Journal of Enterprise Information Management

An exploratory study of the extent of information technology adoption in SMEs: an

application of upper echelon theory
Ta-Tao Chuang Kazuo Nakatani Duanning Zhou
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Ta-Tao Chuang Kazuo Nakatani Duanning Zhou, (2009),"An exploratory study of the extent of information
technology adoption in SMEs: an application of upper echelon theory", Journal of Enterprise Information
Management, Vol. 22 Iss 1/2 pp. 183 - 196
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Hart O. Awa, Sunday C. Eze, Joseph E. Urieto, Benjamin J. Inyang, (2011),"Upper echelon theory (UET):
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Information Technology, Vol. 13 Iss 2 pp. 144-162 http://dx.doi.org/10.1108/13287261111135981
Boumediene Ramdani, Peter Kawalek, Oswaldo Lorenzo, (2009),"Predicting SMEs' adoption of
enterprise systems", Journal of Enterprise Information Management, Vol. 22 Iss 1/2 pp. 10-24 http://
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IT adoption in
An exploratory study of the SMEs
extent of information technology
adoption in SMEs: an application
183
of upper echelon theory
Ta-Tao Chuang
School of Business Administration, Gonzaga University, Spokane,
Washington, USA
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Kazuo Nakatani
Lutgert College of Business Administration, Florida Gulf Coast University,
Fort Myers, Florida, USA, and
Duanning Zhou
College of Business and Public Administration, Eastern Washington University,
Spokane, Washington, USA

Abstract
Purpose – The paper aims to investigate the effect of compositions of managerial/demographic
characteristics of the top management team (TMT) on the extent of information technology (IT)
adoption in small businesses (SMEs), where such strategic decisions made by TMT have direct and
significant influence on all aspects of business operations and its competitive position in a market.
Design/methodology/approach – Based on the upper echelon theory, the study formulated four
hypotheses relating the compositions of TMT characteristics to the extent of IT adoption in different
functional areas. Multiple regression analysis was employed to analyze the data.
Findings – The age average and the education average of TMT in small businesses are significant
predictors of the extent of IT adoption. However, the group heterogeneity (either gender or ethnicity),
contrary to the prediction, has negative impact on the extent of IT adoption.
Practical implications – The research findings indicate that the age and education composition of
managers as current/future top management is critical to facilitate the extent of IT adoption in SMEs.
Originality/value – The research contributes to the body of knowledge in IT adoption by
complementing the results of prior research with the findings that the characteristic compositions of
TMT affect the extent of IT adoption in SMEs, applying the upper echelon theory to examine issues
surrounding IT adoption, and suggesting practical implications that SMEs could compose, educate,
and rejuvenate their top management teams to achieve a high extent of IT adoption.
Keywords Communication technologies, Demographics, Small to medium-sized enterprises,
Senior management, Decision making
Paper type Research paper

