Information and Communication Technology is defined as an assortment of technologies that are used for collecting, accumulating, getting back, transforming, examining and transferring of information (Ritchie & Brindley, 2009). These technologies include such as desktop computers, laptops, handheld devices, wired or wireless intranet, software that are meant for manufacturing in the firm for instance text editor and spreadsheet, software that are meant for activities in firms, storage devices for data and information and security, making sure that the network in the firm is secure and so on (Ashrafi And Murtaza, 2008). According to Kollberg and Dreyer (2006), ICT provides ways of storing, processing, distributing and exchanging information for the companies and their customers.
ICT improves productivity, growth and economic progress and is an essential component in the pursuit of a high value, knowledge-based economy. It improves efficiency and increases productivity through; improving resource allocation, reducing transaction costs and enabling technical improvement, leading to the outward shift of the production function (GOK, 2006).
The adoption of ICT is viewed as an important factor for competitive growth of Small-scale manufacturing firms in global and regional markets through new markets, new products, and new distribution channels (Minton, 2013). ICT has provided improved efficiency, and closer customer and supplier relationship (Steinfield, Larose & Chew, 2012). With ICT, small-scale manufacturing firms are able to gain information that would improve their competitiveness (Swash, 2008). It is therefore surprising that there are slow adoption and integration of ICT by Small-scale manufacturing firms (Small Bone et al, 2011; Dawn et al, 2012). The anticipation that Small-scale manufacturing firms might advance like large firms in ICT acceptance has not been recognised (Mpofu, C., 2007).
Through the use of ICT, Small-scale manufacturing firms can gain from developing capabilities for managing; information intense resources enjoy reduced transaction costs, bringing information together and distributing of international level and gain access to very quick access of information (Minton, 2013). OECD (2002) argues that ICT is able to provide a new approach for the organization, from a production that is lean production and teamwork to a good relationship with the customers. Through ICT, firms are able to introduce changes in the organization in areas like re-engineering, decentralization, flexible work arrangements and outsourcing. Firms are able to be more flexible, shorten the product cycle so as to satisfy the customer preference. By having organizational innovation and ICT, the firms are said to have complementary factors.
Businesses around the world have been influenced and have spread through the use and adoption of ICT. By adopting ICT, businesses are rapidly changing their product, work business methods, trade and consumption patterns in and between enterprises and consumers. This is as a result of the demand improves their products. The strategies that are to be used by the small-scale manufacturing firms assist in the development of competitive advantage both within the locality, the country and internationally (Hitt, Hoskinson &Ireland, 2007). Continuous improvement in product and service are necessary because of changing customers demand.
Adoption of ICT by the small-scale manufacturing firms are able to reduce costs by improving their internal processes, their products through faster communication with the available and future customers and they are also able to better promote and distribute their products by having a presence on the online platform. As the global economies rely on ICT to receive and send information, the Small-scale manufacturing firms in Kenya have yet to reap these benefits. This can be attributed to the ability of the Small-scale manufacturing firms to engage the regional and the global economic business networks where they can in turn demand for provision of the required level of access to and use of ICT (Dixon et al, 2012).
The way globalization is expanding has encouraged the way information is transmitted and this would be facilitated by the use of ICTs in small-scale firms. Sharma and Bhagwat (2006) information flow is considered as a source of survival in an organization and this assists in its operation regardless of the size. ICT adoption in small-scale manufacturing firms is able to provide a means of entry, process and assign a very large amount of data and information very fast in order for the firms to make mindful decisions that would help in fields which including manufacturing, environmental analysis, data processing and result making processes (Jimmy and Li, 2003). Hence, there is the need for small-scale manufacturing firms to embrace the state-of-the-art technologies in order for them to penetrate the international markets and remain competitive despite challenges posed by globalization, liberalization and technological changes. With state-of-the-art technologies, small-scale manufacturing firms can be able to leverage as a resource and to benefit from the value of the information (Sharma and Bhagwat, 2006, Dangayach and Deshmukh, 2001).
There is not enough response in the organizational changes that would assist in the adaption when it comes to the business environment so that these firms would make better use of knowledge, technology, and human resources to respond to new demand and customers and to use of ICT in a better manner. The examination will concentrate on whether ICT has any effect on the better performance in Kenya. These have resulted in productions being high, competition is very stiff due to the imported goods, credits being high, those that induce drought, and doubts (KNBS, 2013).
1.1.1 Small-scale manufacturing firms and Information communication and Technologies adoption
Manufacturing firms are defined as any business that changes raw materials into finished or semi-finished goods using machines, tools, and labor. Those that go through the manufacturing process include food, chemicals, textiles, machines, and equipment (Briens & Williams, 2004). Manufacturing is the process of converting raw materials into a finished product especially by means of a large-scale industrial operation. According to Awino (2011), manufacturing is important in Kenyan economy and it makes a considerable contribution to the country’s growth.
Manufacturing firms in Kenya are classified under large-sized (with assets that go above Kenya shillings 100 million), medium-sized (with assets are between Kenya shillings 40 million and 100 million) and small-sized (with the asset are below Kenya shillings 40 million), (KAM, 2011). The firms whose performances are in terms of machinery requirement, labor force and insensitivity are high as well as the deployment of resources necessary to make the end product.
With this, ICT is considered as the incentive to productivity, growth and economic progress and is an imperative component in the quest for quality, knowledge-based economy. By gaining knowledge, the firms can be able to attain structured information that is difficult to organize and expand due to its inherent inability to be divided into parts or forms or inseparable. It is embodied in individuals and firms. With the availability of attaining knowledge and considered to be part of absorbing and selecting the available information as a human being, knowledge is considered as capital in any firm. When it comes to attaining knowledge, the access is considered to be limited and very partial. The knowledge space is itself disentangled, therefore implying that the decisions are made under a good sense of surrounding. According to Audrestch et al. (2006), innovation opportunities are the result of organized and strong-willed efforts so as to create knowledge and new ideas by devoting all the resources on products that are being produced or looking for ways of remodeling old commodities.
The rate of advancement of new technologies has led to the growth of innovation in products. The available technologies are in themselves innovations and have led to many new innovations and ability to bring to light ideas that were never there before. There is a need to focus on understanding how, why and at what rate, innovative ideas and technologies spread into the social systems. In the diffusion of innovation, diversity is only supposed to take place at innovation and not the people who are consuming the product (Les Robinson, 2009). Efficiency and increase productivity through can be improved by the use of ICT through; a resource that is allocated in the production is improved, making sure that the transaction costs are reduced and technical improvement and this would lead to the noticeable transfer in the manufacturing exercise (GOK, 2006).
