Sunday, May 29, 2011

THE ROLE OF LEADERSHIP IN STRATEGIC CHANGE IMPLEMENTATION

THE ROLE OF LEADERSHIP IN STRATEGIC CHANGE IMPLEMENTATION IN TELKOM KENYA AND UCHUMI SUPERMARKET

Introduction.

1.0  Background.

This chapter forms the basis of this study and it looks at the background of the study from a global, regional and local point of view. The study also highlights the statement of the problem, research objectives and questions, significant of the problem, scope of the study, limitations and assumptions of the study and the definition of terms that will be constantly in use in the study.

1.1.            concepts: strategies, change management.

Chew, Cheng and Lazarevic (2006) in their study on manager’s role in implementing organizational change in an organization Europe found that managers and most employees agreed that in an organization, there is always room for improvement but what matters is the support from the management towards the same. The researchers measured improvement through how employees were motivated. They noted that the core element in changing an organization is the working environment. According to the respondents, it was common understanding that a pleasant workplace would keep employees happy. High-spirited employees would be able to establish and maintain harmonious working relationship with workmates and contribute to keeping high morale. The researchers concluded that managers should always maintain a pleasant workplace for employees to keep them motivated because a stressful environment would result to negative input form the employees, in other words, without support from the managers, employees would be de-motivated. The implied that realizing the value of effective employees’ cooperation and collaboration and motivation in the work place is very important.

The researchers further found that communication was vital in implementing strategic change. The interviews they conducted, they found that effective communication played a significant role in ensuring a restaurant’s successful operations. They observed that this in turn impacted on employees’ productivity. Further, Communication was important amongst managers to employees, and also in employee to employee relationships. Most of the interviewed employees concurred that listening skills, as part of effective communication, is one of the key competencies that a manager ought to possess at all times. Before, during and after the implementation of change, managers should listen to employees’ opinions and understand their perspective and feelings on the imposed changes. This would further help managers to introduce future organizational change. This was supported by Levasseur (2001) who argue that managers should have the initiative to interact with employees and keep them informed about any organizational change. By maintaining communication and listening to employees, managers can understand their unfulfilled needs and resistance to change.

In a study on strategic change leadership in Ericksson, a mobile phone service provider in Australia (Graetz, 2000) in a cross-case analysis revealed that the role that change leadership plays in promoting and sustaining the change agenda is very important. The role of the management was identified as that of establishing a direction which other employees could follow. This was supported by (Jackson, 1997) who argue that the need for strong, personal leadership from the top that provides a clear overarching vision and focus is critical especially when an organization seeks to discard their traditional, hierarchical organizational structures in favour of leaner, flatter boundary less forms comprising smaller, autonomous and networking units. Ericsson was found to vouch for personal involment of the managing director in communication the vision, mission and objectives of the of the organization.  

In a study on leading strategic change in the provision of legal services to the Eastern Cape Provincial government in South Africa (Beningfield, 2006) observed that an effective leader is the one who is able to face challenges that arise from changes in an organization. This type of leaders lead in the realization that their people are the real treasures of the organization and that they should be strategic in nurturing a sense of trust as a partaker in the transformation process. The respondents observed that the managers’ response to problem solving was key to how changes were implemented in the government. A common expectation was that the management should be play a change agent role. 

Abunya, Amin, Molyneux, Akwale,Marsh and Gilson (2010) in their study on importance of strategic management in the implementation of private medicine retailer programs in three districts in Kenya through 24 focus group discussions with clients and managers of the programmes observed that the Kisii program was successful because there was good relationships between the district health managers and the resource teams, supported by a memorandum of understanding which enabled successful implementation.It had flexible budgetary and decision making processes which were responsive to local contexts, and took account of local socio-economic activities.
The researchers observed that in contrast, the Kwale programme, which had implementation challenges, was characterized by a complex funding process, with lengthy timelines, that was tied to the government financial management system which constrained implementation Although there was a flexible funding system in Bungoma, a perceived lack of transparency in fund management, inadequate management of inter-organisational relationships, and inability to adapt and respond to changing circumstances led to implementation difficulties. The researchers concluded that for effective scaling up of the programmes, the provision of technical support and adequate resources were vital, but not sufficient on their own. An active strategy to manage relationships between implementing actors through effective communication mechanisms was essential.
Orange is the only integrated telecommunications solutions provider operating in Kenya (Telkom Kenya, 2011).  It was established as a telecommunications operator under the Companies Act in 1999.  They offer mobile telephony services under the GSM and CDMA platforms, fixed line telephone services and internet services. Orange also owns shares in the TEAMS and EASSy cables, in addition to running the National Optic Fibre Backbone Initiative (NOFBI) and its own terrestrial fibre optic network- supporting its data carrier-to-carrier business. They currently cover the entire country on both the voice and data channels, with comprehensive plans in place to meet the Universal Service Provision’s requirements set out by the industry regulator in Kenya, the Communications Commission of Kenya (CCK). Orange is part of the Lower Indian Ocean Network (LION) cable - an under-sea fibre optic cable connecting Kenya to Madagascar and the rest of the world - that is set to go live in the first half of 2012. Telkom Kenya Observe that founded on friendliness, straightforwardness, honesty, refreshment and dynamism.
The researcher observes that with the partnership between Kenya’s and France Telcom Group, which saw the launch of the Orange brand in Kenya in 2008, the new corporate identity was inspired by new investments and a fresh new approach to doing business. However, it is noted that there is limited data on the changes and the impact they have created and the management’s role in the same. That is why this study is being conducted.



1.2 Statement of the Problem

Against a backdrop of increasing globalization, deregulation, the rapid pace of technological innovation, a growing knowledge workforce, and shifting social and demographic trends, few would dispute that the primary task of management today is the leadership of organizational change (Jackson, 1997). Today’s organizations engaging in businesses have to contend with the dynamics of a changing competitive environment. However the modern trend has shifted from external environmental analysis only to more sophisticated internal organizational analysis.

Chew, Cheng and Lazarevic (2006) they noted that the core element in changing an organization is the working environment. They observed that it was common understanding that a pleasant workplace would keep employees happy. High-spirited employees would be able to establish and maintain harmonious working relationship with workmates and contribute to keeping high morale. The researchers concluded that managers should always maintain a pleasant workplace for employees to keep them motivated because a stressful environment would result to negative input form the employees, in other words, without support from the managers, employees would be de-motivated. The implied that realizing the value of effective employees’ cooperation and collaboration and motivation in the work place is very important. They also emphasized the effect of good communication. Elsewhere, (Beningfield, 2006) observed that an effective leader is the one who is able to face challenges that arise from changes in an organization. This type of leaders lead in the realization that their people are the real treasures of the organization and that they should be strategic in nurturing a sense of trust as a partaker in the transformation process and Abunya et al (2006) argued that good relationship between managers and implementers of programs was key while noting that complex funding systems, lengthy timelines, and lack of transparency from the management’s side brought challenges on implementation of programs meant to bring change.

As noted earlier, Uchumi supermarket and Telkom Kenya are tow organizations that form a basis for this study to look into the role of leadership in strategic change implementation. Uchumi has successfully management to make a turn about after being closed for a while and the Telkom Kenya has in the past attempted to implement changes through partnerships in order to provide better services to the company. The researcher therefore seeks to find out whether establishment by the management of the direction a company should take, the support form the management, communication and the ability to solve problems can actually enhance successful strategic change implementation.

1.3 General Objectives

The general objective of the study is to investigate the role of leadership in strategic change implementation in Telkom Kenya and Uchumi supermarket in Kenya.


1.4 research Objectives
The study will be based on the following specific objectiv


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FACTORS AFFECTING THE ADOPTION OF E-BUSINESS AMONG TOURS AND TRAVEL FIRMS IN NAIROBI





BY
PETER MACHARIA KAMAU
                                                       BUS – 3 - 472 - 05




A Research Thesis Proposal Submitted to Kenya Methodist University in Partial Fulfillment for the Requirement for Award of Degree of Master of Business Administration





JANUARY 2011

DECLARATION

This research proposal is my original work and has not been presented for a degree or a Diploma in any other examination body. No part of this project may be reproduced without the prior permission of the author and/or the University. 

PETER MACHARIA KAMAU       ………………………..           ……………….
BUS – 3 - 472 - 05                                          Sign                                         Date




This research proposal has been submitted for examination with our approval as University Supervisor(s).


Dr…………………………………….







