Social Media Adoption among Small and Medium Enterprises Service Firms in the U.A.E. and its Impact on Business Performance

Abstract

This dissertation examines the key drivers of social media adoption by small and medium-sized enterprises (SMEs) in the United Arab Emirates. It also looks at the impact of social media adoption on firm performance. The study used a framework combining technological, organizational and environmental elements affecting the enterprises. All the factors were drawn from previous studies with evidence that they might have an impact on firm adoption of a new technology. The technological factors consisted of relative advantage, complexity, compatibility, trialability, and observability. The organizational factor was represented by firm size and support of top management. The environmental factors were competitive intensity, competitive pressure and the influence of a bandwagon effect. Data were collected from a sampling frame of 1700 small and medium-sized enterprises operating in the United Arab Emirates, via a survey questionnaire through random sampling and 144 usable responses were received. Partial least squares structural equation modelling and multiple regression analysis were used to analyze the data and test the results against the hypotheses. The technology construct was found to have no significant effect on social media adoption, although one element (complexity) was significant. Both organizational and environmental constructs had a significant impact on firm social media adoption. The results also showed, however, that social media adoption had no impact on firm performance. It is suggested that this may be because many of the firms surveyed had adopted social media simply because other firms were doing so, without a clear strategy or purpose. This has implications for social media experts and others interested in accelerating the adoption of social media among small and medium-sized enterprises, as well as for owners and managers in these firms wishing to maximize their return on investment in social media technology.