Introduction
The increasing ratio of performance/cost of information technology (IT) has resulted in Journal of Enterprise Information
wide penetration of IT into different areas of businesses, especially at small and Management
Vol. 22 No. 1/2, 2009
medium-size businesses (SMEs). A survey indicated that 90 percent of small pp. 183-196
businesses used IT to perform one task or anther (The Federal Reserve Board, 2006). q Emerald Group Publishing Limited
1741-0398
However, the extent to which IT is applied in SMEs varies. Many SMEs use IT to DOI 10.1108/17410390910932821
 JEIM perform a single task, while others may use IT to carry out activities across functional
22,1/2 boundaries. As 90 percent of all businesses in many economies are small businesses
(Longenecker et al., 1994), it is critical to examine factors influencing the extent of IT
adoption in SMEs. This paper aims at answering the question from the perspective of
the characteristics of top management teams (TMT).
IT adoption has been a traditional research stream in the field of information
184 systems (IS). The majority of extant research focused on examining the effect of
contextual factors (decision maker’s and organizational characteristics) on the
adoption of IT (Caldeira and Ward, 2003; Dwivedi and Lal, 2007; Harrison et al., 1997;
Levy and Powell, 2003; Magal and Lewis, 1995; Mirchandani and Motwani, 2001;
Riemenschneider et al., 2003; Thong, 1999; Thong and Yap, 1995). The findings of
extant research show that the characteristics of senior managers have significant
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impact on the decision to employ IT (Harrison et al., 1997; Riemenschneider et al., 2003;
Thong, 1999; Thong and Yap, 1995; Chuang et al., 2007a, Dwivedi and Lal, 2007).
Although existing studies provide a glimpse of how characteristics of executives affect
the decision of IT adoption, extant research places emphasis on individual characteristics
rather than on the characteristics of TMT. Because of its significant explanatory power of
upper echelons, the effect of the aggregate characteristics of TMT on organizational
outcomes has received wide interest in the field of organization behavior (Hambrick and
Mason, 1984). The upper echelon theory (UET) (Hambrick and Mason, 1984) suggests that
organizational strategic choices are a function of organizational dominant coalition’s
background compositions. The compositions of top managers’ observable characteristics
influence the performance of organizational outcomes via their strategic choices. As extant
research of IT adoption focuses on individual-level characteristics, we are interested in
examining how the characteristics compositions of TMT influence IT adoption.
Because of differences between small and large businesses, findings of research on IT
adoption in large businesses might not be applicable to small businesses (Thong, 1999).
For example, because of lack of resources, small businesses usually tend to respond to
competitive environment with short-term planning (Welsh and White, 1981). The
tendency to adopt a short-term management perspective increases the risk of IT
adoption failure. Furthermore, citing Mintzberg’s (1979) work, Thong indicated that
executive officers in small businesses tended to make most of critical decisions because
the structure of small businesses were usually centralized and, consequently, the
characteristics of top management played a critical role in the decision of IT adoption.
Furthermore, it is noteworthy that the object of IT adoption in existing research has
mainly been a single particular technology, with a few exceptions (Thong, 1999).
Instead of focusing on the diffusion of a single technology, the study focuses on the
extent of IT adoption, which is defined as the breadth and depth of applying IT into
different aspects of businesses.
The results of the present study will further the body of knowledge in IT adoption
with an empirical study based on a new theoretical stand. Also, the findings of the
research provide practical implications for companies in an industry that frequently
make decisions on IT adoption.

Literature review
The topic of IT adoption in SMEs has broadly attracted researchers’ interests. Many
studies have been conducted to investigate factors affecting the decision of IT adoption.
 Those studies differ with regard to underlying theories and technologies under IT adoption in
investigation. Popular theories adopted by existing research include the innovation SMEs
theory (Thong, 1999; Thong and Yap, 1995; Yao et al., 2002), the theory of organizational
demography (Chuang et al., 2007a; Chuang et al., 2007b), the theory of planned behavior
(TPB) (Choudrie and Dwivedi, 2006; Harrison et al., 1997), the technology acceptance
model (TAM) (Davis et al., 1989; Riemenschneider et al., 2003), and the resource-based
theory (Caldeira and Ward, 2003). Information technologies examined in prior research 185
include database management systems (Grover and Teng, 1992), business applications
(Thong, 1999; Thong and Yap, 1995; Tye et al., 1995; Caldeira and Ward, 2002; Chuang
et al., 2007a), e-commerce (Mirchandani and Motwani, 2001; Chuang et al. 2007b), the
internet (Levy and Powell, 2003), and asynchronous transfer mode and broadband
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network (Yao et al., 2002; Choudrie and Dwivedi, 2006; Dwivedi and Lal, 2007).
By synthesizing prior research, Thong (1999) identified four contextual elements
that were related to IT adoption:
(1) Decision makers’ characteristics.
(2) Technological characteristics.
(3) Organizational characteristics.
(4) Environmental characteristics.