ABSTRACT

Recent research in developing countries of Africa indicates that the use of ICTs is growing exponentially (Kareithi, 2003; CCK, 2010). This trend therefore means that ICTs have become an avoidable reality for enterprises world-wide as they endeavor to survive and develop new markets. There is a very significant threat that countries which do not enter actively into the information age will be increasingly marginalized in the twenty-first century. The extent to which entrepreneurs in the tourism industry in Kenya can actually benefit from the utilization of this potential and the factors that influence the adoption of this potential has been unclear. As such, the main purpose of this study will be to find out the factors affecting the adoption of E-business among tours and travel firms in Nairobi.
The study will employ the use of descriptive research design as a design strategy. The target population will be owners, employees of the travel agency companies as well as government officials in the ministry of tourism, Kenya Tourism Board. The target population will be tourism industries within the MSEs sector in Kenya covering travel agencies. The sample population will be taken from Nairobi. The target population for this study will be 55 travel agency companies in Nairobi. This translates to 440 employee respondents comprising of top management staff and middle level management. The study will randomly sample 30% of the target population; as such, the total sample size will be 132. The study will sample 30% because Patton (2002) recognizes 30% as an adequate sample size in a survey study. The main research instrument that will be used in this study will be questionnaires.
The data from the completed questionnaires will be cleaned, re-coded and entered into the computer using the statistical package for social sciences (SPSS) for Windows for analysis. Descriptive statistics (i.e. frequency analysis) will be computed for presenting and analyzing the data in order to answer the research questions. The study is important because it will provide empirical information on the utilization of ICTs to access and manage information by tours and travel firm entrepreneurs in the tourism industry. This information can be used by policy makers to come up with policies that will support diffusion and use of ICT in the country.


TABLE OF CONTENTS


 















 

 

 

 

 

 

 

 

 



                                          LIST OF ABBREVIATIONS
CCK               : Communication Commission of Kenya
GDS                : Global Distribution Systems
CRS                : Computerized Reservation Systems
ICT                 : Information Communication Technology
IPAR              : Institute of Public Analysis and Research
IT                    : Information technology
SPSS               : Statistical package for Social Sciences



CHAPTER ONE

1.0 INTRODUCTION

1.1 Background of the Study

Tourism is the fastest growing industry in the world (Foster, 2004).  It plays an important role in the economy of a country.  In Kenya, it is the second foreign exchange earner after agriculture. Tourism is an amalgam of various components. The basics of which are; attraction, accommodation and transportation.  The tourism products are sold through varied and multiple distribution channels (Kandiri, 2006).  These are either done directly or indirectly.  Direct means involve sale through the internet or representatives of service providers such as airlines, railway companies, hotels among others.  The indirect distribution channels entails intermediaries such as travel agents, tour operators, consolidators and air brokers.  Travel agents are the major distribution channels used in selling tourism products on behalf of service providers to clients.

The advent of the Internet is also having profound impacts on the industry: travel and tourism has become the single largest category of products/services sold over the Internet and the proportion of business being transacted through this medium is constantly growing. Advancement in Information Communication Technologies has posed a major threat of disintermediation of the traditional travel agencies. ‘Traditional principal intermediaries, travel agencies, in the distribution chain throughout the world are under the threat of disintermediation’ (Kareithi, 2003).

There are several impacts that are being experienced by the travel agents such as zero commissions paid by airlines, increased use of internet and other online services to obtain travel information and make airline reservations by clients (Ikoja and Ochola, 2004).  In addition, customers have increased demand, expectations and knowledge and they are themselves user of ICTs.  The emergence of electronic markets is also likely to promote bypassing of travel agents.  ICTs have the ability to reduce transaction cost.  They are also allowing clients and service providers to communicate directly over data-rich, easy to use information channels.  All the above trends are playing a significant role in by passing the traditional travel agencies. 

Different tourism researchers have debated the topic of disintermediation, particularly the elimination of the middleman in the customer-agent-destination/supplier network in the travel industry of the future (Freund, Konig and Roth, 2007).  The accessibility of online travel websites is reducing the importance of travel agencies and might result in their being passed altogether (Duncombe and Heeks, 2008).

The advent of online technologies and development of new distribution mechanisms that exploit these technologies presents a challenge to those traditional intermediaries who are unwilling or unable to implement changes in their own business practices. although travel agents still appear to have a substantial role in the industry, forces including ICT impacts, e-ticketing, changes to commission arrangements and a consolidation in the industry, have all been working towards a significant diminution of that role (IPAR, 2000).

The future of the travel agencies will depend on their ability to adapt and utilise    ICTs to the fullest potential (Foster, 2004). Despite the disintermediation threats, most travel agencies are still thriving in their businesses. Most travel agencies all the world have managed to adopt various survival strategies. For instance, travel agencies have embraced the recent innovations in ICTs and they are repositioning themselves by offering their services online. Various online travel agencies have emerged such as expedia, travelocity, lastminute.com, e-bookers, web weekends and online travel corporations.  These virtual travel agencies are posing a threat to the traditional travel agencies. Travel agents need to take good measures in order to benefit from ICTs trends       and avoid emergent threats in the future (World Bank, 2009).

Research into the travel agency sector by tourism researchers has mainly focused on the need for travel agents to adopt strategies and embrace technology that will enable them cope in the ever changing technological environment.  These developments have been studied in Canada, United state of America and Europe. In a study, that was carried out in Auckland in New Zealand, mainly focused on the perceptions, adoption and Impacts of ICTs. The results indicated that the main survival strategies adopted by the travel agents were customer and niche market orientation (Foster, 2004). 

The development of Information and Communication Technologies (ICTs) has had more marked effects in the tourism industry than in many other business sectors. Emerging technologies have changed a growing number of tourist industry functions, from marketing and advertising to production and supply. New services have been made available, which have in turn influenced company choices and behaviour, and have led to the construction of new business models.

These technological innovations started in the 1970s when the main airlines set up CRSs (Computerized Reservation Systems), with the strategic aim of building a global distribution network for their products. Connecting travel agencies to the CRSs set off a process of distribution automation involving an ever-increasing number of tour operators, carriers, car hire firms, individual hotels, hotel chains, and other hospitality firms. CRSs then became GDSs (Global Distribution Systems), enabling intermediaries to access all the different types of tourist services, with the result that services could be more flexible and customised. This was important in that customers were better informed, wanted a wider range of services, and were more difficult to satisfy. Access to GDSs was soon no longer an option but an obligation for travel agencies. They had to learn specific terminology, and new technical and technological skills.
The sector became highly concentrated and was eventually dominated by four large, global operators which were able to operate internationally via a closely-knit network of agreements with local operators. The four were Amadeus, Galileo, Sabre and Wordspan.

Internet use took off in the 1990s although, of course, this varied from one country to another. It had an even greater impact on the tourist product distribution system. It changed the behaviour of potential customers and enabled them to obtain information independently and to organise their own trips, their own travel products. Internet transformed competition within the sector by encouraging new types of companies to join the industry, which affected the strategic, technical and operational choices made by operators already engaged in tourism. The most innovatory tourist industry firms set up their own websites so as to increase their advertising potential. Specialist and more general e-marketplaces were created which initially gave possible customers information but soon started to sell tourist services directly.

The IT revolution changed the sector dramatically; but the GDSs did not fade away, as was initially expected to be the case. The only reason for this was that they updated what they could supply by working even more closely with other firms in the sector. They did so by creating their own gateways and websites. In addition, various researchers have carried out research to evaluate the disintermediation risks being faced by travel agencies today. However, there is need for research to analysis on the constraints facing adoption of E-business by tours and travel firms (IPAR, 2000). 

The lack of effective ICT systems that can provide timely, accurate and relevant information to the needs of travel agencies is harming these enterprises by reducing incomes and increasing costs, affecting their competitive edge and their growth and development. Market failures have constrained entrepreneurship development in Kenya, as in many other developing countries, by limiting the necessary access to information, finance, labor skills, and business development services (BDS) to increase competitiveness and productivity (GOK, 2010). The lack of information and past experience with transactions is a common factor that limits the willingness of small firms to pay for services and potential suppliers to take risks (or calculate them reliably) or to adapt products to SMEs. Past dependence on government agencies for these services, often at highly subsidized rates, has in some way made SMEs not seek these services from private providers, who in turn have been crowded out (Kandiri, 2006).