The significance of ICT to small-scale manufacturing firms being a critical pillar, the adoption of ICT is expected to be an important factor for the competitive growth of small-scale manufacturing firms in global and regional markets. When it comes to the manufacturing firms’ location, there is a positive effect on the concentrated environment on the location of firms. Environments characterized by the small firm’s causes better ways of doing business by lowering the effective costs through the development of self-reliant suppliers, together with a larger and a more assorted supply. The growth of aggressive press forces small-scale manufacturing firms to fight for modern business areas of state-of-the-art products and prevailing dissemination routes (Minton, 2013).
By using ICT, small-scale manufacturing firms are able to advance in the development capabilities in management, in-depth information resources, enjoy reduced transaction costs, develop a scope for information gathering and distribution to a level that is in the international scale and gain access to a swift flow of information (Minton, 2013). New business models and market compositions enabled by information technology, including business process outsourcing, provide small-scale manufacturing firms with access to new a market and new sources of competitive edge.
For instance, in India, small-scale manufacturing firms have been doing way much better in comparison to the large companies on most important areas like advancement in production and growth in employment. The category accounts for 40 percent of the factory-made production, 35 percent of the total products being distributed beyond the borders of the country and brings in about 80 percent of jobs and business transactions in the streamlined sector (Sharma and Bhagwat, 2006). In Singapore, 51 percent of the total people who are recruited in the small- and medium-scale region, and to be more specific, SMEs in the industrialized zone adds up to 15 percent of a massive domestic commodity (Lukacs, 2005). In Hong Kong, SMEs hires the highest number people and they are estimated to be over 1.4 million people and in Japan 81 percent of the people employed to put in the category of the SMEs (Lukacs, 2005).
The employment in Africa by the SMEs has been put to higher than 40 percent of all new entrants because the demand for labor is higher than large firms and are thus better placed to eliminate the lack of jobs (Muuka, 2002). Further research has shown that SMEs have pitched in greatly to job creation and in promoting social economic advancement (Mutula and Brakel, 2006).
Their lower level technology and poor managerial capabilities have often shown to be a challenge when it comes to their effective use of new technologies (Caldeira and Ward, 2002). Whereas ICT is not a remedy for all development problems, it offers a fighting chance for the small-scale manufacturing firms. It continuously grants the small-scale manufacturing firms a chance to fully participate in the knowledge economy by aiding in connectivity; helping to create and deliver products and services on a wider market, and providing access to new markets and new sources of competitive advantage to boost income growth.
1.2 Statement of the problem
Companies today are adopting ICT in all aspects of their businesses, not only for improving business processes and task efficiency but also for improving engagement and communication with their customers (Mutula and Van Brakel, 2007). According to the organization for economic co-operation and development (2003), ICT has the potential to enhance communication within a company, leading to efficient resource management. Additionally, ICT applications such as enterprise resource planning (ERP) provide businesses with a viable source to store, share, and utilize acquired business knowledge and know-how (OECD, 2003).
Small-scale manufacturing firms are an important component of many economies in the world (Mutula and Van Brakel, 2007, Jones, Packham, Beynon and Pickernell, 2011). By not adopting ICT, it is convincing that the Small-scale manufacturing firms can be able to compete effectively and efficiently in both local and international markets (Moyi ; Njiraini, 2005).
Advancements in ICT, especially the internet, have brought about a lot of changes in the way the world economies and markets work, both in developed and developing countries (Montazemi, 2006). Companies in all economies and regardless of size want to expand and increase their market reach, this is easily achieved by utilization of ICT which enables them to communicate with virtually any individual throughout the globe, acquire vital business information and run their organizations more effectively (Montazemi, 2006).
It seems SMEs operators often lament of poor profits and high operational cost. Also, Small-scale manufacturing firms in Nyeri County in Kenya primarily employ traditional methodologies and tools to operate. These traditional means of operations very often has resulted in the collapse and lack of competition by the Small-scale manufacturing firms within the first 2-6 years of existence (Apulu and Lathen, 2009).
The livelihood of most people in the rural areas comes from the informal economic activities. This is because access to the formal employment has been decreasing as the public sector is retrenching its employees. Kenya is faced with several developmental challenges including poor manufacturing products. To the majority of Kenyan consumers, manufactured products are important features within the lifestyle choices. Therefore the small-scale manufacturing firms need to avail and access timely and up-to-date products and services. This can be achieved through the adoption of ICT. By identifying the benefits that come with the use of ICT, it is necessary to identify the reasons that caused the small-scale manufacturing firms not to fully and ably using ICT in their business the challenge found by most small-scale manufacturing firms, is the decision of whether or not to adopt ICT (Payne, 2005).
The study, therefore, will investigate factors affecting the adoption of ICT among rural-based small-scale manufacturing firms in Kenya (Ihua,2009).
The general objective of this research is to evaluate factors affecting the adoption of ICT among rural-based small-scale manufacturing firms in Kenya.
1.3.1 Specific objective
1. To determine the effects of cost on the adoption of ICT in small-scale manufacturing firms in Nyeri.
2. To determine skills development affects the adoption of ICT in small-scale manufacturing firms in Nyeri.
3. To determine the effect of administrative support in the adoption of ICT in small-scale manufacturing firms in Nyeri.
1.4 Research questions
2. Are the costs of ICT and the infrastructure preventing ICT adoption by small-scale manufacturing firms?
3. Do skills affect the adoption of ICT by the small-scale manufacturing firms?
4. Is there any effect of administrative support in the small-scale manufacturing firms?
This chapter carefully looks at the quality of appropriate forthis research which includes both empirical as well as theoretical literature. The study has demonstrated that empirical study focuses on earlier studies on the same topic, their findings and their impact on the factors affecting the adoption of ICT among the small-scale manufacturing firms in Nyeri County. Theoretical literature deals with concepts and principles that guide the small-scale manufacturing firms. The literature review section shall also consider the knowledge gaps.
2.2 Theoretical overview
The theoretical overview is a composition that backs the path to a research study. The theoretical framework brings into use and gives into detailed account the bone of contention as to why the study is being done (Abend ; Gabriel, 2008). This potion scrutinizes the theories that the researcher considers applicable to the study. It reviews the Kirzner’s ‘alert’ theory of entrepreneurship, the Schumpeterian theory of innovation, and innovation diffusion theory on perceived usefulness.