He examined the impact of these factors on the likelihood of and the extent of IT
adoption. Thong found that the likelihood of IT adoption was significantly associated
with CEO characteristics, IS characteristics, and organizational characteristics. Also,
he found that business size, employee’s IS knowledge, and information intensity were
associated with the extent of IT adoption. Part of Thong’s findings regarding CEO’s IT
knowledge was supported by other research (Mirchandani and Motwani, 2001). Also,
the finding regarding firm size was supported by other research (Thong and Yap, 1995;
Yao et al., 2002). Nevertheless, other studies (Seyal and Rahman, 2003, Scupola, 2003)
found that the firm size had no impact on the e-commerce adoption.
Similar results were found in different contexts. Caldeira and Ward (2002)
investigated the impact of enabling and inhibiting factors of IT adoption in Portuguese
SMEs in the manufacturing industry. They found that top management perspectives
and attitudes toward IT adoption appeared to explain different levels of success of IT
adoption. Caldeira and Ward (2003) employed the resource-based theory to interpret
the findings of their prior research (Caldeira and Ward, 2002). They argued that from
the resource-based theory’s point of view, the firm placed focus on the development of
internal skills, competences, and capabilities, which were affected by top management
perspectives and attitudes towards the adoption of IT. Levy and Powell (2003)
proposed a contingency model, named “transporter” model, of the Internet adoption
based on the evidence of multiple case studies. The model suggests that the major
factors of the internet adoption are the SME owner’s perception of business value of the
internet and attitude towards business growth.
The theory of planned behavior (TPB) and technology acceptance model (TAM)
have been widely employed to examine the issue of IT adoption. Based on TPB,
Harrison et al. (1997) investigated executive decision processes of IT adoption in a
multiphase field study. Their findings indicate that attitude, subjective norms, and
perceived control are sufficiently explaining the IT adoption decision and that the
 JEIM effect of those factors is moderated by firm size. Nevertheless, firm and individual
22,1/2 executive characteristics had no bearing on the decision of IT adoption.
Riemenschneider et al. (2003) argued that TPB and TAM possessed complementary
advantages and disadvantage in predicting the adoption of IT. Consequently, they
asserted that combining these two theories would offer a better explanation of IT
adoption. They found that the more integrated both TPB and TAM became, the better
186 they explained the phenomenon of IT adoption.
Many previous studies in IT adoption were conducted mainly from the
perspective of innovation diffusion. Whether one technology is innovative to a firm
is predicated on the firm’s knowledge and capacity of IT. Grover and Teng (1992)
took into account the firm’s sophisticated level of using IT and examined how
organizational characteristics (the firm size and the industry) and the IS/IT maturity
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differentiated adopters from non-adopters of DBMS. They found that the adoption
of DBMS was positively associated with the firm size and most components of IS
maturity.
The effect of organizational demographical factors, such as gender, age, and
education of executives, on the adoption of IT has recently become the interest of
research in this area (Chuang et al., 2007a, b; Dwivedi and Lal, 2007). Chuang et al.
(2007a) found that the CEO’s gender and education were significant predictors of the
extent of IT adoption, while the CEO’s work experience was not. Dwivedi and Lal
(2007) found that except for gender, all other socio-economic factors, including age,
education, occupation and income, were significant predictors of broadband adoption.
In summary, no study examining the relationship between characteristics
composition of TMT and the extent of IT adoption was found in the extant
literature of IT adoption. This study tries to fill this void using the UET (Hambrick and
Mason, 1984).

Theoretical foundation: upper echelon theory

The UET (Hambrick and Mason, 1984) suggests that organizational strategic
outcomes and processes are a function of managerial characteristics of top managers
as shown in Figure 1. The main notion of the UET is that strategic choices are more of
the outcome of behavioral factors than that of mechanic calculation for economic
optimization. As a result, strategic choices generally own a great deal of behavioral
components and reflect decision makers’ idiosyncrasies, such as cognitive base and
value preferences. The idiosyncrasies frame the decision situation that executives face
and create their perceptions of the situation. The UET suggests that because cognitive
base, values and perception are unobservable, measurable managerial characteristics
could be adequate surrogates for and provide reasonable indicators of those latent
constructs. Hambrick and Mason (1984) suggested an unexhausted list of observable
managerial characteristics, including age, functional tracks, career experiences,
education, socioeconomic roots, financial position and group characteristics. They
proposed 21 propositions relating those characteristics to strategic choices and the
performance of organizational outcomes.

