for a research degree

at this University.

• Where any part of this thesis has previously been submitted for a degree or any

other qualification at this University or any other institution, this has been clearly

stated.

• Where I have consulted the published work of others, this is always clearly at￾tributed.

• Where I have quoted from the work of others, the source is always given. With

the exception of such quotations, this thesis is entirely my own work.

• I have acknowledged all main sources of help.

• Where the thesis is based on work done by myself jointly with others, I have

made clear exactly what was done by others and what I have contributed myself.

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ABSTRACT

The main objectives of the study are to measure the e-readiness level at medium and

large enterprises, and analyze factors affecting e-readiness and propose solutions for

those enterprises to develop their strategy to enhance the level of e-readiness of medium

and large enterprises in Thai Nguyen province. To accomplish the research objectives

of the thesis, the researcher focused on the following specific objectives. Firstly, by sys￾tematizing the tools for measuring e-readiness, a simple tool modified from the Verify

End-user e- Readiness using a Diagnostic Tool (VERDICT) was proposed. Secondly,

the profile of the large and medium enterprises in Thai Nguyen province as well as the

e-readiness of the surveyed firms using the proposed tool were described. The signifi￾cant difference of e-readiness level, Perceived Organization E-Readiness and Perceived

Environmental E-Readiness based on profile of the enterprises such as size, industry,

years in business, ownership and the e-readiness level were determined and the factors

affecting the e-readiness level of the large and medium enterprises also were identified.

Data were collected at 102 large and medium enterprises randomly chosen from 132

large and medium enterprises in Thai Nguyen province. Pearson correlation analy￾sis shows that Perceived Organizational E-Readiness has positive relationship to e￾readiness of enterprise and Perceived External E-Readiness has positive relationship to

e-readiness of enterprise and Linear regression analysis shows that both internal fac￾tors and external factors are significant affecting the e-readiness of enterprises. Other

factors like firm size, firm age, ownership, industry sector is not significant.

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Contents

Acknowledgements i

Declaration of Authorship ii

Abstract iii

1 PROBLEM AND ITS SETTING 1

1.1 Background and Rationale of the Study . . . . . . . . . . . . . . . . . . . 1

1.2 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

1.2.1 General Objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

1.2.2 Specific Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

1.3 Hypotheses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

1.4 Theoretical Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

1.5 Conceptual Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

1.6 The Operational Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 14

1.6.1 Dependent Variable: E-readiness . . . . . . . . . . . . . . . . . . . 14

1.6.2 Independent Variables . . . . . . . . . . . . . . . . . . . . . . . . . 22

1.6.3 Antecedent Variables . . . . . . . . . . . . . . . . . . . . . . . . . . 24

1.7 Significance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

1.8 Scope and Delimitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

1.9 Organization of the Dissertation . . . . . . . . . . . . . . . . . . . . . . . 27

2 REVIEW OF RELATED LITERATURE AND STUDIES 29

2.1 Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

2.1.1 Macro e-readiness Assessment . . . . . . . . . . . . . . . . . . . . 29

2.1.2 Micro e-readiness Assessment . . . . . . . . . . . . . . . . . . . . 30

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2.1.3 Overview of e-readiness Assessment tools . . . . . . . . . . . . . 35

2.1.4 Vietnam ICT Index . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

2.1.5 Factors Influencing e-readiness . . . . . . . . . . . . . . . . . . . . 43

2.2 Empirical related studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

3 RESEARCH METHODOLOGY 51

3.1 Research Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

3.2 Population, Sample Size and Sampling Technique . . . . . . . . . . . . . 52

3.3 Research Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

3.3.1 Evaluation the Scale Reliability . . . . . . . . . . . . . . . . . . . . 54

3.3.2 Explore Factor Analysis (EFA) . . . . . . . . . . . . . . . . . . . . 59

3.4 Data Gathering Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . 62

3.4.1 Secondary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

3.4.2 Primary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

3.5 Data Processing and Data Analysis . . . . . . . . . . . . . . . . . . . . . . 63

3.5.1 Descriptive Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . 63

3.5.2 Factor Naming and Model Modification . . . . . . . . . . . . . . . 63

3.5.3 Verbal Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . 64

3.5.4 Testing the Hypothesizes . . . . . . . . . . . . . . . . . . . . . . . 64

3.5.5 Regression Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 65

4 DATA PRESENTATION, ANALYSIS AND INTERPRETATION 68

4.1 Characteristics of Survey Sample . . . . . . . . . . . . . . . . . . . . . . . 68

4.2 Results of e-readiness Assessment of Enterprises in Thai Nguyen Province 70

4.3 The Perceived E-readiness . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

4.4 Hypothesis Testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

4.5 Factors Affecting E-readiness Level of Large and Medium Enterprises . 84

4.5.1 The Basic Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

4.5.2 The Extended Model with Control Variables as Dummy Variables 86

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4.5.3 The Final Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

