Managerial Support, Time Constrain and User Pressure on Digital

Technology Adoption

Dyah Sugandini

, Helisia Margahana

and Istiana Rahatmawati

Management Department, Economic and Business Faculty,

Universitas Pembangunan Nasional Veteran Yogyakarta, Indonesia

Department of Management, Sekolah Tinggi Ilmu Ekonomi Trisna Negara, Indonesia

Keywords: Digital Technology Adoption, Managerial Support, Time Constrain and Pressure from User.

Abstract: This study aims to explore and analyze the factors that influence the adoption of digital technology mediated

by the intention to adopt the technology. The variables used as antecedents of digital adoption are managerial

support, time constraints and pressure from users. The object of this research is the adoption of digital

technology-based social media marketing. This study used a survey of respondents. The number of samples

used is 210 SMEs in the Special Region of Yogyakarta and South Sumatra Indonesia. The data analysis tool

used is Structural Equation Modeling. The results of this study indicate that the model of digital technology

adoption that is influenced by managerial support, time constraints and pressure from users by mediating the

intention to adopt can be accepted.

1 INTRODUCTION

1.1 Background

Industrial Revolution 4.0 has changed the industry

and forced businesses in Indonesia to be involved in

digitalization, and must be prepared to adopt digital

technology (Bettiol, Capestro & Di Maria, 2017;

Morrar, Arman & Mousa, 2017)). On the one hand,

small and medium enterprises in the Special Region

of Yogyakarta are late in applying technology

(Sugandini et al., 2018b).

Digital marketing technology is an option in

marketing products in the digital era. Digital

technology in production, customer service, and sales

can also increase business value (Hood, Brady and

Dhanasri, 2016). The development of the Internet and

its related technologies such as social media

platforms has rapidly changed the way people

communicate with each other. Many companies and

consumers prefer and switch to using online channels

rather than traditional channels (Aspasia & Ourania

2014). The last two decades have shown that more

and more companies have adopted electronic

communications to carry out their operational

activities and provide a platform for e-marketing.

Social media based marketing is something that is

very much needed by the company (El-Gohary 2012;

Ndekwa & Katunzi 2016). But unfortunately, not

many business companies have succeeded in

adopting the technology (Sugandini et al., 2018a).

Thus, research on the success of social adoption of

digital technology-based media is still very important.

Besides for reasons of competition, also because the

business demands of the 4.0 industrial revolution

have forced companies to digitize in all aspects of

their business.

This study aims to analyze the influence of

internal factors from companies in adopting Industrial

4.0 technology. Primarily, this study analyzes the

adoption of digital technology that is influenced by

managerial support, time constraints and pressure

from users. This research is based on the Technology

Organization Environment model (Tomatzky and

Fleicher, 1990), because: Technology-Organization-

Environment (TOE) is an organizational theory used

to understand new technology adoption decisions

(Matikiti and Mpinganjira, 2018). In addition, (1)

TOE can explain that innovation cannot be separated

from organizational conditions, the industrial

environment, and technological developments

(Matikiti & Mpinganjira, 2018). (2) TOE is able to

combine the schemes of technological characteristics,

organizational factors, and elements of the macro

environment (Ifinedo, 2012). (3) TOE can explain

304

Sugandini, D., Margahana, H. and Rahatmawati, I.

Managerial Support, Time Constrain and User Pressure on Digital Technology Adoption.

DOI: 10.5220/0008430603040309

In Proceedings of the 2nd International Conference on Inclusive Business in the Changing World (ICIB 2019), pages 304-309

ISBN: 978-989-758-408-4

that corporate innovation involves 3 contexts, namely

technological context, illustrating that adoption

depends on technology both from outside and inside

the company; organizational context, describing the

scope of the company's business, support of top

management, organizational culture, complexity of

managerial structures measured by centralization,

formalization, differentiation, quality of human

resources, and size of problems; and the

environmental context related to facilities and the

company's operating factors such as competition,

customer pressure, social cultural issues, government

encouragement, and technological infrastructure

(Awa, Ukoha, & Emecheta, 2012).