2.2.1 Kirzner’s ‘alert’ Theory of Entrepreneurship
The entrepreneur is at the center stage in the market process of economic development. According to Kirzner (1997) the success of any capitalist market economies is brought out by what is recognized to be true in form of habit where less efficient, less imaginative ideologies, are to be replaced by what is considered to be newly identified, remarkable ways of serving customers by manufacturing better goods or by taking advantage up till now unknown, but available, source of resource supply. According to Kirzner, the entrepreneur who is in the market will identify and take advantage of opportunities so as to gain profits by bringing in or restoring of a less efficient, less imaginative systems with better ways of serving customers.
By having an entrepreneur and expounding on her role in driving the development of serenity is critical to understand the market as a process that is changing. Kizner relaxes on the assumption that what goes hand-in-hand with this framework is the perfect knowledge of assumption. It is not the success that is looked at but instead calculates the most favorable blueprints that are based on any given data. When it comes to the decision-making process, the entrepreneur has to make the decision to remove a product that is less or not preferred or even valued by the consumer for something that is more preferred and valued and sought after.
Kizner (1973) emphasizes that the plans he has can be explained, in terms of cutting down of the most favorable allocations and magnifying where his plans can be shown to be essentially uninterrupted in terms of data which complements and makes up his knowledge of all present and future circumstances that is relevant to his situation. Goods are always sold at the same price and where the goods are sold differently, the explanation of the different prices is available. The explanation has to bring out the differences in the transaction costs, like differences in transportation costs between the space where the good was produced and the two point-of-sale.
Kirzner’s view of the world, when it comes to knowledge is imperfect and imperfectible. This imperfect knowledge allows the entrepreneur to have a function and for the market process to take place. The imperfect knowledge, according to Kirzner (1973) brings out the thought that there is a king of investments that are meant to capture the slight differences in price and when there is a difference in price of a product on two different markets, the person buying, buys the product at a lower price and then sells it at a higher price. This scenario exists, where there is an imperfect knowledge, buyers and sellers can make errors of having too many expectations which may lead to frustrated plans and errors that are above despair and leads to unexploited opportunities. According to Kirzner, individuals and entrepreneur are alert to trading that is programmed and may lead to opportunities and it is their alertness to these opportunities that explains the tendency of the entrepreneur to bring a balance in the market. Kirzner (2000) explains that each market is characterized by opportunities for pure entrepreneurial errors which have resulted in shortages, surplus, and misallocation of resources.
Deliberate searching for profit opportunities is altogether different as compared to an entrepreneur who is being alert to and so discovering profit opportunities. Engaging or deciding to engage can only come to pass if the costs of acquiring the knowledge required are less than the returns that come with the search. The costs can only be calculated if the individual has some degree of knowledge about the prospect and the likelihood of finding what he is looking for. For this to happen, the individual has to be given an advance search which has to be profitable in form of opportunities and the ability to discover the opportunity that will be of benefit for that particular kind of search.
According to Kirzner, entrepreneurship is a balancing force that consists of (and is reducible to) an alert to programs of trading that brings opportunities which are readily appreciable and detectable and that only exist because of the widespread ignorance in the market.
For markets that have multiple periods and commodities, market participants are less likely to commit errors because of their insensitivity but they are not aware of best course of action available to them and that is where the scope of creativity and judgment comes in handy. They are not able to unquestionably make sense of their circumstances and their options which leads to situations that can be analyzed.
Kirzner demonstrates that if there has to be a balance in the market where there is an elimination of errors of over-optimism and over-pessimism, there is need to have agents who can economize and be alert to profits and opportunities that will bring out pure entrepreneur.
2.2.2 Schumpeterian Theory of Innovation
The factors of production, improvements in the efficiency of allocation across economic activities, knowledge and the rate of innovation are considered as a sign of growth in a firm. For one to be considered employed and efficiently allocated, growth has to be put in place by build-up or amassing of both knowledge and innovation. For innovation to be viewed as an incentive structure there has to be access to existing knowledge and a more systematic part. Innovation penetrates and improves or boots an already existing knowledge, thereby serving as an avenue for realizing knowledge in excess.
Schumpeter (1911/1934) explains in details about the economic functions and development of the entrepreneur in three separate sections which include: the first stage, Technical discovery expands invention and can be defined as identifying new things or identifying new activities. Technological innovations are realized by the entrepreneur who has credit which can be equated to an expansion of the economy while if there is a decrease in credit by not paying the lenders then there is a fluctuation that is experienced in the market. Where profits are experienced in the market, the same proportion of losses can be attained. The entrepreneur is identified as an innovator and a catalyst to change and this is seen through the introduction of new technological products and processes. The second stage is the innovation where there is successful trading of the new goods or services. By introduction of entrepreneurs into the market, there is a need to identify or spot new technological opportunities and to understand possible technological and economic applications of new a scientific breakthrough. This is considered an important factor in understanding the steps taken in the introduction of new technologies and there are specific economic and technological characteristics. This approach compliments or commends the role of small-scale manufacturing firms as a point of the compass in terms of new technologies and suggesting that only high creation levels of firms can sustain rates of technological change (Antonelli, 2009). Finally, there is the combination of knowledge which includes both new and the old. The entrepreneur has to be innovative in the production order, using invention so as to come up with new goods or be able to manufacture products previously produced by the firm in a new form that would attract consumers and find new resources of raw materials or markets for their products.
The entrepreneur has to have the ability to be inventors which is considered to be crucial for further adoption and provide custom specific innovation thus reducing uncertainty in the firm’s capacity. Entrepreneurs and small-scale firms’ take advantage of the existing knowledge through their network and link to other knowledge producers in order to satisfy their specific needs in the manufacturing of goods. It’s through this that they are able to produce knowledge even if it does not crop up.
Small-scale firms have a great chance for development, use and introduce profound market-making products that give the firm a competitive edge over an already existing company who are set out to an established growth target and less ability to adapt to change (Casson 2002a, 2002b, Baumol 2007a). The small-scale firms are able to compete through innovations and this can be seen through the process of holding a more extreme view through new ideas that will more likely stem from new ventures (Scherer 1980, Baumol 2004) and in particular if small and new firms have access to knowledge surplus from the available stock of knowledge.
Schumpeter’s idea of holding a more extreme view is to initiate innovations that will essentially change the way things are manufactured, the type of products being produced, how the firm is methodically organized and the way people transport things and communicate suggest that long currents or influx are caused by the bringing together of innovations.
There is an advantage when it comes to the habit of any firm and this can be seen through the access of finance and services, higher flow of ideas, larger markets and less fluctuation of demand, together with lower entry costs which are considered to be advantages. The firms can be able to supply a go-between to the final goods manufactured and which link entrepreneurs to qualitative and structural change and with the increased numbers of small manufacturing firms into the market imply more of variety or assortment and higher regional growth.