Research model and hypotheses

In the application of the UET to the present study, we are interested in answering the
following questions:
 IT adoption in
SMEs

187
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Figure 1.
Upper echelon perspective
of organization

.
How does the age composition of TMT affect the extent of IT adoption in SMEs?
.
How does the education composition of TMT affect the extent of IT adoption in
SMEs?
.
How does the group heterogeneity of TMT affect the extent of IT adoption in
SMEs?

The inquiry into the above questions is summarized in the research model as shown in
Figure 2. The extent of IT adoption is defined as the breadth and depth of using IT in
different aspects of businesses. Businesses might use IT to support its operations or
improve the decision quality. Business operations can be a single task within a
functional area or a process consisting of a series of activities. The extent of IT
adoption varies from one firm to another. One company might use IT (e.g. productivity
suite) to improve clerical productivity in the form of office automation. Another might
use IT in several functional areas.
The UET suggests that youthful managers are more appealing to fresh and unique
ideas, and more willing to take risks than older managers (Hambrick and Mason, 1984).
Hambrick and Mason proposed several possible reasons for this phenomenon: First,
older managers might not be able to grasp new ideas or do not have physical or mental
strength as strong as younger managers (Child, 1974). Even though managerial age
has positive impact on the information evaluation accuracy, it is negatively related to
the ability to integrate information and the efficiency of making decisions. Second,
Hambrick and Mason suggested that “older executives have greater psychological
commitment to the organizational status quo.” (Hambrick and Mason, 1984, p. 198).

Figure 2.
Research model
 JEIM Because of the commitment to the status quo, an older TMT may be more reluctant to
22,1/2 attempt new ideas or take risks, such as new technologies, because IT adoption might
involve radical changes in existing practices. Third, older managers have already
established their social networks, lifestyles, and careers planning and tended to become
risk aversive. Since IT projects involve risks, an older TMT might be less likely to
widely adopt IT. Based on the above reasoning, we develop the following hypothesis:
188 H1. The age average of TMT is negatively associated with the extent of IT adoption.
Prior research has consistently shown that managers’ education level is positively
related to their receptivity to innovation (Hambrick and Mason, 1984). The impact of
education in IT adoption can be twofold: first, the more education the TMT receives,
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the more likely they are exposed to IT, and more likely to better understand the value
of IT. The understanding may be translated to the acceptance of IT into their business.
Second, education may foster self-efficacy. That is, the more education the TMT
receives, the more confidence they develop that they are capable of mastering IT.
Igbaria et al. (1998) empirically found that education played an important role on the
number of adopted applications and the number of tasks supported by IT. Based on the
above discussion, we propose:
H2. The average amount of formal education of TMT received is positively
related to the extent of IT adoption.
Prior research in organization sciences shows that when a group of decision makers
with homogeneous background faces a non-routine problem, it often brings on
groupthink, which in turn might restrict the generation and assessment of alternatives
and result in inferior decisions (Hambrick and Mason, 1984). This implies that a
heterogeneous group might take advantage of diverse backgrounds of members to
openly generate and evaluate alternatives. Thus, a TMT with diverse backgrounds
(such as ethnicity) might be more receptive to innovation and more willing to introduce
IT to its organization.
Furthermore, organizational demography (Korac-Kakabadse et al., 1998) suggests
that the gender composition of top managers plays an important role in organizational
processes, including decisions on IT adoption. This view is supported by the findings of
research (Igbaria et al., 1998). Gender composition might affect the decision on IT
adoption in two manners: One is the number and kinds of software applications that are
adopted, and the other is the type of tasks that are supported with IT. Igbaria et al. (1998)
found that males used more software packages than females did, while females used
more application packages than did males. Thus, a TMT consisting of mix of males and
females may adopt more different types of IT in different areas in business in order to
accommodate their respective needs. Based on the above discussion, we hypothesize:
H3. The heterogeneity of TMT is positively associated with the extent of IT
adoption.
H3a. The gender diversity of TMT is positively associated with the extent of IT
adoption.
H3b. The ethnic diversity of TMT is positively associated with the extent of IT
adoption.
 It is noteworthy that while it is possible to include age and education in the IT adoption in
heterogeneity of TMT, their relationships with the extent of IT adoption are separately SMEs
hypothesized. The reason is because, according to the UET, the younger the TMT is,
the more likely the TMT tends to adopt IT. With the same reasoning, the higher the
education average the TMT is, the more likely the team will widely adopt IT. Thus, the
inclusion of age and education in the heterogeneity of the TMT may diminish the effect
of gender and ethnic diversity on the extent of IT adoption. 189