Information and communication technologies can be used as tools to strengthen and develop, and improve on the existing information systems of tours and travel firms in Kenya. But they remain out of reach for the majority of entrepreneurs in terms of awareness, cost, poor information infrastructure and skills to utilize their potential. There is also the danger that if not integrated into the tours and travel information systems ICTs might further marginalize this group of entrepreneurs. On the other hand, the potential contribution of ICTs to entrepreneurs in tours and travel business can only be assessed by first understanding current constraints facing them in adoption of E-business.

1.2 Statement of the Problem

According to UNCTAD (2001), “internet-related technologies are considered the most strategic within the context of the new economy at the start of the twenty-first century”. Undoubtedly, the internet is democratic and its tourist contents are accessible worldwide. This brings an opportunity for developing countries to market their tourist destinations and products. However, only few emergent and developing countries are making efficient use of this innovation. In fact, it could be argued that the huge differences that separate developed and developing countries are perpetuated in the way they are available online. The great majority of developing countries reproduce in their homepages the lack of planning and strategies visible in their physical institutions.

Past research in developing countries of Africa indicates that the use of ICTs is growing exponentially (Kareithi, 2003; CCK, 2010). This trend therefore means that ICTs have become an avoidable reality for enterprises world-wide as they endeavor to survive and develop new markets. There is a very significant threat that countries which do not enter actively into the information age will be increasingly marginalized in the twenty-first century.
In Kenya today, the micro and small enterprises must embrace ICTs to survive. The UNDP Human Development Report (2001) strongly supports technology as an essential ingredient in any development effort, and it proposes that subsequent interventions include technology of some kind. Employment in the private and Non-Governmental Organizations (NGOs) requires an appropriate level of understanding of ICT, because of the growing use of the skill in conducting business. Development, as an individual or corporate, entrepreneur or employee, private or public body is becoming more dependent on the knowledge base of its units. The “knowledge worker” is rapidly replacing the labourer as basic activities are automated and consolidated by economies of scale because of globalization. Any economy, organization or government that misses this paradigm shift in human resource development will find it difficult to sustain growth and remain competitive (Waibochi, 2002).

 Thus it is of vital importance to improve the efficiency and competitiveness of MSEs in the face of an increasingly globalized and knowledge-based economy and there is no better way than to embrace ICTs. Kareithi (2003) in his study ‘Coping with Declining Tourism, Examples from Communities in Kenya’ found out that majority of the tours and travel firms were not able to market themselves competitively. The study attributed this to lack of adoption of ICTs. As such, this study would like to extend Kareithi’s (2003) study and investigate the constraints in the adoption of E-business among tours and travel firms in Nairobi.

Similarly apart from being subjected to increased competition, entrepreneurs in the tourism industry are facing an increased demand for quality of products and services, and a growing demand for customised services. Surviving in this competitive environment will require raising the overall productivity, which in turn will require higher levels of management capacity. In this regard, the ability to acquire, process and effectively use business information becomes central. The extent to which entrepreneurs in the tourism industry in Kenya can actually benefit from the utilization of this potential and the factors that influence the adoption of this potential has been unclear. This study sets out to clarify this potential and assess the factors influencing the adoption of  adoption of E-business by tours and travel firms. The lack of knowledge on the potential of ICTs limits efforts to assist entrepreneurs in the tourism industry in their quest to use ICTs and thereby negatively affects their competitive edge in the global market. This therefore, presents a knowledge gap that this study envisages to establish.


1.3 Purpose of the Study

The main purpose of this study will be to find out the factors influencing the adoption of E-business among tours and travel firms in Nairobi.

1.4 Research Objectives-

The objectives of this study will be to:
i)        To find out the relationship between cost of ICT and its adoption by tours and travel firms.
ii)      To find out the effect of infrastructure on the adoption of ICT by tours and travel firms.
iii)    To find out role of ICT knowledge and experience on the adoption of ICT by tours and travel firms.
iv)    To explore the effect of government and institutional ICT policies on adoption.

1.5 Research questions

In order to achieve the objectives of the study, the following research questions will guide the study:
i)                    What is the relationship between cost of ICT and its adoption by tours and travel firms?
ii)                  What is the effect of infrastructure on the adoption ICTs by tours and travel firms?
iii)                What is role of ICT knowledge and experience on the  adoption in tours and travel firms?
iv)                What is the effect of government and institutional ICT policies on adoption?

1.6 Significance of the Study

The study will give some insight into the factors that have inhibited adoption of ICT by tours and travel firms in Kenya. It therefore will provide stakeholders in this sector with remedial measures that need to be undertaken in addressing the challenges facing tour and travel firms in this era of globalization and information society.

The study is important because it will provide empirical information on the utilization of ICTs to access and manage information by tours and travel firm entrepreneurs in the tourism industry. This information can be used by policy makers to come up with policies that will support diffusion and use of ICT in the country. It will also permit policy makers to integrate tours and travel firms into national and international information supply chains using modern communication technologies.

It is hoped that the outcome of the study will provide practical suggestions on policies and programs that can help Kenya utilize ICTs for effective poverty eradication through the growth of economically sustainable enterprises and the quality employment they generate.

The study will be useful to researchers in the tourism industry and related industries. In addition the findings of the research can also be used as a basis for further research in the area.

1.7 Scope of the study

The study will focus on the diffusion of ICTs among MSEs in the tourism industry in Nairobi, Kenya. It will explore the factors influencing the adoption of ICT in the tourism industry including cost, infrastructure, ICT knowledge and experience and government policies. The field of analysis will be limited to tours and travel firms in Nairobi.

Therefore the study will restrict itself to tours and travel firms in the tourism industries that are registered with the ministry of tourism. In addition, the research will only cover the portion of ICTs that are new and emerging such as computers, mobile phones, faxes, the internet and e-mail services.

1.8 Operational Definition of Terms-

The following terms will be used in this study to convey the meaning shown below.
Adoption - Use new technology to support traditional instruction/tasks.
Information Communication Technology - an umbrella term that includes all          technologies for the manipulation and communication of information.
Business Models - describes the rationale of how an organization creates, delivers, and      captures value- economic, social, or other forms of value (CCK, 2010).

E- business - application of information and communication technologies (ICT) in support of all the activities of business (Foster, 2004). Commerce constitutes the    exchange of products and services between businesses, groups and individuals           and can be seen as one of the essential activities of any business.
Tourism Distribution System – Channels used to pass and share information in the             tourism industry to the relevant stakeholders

















CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

This chapter reviews literature related to the constraints in the adoption of E-business among tours and travel firms. Literature will be reviewed from books, journals, academic and government papers and the internet.

2.2 Theoretical Review

2.2.1 Diffusion of Innovation Theory
Davis (1989) Diffusion of Innovation theory, suggest that supposedly innate characteristics of the innovation are important in determining whether or not it is adopted. According to Straub (1997), information about the existence of innovations flows through social systems where the potential adopters are situated.

The Diffusion of Innovations identify perceived attributes of an innovation as key predictors explaining adoption, and feature user intention to adopt a technology as the dependent variable. Davis (1989) identifies five perceived attributes of innovation as influencing adoption behavior: 1) relative advantage, 2) complexity, 3) compatibility, 4) trialability, and 5) observability. Relative advantage captures the extent to which a potential adopter views the innovation as offering an advantage over previous ways of performing the same task. Complexity refers to the degree to which an innovation is perceived as relatively difficult to understand and use.

Compatibility encompasses the degree to which an innovation is perceived as being consistent with the existing values, needs, and past experiences of potential adopters. Trialability measures the extent to which potential adopters perceive that they have an opportunity to experiment with the innovation prior to committing to its usage. Finally, observability indicates the degree to which the results of an innovation are visible to others. As such, this theory will be adopted since it directly applies to the study on why some tour and travel firms have completely adopted ICTs while some have adopted ICTs half-heartedly.

2.2.2 Technology Acceptance Model
Technology Acceptance model is useful for predicting if users will adopt new information technology and has also been shown to demonstrate good predictive validity.  Jasen (2002) in contrast to Davis (1989), explains adoption behavior by suggesting only two perceived attributes that influence innovative adoption: perceived usefulness and ease of use. Perceived usefulness is defined as the extent to which a person believes that using a particular technology, in this case  a computer, will enhance job performance, while perceived ease of use is defined as the degree to which a person believes that using a technology will be free from effort. Davis’ concept of perceived usefulness is analogous to Rogers’ concept of relative advantage. Likewise, Davis’ concept of perceived ease of use is similar to Rogers’ reference to complexity. Clearly, Davis’ Technology Acceptance Model offers a more focused framework for predicting technology acceptance and use by potential adopters.