5 SUMMARY, CONCLUSION AND POLICY RECOMMENDATIONS 90

5.1 Summary of Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

5.2 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

5.3 Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

5.4 Limitations of the Study and Scope for Future Research . . . . . . . . . . 96

REFERENCES 97

A PREPARED QUESTIONNAIRE 102

B E-READINESS IN DIMENSIONS AND OVERALL E-READINESS AT SUR￾VEYED ENTERPRISES 117

C CRONBACH’S ALPHA 122

D ROTATED COMPONENTS MATRIX 125

E POST-HOC ANALYSIS FOR SIGNIFICANT DIFFERENCES 127

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List of Figures

1.1 Model of E-Commerce by Molla et all 2005a . . . . . . . . . . . . . . . . . 12

1.2 Conceptual framework for determining factors affecting e-readiness . . 13

4.1 Surveyed firms by Business Industry . . . . . . . . . . . . . . . . . . . . . 69

4.2 Surveyed firms by Ownership . . . . . . . . . . . . . . . . . . . . . . . . . 70

4.3 Overall Level of e-readiness at Enterprises in Thai Nguyen Province . . 71

4.4 Average e-readiness Level of Firms Grouped by Industries . . . . . . . . 73

4.5 Average E-readiness of Enterprises Grouped by Business Age . . . . . . 74

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List of Tables

3.1 List of indicators to measure e-readiness . . . . . . . . . . . . . . . . . . . 55

3.2 List of indicators to assess factors affecting e-commerce . . . . . . . . . . 56

3.3 Cronbach’s Alpha of the questionnaire to measure e-readiness . . . . . . 58

3.4 KMO and Bartlett’s Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

3.5 Verbal Interpretation of POER anf PEER . . . . . . . . . . . . . . . . . . . 64

4.1 Profile of surveyed companies . . . . . . . . . . . . . . . . . . . . . . . . . 69

4.2 Average e-readiness of Enterprises Grouped by Ownership . . . . . . . . 71

4.3 Average e-readiness of Enterprises grouped by industries . . . . . . . . . 72

4.4 Average e-readiness of enterprises grouped by size . . . . . . . . . . . . 73

4.5 Average e-readiness of Enterprises grouped by years in business . . . . . 73

4.6 Arevage perceived e-readiness grouped by industries . . . . . . . . . . . 75

4.7 Perceived e-readiness grouped by years in business . . . . . . . . . . . . 75

4.8 Perceived e-readiness grouped by ownership and by size . . . . . . . . . 76

4.9 T-test and ANOVA for significant difference e-readiness interms of firm

profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

4.10 Post-hoc analysis of significant difference of e-readiness in terms of profile 78

4.11 Test for significant difference of POER, PEER interms of profile . . . . . 80

4.12 Post-hoc Analysis difference of POER, PEER in terms of profile . . . . . 81

4.13 Pearson corelation of e-readiness and PEOR, PEER . . . . . . . . . . . . . 84

4.14 The ANOVA of the basic regression model . . . . . . . . . . . . . . . . . 85

4.15 Coefficients of basic model . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

4.16 Coefficients of regression with firm size as dummy . . . . . . . . . . . . . 86

4.17 Coefficiens of regression with business age as dummy variable . . . . . . 87

4.18 Coefficients of regression with industry as dummy . . . . . . . . . . . . . 88

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4.19 Regression coefficients with types of ownership as dummy variables . . 89

B.1 E-Readiness in dimensions of the surveyed enterprises . . . . . . . . . . 117

C.1 Cronbach’s Alpha of Tool to Measure E-Readiness (27 items) . . . . . . . 122

D.1 Rotated Component Matrix For E-Readiness Measure . . . . . . . . . . . 125

D.2 Rotated Component Matrix For POER And PEER . . . . . . . . . . . . . 126

E.1 Post-Hoc Alanisys for significant Differences of E-readiness and POER

PEER based on firm porfile . . . . . . . . . . . . . . . . . . . . . . . . . . 127

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List of Abbreviations

LIST OF ABBREVIATIONS

ABBREVIATION FULL WORDS

PEC Asian Pacific Economic Cooperation

CEO Chief Executive Management

CID Center for International Development

CIDCM Center for International Develop. and Conflict Manag.

CSPP Computer Systems Policy Project

DAI Digital Access Index

e-CRM electronic Customer Relationship Management

FDI Foreign Direct Invesment

ICT Information and Communication Technology

ITD Innovation Diffusion Theory

LAN Local Area Network

PEER Perceived Environmental E-Readiness

POER Perceived Organizational E-Readiness

SCT Social Cognitive Theory

SME Small and Medium Enterprise

SMHO Small and Medium-Sized Hospitality Organizations

TAM Technology Acceptance Model

TOE Technology, Organizational and Environmental

TPB Theory of Planned Behavior

TRA Theory of Reasoned Action

UTAUT Unified Theory of Acceptance and Use of Techno.