Methodology
Sample
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The data came from the 2003 National Survey of Small Business Finances (NSSBF)
(USA), which contained information of 21,200 observations of small businesses in
operation as of December 2003 (National Opinion Research Center, 2005). The
population was for-profit, nongovernmental, nonfinancial, and nonagricultural
businesses that had fewer than 500 employees. Each business was verified whether
it met the target-population definition. Those businesses qualified were surveyed and
interviewed by the National Opinion Research Center.
For the purpose of the study, a sample of 97 observations from the SBBF data set
was drawn. Those cases were chosen based on the following criteria, following the
suggestions of UET and US Small Business Administration (The US Small Business
Administration, 2007):
.
companies in a single industry, the whole trade industry;
.
businesses with 100 employees or fewer;
.
companies with three or more owners;
.
companies in urban areas; and
.
companies using computers one way or another.

Measurement instruments
Extent of IT adoption. Following the convention used by Thong (1999) and Chuang
et al. (2007a, b), we developed a composite measure of the extent of IT adoption that
was composed of eight items used in the NSSBF, each of which asked whether the
respondent business used IT to perform one particular task. As a whole, these eight
items measured how widely businesses had used IT in their businesses. These eight
items are:
(1) Uses computers to do online banking.
(2) Uses computers for an e-mail or internet connection.
(3) Uses computers to purchase business products and services.
(4) Uses computers to sell business products and services.
(5) Uses computers to apply for loans or other forms of credit.
(6) Uses computers to manage inventory.
(7) Uses computers for administrative functions such as word processing.
(8) Uses computers to manage the firm’s accounts/bookkeeping.
 JEIM The composite measure was created by summing up the “yes” answers to the eight
22,1/2 items to generate a scale ranging from 1 to 8, with one being the least extent of
adoption and eight being the strongest level of adoption.
Independent variables (managerial characteristics of TMT). The characteristics of
TMT that were examined in the study were age, education, gender, and ethnicity. Age
was measured in years. Education was measured with the scale:
190 .
Less than high school degree (grade 11 or less).
.
High school graduate or equivalent (GED).
.
Some college but no degree granted.
.
Associate degree occupational/academic program.
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.
Trade school/vocational program.
.
College degree (BA, BS, AB, etc.).
. Postgraduate degree (MBA, MS, MA, Ph.D., JD, MD, DDS, etc.).

The measurement of gender is self-explanatory. Ethnicity was measured with five

categorical questions (yes/no), each of which asked whether the owner/manager had one
of the following ethnical background: Hispanic, African-American, Asian,
Hawaiian/Pacific Islanders, and Native-American. Independent variables of interest are
the weighted averages of age, education, gender, ethnicity of TMT, as shown in Table I.
Since the consequence of an IT investment might have bearing on financial results,
owners/managers might be concerned with return of such an investment. Thus,
owners/managers who have greater ownership share might exercise greater influence.
As a result, the impact of ownership on the dependent variable should be taken into
account. The independent variables were calculated with weights of ownership to
account for the influence of ownership. The formula is as follows (The Federal Reserve
Board, 2006):