As TAM (Davis, 1989) offers two attributes compared to the five attributes set forth in  Klein (2003). Diffusion of Innovations framework, the researcher Klein (2003) found that a smaller set of beliefs could predict current usage behavior, as well as future use intentions. Therefore, a more parsimonious set of beliefs have been selected for this research. TAM, the more parsimonious model, will be employed as the main model combining elements from other frameworks to explore factors impacting teachers’ perceptions of intention to use a computer.

One of the most frequently cited technology adoption model is Davis (1989) Technology Acceptance Model (TAM). The TAM adapted the Theory of Reasoned Action by incorporating technology into their model to explain usage behaviour of computers. Specifically TAM identifies the causal linkages between an individual user’s attitudes and perceptions toward technology and actual adoption of technology.

According to Davis (1989) , the goal of TAM is `` to provide an explanation of the determinants of computer acceptance that is general , capable of explaining user behaviour across a broad range of end user populations while at the same time being both parsimonious and theoretically justified (pg.985)’’.

TAM compares Behavioural Intentions and Usage and states that behavioural intention is an indicator of computer usage. Additionally TAM states that Attitude directly influences Behavioural Intentions. Attitude is defined as the individual’s attitude toward using the system. According to Davis et al (1989), several studies have found a relationship between Attitude and Usage.

TAM considers the impact of external factors on Attitude, and thus Behavioural Intentions, by adding two additional constructs that influence the technology adoption process. The two main constructs of TAM are Perceived Usefulness and Perceived Ease of Use. The first construct, Perceived Usefulness is defined by Davis (1989) as the `` the prospective user’s subjective probability that using a specific application system will increase his or her job performance within an organizational context (pg. 985)’’. The second construct, Perceived Ease of Use, was conceptually defined by Davis (1989)   as the `` degree to which prospective user expects the target system to be free of effort (pg. 985). Davis excludes TRA’s Subjective Norm as a determinant of Behavioral Intention.
Both Perceived Ease of Use and Perceived Usefulness directly influence Attitude in the TAM, and thus influence Behavioral Intention through its direct relationship with Attitude. In addition to its influence on Behavioural Intention through Attitude, Perceived Usefulness has a direct relationship with Behavioral Intention. Perceived Ease of Use also affects Perceived Usefulness.
TAM has satisfactorily predicted intentions and usage for individuals.

Fig 2.1 Technology Acceptance Model (TAM) -Based on Davis 1989



Thus, an attempt will be made to apply insights from a growing body of research literature associated with innovation adoption and information technology acceptance to the research problem where owners of tours and travel firms are called upon to use ICTs as part of E-business. Hence, an adaptation of the Technology Acceptance Model that accounts for organizationally mandated adoption decisions can serve as a valuable tool for exploring these factors that affect firms adoption of ICTs.

2.3 Review of Related Literature

2.3.1 Small Tourism Enterprises and E-business

The challenges and limitations to technological innovation in small enterprises have been well visited. Concerning Internet adoption, three of the most commonly cited obstacles are the inadequate and unreliable telecommunications infrastructure, the cost involved with adopting and using the technology, and the lack of the relevant knowledge and skills
(Law and Wei, 2001; Branden et al., 2004; Bedard, 2005). Faced with these challenges, and often-turbulent political and macroeconomic circumstances, how are entrepreneurs in developing countries exploiting the Internet?

Overall, the literature suggests that little Internet adoption is taking place (Wan, 2002; Drew, 2003). For instance, evidence from an investigation by Cai, Card and Cole (2004) in Nicaragua and Costa Rica showed that less than 13% of Costa Rican and less than two percent of Nicaraguan SMTEs advertised on the Internet. Email was the most widely used online activity, although SMTEs indicated a preference for interaction through low-tech means such as cellular phones, whereas the least common uses were advertising and selling or buying goods on the Internet.

This suggests that identifying strategies that can enable small tourism enterprises to overcome Internet adoption barriers is imperative to its widespread diffusion. This is especially important because a number of benefits have been linked with small tourism enterprise. Some of these are (Branden et al., 2003): reduced cost of advertising; more effective and cheaper communication; exposure to a global market; more efficient access to information; and possibility of attracting multinational organizations.

2.3.2 Government and ICT Institutional Policies in Kenya

The Government of Kenya recognizing the global growth in Information and Communication Technology (ICT) decided to make Kenya an active Participant in the age of information technology. This is in recognition of the fact that ICTs are important agents for transformation of every facet of human life with a huge potential of bringing about a knowledge-based society in the Twenty-first century (Kenya, Ministry of State for Planning, National Development and Vision 2030, 2008). The economic recovery strategy for wealth and employment creation, 2003 – 2007 identified the following goals in its policy document. They included: establishing an inter-ministerial committee to incorporate ICT into government operations; investing in adequate ICT education and training; implementing tax reduction and tax incentives on both computer software and hardware so as to make them affordable to travel agencies and low income earners; and reviewing the legal framework to remove impediments that have discouraged the adoption and use of e-commerce. The E-government strategy was developed with the aim of using information technologies to improve service delivery, transform government operations and promote democracy. This was going to be achieved through the development of websites, networking all ministries, developing computer literacy among government staff and computerizing office operations. The development and implementation of a national ICT policy will see Kenya attain a strategic framework for approaching ICT as a development tool in government, in private sector and in underserved rural areas at all levels (Sigala, 2003).

One of the major initiatives that the Government is pursuing is to improve ICT infrastructure in order to bridge the digital divide and lower the cost of communications. The Government is also leveling the ground through development and implementation of policy and regulations aimed at attracting investment within the sector. It must be emphasized that the Government recognizes information to be a resource which must be generated, collected, organized, leveraged, secured and preserved to enhance national prosperity. With this in mind, in 2007, the Government launched the ICT Board to oversee the development of ICT in Kenya. There are several institutions with responsibility for ICT in Kenya. In addition to the Ministry of Information and Communication, there are four other institutions, the Communication Commission of Kenya which acts as the regulator, the Government information Technology Service (GITS) which provides ICTs support for ministries, the National Communications Secretariat (NCS) which advices the government on telecommunications policy, and the Directorate of E-government which oversees the implementation of e-government strategy and assist the government to deliver more effectively services to Kenya’s population (Sigala, 2003). The private sector and the civil society have also played a significant role in the ICT arena, in particular the ICT policy process. The notable ones include the Telecommunications Services Provider Organization of Kenya (TESPOK), Kenya ICT Federation (KIF) and the Kenya ICT Policy Action Network (KICTANET). All these entities are working more closely under the coordination of the ICT board to ensure mainstreaming of ICT in Kenya. On the other hand the civil society and the private sector are involved in building government capacity in this sector. A few of government services can be accessed online, digital villages are to be set up in every constituent, telecommunication services now cover more than 80% of the Kenyan population and internet services are now available in most rural centres in the country. This notwithstanding, the government operations remain entirely manual particularly at provincial and district level(Sigala, 2003).

 A study by on the institutional structures and models for implementing the Kenya National ICT plan observed that the current functioning of the institutional structures for ICT in Kenya has a number of adverse consequences that include: uneven computerization of ministries, lack of trained ICT personnel, poor distribution of resources, duplication of ICT resources across ministries, lack of publicly available information on what is happening regarding ICT in government, uncoordinated donor initiatives in various ministries and lack of integrated ICT strategy (Outa, et al., 2006). The Kenya vision 2030 medium term plan has identified the following challenges being experienced within the communications sector: Lack of an institutional and legal frame work to implement automated services including electronic transactions; lack of standardization of components and systems being procured and applied across the government; limited country-wide ICT awareness that hinders cultural and attitudinal change; a wide internal digital divide between rural and urban areas as well as low bandwidth; financial and human resource constraints; bridging the “islands of automation” by allowing sharing of information among agencies; high costs of ICT utilization and maintenance; high costs of migrating from analogue to digital broadcasting; challenge of obtaining a better integration of ICT solutions into company and public policies.

This study aims at establishing the relationship between government ICT policies and survival of travel agencies. This section is linked to the conceptual framework as part of the input in form of government support. The study will strive to find out the role of the stated government ICT policies above on survival of travel agency companies. As such, this part of policy forms a core par of the conceptual framework which is the input.