1.2 Originality/Value

This study analyzes the factors that influence

organizations in adopting technology innovation. It is

different from the research conducted by previous

researchers which emphasize the readiness of users in

information system adoption and emphasizes the ex

post benefits to adoption testing, namely benefits

after adoption occurs or after they estimate the

benefits to be enjoyed after innovation adoption

(Rubas, 2004; Al- Nashmi & Amer, 2014).

2 LITERATURE REVIEW

2.1 Industry 4.0

Industrial Revolution 4.0 is a new industrial

revolution that is activated by the application of

advanced technology (such as information

technology). Industry 4.0 brings new values and

services to customers and organizations, as well as

quality flexibility in production and marketing

systems to meet the demands of new business service

models, which are more innovative and faster.

Digitalization and virtualization are tools to bring

end-to-end services throughout the product life cycle

(starting from product design to recycling) in an

effective and cost-effective way. Industry 4.0 is often

referred to as a smart factory (Dutton, 2014). In smart

factories, virtual copies of the physical world and

decentralized decision making can be developed, and

people can also work together and communicate with

each other in real time (Buhr, 2015). Industry 4.0 has

a global impact that includes: digitalization, the

internet, intelligent knowledge, and systems (Friess &

Ibanez, 2014; Vermesan et al., 2014). Although

industry 4.0 brings high uncertainty, if utilized

properly it will increase the speed of technological

innovation in various aspects of human life. The

industrial revolution has changed buyer-seller

relations, both in Business to business (B2B), in

business to consumer (B2C), and emphasizes the

company's ability to respond quickly to customer

needs (Obal & Lancioni, 2013). Companies must be

closer to their customers and more reactive in

interpreting customer needs. companies must be able

to increase customer involvement at the value chain

level - in designing and developing product designs.

Another recent study highlights how B2B companies

are starting to use digital marketing tools, especially

social media marketing, in the same way as B2C

companies (Wang, Pauleen & Zhang, 2017)

2.2 Technology Organization

Environment Model

Tornatzky & Fleischer (1990) proposed a TOE model

for analyzing factors that could influence the adoption

of new technologies. The TOE model identifies three

important aspects of the organization that influence

the process of adoption and application of

technology, namely, technology, organization, and

environment. The technological context refers to

internal and external technologies that are useful to

the company (Tornatzky & Fleischer 1990). The

technology context can also show the relevant skills

needed to use certain technologies (Dwivedi &

Schneberger, 2011). The organizational context

describes the size and scope of the organization and

management structure (Oliveira & Martins 2011).

The environmental context shows the external aspects

that influence a company's decision to adopt new

technology, which includes competitors, customers,

and government involvement. As such, the TOE

model provides a platform for assessing the

application of social media marketing; in this case, it

highlights both internal (technical knowledge) and

external aspects (such as pressure from competitors)

from an organization that can influence the adoption

of new technology. The TOE model also provides the

framework needed to assess the adoption of new

technologies such as social media (Chao & Chandra

2012; Wamba & Carter 2014).

2.3 Hypothesis

H1: Managerial support affect the intention to adopt

digital technology.

H2: Time constraints affect the intention towards the

adoption of digital technology.

H3: User pressure affect the intention towards the

adoption of digital technology.

Managerial Support, Time Constrain and User Pressure on Digital Technology Adoption

305

H4: Intention to adopt digital technology has an

effect on digital technology adoption.

3 RESEARCH METHODS

This research is a survey. The setting of this research

is the adoption of social media marketing. The study

population consisted of all SMEs in the Special

Region of Yogyakarta and South Sumatra. The

number of samples used is 210 respondents. The data

analysis using SEM-AMOS techniques. According to

Hair et al., (1998) in testing using SEM the

recommended number of samples ranged from 100-

200 samples, but as many as 200 samples were

considered critical for testing with SEM. The sample

units in this study are organizations. This study uses

purposive sampling technique because respondents

must meet the criteria, namely: as individuals

involved in the innovation decision-making process.