A market that has small-scale firms causes more business or trading capabilities by lowering the effective costs of entry through the improvement of self-sufficient suppliers, together with larger and more diversified supply of investment capital where risk capital investors more easily can spread the risks.
Success and entrepreneurship can be said to be important when the regional economic surrounding is demonstrated in terms of culture, knowledge base and the business attitude (Camagni,1991). The firms will need networks which offer more favorable conditions for innovative entrepreneurship and they can be accessed through knowledge, skills, destiny, and opportunities (Nijkamp 2003).
2.2.3 Innovation Diffusion Theory on Perceived Usefulness
It is the customer who benefits when there is a new idea, product or service and the manufacturer only gets a relief when the innovation that has come from the firm is considered valid and the end user accepts it wholly. Diffusion can only be considered important when the end user can fully adopt and use it. This can be done when the users can be able to comfortably do their research on the benefits and the disadvantages of any innovation that comes up before using it and it can be done by the use of the internet.
The understanding of Innovation diffusion theory, is brought about by factors like how, why and how fast these ideas and technologies penetrate into the social system (Rogers, 1962). There is no need to wait for the people to change, but there has to be changed on the way products are reinvented and the behaviors so as to make them better for the individuals and groups who will need them. Innovation diffusion theory further explains that it, not the people who are supposed to change in favor of the product but the innovation that is coming up from any firm (Les Robinson, 2009). Diffusion is defined as the process through which innovation is passed on through certain avenues over time among the community (Rogers, 2003). According to Fichman (2000), diffusion is described as the process through which a technology is able to spread across any population of an organization. The understanding of diffusion of innovation can be interpreted as the widening of ideas from one society to another or from a focus or institution within a society to other parts of that society (Rogers, 1962). Theory of innovation diffusion is divided into four main elements (Ismail Sahim, 2006). Innovativeness brings out the adoption as being new to how individual in the form of an idea, practice, objects or other entities (Rogers, 1983). Innovation is when the product and service is presented to the user differently or in a way that the user cannot explain. The product and service have to be for use by the consumer.Communication system is the medium through which users can be able to pass information with each other. It is the means through information is passed from one channel to another between users. Rogers believes that it is the relational path that is more important for the diffusion of new innovations or technology. Time in terms of innovation diffusion process is duration it takes for adoption in terms of categories and rate to happen. It weighs how a product and innovation is able to penetrate from the moment it is created to the moment it stops to exist in the market. It documents the proportion at which the innovation is distributed into the society and adopted by the different users. Social Systems is a set of units that are not related but combine effort so as to solve a problem in order to accomplish a common goal (Rogers, 2003). Innovation becomes useless if it is not adopted, recognized, accepted and get to the point of sharing the information through social systems. Barnett (1991) suggested that for a particular innovation and product to be adopted by individual, the people have to think about using it. Rogers (2003) described the innovation-diffusion as the process of reduction of doubt about innovation brought into the market. Once the process of accepting the innovation, the implements the innovation and proceeds to confirm their decision which can go through five stages:
Knowledge stage (Demir, 2006) where the individual is exposed to the technology and explores how it functions. The individual attempts to determine “what innovation is, how and why it works” (Rogers, 2003).Persuasion where the individual has to do his or her own research regarding the innovation, analyses that information that has been obtained, determine if the sources are reliable and if these sources are credible, there will be a determination if the peers have any attitude towards the technology. The acceptance or rejection does not that the innovation has been rejected, an attitude is towards the idea is perceived when it exists (Rogers, 1983). Uncertainty is said to be present when a wrong word of mouth or wrong publicity becomes too much while a reduction of uncertainty comes when there is a positive feedback from people around you like friends and peers is spread. According to Sherry (1997) people tend to trust information from close circle peers and family members about an innovation and there is always an ability to refine innovation that comes from outside this circle. The decision comes when there is a participation in activities that would lead to the acceptance or the rejection of technology or innovation. The individual is able to verify whether the technology or innovation provides a benefit, which if it does greatly enhance acceptance (Rogers, 2003). There is a very good chance that the individuals may end up changing their mind over time. Implementation is where the innovation is used on a daily basis or one can say the innovation is put into practice. The implementation involves a change in behavior, as the new idea is indeed put into use (Rogers, 1983). The adoption can be hampered by the newness of an innovation and uncertainties by the individual and this is because of the information flow is not directed to the user of the innovation or product but to other people. Confirmation is identified when the behavior of human beings change from a state of imbalance, state of mind that is uncomfortable and leads to elimination or the individual seeks to reduce (Rogers, 1983). According to Rogers, research about innovation is always sought, even after an adoption decision is made about an innovation, so that they can feel motivated or to do away with the innovation. This stage plays a huge role in convincing a person to continually adapt to or discontinue the adaption. The concept of reinvention is defined as the innovation or modification by a user in the process of adoption and implementation (Rogers, 1983). The definition of invention is the process where a new idea is identified or created, while adoption is described a process of making full use of an innovation as the best line of action available. Computers are the tools that consist of many possible opportunities and applications, so computer technologies are more open to reinvention (Ismail Sahin, 2006).
2.3 Empirical review
This section offers information on the research objectives idea in relation to other researcher’s opinion. Relying on other research practical conclusions, the researcher attempts to react to the research objectives. The idea is to improve the efficiency, quality, manufacture value and sustainability need to spend the necessary resources so as to move to the digital platform so that they can be able to improve the profitability (Schulte, 2002). The businesses can be able to use the technology to grow by identifying the required customers. This can also be done by improving productivity, training and the necessary procedures.
2.3.1 Factors affecting the adoption of Information Communication and Technologies among small-scale manufacturing firms
18.104.22.168 Skill development on adoption of Information Communication and Technologies
With training, small-scale manufacturing firms can be able to attract new employees, as well as turnover reduction methods for the current staff. The major reasons for making training priorities are the overall IT staffing shortages and the expense of the turnover. Training provides a relatively simple way of creating new IT professionals plus, moral will climb as IT employees learn new skills and are continuously challenged. Small-scale manufacturing firms that offer current, exciting opportunities have an easier time extracting highly experienced IT staffers. It is less expensive to keep current IT staff that know the business and train them on the latest technologies. Other considerations include the cost of hiring a replacement for the people lured away and hidden costs of missed deadlines.
When the SME is able to access skills, they can be able to adjust to changes in the competitive environment, in particular to changes that take the form of continuous shifts. Upgrading in skill has notably been identified as an approach used by firms to adjust to increasing market shares by foreign competitors. In order to increase in competition by low-wage countries, firms have to increase the skill-content of their products and move up the quality of their products (Montfort Et Al., 2008). Kumar Chugan and Rawani (2012) emphasize the need to upgrade skills in small-scale firms where they are losing the market.