2.4 Empirical Review


2.4.1 Poor Infrastructure:

A study carried out by Duffy (2010) on factors influencing technology adoption amongst tourism SMEs found out that there was a low level of ICT usage amongst those tourism firms. One of the major factors identified was the location of those institutions. The researcher observed that other researchers had identified that businesses operating in a peripheral location can be a barrier to ICT adoption for small tourism industries (Anckar and Walden, 2001; Braun, 2004). The respondent interviewed, especially drawn from the rural areas revealed that they had lower levels of connection to the internet and were less likely to have a computer for business. The majority of respondents never used applicable ICT applications, for example, database management was not used by 63% of industries, document management (60%), statistical analysis (71%) and accounting software (62%). Only 43% of hotels surveyed updated their websites on a daily or weekly basis, indicating that the majority of the hotels were not using ICT to respond to market changes. They were not exploiting the potential of the Internet in relation to on-line promotion of special offer room rates/availability.
Babnjevic & Padukova (2006), in their study on ICT awareness in small enterprises in the Indian tourism branch found that although the diffusion of ICT in India has been amazing in the past decade, it was revealed that the ICT penetration in India was still slow. There were only 0.40 connections per 100 people in 2004, compared to 2 connections per 100 people in China, 11 in Malaysia and 58 in Korea. On of the major reasons identified by the study was poor infrastructure and they recommended that there is a crucial need of not only developing and investing in infrastructure  and providing lower costs of promotion of ICT. They showed that the domestic demand of IT services accounts for less that one-fifth of total IT turnover and therefore, developing IT applications for domestic market is needed.


2.4.2 ICT Knowledge and Experience
In a study carried out by Al-allak (2010) on evaluating the adoption and use of internet-based marketing information systems to improve marketing intelligence of tourism SMEs in Jordan found that the current form of marketing information systems used within tourism SMEs is based largely on internal data supplemented by customer survey and informal investigations and local and national competitors. No evidence of the existence of marketing orientated information systems is found. Indeed, the sector was more operationally focused than marketing orientated as manifested by the sector's reliance on personal contacts and personal experience and knowledge rather than hard facts and quantitative data.

Marketing research was hardly conducted and subjective and qualitative judgments prevail. The majority of research revealed that the systems were poorly designed, lacked flexibility, comprehensiveness and the ability to create an organized and timely flow of information required by marketing decision makers. The gathering of information from wider external sources was limited. There was a state of 'in-balance' between external data to internal data gathering activity. The majority of  tourism SMEs surveyed approach marketing intelligence gathering in a less deliberate fashion, not training their sales force, after-sales personnel and district/area managers to take cognizance of competitors' actions, customer complaints and requests and distributor problems. Information technology was not greatly utilized to aid information gathering, analysis and management (Al-allak,2010).

Although 51% of tourism SMEs were online, their use of the Internet for marketing intelligence is limited. The Internet was only regarded as a supplementary tool alongside other sources, which seemed to carry more importance than the Internet as a source of external information. This suggested that the existence of a number of obstacles that make tourism SMEs less inclined to integrate or utilize this technology in their businesses, including: limited understanding or appreciation of the potential of technology, 'hidden costs' of technology adoption, such as training, external expertise and upgrading software, or a lack of clear business strategies(Al-allak,2010).

ECA (2000) ECA (2000) in their study on pan African imitative on e-commerce found out another challenge facing the African countries in adoption of ICT was challenges related to creation of  a skilled labour pool for e-commerce. This challenges included:  Filling the gaps in the education and training systems where the arrival of e-Commerce and the new knowledge based economy in Africa confronted the economies of the continent with the need to both improve the teaching of IT related matters throughout the existing formal education system and to put in place new learning opportunities for people already in the work-force ; inadequate IT knowledge among many workers, including many of those at senior level; inadequate entrepreneurial skills among the technically trained, which inhibits the emergence of new start-ups in the new economy; and inadequate numbers of adequately skilled trainers in IT fields

2.4.3 Costs of adoption of ICT

Babnjevic & Padukova (2006), in their study on ICT awareness in small enterprises in the Indian tourism branch observed that according to Currie’s model (Currie, 2000), which measures the development in four stages (the publishing, the interacting, the transacting and the integrating), the interviewed companies did not reach the later phases or the high levels of such development. Most of them were still in the Publish stage, as the e-commerce level still was as low as setting up an occasional homepage. Most of the homepages contained only the information about the companies and there were no possibilities of purchasing the services online. Very few companies were moving on to the Interact stage by sending documents electronically and similar, even if these companies considered it to be very flexible. Others preferred personal touch for information exchange. The next stage, Transact, was hard to reach in these companies due to the fact that, for example, customers were not willing to make credit card transactions. Since the companies were small, they perceived the setting-up and maintaining costs of a transaction or online order system as unnecessarily high. There was still a long way to full supply chain integration as the tools for integrating business processes were still mostly unknown for the companies’ management.

Buhalis (2003)(qt) argues that in some cases, the customers might not use Internet services due to the high internet cost (Buhalis, 2003)(qt). In India, there was a huge gap between the middle class, that sees ICT as a necessity, and those that consider even a local telephone call a luxury. The author established that there was appositive outcome of lowered prices of internet connection and a more competitive market in the tourism sector who had adopted ICT usage. Though the interviewed companies did not at the present consider the cost of Internet as high or an obstacle but the fact that none of the companies adopted Internet before 1998, demonstrates clearly that the growing number of Internet service providers has, to some extent, had an effect on the companies’ use of Internet, since the highest growth rate of Internet subscribers in India has been between 1999 and 2001(Babnjevic & Padukova, 2006).

Many travel agents try to adopt ICT to support their business but due to their limited resources, travel agents ICT adoption is different from larger business (Sagala, 2003). The literature shows that despite all the benefits that can be achieved by using ICTs, many micro and small tourism enterprises have failed to embrace ICT and internet (Outa, 2006). They do not engage in formal skills and information gathering and they rarely use external consultants due to resource constraints, lack of specialist expertise and size versus their perceived impact in the market place (cited by Sohn, 2005). In most travel agencies particularly the micro enterprises, training is considered as a cost value than an investment. Despite the fact that travel agencies fall short in ICT skills and have remained reluctant to move away from informal information systems that rely on manual processes, ownership of technology and internet access is on the rise and when introduced at the right time and in the right way, may encourage travel agencies owner/manager to embracing ICT for innovative uses such as access to information.
Information and communication technologies (ICTs) are proving to be an effective mechanism to transmit information on the intangible tourism product as the functionality of this industry depends upon the transmission of accurate and reliable information. They have taken over from published materials such as brochures to convey information on price, quantity, transport, quality, supplements and conditions of purchase due to the dynamic and perishable nature of the tourism product (Kiplangat et al, 2005).

Until the advert of ICTs, the methods used to seek, store and transmit information were both cumbersome and inefficient. The methods included the telephone, snail mail, brochures, leaflets, directories and face to face meetings. However the internet and mobile telephony have become major business instruments for travel agencies. But research findings shows that travel agencies first consulted other sources of information such as a colleague and printed media before consulting the internet (Kiplangat, 2005).  It shows that internet usage is not a major source of information to them and is used as a last resort. Most travel agencies rely on telephone and fax services to communicate and disseminate information because they are the most accessible unlike the internet.

2.4.4 Government Policies:

Babnjevic & Padukova (2006), in their study on ICT awareness in small enterprises in the Indian tourism branch found that the government of India would have to be involved in liberalization reform program if the adoption of ICT in this country has to become easier. Though it is actively involved in e-governance and it contributes to the awareness of ICT in the country, it still had to go along way in creating appropriate local ICT applications or lowering tariffs. The respondents in the study saw the government as something that stands in their way because of the bureaucratic procedures. They though that the government and businesses would benefit by a smoother use of governmental services and by a better corporation between these tow actors. Considering that the tourism is essential for the development of India as much as the small companies are, both tourism and small travel agencies and tour operators would profit if a closer interaction with the government was established.