The items in the questionnaire were adopted from Al-

Mamary and Shamsuddin (2015), Matikiti et al.,

(2018); Sugandini et al., (2018a) which was adopted

adjusting to the research of digital technology

adoption. This study uses structural equation

modeling (SEM) technique

4 RESULT

4.1 The Characteristic of the

Respondent

All respondents in this study were SMEs managers.

The description of the respondents presented below

contains the demographics of the respondents

consisting of gender, age, level of education, and

length of time the UMKM operates. Description of

respondents about the data of respondents who

participated in the study can be seen in table 1.

Table 1: Characteristics of respondents.

Classification Characteristics %

Gender

Female 43

Male 57

Age

20 – 35 40

36 – 55 60

Educational level

High school 26

Diploma 21,6

Bachelor 52

Master 10,1

Doctor 0,4

The duration of SMEs

operating

< 10 years 19,8

≥ 10 years 80,2

4.2 The Test Results for Adoption

Models of Digital Technology

The results of testing the model of digital technology

adoption using SEM can be seen in Figure 1.

Evaluation of the results of testing the model can be

seen in table 2.

Table 2: Evaluation of Criteria for Goodness of Fit Indices.

Criteria Result Critical Value *) Evaluation

Cmin/DF 4.495



Cmin/DF 5

Good

Probability 0.058

0,05

Good

RMSEA 0.012

0,08

Good

GFI 0.994

0,90

Good

TLI 0.927

0,95

Good

CFI 0.977

0,94

Good

Figure 1: Digital Technology Adoption Model.

From table 2 and figure 1 above, it can be stated

that the model of digital technology adoption is

acceptable. To test the hypothesis of a causal

relationship between managerial support, time

constraint, user pressure, intention to adopt and

digital technology adoption seen from the CR value

greater than 2 or the probability value is less than 0.05

(p  0.05). Based on these criteria, all paths are

significant. The causal relationship between these

variables is shown in Table 3.

Table 3: Standardize Regression Weight between

Variables.

Path Estimate p C.R. Result

MS  IA 0.500 .008 2.654 Supported

TC IA 0.370 *** 4.061 Supported

UP IA 0.709 *** 4.554 Supported

IA Adopt 0.662 *** 5.209 Supported

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5 DISCUSSION

The first hypothesis in this study which states that

managerial support influences the intention of

adopting digital technology is accepted. The

influence of managerial support on the intention to

adopt is positive. This shows that managers in SMEs

studied have been aware of the benefits that can be

achieved by using digital marketing through social

media. SMEs managers also support their business

organizations to use information systems and provide

access to both hardware and software. This access is

given to all Human Resources (HR) and SMEs

business units so that the support provided by these

managers is able to increase the intention to adopt

social media-based digital marketing for the SMEs

they lead. The better the support given by the UKM

manager will increase the intention to use digital

marketing based on social media. The results of this

study support the results of the research of Nguyen

(2009) and Dahnil et al., (2014), which states that the

process of adopting digital technology is influenced

by top management because all innovation decisions

are the authority of top managers. Matikiti et al.,

(2012) also state that the role of managers is

important to support digital technology innovation

(Tarafdar & Vaidya 2006).

The second hypothesis in this study which states

that time constraints influence the intention of

adopting digital technology is accepted. The effect of

time constraints on the intention to adopt is positive.

This shows that managers feel that the application of

social media innovation is not too time-consuming so

the intention to adopt social media marketing will

increase. Proxy time constraints with the time needed

to prepare the system that can support the success of

this innovation, the difficulty of allocating time in

initiating social media marketing applications for his

business, and the perception that social media

marketing spends a lot of time turn out to affect SMEs

intention to adopt social marketing media. Thus it can

be concluded that the faster the time needed by SMEs

to adopt social media marketing, it will increase the

intention to adopt social media marketing. The results

of this study support Braun (2004) which states that

the adoption of digital technology requires time

(Braun 2004). Braun (2004) and Au (2010) also state

that time constraints can improve technology

adoption.