One of the most difficult things among the small-scale manufacturing firms is the ICT staffing shortage who are skilled and training is considered as a reason that hampers ICT adoption by the small-scale manufacturing firms in Kenya (Lange et al., 2000; Arendt.,2008).
Apulu and Lattam (2009) are certain that owner/managers are usually reluctant to invest in the training of employees because they are afraid that following the completion of such training the employees will leave and find employment in large companies that offer better salaries. Kumar and Ravindran (2012) found that ease of use was not considered a factor but rather it represents intellectual beliefs formed by indirect information. Also, perceived ease of use was found to have an insignificant effect on consumer intention to use e-commerce (Wei et al., 2009). Without the necessary skills, Small-scale manufacturing firms will have a challenge of implementing all the necessary ICT skills. Options available for the small-scale manufacturing firms in solving these problems include training, retention management, and outsourcing the work.
Individuals may also not invest in training because they do not have all the necessary information about the future returns from such training or because the trainers do not give all the information on the quality of training they give and therefore hesitate to make the necessary investments. Both problems fall under of decision-making failures. Co-ordination failures typically arise at the high end of the category of skills because of the existence of external innovation (Robalino et al., 2012).
Folorunso et al (2006) and Owoseye (2010) also identifies cost implementation and lack of funds as challenges of ICT adoption in Kenyan small-scale manufacturing firms. Abor and Quaterly (2010) confirm that Small-scale Manufacturing Firms development is inevitably constrained by the limited availability of financial resources and cost implementation to meet a variety of operational needs. Many Small-scale Manufacturing Firms in Kenya struggle with the high cost involved in the implementation of ICT hence they sometimes ignored the adoption or effective utilization of ICT.
H01 There is no significant relationship between ICT adoption and Skill development on adoption of Information Communication and Technologies.
2.3.2 Cost of Information Communication and Technology materials on adoption of Information Communication and technologies.
A firm’s coordination costs can be divided into two distinct categories: internal coordination costs and external coordination costs (Kim & Mahoney, 2006). Internal coordination costs represent the economic costs incurred for communications, data transfer, and other economic expenditures on managing dependencies between activities within a firm. External coordination costs represent the economic costs of locating suppliers, writing contracts, and other economic costs of market procurement. Bloom, Garicano, Sadun, and Van Reenen (2014) find that the adoption of ICT within the same organization can reduce communication costs as well as knowledge acquisition costs. ICT can be able to support increased responsiveness to customers easily. This helps to tie customers to a company. Being responsive gives customers the feeling that they are treated well by the company. Moreover, Dosi et al. (2008) find that the size distribution of firms and industrial concentration in the advanced economies over the past few decades have not changed despite the increasing role of ICT. ICT adoption can reduce internal coordination costs and provide management with the capability to manage an organization more effectively and facilitate increased integration. On the other hand, adoption of ICT can directly reduce market transaction costs by providing a cost-effective means to access and process market information, thus, reducing external coordination costs to the firm. ICT can also reduce market transaction costs by facilitating closer inter-firm links through information sharing and mutual monitoring. Rangan and Sengul (2009), for instance, argue and provide empirical evidence for increased internationalization at arm’s length associated with increased ICT spending.
There is research that has been made on the cost factor indicating that there is a direct and significant relationship between cost and adoption technology (Seyal and Rahim, 2006). According to Oliver (2002), cost refers to an amount paid or to be paid for a purchase to acquire, produce or maintain goods or services. Adoption according to this study refers to the application of ICT in small-scale manufacturing firms. The cost of ICT training materials is considered to be among the problems that could negatively affect the implementation of ICT in most small-scale manufacturing firms. Personnel costs include recruiting, hiring, training/retraining and resolve ongoing human resource management issues. The firms need to address a changing corporate culture which results from a move that is web-based in transaction that often requires firms to hire professionals who are experienced in managing such an exchange.
The higher the cost of computers and their accessories, the fewer computers one can buy with the limited resources. The adoption of ICT by small-scale manufacturing firms is avoided because of the complexity of use that comes with them. The costs that come with the use of ICT are different because of the unknown associated with both the technology and marketing strategy. As ICT evolves, new costs of various types of hardware, software and business processes will disappear. Hardware costs can be incurred based on redundancy and reliability needs. Many firms purchase or lease hardware so that they can get through peak usage times and because such hardware is not fully utilized, the lease expense can become a loss. Software costs may be incurred depending on the firm’s industry, location and the type of ICT initiative (Macgregor et al., 2006).
H02 There is no significant relationship between the Cost of Information Communication and Technology materials and the adoption of Information communication and technologies.
2.3.3 Effect of administrative support on the adoption of ICT
Malik and Malik (2008) state that the lack of supportive organizational culture and structure may hamper technology initiatives in any organization. Eruban and Dejong (2006) also state that culture can influence actual behavior through its influence on attitudes and subjective norms.
For the Small-scale manufacturing firms to successfully adopt ICT, the management has to change their perception (Martin and Matlay, 2001). Top management support can encourage the adoption of ICT through positive attitude towards its adoption and usage (Premkumar and Roberts, 1999). The positive attitude will then lead to a high likelihood of allocating the necessary resources for ICT adoption and usage. There can also be ease of adoption of ICT in the firm if they can be able to spearhead through effective communication with the employees. Additionally, Molla and Licker (2005) found that competition of senior management of e-commerce activities significantly affects the maturity level of e-commerce adoption.
In order to maintain shareholder and customer confidence in a rapidly changing environment, the leadership has to attain skills in organizations where ICT plays a crucial role in creating competitive advantage. The understanding of leadership in an e-business context, it is necessary to make the difference between the new economy and traditional bricks-and-mortar firms.
Investing in technology is important, but the critical success factor is getting people to use it effectively and the leaders can do this by communicating their vision on the role of the internet when it comes to achieving the company aims. The effectiveness of a leader is determined by the extent to which the workforce understands and embraces the vision. That is, it is the followers that attribute leadership. If there are no followers, then there is no leadership (Grint, 2005).
The owners of small-scale manufacturing firms should get all the staff/departments in the business involved so that they can assist in the re-engineering of business processes. In order for this to work, effectively, everybody should have some knowledge and the necessary skills of ICT and internet, by providing the introductory courses for employees who have no contact with the internet in order to make their contributions more valuable and reduce their fear of new medium. They will have that there are possibilities, along with some basic applications such as email. There has to be connectivity between computers being used by the employees so that there is ease in exchanging of files, information, and emails.
H03 There is no significant relationship between ICT adoption and administrative support.