ECA (2000) in their study on pan African imitative on e-commerce found out that the barrier to adoption of e-commerce by small tourism firms like all the other SMEs was challenges of regulatory framework. There was problems in establishment of financial services for e-commerce because the banking and financial sectors did not encourage the implementation of changes in their policies, practices and services to accommodate growth of e-commerce.in their national economy; in regard to online payments, there were still steps which needed to be taken to provide the legally accepted means of on-line payment and financial transfers; the governments were not willing to conduct reviews of foreign exchange control rules and procedures in the light of the introduction of e-commerce; and there was no security and trustworthiness of on-line transactions because the governments were not willing to accredit agencies which would in turn have a reliable capacity to certify the validity of electronic signatures and electronic contracts and the governments in many countries in Africa were not willing to put in place legal commissions to propose amendments necessary to all businesses and corporate laws which would be affected by the introduction of e-commerce. Such laws in need of revision would include, but not be limited to: Copyright Laws; laws on intellectual property which should be brought into line with the WIPO Copyright Treaties; laws regarding protection of databases, privacy protection, trademarks and domain names; laws on competition; laws regarding the use of cryptography; and laws relating to new forms of ‘cyber-crime’.

Kenya’s socio economic challenges include poverty, ignorance, disease, hunger, and gender inequality. These challenges are well covered in the national development objectives including the Millennium Development Goals (MDGs). The Economic Recovery Strategy for Employment and Wealth Creation, 2003 – 2007 has recognized that ICTs have a role to play in addressing these cahllenges. ICT promotes economic growth and social opportunity at the same time that it renders many traditional economic approaches less viable. ICT can serve as a critical enabler to achieve many of the development goals agreed to by world leaders at the UN Millennium Summit. ICT has the potential to create earnings opportunities and jobs, improve delivery and access to health and education, facilitate information sharing and knowledge creation, and increase the transparency, accountability and effectiveness of government, business and non-profit organizations (UNDP, 2003). All these contribute to an enabling environment for development. The service industry in which tourism industry falls is one of the fastest growing sectors in the global economy. This growth is more pronounced and driven by information and communication technologies (ICTs). Governments all over the world have now realized the crucial role of information and knowledge in national competitiveness among nations and also as a major economic sector in its own right.  Governments are therefore putting in place measures to harness national resources to build information infrastructure to exploit information and knowledge for development.  In Kenya the potential of ICTs even within the service industry remains largely untapped and as already observed, the country lacks an integrated policy and a comprehensive legal regime to address the institutional framework, issues and challenges facing the sector (Outa, et al., 2006). ICT policies are important in the transformation from industrial societies to information societies. Countries that are slow to act, or are not in a position to respond, are likely to find their ability to participate in the global economy and society diminished, thus exacerbating existing inequalities. The risks are great, but so are the rewards. To be successful, countries need to develop comprehensive ICT and e-Development strategies, put in place and support the necessary policy, human and physical infrastructure. They also need to adopt measures to ensure equitable access and widespread capacity to make use of ICT. The challenge for Kenya is therefore to put in place policy frameworks that foster the growth of ICTs so as to ensure that the country transforms itself to an infrmation-based economy ready to reap the benefits of ICTs.

The ICT policy process has for a long time lacked political leadership, which has been reflected in the absence of a national ICT strategy and ineffective coordination between different government departments and agencies with ICT responsibilities (Outa, et al., 2006). The absence of ICT policy process open to participation by all stakeholders and based on public discussion and debate remained so until recently. A number of Civil Society Organizations (CSOs) and private sector and media groups, in Kenya, had been actively contributing to the development of an ICT regulatory framework, even prior to the World Summit on the Information Society (WSIS) global process. Initial key concerns were fundamental issues of access and removal of monopoly in telecommunications service provision as well as integration of telecommunications into national economic development programming. Due to lack of ICT policy in Kenya  a number of groups came in to fill the gap: CSK, TESPOK, ITSA, ISACA, CCOAK, E-Commerce Association, NSE, KEPSA, ICT Board/KIF, Civil Society, Research and academic institutions, and Development partners (Eldon, 2004).

The first national ICT policy was released in late 2003, just prior to World Summit on the Information Society (WSIS) in Geneva. The copy was however not officially available and was more of a document just to give Kenya a face during the world summit. In November 2004, Kenya ICT Policy project (KIP) and the International Development and Research Centre (IDRC) organized a visioning in collaboration with Kenya ICT Action Network (KICTANet) members and the government. The workshop aimed at visioning the kind of ICT enabled country Kenyans desire as a backdrop for preparing sectoral roadmaps, which would serve as the entry point for implementation planning, considered the next logical step after a policy is drawn up.

During the visioning exercise participants from civil society, private, media and government attempted to approach some consensus on the country they envision, enabled by ICTs. The timing of this exercise was particularly significant because national plans and planning for the sector were weak, unclear and broadly un-negotiated. The Minister of Information and Communications had observed that the draft policy document which has been circulating in government did not have a strong vision and promised “the government would fast track the development of an enabling National ICT Policy through a multi-stakeholder consultative process” during this workshop. The outcomes of the workshop were a National vision document.

On March 8th and 9th, 2005 the Kenya ICT Action multi-stakeholder network organized a national ICT convention, which focused on evaluating progress of Kenya’s national ICT policy process. Participants included representatives from civil society, the media, academia, and the private sector as well as development partners. The heavy presence of diverse interest groups underscored the participatory multi stakeholder nature of the national ICT policy process. This was the Second National ICT Convention.

The 2005 convention emphasized a consensus building approach that values all sectors’ contribution by bringing together a multiplicity of stakeholders from civil society, the private sector, the media and government who had been working closely for a number of years to support the government’s efforts in developing and finalizing Kenya’s ICT policy. The aim of the convention was the beginning of a detailed process of analysis, critique and public input into Kenya’s ICT Draft Policy (Republic of Kenya, 2004) with an eye to finalizing the policy and pursuing future legislative action for implementation. Further, the Convention launched sector specific working groups, which commented on specific segments of the Draft ICT Policy through the online mailing list discussion forums launched after the convention.

Other Highlights of the convention were: the official launch of Kenya ICT Action Network (KICTANet) and the pledge by many organizations to join this network to make real impact; and the real and collective beginnings of the process of gathering comments for the ICT Policy improvement, which included a gender analysis of the ICT Policy, and a media and ICT policy Workshop, held on the second day of the convention.

The Kenya National ICT Convention gave an opportunity to move an ICT agenda. Here, there was the coming together of the private sector representatives, civil society, and academia, and development partners. The sessions addressed: i) Sector polices and ICT; ii) National ICT policy that covered the strategy and e-commerce, and the strategy and human resource; iii) National ICT infrastructure; iv) ICT projects- Investment opportunities; and v) ICT professional bodies. Many other sessions were held which culminated in coming up with a national ICT policy.
The National ICT policy noted the stakeholders’ to include: a) Government - enabling policies, conducive to private sector investment; b) Development partners - build capacity, in collaboration with Government of Kenya; c) Civil society - inform policy making (access, learning, poverty, governance); d) Consumers - participate in development, application, setting standards and ensuring consumer protection; e) Regulator - Issue licenses, tariffs, interconnections, standards, Frequency management and domain management; f) Investors, Operators, Service providers these are to develop an efficient ICT sector, ensure commercial integrity, strong corporate governance, high quality standards, and participate in provision of universal access

The ICT Policymaking process was seen as an elite driven process. The main drivers have been the private sector, through a trade association called the Kenya ICT Federation (KIF), as well as civil society, through an organization called the Kenya ICT Action Network (KICTANET). To some extent, KICTANET represents social justice interests, by including representatives of open source organizations, gender activists and the youth. However, there is also a high level of private sector participation in KICTANET. Finally, the government is under no legal or regulatory obligation to consider the public's comments on the ICT policy in Kenya, which weakens the democratic implications of the policy.

The Kenyan ICT policy process has been incremental yet "authentic." That is, the policy process has been slow, and has proceeded in fits and starts. However, the policy process has been driven by Kenyan citizens, not donors, for the most part. By contrast, the ICT policy process in Rwanda has been largely donor directed. It has been an extremely positive development that the Kenyan government has considered public comments with regard to the policymaking process. Thus it has benefited enormously from public comment.
Through the policy, the government seeks to promote the development of ICT infrastructure and services. Outa, et al. (2006) has pointed that, the policy is founded on four principles, namely, infrastructure development, human resource development, stakeholder cooperation, policy and regulatory frame work. The policy objectives include: Facilitate sustainable economic growth and development, wealth creation and poverty eradication; address development gaps as they relate to women, youth, rural and other disadvantaged groups; address progress towards socio-economic inclusion of all citizens through provision of universal access; stimulate investment in the ICT sector; stimulate innovation in the ICT sector through research and development and;  provide for increased access to ICT services.