VAIP Vietnam Association for Information Processing

VERDICT Verify End-user e- Readiness using a Diagnostic Tool

WAN Wide Area Network

WITSA World Information Technology and Services Alliance

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Chapter 1

PROBLEM AND ITS SETTING

1.1 Background and Rationale of the Study

In our society today, computers and the Internet are considered the tools that change

the way we live, the way we communicate, the way we get education, and the way we

make business (Lee and Kim, 2007). This can be seen in the following aspects: Firstly,

Ramsay (2003) claimed that information and communication technology (ICT), partic￾ularly the Internet, is having a significant impact on the operations of enterprises and it

is claimed to be essential for the survival and growth of nations’ economies in general

and enterprise in particular. Today, many businesses depend on computers and the

Internet for their daily operations. For example, ICT helps enterprise to reduce trans￾action costs, to gather information and control the operations such as inventory control,

and quality control. Information has long been considered as a very important tool for

decision making especially in the business environments. Forgionne (1991) pointed

out that information was needed for various purposes. For example, the global econ￾omy relies on producing high technology goods and services within an information

society. In such a society, enterprises transform human effort, materials and other eco￾nomic resources into products and services that meet consumer demand. Managers on

the other hand, utilise these resources to plan, organise, staff, administer and control

activities in ways that best achieve the enterprises’ objectives. In the information so￾ciety environment, successful enterprises have to produce high technology goods and

services.

Secondly, as the world economy continues to move toward increased integration as

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a result of advances in ICT, and the increasing reduction in trade barriers, some of

the greatest opportunities for businesses may derive from their ability to participate

in the regional and international markets. Jean-Francois Richard cited in Fonin (2002)

pointed out that new technologies in computing, communication and multimedia are

changing the way we work and learn. They are changing the global flows of infor￾mation, trade and investment and the competitive advantage of industries, services,

countries and regions. These changes are putting a premium on the use of these tech￾nologies requiring all enterprises to invest in the technological development and learn￾ing.

Furthermore, Forgionne (1991) observed that information had attributes that were use￾ful to a many people and organisations and enterprises. Information could serve as

a critical tool in communication and decision making for all levels of management.

Moreover, since individuals and groups had different objectives within unique organ￾isations’ settings, all attributes could not be of equal value to each user. Instead, sepa￾rate but related information systems are needed to deliver the desired attributes to the

different users. Such information systems would include those that support decision￾making, provide an effective interface between users and computer technology, and

provide information for the management of the day-to-day routine operations of the

enterprise in support of the unique needs of professionals. Dawes (1996), on the other

hand, in a study of the inter-organisation information sharing amongst government

managers, observed that information is valuable for (a) better, more integrated plan￾ning, (b) policy development and program implementation across agencies, (c) provid￾ing more comprehensive and accurate data for decision making and problem solving,

(d) enhancing productive use of scarce staff resources, and (e) providing better inter￾agency and professional relationships.

To evaluate the role of information technology in the production of the enterprises, Hu￾ber, 1984) observed that the ability of an organisation to realize its goals depends on

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how well the organisation acquires, interprets, synthesises, evaluates and understands

information, and how well its information channel supports organisational processes.

Hiltz and Johnson (1989) pointed out that research on computer information and com￾munication systems has found that greater use of these technologies is often associated

with improved availability of information, productivity, quality of work, effectiveness,

and efficiency in accomplishing tasks. Moodley (2001) noted that the Internet pro￾vides enterprises with an opportunity for reduced costs with respect to information

searching. Furthermore, the type of information that is available to firms is likely to

influence the decision by buyers and sellers to engage in business-to-business (B2B)

trading hubs.

According to Peters (2001) electronic readiness or e-readiness is defined differently in

different contexts and for different purposes. Therefore e-readiness can be divided into

macro e-readiness which looks at the economy level and micro e-readiness which is at

the enterprise level. At the micro level, e-readiness can be defined as the degree to

which a community is prepared to participate in the Networked World. It is measured

by assessing a community’s relative advancement in the areas that are most critical for

ICT adoption and the most important applications of ICTs such as electronic commerce

(e-commerce) or electronic business (e-business). When considered together in the con￾text of a strategic planning dialogue, an assessment based on these elements provides

a strong representation of a community’s readiness. World Information Technology

and Services Alliance (WITSA) further claimed that an ‘e-ready’ country has extensive

usage of computers in schools, businesses, government, and homes; affordable reliable

access in a competitive market; free trade; skilled labor forces and training in schools; a

culture of creativity; government-to-business communication; transparency and stabil￾ity in government and an evenly enforced legal system; secure networks and personal

privacy; and regulations allowing digital signatures and encryption.

There are many tools for assessing e-readiness depending on the level of assessment