Figure 1.1: The conceptual framework
Operationalisation of Variables
Refers to how you will define and measure a specific variable as it is used in the study. Operationalization of variables shows the measure of the dependent variable (ICT adoption) and independent variables (cost of materials, skills development in ICT, infrastructure, administrative support).
Table 2. 1: Operationalization of Research Variables
OBJECTIVES VARIABLES INDICATORS
To establish the effect of costs on materials ICT adoption in small-scale firms. Cost of materials ? Price of computer.
? Installation costs.
? Maintenance fee.
To investigate whether skills on ICT use affects its adoption. Skills development ? Ordinary level.
? Advanced level.
? Tertiary level.
To establish how infrastructure is affecting the ICT adoption in small-scale firms. Infrastructure ? Computer equipment.
To establish whether the administration is affecting the adoption of ICT in small-scale firms. Administrative support ? Technical assistance.
? Financial assistance.
? Managerial assistance.
RESEARCH DESIGN AND METHODOLOGY
This study used descriptive research design where the people of concern were small-scale manufacturing firms. The design was considered to be appropriate because the main interest was to investigate the factors affecting the ICT adoption in small-scale medium manufacturing firms in Nyeri County.
Descriptive design method provided quantitative data from a cross-section of the chosen population. The questionnaires were administered and later collected from the respondents. According to Kothari, (2008) the descriptive research accumulates data so as to answer the questions concerning the present status of the subject being studied. The target population for this study was small-scale manufacturing firms who were in Nyeri County.
3.2 Research Design
The research design used a descriptive survey design so as to get both the prevailing and clear-cut objectives of the study. According to (Orodho, 2004), a descriptive survey design is a scientific method which involved observing and describing the behavior of the one who is liable or accountable without influencing it in any way. This is because the researcher’s view is to get detailed information and description from the respondents regarding the manufacturing sector in the area.
3.3 Target population
Population refers to the entire group of people, events or things of interest that the researcher wishes to investigate (Creswell, 2003). A study population is defined as the entire group or an assembly of cases or units the researcher is ready and willing to draw an outcome.
The target population in statistics is defined as a specific population about which information is yearned for. According to Ngechu (2004), a population is well-defined as the setting or surrounding that includes a set of people, services, elements, and events, group of things or households that are being investigated. The target population of this study was made up of all small-scale manufacturing firms in Nyeri County. According to the national survey on Kenya labor force (RPED, KMES, RPED, 2000), food, furniture, clothing, leather, soap, textile, wood, and metal comprises about 73 percent of the manufacturing sector in Kenya.
Table3.0: population size
Business Total number of registered business
The Municipal Council of Nyeri- classification and distribution of SMEs across the Nyeri County.
3.4 Data collection techniques
Primary data was collected through a structured questionnaire (Appendix II). As Kumar (2010) argues, primary data is first-hand information collected, compiled and published for some purpose. The study involved the use of a questionnaire because they were not only convenient but also effective in the collection of data. For the purposes of this study, questionnaires were self-administered and collected after a few days while others were answered promptly. The types of questions included both open and closed-ended. Closed-ended questions were used to ensure that the given answers were relevant. The questions were phrased clearly in order to make clear dimensions along which respondents were properly analyzed. The questionnaires were administered on the basis of drop and pick later as per the agreement that the researcher made with the respondents.
3.5 Sampling technique
Sampling refers to the process by which a relatively small number of individual, object or event is selected and analyzed in order to find out something about the entire population from which it will be selected. A simple random sample is a subset of a statistical population in which each member of the subset has an equal probability of being chosen
A sample of 217 small-scale manufacturing companies was selected from a sample of 722 small-scale manufacturing firms. In this case, with a population of 722 small-scale manufacturing firms, sampling was made random because each employee will have an equal probability of being chosen to participate in the research.
At least 30% of the total population is representative (Borg ; Gall, 2003). Thus, 30% of the accessible population is enough for the sample size. A simple random sampling technique was used to select a sample size of 217 small-scale manufacturing firms from a population of 722 firms.
The sampling fraction is f=n/N*100= (217/722)*100%=30%
Easton and McColl (2002) proposed the use of simple random sampling technique because they considered that it was quite possible to use a section of the population to represent the entire population. According to the researchers, individuals who were chosen by chance had an equal probability of representing the entire population. The essence of randomization in this regard was to achieve a sample that was unbiased. It is demonstrated as follows:
Table3.1: population size
Business Total number of registered business Percentage % Sample
Furniture 130 30 39
Textile 110 30 33
Clothing 277 30 83
Soap 100 30 30
Leather 105 30 32
Total 722 30 217
3.6 Data analysis
Both quantitative and qualitative approaches were used for data analysis. Quantitative data from the questionnaire were coded and then entered into the computer for computing of descriptive statistics. The data collected from the field was assessed and comparison made so as to select the most accurate and quality information from the feedback given by various respondents. This involved assessing and evaluating the questionnaires and other sources of both primary and secondary data. STATA was used to run descriptive statistics which included frequency and percentages so as to present the quantitative data in form of tables and graphs based on the major research questions.
Regression analysis was done to evaluate the linearity and the correlation of data using the following equation;
Y =? + ?1X1 + ?2X2 + ?3X3 + ?4X4 + ?
Y = Dependent variable (Firm performance)
? = Constant
?1 ?2, ?3 and ?4 =Coefficients of the independent variables
X1=Cost of materials
X2= Skills development
X3 = Administrative support
X4 = Independent variables (infrastructure)
? -Error term
All the necessary regression diagnostics were collected conducted including Multicollinearity Test, Homoscedasticity, and Normality test, Sampling Adequacy, Chi-square Tests and Linearity Test. The research findings were presented in charts, tables, frequencies and percentages
DATA ANALYSIS AND INTERPRETATION
This chapter discusses data analysis, presentation, and interpretation of the research findings in line with the objectives of the study. The data obtained were presented in tables to reflect different response rate amongst the respondents. Analysis of the response rate, general information, and independent variables was conducted and the obtained data was subjective to quantitative analysis. Analysis, therefore, may be categories as descriptive analysis and inferential analysis which is often known as statistical analysis.
4.1.1 Response rate
The study targeted 217 respondents and to determine the actual number of the respondents who actively participated in the research study by filling and submitting back the questionnaires, the analysis of the response rate was conducted as follows;
Table 4.1: Response rate
Responded 135 62.22%
Not respond 82 37.78
Total 217 100%
Table 4.1 shows that 135 respondents were able to fill and return the questionnaires which amounted to a response rate of 62.22%. According to Kumar ( 2010) a response rate of 50% and above is acceptable for statistical analysis.