2.4.5 Critical Review of major issues


During the past decade there has been rampant change in the travel industry. Travel agencies in particular have long resisted change. The great majority have become entrenched in their methods, their systems and their way of thinking. They have reacted, complained and resisted the changes and have been slow to adapt and change their way of doing business. I call this “status quo retention”. Not only have many agencies retained the status quo, but customers, who themselves operate in a changing environment and adapt to their changes, have resisted changes in the way agencies do business and have reacted negatively or slowly to changes introduced by agencies as they attempt to adapt to their changing environment.

As far as the spread of internet among travel agencies is concerned, the results of previous studies have shown that travels agencies do not exploit all of its potential and many benefits of electronic commerce via the www are not being realized. An interesting example is provided by the answers of 200 Singaporean travel agencies, which reflect poor e-mail customer service but companies with established web sites are in a position to undertake productive marketing activities (Murphy and Tan, 2003). Regarding Kenyan travel agencies, there is an increased use of the internet, but its use is simply an additional mode of communication; and their web sites do not possess the interactive features required for internet marketing.

Content of web sites: The main reason customers will visit an agency’s site is for information or content. The term “content” refers to the information features or services that are offered in the web site (Wan, 2002). For effective on-line selling, a travel agency should offer on-line catalogue and product search engine, tourism information, interactive communication, company information, electronic board, site link and membership registration (Beirne and Curry, 1999; Liu and Arnett, 2000). In addition to these, a brief introduction to the agency itself, marketing activities, safety protection in transaction, what is new, electronic media functions, on line products purchasing, questions and answers services, and frequent visitor programs tend to be preferable items for consumers according to Lu (1997, in Yung (1998)). Opportunities for differentiation appear to rest with developments in electronic transactions, providing interactivity and rich data, and taking online reservation and itinerary planning to new heights of sophistication (Rayman-Bacchus and Molina, 2001).

Marketing on the internet: Another serious point that deserves attention is marketing on the internet. For travel agencies, the emphasis is still on traditional marketing communication channels such as printed media and telephone (Cai, Card and Cole, 2004) even though that the validity of the internet as an advertising and marketing tool has been proven. As marketing on the internet is a very different process from traditional marketing, how to construct and utilize the internet as a marketing tool is becoming a crucial issue.

Building a site and advertising it does not guarantee an audience, neither an effective revenue stream, nor a competitive advantage. Many web sites do not incorporate features that exploit promotional media and are rarely integrated with online marketing strategies. The major factors to be worked out in order to build the confidence of travel agencies in using the internet as an effective marketing tool are: security developed, technology needed and cost effective concerns (Cai et al., 2004; Chen and Yen, 2004; Wan, 2002, Yung, 1998).










2.5 Conceptualization

The conceptual framework below shows the dependent as well as the independent variables as shown in figure 2.1 below

Figure 2.1 Conceptual Framework


 











Independent variables                                                                        Dependent variable

The framework above shows that adoption of ICTs of tours and travel firms in the tourism industry is affected by four variables as the independent variables. These variables are: cost, infrastructure, ICT knowledge and experience as well as the government and institutional ICT policies in place which enhance or inhibit diffusion of ICTs by the tours and travel firms.

2.6 Operationalization

The operational framework below shows the dependent, independent and intervening variables as shown in figure 2.2.




Figure 2.2 Operational Framework

Cost of ICT
- Affordability of installing ICT programs
-funds to hire competent staff

 
Independent variables                                                          Dependent variable







 












Source: Author



The operational framework above shows that adoption of the tours and travel firms will be measured by the performance of the industry. This will form the dependent variable. On the other hand the independent variables will be cost(affordability of installing ICT programs and hiring competent staff), infrastructure (area within reach of ICT) ,ICT knowledge and experience (availability of experienced staff and market information) as well as government and institutional ICT policies in place.
The independent variables will affect the dependent variable either positively or negatively. For example, a firm that has diversified into many areas might record better performance than a firm which has not diversified in many areas.

The parameters for measuring adoption will be the factors; items will be developed that will what factors affect the adoption of e-business by the tours and travel firms. This will include finding out how frequently used the ICT tools are used. In terms of ICT, the study will use frequency and extent of use as parameters of measuring use of ICTs. In information systems, the study will use variety of use of information systems as the parameter. They will include: computers, internet and website.




















 

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 Introduction

The chapter outlines the methodology and procedures and modalities that will be used in data collection.  It also covers research design, determination and identification of the population sample size, sampling design, sampling procedure, the instruments of data collection, validity and reliability of data collected, sources of data, methods of data collection and methods of analyzing the data.

3.2 Research Design

As stated by Bryman and Bell (2007), research design refers to the structure that guides the execution of a research method, and the subsequent analysis of acquired data. It provides a framework for the generation of evidence that is suited both to a certain set of criteria and to the research question in which the investigator is interested. The study will adapt the descriptive research design. Creswell (2002) observes that a descriptive research design is used when data are collected to describe persons, organizations, settings, or phenomena. The study aims at observing and describing the behaviour of the subjects under study without influencing it in any way and therefore considers the descriptive research design to be the most appropriate for this study
A definition devised by Morrison (1998) was adapted for the purpose of this study as follows: SME travel agents are those, which are independently owned, managed in a personalized manner by the owner-manager and not contracted out to an agent, represent the primary source of income for the owner-manager, and employ less than 50 employees. Applying this definition, qualitative research methodology will be applied in the form of exploratory in-depth interviews. The resultant data will be consolidated and the content analyzed. This will allow the researcher to identify emergent recurring themes, contributing to the evolution of a more comprehensive understanding of the important survival strategies adopted by travel agency companies in the advent of modern ICTs.

3.3 Target Population

The target population will be owners, employees of the travel agency companies as well as government officials in the ministry of tourism, Kenya Tourism Board. The target population will be tourism industries within the MSEs sector in Kenya covering travel agencies. The sample population will be taken from Nairobi. The key considerations in the determination of the sample regions will be their economic significance, abundant tourism resources, a developed tourism sector and their ability to represent fairly the MSEs sector in the tourism industry.

Data from the ministry of tourism also indicates that Nairobi has a higher number of registered tour operators agencies (class A1 enterprises) than any other towns in Kenya (Kenya, Ministry of Tourism and Wildlife, 1968). The target population for this study will be 55 travel agency companies in Nairobi. This translates to 440 employee respondents comprising of top management staff and middle level management.

Table 3.1 Target Population
Category
Target Population
Less than 10 employees
310
11- 50 employees
120
51 – 99 employees
10
Total
440

3.4 Sampling Design

Neuman (2000) argues that, the main factor considered in determining the sample size is the need to keep it manageable enough. This will enable the researcher to derive from it detailed data at an affordable costs in terms of time, finances and human resource (Mugenda and Mugenda (1999). The researcher will ensure a high degree of correspondence between a sampling frame and the sample population as the accuracy of the sample depends on the sampling frame. Further, Patton (2002) argues that the sample size depends on what one wants to know, the purpose of the inquiry, what is at stake, what will be useful, what will have credibility and what can be done with available time and resource.

The study will use purposive and simple random sampling techniques. The study will randomly sample 30% of the target population; as such, the total sample size will be 132. The study will sample 30% because Patton (2002) recognizes 30% as an adequate sample size in a survey study.

Table 3.2 Sampling Frame and Size
Category
Target Population
%
Sample size
Less than 10 employees
310
30
93
11- 50 employees
120
30
36
51 – 99 employees
10
30
3
Total
440

132

3.5 Data Collection

This section presents the research instruments, the validation and reliability assurance of the research instruments and the data collection procedure that will be adopted in this study.

3.5.1 Research Instruments

The main research instrument that will be used in this study will be questionnaires. In developing the questionnaire items, the fixed choice and open-ended formats of the item will be used. This format will be used in all categories of the questionnaires. However, in the fixed choice item, it involves ‘putting words’ in the respondents’ mouth, especially when providing acceptable answers, there is temptation to avoid serious thinking on the part of the respondent. The respondent ends up choosing the easiest alternative and provides fewer opportunities for self-expression. It is because of these reasons that it will be necessary to combine this format of items with a few open – ended response items. Most of the items will adopt a Lickert scale (e.g. 1-strongly disagree, 2-disagree, 3-undecided, 4-agree, 5-strongly agree). An interview schedule will be used to collect data from the management staff of travel agency companies as well as the relevant government officials in the ministry of tourism.