Percentage of firm owned by individuals with characteristic

Y ¼ {ð½ðOwner1’s characteristic £ Owner1’s shareÞ
þ ðOwner2’s characteristic £ Owner2’sshareÞ
þ ðOwner3’s characteristic £ Owner3’s shareÞ
=½owner1’s share
þ Owner2’s share þ Owner3’s share
Þ £ 100}

All weighted percentages were rounded to the nearest percentage point. The scale of
diversity of ethnicity and gender was further transformed, because a TMT consisted of
dominantly a single ethnicity or gender would have the diversity value of 100 percent,
which happened to be the least diverse case. Theoretically, the most diverse state

Independents Definitions

Age Weighted average age of owners

Table I. Education Weighted average education of owners
Managerial Gender composition Weighted average of female proportion in TMT
characteristics of TMT Ethnic composition Weighted average of minority proportion in TMT
 should be 50 percent. Thus, we convert the diversity scale for ethnicity and gender as IT adoption in
follows:
SMEs
Diversity scale ¼ 50 2 ðabsolute value of ðweighted average 2 50ÞÞ

Data analysis and results 191

The descriptive statistics and the correlations of the variables are listed in Tables II
and III, respectively. Multiple regression analysis was employed to examine the
hypotheses regarding the extent to which the characteristics compositions of TMT
influenced the extent of IT adoption. The regression model is as follows:
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Extent of IT adoption ¼ a þ b1 Age þ b2 Education þ b3 Gender þ b4 Ethnicity þ 1

The regression module of SPSS was used to fit the model with the enter method. The
result of the regression analysis is shown in Tables IV and V.
Overall, the model explained a relatively large portion of the variance in the extent
of IT adoption (R 2 ¼ 0:601, p , 0.01). The three independent variables, age average,
education average, and group heterogeneity composition, together explained 60.10
percent of the variation of the extent of IT adoption. This seems to support the

Descriptive statistics
n Min Max Mean SD

Extent of IT adoption 97 1 8 5.3505 2.00542

Age 97 24 72 49.9897 11.15935
Education 97 2 7 4.5361 1.60768 Table II.
Gender 97 0 50 6.8351 14.59786 Descriptive statistics of
Ethnicity 97 0 34 1.6392 6.47139 variables

Correlations
Extent of IT adoption Age Education Gender Ethnicity

Extent of IT adoption 1
Age 2 0.393 * * 1
Education 0.487 * * 0.050 1
Gender 2 0.302 * * 0.073 0.085 1
Ethnicity 2 0.218 * 0.067 0.117 20.120 1 Table III.
Pearson correlation of
Notes: *Significant at the 0.05 level (two-tailed); * *significant at the 0.01 level (two-tailed) variables

Model R R2 Adjusted R 2 Std error

1 0.775a 0.601 0.583 1.29457 Table IV.

Result of regression
Note: a Predictors: (constant), ethnicity, age, education, gender analysis: model summary
 JEIM proposition that the characteristics compositions of TMT have impact on how widely a
22,1/2 business might adopt information technologies.
The correlations and the regression coefficients showed mixed results regarding H1,
H2, H3a and H3b. Since the extent of IT adoption and the age composition were
negatively and significantly correlated at the level of 0.001 (r ¼ 20:393), the H1
hypothesis that the higher the age average of TMT, the less likely the business would
192 broadly adopt IT was supported. The standardized coefficients indicated that the impact
of the weighted age average of TMT on the extent of IT adoption (beta ¼ 2 0.3748)
was slightly weaker than that (beta ¼ 0.5720) of the weighted education average.
The hypothesis (H2) that the education average of TMT received was positively
related to the extent of IT adoption was supported at the significance level of 0.001.
This suggested that the more education the TMT received, the more broadly the firm
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would employ IT. Furthermore, the standardized coefficient of the education