4.1.2 Reliability analysis
The reliability is expressed as a coefficient between 0 and 1.00; where the higher the coefficient, the more reliable the test is.
Table 4.2: Reliability analysis
Cost of materials 0.9748
Skills development in ICT 0.9832
ICT infrastructure 0.9861
Adoption of ICT 0.9798
4.2 Demographic information
The study sought to establish the respondents’ demographic information which included gender, occupation, and age. The respondents answered questions concerning the same in the questionnaire for the date to be obtained.
Table 4.3: Gender of the respondent
Male 67 49.63%
Female 68 50.37%
Total 135 100
From the findings the study found and demonstrated on table 4.3, that male respondents were 49.63% while female respondents were 50.37%. This shows that the researcher was not biased and collected the data considering all the respondents irrespective of their gender. This can be demonstrated in table 4.3.
Fig 4.1: Gender
Table 4.4:The occupation of the respondents
Furniture 20 14.81%
Textile 25 18.52%
Clothing 45 33.3%
Soap 25 18.52%
Leather 20 14.81%
Total 135 100
According to table 4.4, the findings showed that most of the respondents were in the clothing as shown by 33.3% while the rest were in furniture at 14.81%, textile at 18.52%, soap18.52%, and leather was 14.81%. This indicated that majority of the respondents could understand the subject under study.
Table 4.5: Age of the Respondent
Between 18-25 years 35 25.93%
Between 25-35 years 45 33.33%
35 years and above 55 40.77%
Total 135 100%
According to table 4.5, the study results revealed that there were respondents aged between 18 to 25 years as shown by 25.93%, aged between 25 to 35 years as shown by 33.3% and aged 35 years and above as shown by 40.77%. This implies that the respondents who participated in the study were mature enough to cooperate in giving reliable information on the subject under study.
Fig 4.2: Age
4.3 Factors affecting the cost of ICT
Table 4.6: The extent to which the availability of funds have affected the adoption of ICT
In table 4.7, at cost of materials, 2 disagree, 3 moderately agree, 4 Agree and 5 strongly agree. According to the table, 48.15% of the respondents strongly agree that cost affects the adoption of ICT, 46.67% agree, 3.7% disagree while 1.48%moderately agree.
Fig 4.3: Cost
Table 4.7: The extent to which the cost of materials affect the adoption of ICT
Table 4.7 explains the study by stating that the mean is 4.392593 when it comes to the adoption of ICT.
Table 4.8: Demonstration of how the routine and maintenance has affected the adoption of ICT
In table 4.7, at cost of materials, 2 disagree, 3 moderately agree,4 Agree and 5 strongly agree. According to table 4.8, 50.37% of the respondents strongly agree that the routine and maintenance affect the adoption of ICT while 45.1% agree, 2.22% agree and 2.22% disagree.
Fig 4.4: Routine and maintenance
Table 4.9: Shows the extent to which maintenance and servicing affect the adoption and use of ICT
According to table 4.9, the mean is 4.437037
Table 4.10: This table demonstrates how migration has affected the adoption of ICT
At migration of data to the electronic state, 2 disagree, 3 moderately agree,4 Agree and 5 strongly agree. Table 4.10 states that 55.6% of the respondents agree that the costs that come with migrating of records to electronic forms are a cause for not adopting ICT while 40.7% strongly agree, 1.5% moderately agree, and 2.2% agree.
Fig 4.5: Migration
Table 4.11: Shows the extent to which the migration to electronic records affects the adoption of ICT.
Table 4.11 shows a mean of 4.50
4.3.2 Skills development and adoption
Table 4.12: Demonstrates the lack of specialized ICT Knowledge and skills.
In knowledge and skills, 2 disagree, 3 moderately agree,4 Agree and 5 strongly agree. Table 4.12 illustrates that 37.04% of the respondents agree that lack of the necessary skills is affecting the adoption of ICT, while 32.59% strongly agree, 13.33% disagree11.11% moderately agree while 5.93% strongly disagree.
Fig 4.6: ICT Knowledge and Skills
Table 4.13: shows the extent to which the members of the firm are lacking the necessary ICT knowledge and skills
According to table 4.13, the mean is 3.77037
Table 4.14: Shows how the higher capability have a higher potential of the employees
In the table 4.14, at cost of materials, 2 disagree, 3 moderately agree,4 Agree and 5 strongly agree. According to table 4.14, 42.22% of the respondents strongly agree there is a higher potential in small-scale manufacturing firms when ICT is used,17.78% agree, 17.78% moderately agree, 11.85% disagree while 10.37Strongly disagree.
Fig 4.7: Capabilities
Table 4.15: Demonstrates how the firm can have a lot of potentials when ICT is adopted
According to table 4.15, the mean was 3.77037.
Table 4.16: The table demonstrates the extent the firm is willing to train its staff
On table 4.16, 1 is strongly agree,2 disagree,3 moderately agree,4 agree and 5 strongly agree. According to table 4.16, 44.29.63% of the respondents that the management and staff should be educated and trained on computer use while 22.22% disagree, 18.52%Agree, 14.81Strongly disagree and 14.81%moderately agree.
Fig 4.8: Training
Table 4.17: Shows the extent the firm is willing to train their staff on ICT use
The mean in accordance to table 4.17 is 3.259259
Table 4.18: Shows if the management has the necessary skills and their willingness to apply.
In table 4.18, 1 is strongly agree,2 disagree,3 moderately agree,4 agree and 5 strongly agree and it shows that 37.04% strongly agree that management is lacking the necessary skills when it comes to the adoption of ICT, 22.22%Agree, 16.30% moderately agree, while 14.07% disagrees and 10.37% strongly disagree.
Fig 4.9: Management Skills and Development
Table 4.19: Demonstrates the level of management has the necessary skills and their willingness to employ ICT
The mean according to table 4.19 is 3.614815
4.3.3 ICT infrastructure
Table 4.20: Show the potential that ICT has in a firm
According to table 4.20, 1 is strongly agree,2 disagree,3 moderately agree,4 agree and 5 strongly agree. According to the table, 44.44% of the respondents agree that ICT can cause a firm to have a lot of potentials, 29.63% strongly agree, 11.11% strongly disagree, 7.41% disagree, 7.41% moderately agree.
Table 4.21: Demonstrates the potential a firm would have if ICT is applied.
Table 4.21 shows the mean to be 3.740741
Table 4.22: shows how Communication shifted from a largely manual to digital communication
According to table 4.22, 1 is strongly agree,2 disagree,3 moderately agree,4 agree and 5 strongly agree. According to the table, 44.44% of the respondents strongly agree that communication has shifted from manual to digital communication, 29.63%agree, 11.11% strongly disagree, 7.41%disagree, 7.41%moderately agree.