The third hypothesis which states that user

pressure influences the intention to adopt digital

technology is accepted). The results of this study

indicate that the user, in this case, is HR who handles

the marketing of SMEs expecting and demanding that

SMEs are time to apply digital technology in social

media marketing. Marketing through social media

can satisfy customers, and the user is also ready to

adopt digital technology. With the encouragement of

the user, the manager is increasingly convinced to

adopt marketing through social media. The results of

this study support El-Gohary (2012) stating that new

technology is a competitive tool that enables MSMEs

to have a rapid leap in the face of competition.

Wanyoike et al., (2012) stated that the pressure of

competitors and users determine the application of

Internet-based technology.

The fourth hypothesis states that the intention of

adopting digital technology influences digital

technology adoption is accepted. The results of this

study indicate that SMEs will continue to use social

media marketing. SMEs plan to increase social media

marketing budgets and intend to adopt more social

media sites for digital marketing. The increasing

intention to adopt social media marketing means that

SMEs have extensive social media marketing

policies, have guidelines for social media marketing,

SMEs often interact with customers in social media

and SMEs have provided a number of links from

major social networking pages to other important

sites. The intention to use social media has

encouraged SMEs engaged in the manufacturing and

tourism industry in the Special Region of Yogyakarta

and South Sumatra to adopt social media marketing.

The results of this study support the TAM theory

which states that intention is the cause of someone

using a technology (Davis et al., 1989; Davis 1989).

Praveena and Thomas (2014) and Shen (2015) also

state that technology usage levels are influenced by

the intention to use Web technology.

6 CONCLUSIONS

The results of this study indicate that the model of

social media marketing adoption as a form of

adoption of digital technology from SMEs is

accepted. Furthermore, it was explained that the

intention of adopting digital technology was signed to

affect managerial support, time constraint and

pressure from the user. The TOE used as the

theoretical basis in this study is also supported.

Managerial support and user pressure are internal

organizational factors that are found to have an

influence on social media marketing adoption. The

adoption of digital technology analyzed in this study

is the adoption of technology related to digital

marketing based on social media. In this study, it can

show that intention has a dominant influence on

Managerial Support, Time Constrain and User Pressure on Digital Technology Adoption

307

social media adoption. This reinforces the reasoned

action theory of Fishbein & Ajzen (1975), which

states that intention is the most appropriate factor for

predicting behavior. This research also supports TAM

from Davis (1989) who shows that on information

system adoption, intention to use is a predictor of the

adoption of Information systems. Another factor that

is very influential towards adopting intentions is

managerial support. Dahnil et al., (2014); Matikiti et

al., (2012); Al-Mamary & Shamsuddin (2015) in his

research also showed that in adopting IS, manager

support was needed because it was managers who

determined innovation policies for their business

units. Managers also play a role in determining

budgets for technological innovation.

This research is limited to the adoption of digital

marketing innovations based on social media. In

future research, researchers should conduct research

by analyzing the readiness of users (human resources)

available in SMEs in accepting new technology,

because, in SMEs, the knowledge and skills of HR to

adopt new technologies are still lacking (Sugandini et

al., 2018b). In addition, several other factors also

need to be analyzed in predicting adoption of digital

technology innovation, namely consumer pressure

(Matikiti, Mpinganjira & Lombard, 2018) and

training for HR (Al-Mamary and Shamsuddin, 2015).

Matikiti et al., (2018) states that consumer pressure is

very influential on the need for the adoption of digital

technology. Besides that, the pressure of the industrial

revolution 4.0 also requires SMEs to make new

breakthroughs in the field of digital technology

(Ndekwa & Katunzi 2016).

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