composition (beta ¼ 0.5720) indicated that the education composition had the greatest
impact on the extent of IT adoption among the independent variables.
Since the correlation between the gender heterogeneity of TMT and the extent of IT
adoption was negatively significant at the level of 0.01, the hypothesis (H3a) that the
gender heterogeneity of TMT was positively associated with the extent of IT adoption
was not supported. The standardized coefficient of the gender diversity
(beta ¼ 2 0.3599) showed that the magnitude of impact of the gender heterogeneity
on the extent of IT adoption was about the same as that of the weighted age average.
Similarly, the hypothesis (H3b) that the ethnicity composition of TMT was
positively associated with the extent of IT adoption was not supported since the
correlation was negatively significant at the level of 0.05. The standardized coefficient
of the ethnicity composition (beta ¼ 2 0.3028) showed that the ethnicity diversity
had slightly less impact on the extent of IT adoption than did the gender diversity.
Consequently, the hypothesis that the group heterogeneity of TMT was positively
related to the extent of IT adoption was not supported.

Discussion and implications

Based on the UET, the study is intended to examine the impact of characteristics
composition of TMT on the extent of IT adoption in small enterprises. The major
finding of the study was that overall, the three characteristics (age composition,
education composition, and group heterogeneity) explained a significant amount of the
variation of the extent of IT adoption. Specifically, more than 60 percent of variance in

Unstandardized Coefficientsa
coefficients Standardized coefficients
Model B Std error Beta t Sig.

1 (Constant) 5.9732 0.6985 8.5513 0.0000

Age 20.0674 0.0119 2 0.3748 2 5.6540 0.0000
Education 0.7135 0.0832 0.5720 8.5731 0.0000
Gender 20.0494 0.0092 2 0.3599 2 5.3796 0.0000
Table V. Ethnicity 20.0938 0.0208 2 0.3028 2 4.5135 0.0000
Result of regression
analysis Note: a Dependent variable: extent of IT adoption
 the extent of IT adoption could be explained by the three variables. This finding IT adoption in
appeared to support the main thesis of the UET: the composition of demographic and SMEs
managerial characteristics of TMT in small enterprises significantly affected the width
and breadth of IT applications. Additionally, this result is in accordance with the
findings of prior research (Thong, 1999; Thong and Yap, 1995; Chuang et al., 2007a, b;
Dwivedi and Lal, 2007) that the characteristics of decision makers influenced the
decision over IT adoption, even though prior research was focused on individuals. 193
The finding regarding the relationship between the age composition of TMT and
the extent of IT adoption is critical and significant because even though such a
relationship is intuitively valid and theoretically sound as suggested by the UET and
empirically validated in consumer sectors (Choudrie and Dwivedi, 2005; Dwivedi and
Lal, 2007), prior research (e.g. Chuang et al., 2007b) failed to confirm the proposition at
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the aggregate-level in organizational setting. Prior research in management indicated