Fig 4.11: Communication
Table 4.23: Demonstrates that communication has changed from manual to electronic communication
The mean as demonstrated in table 4.23 states the mean 3.888889
Table 4.24: shows how the Internet has become an important part of the firm
According to table 4.24, 1 is strongly agree,2 disagree,3 moderately agree,4 agree and 5 strongly agree. According to the table, 40.74% of the respondents agree that internet has not become an important part of their business, 37.04%strongly agree, 10.37%moderately agree, while 8.15% disagree and 3.70% strongly disagree.
Fig 4.12: Internet
Table 4.25: Demonstrates that the internet has not become part of their firm.
According to table 4.25, the mean has been stated as 3.992593
Table 4.26: Shows that there are challenges that the firms are going through in the firm when it comes to ICT adoption.
According to table 4.26, 1 is strongly agree,2 disagree,3 moderately agree,4 agree and 5 strongly agree. According to the table, 44.44%agree that there are constraints that are preventing them from adopting ICT, 21.48% strongly agree, 17.04%moderately agree, 9.63%agree while7.41% strongly disagree.
Fig 4.13: Constraints
Table 4.27: Demonstrate the challenges in firms
According to table 4.27, the mean is stated as 3.62963.
4.3.4 Adoption of ICT
Table 4.28: Shows the extent to which ICT improves quality
According to table 4.28, 1 is strongly agree,2 disagree,3 moderately agree,4 agree and 5 strongly agree. According to the table, 58.52% of the respondents strongly agree that the quality of the product is improved when ICT is adopted, 37.78% Agree, 2.22% moderately agree, while 1.48% disagree.
Fig 4.14: Improvement of quality
Table 4.29: Demonstrates how ICT is adopted
According to table 4.29, the mean is stated as 4.533333
Table 4.30: Elaborates whether ICT increase knowledge when it comes to the running of the firm
According to table 4.30, 1 is strongly agree,2 disagree,3 moderately agree,4 agree and 5 strongly agree. According to the table, 66.67% of the respondent strongly agrees that using ICT in manufacturing does indeed increase knowledge, 21.48% agree, 5.19%disagree,4.44% moderately agree, while 2.22% strongly disagree.
Fig 4.15: Increase of knowledge
Table 4.32: Demonstrates on the knowledge level when it comes to ICT adoption
According to table 4.32, the mean based on the knowledge level is 4.451852
Table 4.33: Illustrates how ICT adoption would affect the efficiency of a firm
According to table 4.33, 1 is strongly agree,2 disagree,3 moderately agree,4 agree and 5 strongly agree. According to the table, 61.48% of the respondents strongly agreed that ICT adoption does indeed affect the efficiency of the firm, 29.63% Agree, 3.70% moderately agree,2.96% disagree while 2.22% strongly disagree.
Fig 4.16: Improve Efficiency
Table 4.34: Demonstrates how ICT has affected the efficiency of the firm
According to table 4.34, states the mean 4.451852
Table 4.35: Shows how competition is affected by the adoption of ICT
In the table 4.35, 1 is strongly agree,2 disagree,3 moderately agree,4 agree and 5 strongly agree. According to the table, 62.96% of the respondents strongly agree that ICT does indeed improve the completion of firms, 25.93% agree, 7.41% moderately agree, 3.70% disagree.
Fig 4.17: Improved Competition
Table 4.36: Demonstrates the impact of ICT adoption when it comes to competition.
According to table 4.36, the mean is 4.481481
Table 4.37: Illustrates how ICT affects the finances in form of speed
In table 4.37, 1 is strongly agree,2 disagree,3 moderately agree,4 agree and 5 strongly agree. According to the table, 55.56% of the respondents strongly agree that ICT affects the financial services in terms of speed, 29.63% agree, 5.93%strongly disagree,5.19%disagree, while 3.7%moderately agree.
Fig 4.18: Speed in financial services
Table 4.38: Demonstrates how Finances are affected by the use of ICT
The mean in accordance to table 4.38 is 4.237037
Table 4.39: Illustrates how ICT affects the finances in form of accuracy
In table 4.39, 1 is strongly agree,2 disagree,3 moderately agree,4 agree and 5 strongly agree. According to the table, 59.26% of the respondents strongly agree that ICT affects the financial services in terms of speed, 29.63% agree, 7.49% moderately agree, 2.22% strongly disagree while 1.48% disagrees.
Fig 4.19: Accuracy in financial services
Table 4.40: Elaborates how ICT affects the finances in form of accuracy
The mean in accordance to table 4.38 is 4.422222
4.4 Pearson’s product moment correlation
A Pearson’s Product Moment Correlation was conducted to establish the strength of the relationship between the variables. The findings are presented in Table 4.41.
Table 4.41: Correlations
r(N) = 135
r(rho) = 1
r(C) : 2 x 2
In table 4.41, the study reveals reveal that there is a positive and significant correlation between cost and ICT adoption(r=0.9530, p. value 0.0000). Further, the study reveals that there is a positive and significant correlation between skills and adoption(r=0.979, p. value=0.9679). Finally, the study reveals that there is a positive and significant correlation between infrastructure and adoption of ICT (r=0.9855, p. value=0.0000).
4.5 Regression analysis
Multiple regression analysis was used to test the relationship between variables which shows how the dependent variables are influenced by the independent variables. The study sought to determine the effect of costs of availability of funds, skills development and development, ICT infrastructure, and the adoption of ICT.
Table 4.42: Model summary
a. skills development in ICT, ICT infrastructure, cost of ICT
Table 4.42, is a model fit which establishes how fit the model equation fits the data. The adjusted R2 was found to be 0.9944 implying that 99.4% of the variations in performance of firms in the small-scale manufacturing firms are explained by changes in the cost of materials, skills development in ICT, ICT infrastructure and the adoption of ICT. This established that the model equation fits the data.
Table 4.43: ANOVA
a. Dependent Variable: Adoption of ICT
b. Predictors: (Constant), cost of materials, skills development, and ICT infrastructure
The probability value at the model is 0.000 indicates that the regression relationship was significant in determining how the cost of material, skill development in ICT, ICT infrastructure affects the adoption of ICT.
Table 4.43: Coefficients
a. Dependent Variable: Firm Performance
The established model for the study was:
Y= Firm Performance
The regression equation above has established that taking (Cost, Skills, infrastructure) constant at zero, firm performance will be 10.99175. This shows that if all the independent variable were held constant, the performance will be increasing.
The findings presented also show that a unit increase in the scores of Cost would lead to a 7.67822 increase in the scores of firm performance. This variable was not significant since 7.67822