that managerial youth was related to corporate growth; however, the causal
relationship between corporate growth and managerial youth was indeterminate. The
finding might add our understanding about the relationship as the benefit of wider IT
use might induce greater corporate growth.
The result of previous research indicated that decision makers’ education level was
positively related to receptiveness toward innovation (Kimberly and Evanisko, 1981;
Dwivedi and Lal, 2007); thus, it is not surprising that the hypothesis (H2) regarding the
positive relationship between the education composition of TMT and the extent of IT
adoption was supported. In the context of IT, this finding is consistent with that of
prior research (Igbaria et al., 1998). Nevertheless, it is noteworthy that another study by
Choudrie and Dwivedi (2005) showed that educational attainment did not have impact
on the adoption of broadband services. The disparity between Choudrie and Dwivedi’s
finding and that of present study might be attributed to the differences in subjects
(individual consumers vs TMTs) and in the dependent variables (the adoption of
broadband services vs the extent of IT adoption). The use and adoption of broadband
services was mainly driven by relative advantages and utility outcomes perceived by
direct users as well as their hedonic purpose (Choudrie and Dwivedi, 2006), while
adopting IT in a variety of businesses usually needed a greater amount of knowledge
about benefits of IT and business needs in order to generate expected benefits.
The hypothesis that group heterogeneity of TMT was positively associated with the
extent of IT adoption was not supported. Instead, the significant, negative
standardized coefficients (beta ¼ 2 0.3599) and correlation between gender
diversity and the extent of IT adoption (r ¼ 20:302) seemed to suggest that the
more predominantly a single gender the TMT was, the more likely the firm would
broadly apply IT. The result of previous research (Igbaria et al., 1998) showed that
males and females had different uses of and preferences for IT. Ideally, a TMT
consisting of both genders would be more likely to broadly apply different technologies
to business. However, such a proposition was not supported. There are several
possibilities: One is that the type of IT (e.g. applications packages, system packages or
productivity suite) might moderate the effect of gender heterogeneity on the extent of
IT adoption. Research by Igbaria et al. (1998) suggested that females would use more
applications than their male counterparts, while males used more productivity
packages than females did. It is possible that a TMT consists of predominantly a single
gender might broadly adopt one particular type of IT. For example, a
 JEIM female-dominating TMT might determine to widely use applications packages, while a
22,1/2 male-dominating TMT might use productivity packages. Under both circumstances,
the less diverse the gender composition of TMT was, the more broadly the extent of IT
adoption was. Another explanation is a methodological issue. The data of
characteristics of TMT and of IT use were collected at the same time. It is possible
that the gender composition of the TMT that made decision over IT adoption was
194 different from that of the TMT using IT. In such a case, the relationship between the
extent of IT adoption and the gender diversity could be negative.
The hypothesis that the ethnicity diversity was positively associated with the
extent of IT adoption was not supported. To the contrary, the relationship was
negatively significant. The explanations for negative relationship between gender
diversity and the extent of IT adoption might be applicable to explain for the negative
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relationship between the ethnicity diversity and the extent of IT adoption. That is, the
relationship between the ethnicity diversity and the extent of IT adoption was
moderated by the type of technologies. Another explanation is a methodological issue.
That is, it is possible that the ethnicity compositin of the TMT that made decision on
IT adoption was different from that of the one using it.

Research limitations
There are several research limitations in the study. First, the study chose one single
industry, the wholesale trading industry. While the choice of a single industry followed
the suggestion of the UET, it might limit the generalizability of the findings. One possible
way to improve external validity is to conduct similar research within different industries.
Second, the study did not consider the effect of firm size among small organizations due to
the relatively small sample size (97 firms). Levenburg et al. (2005) found that size effect on
internet technology adoption diminished somewhere between micro- (0-10 employees) and
small- (11-50 employees) organizations. The effect of firm size, especially on micro-size
firms, deserves further research. Third, because of unavailability of data, the study didn’t
differentiate owners from managers in data analysis. However, the effect of failure to
differentiate owners from managers could be mitigated if we consider IT adoption as a
capital investment and ownerships might play a role in such investment decisions.
Fourth, the TMT responsible for introducing IT into its company might be different from
the one using it and the characteristics compositions of both teams are different. Further
research should be conducted to investigate a relationship between the characteristics of
TMT and decisions of adopting or not adopting IT.

Conclusion
The field of IS has long tradition in examining issues surrounding the decision of
adopting IT. Many research studies based on different theories have been conducted to
examine factors affecting IT adoption. The results of extant research have greatly
facilitated our understanding of IT adoption. While the impact of CEO’s characteristics
on the IT adoption has been examined in existing research, such research is rarely
based on a sound theory. One research objective of the study was to fill the void. Based
on the UET, the study examined the impact of the age compositions, the education
composition, and group heterogeneity of a TMT on the extent of IT adoption in SMEs.
The results of the study generally confirmed the propositions of the UET that
organizational strategic decision was a function of idiosyncracies of a TMT. The study
 found that that the compositions of age and education had a significant positive IT adoption in
influence on the extent of IT adoption in SMEs. However, the group heterogeneity, SMEs
specifically ethnicity diversity and gender diversity, of TMT seemed to have negative
relationship with the extent of IT adoption in SMEs.

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Corresponding author
Ta-Tao Chuang can be contacted at: chuang@jepson.gonzaga.edu

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