Interviews

Field interviews will be selected as the primary data collection technique because they are valuable for developing an understanding of a phenomenon at the ‘grass roots’ level
(Neuman, 2000). Following the direction of Purcell et al. (2004), the underlying principle used to select participants will be to select enterprises that use the Internet or those that have developed a web site. Enterprises will have to fulfill two further conditions to be eligible for the study:
(1) They should have less than 20 employees (the number of employees will be considered as the principal criterion because of the difficulty obtaining information such as sales turnover or capital).
(2) They should be either an accommodation provider and/or a tour operator (these two categories of tourism enterprise will be selected as they operate by attracting customers based on information provided).

3.5.2 Validity of the Research Instrument

i. Use multiple source of information
ii. Establish chain of evidence
iii. Have key informants review the report
Multiple sources of information will be used in the form of three kinds of sources: (1) literature review on previous empirical research, (2) primary data in the form of interviews owners of the travel agency companies, (3) direct observation.
Establish a chain of evidence will be performed in three steps: (1) Literature review, which provides an emerging framework. (2) Pilot study, which will fill the gap between emerging conceptual framework and later field study. (3) The questionnaire as an instrument of data collection. Also these findings will be validated in statistical studies.
Have key informants review the report. In order to perform this technique several respondents will be asked to comment on some of the conclusions.

3.5.3 Reliability of the Research Instrument

Reliability is the extent to which any measuring procedure yields the same results on repeated trials (Neuman, 2000). In many areas of research, the precise measurement of hypothesized processes or variables (theoretical constructs) poses a challenge by itself. In general, in all social sciences, an unreliable measurement of people’s beliefs or intentions obviously hampers efforts to predict their behaviour. Reliability and item analysis can be used to construct reliable measurement scales, to improve existing scales, and to evaluate the reliability of scales already in use. Specifically, Reliability and item analysis will aid in the design and evaluation of sum scales, that is, scales that are made up of multiple individual measurements (e.g., different items, repeated measurements, different measurement devices, etc.). The program will compute numerous statistics that will allow the user to build and evaluate scales following the so-called classical testing theory model.

The assessment of scale reliability is based on the correlations between the individual items or measurements that make up the scale, relative to the variances of the items. In this context the definition of reliability is straightforward: a measurement is reliable if it reflects mostly true score, relative to the error. We can estimate the proportion of true score variance that is captured by the items by comparing the sum of item variances with the variance of the sum scale. Specifically, we can compute: a = (k/(k-1)) * [1- S(s2i)/s2sum].

This is the formula for the most common index of reliability, namely, Cronbach's coefficient Alpha (a). In this formula, the s2i's denote the variances for the k individual items; s2sum denotes the variance for the sum of all items (Patton, 2002). If there is no true score but only error in the items (which is esoteric and unique, and, therefore, uncorrelated across subjects), then the variance of the sum is the same as the sum of variances of the individual items. Therefore, coefficient Alpha equals to zero. If all items are perfectly reliable and measure the same thing (true score), then coefficient Alpha is equal to 1. Cronbach's alpha is the most common form of internal consistency reliability coefficient. By convention, a lenient cut-off of .60 is common in exploratory research; alpha should be at least .70 or higher to retain an item in an "adequate" scale; and many researchers require a cut-off of .80 for a "good scale." Regarding the above explanation, in this research, Cronbach’s alpha will be used in order to test the reliability of items at the pilot study, after calculating this; the researcher made some changes in order to make the questionnaire reliable and bring the Cronbach’s alpha to minimum .70.

3.5.4 Administration of Research Instruments

Research assistants will be thoroughly trained both in interpretations of responses from respondents and also in the procedure of administration. They will then accompany the researcher in piloting and modifying the research instruments so that they can comprehend fully the purposes and methods of data collection. The research assistants will administer the questionnaires personally to the respondents and will be the ones entering responses from the respondents in the questionnaire. The researcher will however administer the interview schedule to government officials on his own. This will enable him gather additional information and interpret answers based on the research objectives.

3.6 Data Analysis

The questionnaires will be checked for completeness and consistency of information at the end of every field data collection day and before storage. Data capturing will be done using Excel software. The data from the completed questionnaires will be cleaned, re-coded and entered into the computer using the statistical package for social sciences (SPSS) for Windows for analysis. Data analysis and the findings will be reported in chapter four. Descriptive statistics (i.e. frequency analysis) will be computed for presenting and analyzing the data. Descriptive statistics enables the researcher to describe the aggregation of raw data in numerical terms (Neuman 2000 p. 317). The descriptive statistics used will involve the use of univariate. This method will incorporate the use of frequency distributions, percentage tables and measures of central tendency. It will also incorporate the use of measures of variation such as: ranges, percentiles and standard deviations for univariate analysis.

3.7 Ethical Issues
The study will adhere to ethical issues that are the baseline of any research. The researcher will inform the respondents that they have a right not to participate in the study if they so wish. The study will also inform the respondents that they have a right to withdraw from the study at any time without giving a reason as to their withdrawal.

3.8 Expected Outcome
The study will provide empirical information on the utilization of ICTs to access and manage information by tours and travel firm entrepreneurs in the tourism industry. The study will also give some insight into the factors that have inhibited adoption of ICT by tours and travel firms in Kenya. It therefore will provide stakeholders in this sector with remedial measures that need to be undertaken in addressing the challenges facing tour and travel firms in this era of globalization and information society.













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APPENDICES


APPENDIX I - TIME SCHEDULE


This is the approximate time that will be taken to finish the research.

ACTIVITY
DURATION

Collection of literature
                Aug - Nov 2010
Writing of proposal
                Dec 2010 – Jan 2011
Development of research instruments
                Jan 2011

Data collection and analysis
               Feb – March 2011

Project write-up
               April 2011

Presentation of 1st drafts and defense
               May 2011

Submission of final draft
              June 2011




 




APPENDIX II - BUDGET SCHEDULE

The following is the approximate amount of money that will be used during research.

Activity
Money in Kshs
Collecting literature
2000
Proposal writing
6000
Correcting of proposal
2000
Printing and defense of proposal
3000
Pilot study
2000
Printing research instruments
4000
Data collection
26,500
Data analysis
17000
Submission of 1st draft
3000
Correction and defense of thesis
2500
Final submission
8000
Total
74, 000

 







APPENDIX III- INTRODUCTORY LETTER


 P.O BOX ….,
NAIROBI


Dear Respondent,

I am a student from KEMU University pursuing an MBA. I am carrying out a research entitled:

FACTORS AFFECTING THE ADOPTION OF E-BUSINESS AMONG TOURS AND TRAVEL FIRMS IN NAIROBI


Please assist me by filling in the questionnaires provided. The questionnaires are meant to help in fulfilling the research objectives. The researcher assures you confidentiality in the information given.  

Yours Faithfully,

PETER MACHARIA.






 

APPENDIX IV  : MANAGER/OWNER QUESTIONNAIRE

This questionnaire is to collect data for purely academic purposes. The study seeks to what are the factors that affect  the adoption of e-business among tours and travel firms in Nairobi. All information will be treated with strict confidence. Do not put any name or identification on this questionnaire.

Answer all questions as indicated by either filling in the blank or ticking the option that applies.

SECTION A: DEMOGRAPHIC

1.     

 

 
Gender
Male                            Female

2.      Age

 

 
Below 30 years                        30-35 years

 
36-40 years                             

 
Over 40 years


3.     

 

 
Marital Status
Single                                       Married

 

 
Divorced                                  Widowed

4.      Highest level of education
 

 
Primary level                                       Secondary level
 
 
College level                                        University level
           
5.      Position in the travel and tour firm…………………………….

6.      Number of years worked in the tours and travel firm

 

 
0-3 years                                              4-6 years

 

 
6-9 years                                              Over 10 years

Adoption
7.      Channels of communication often used in everyday business
Computers (email)                                           Telephones                                                      Fax                                                                  Electronic media – radio, TV                           Print media e.g. letters, posters, Handouts            Face to face                            
8.      Channels of communication most effective in promoting enterprise services
Computers (Internet-websites)             Telephone                                                                    Electronic media (Radio, TV)                 Print media e.g. Posters, brochures & Handouts                      Face to faces                                                   
9.      Mode of Storing Business Information
Galileo system                                                
Office files (hardcopy)                                                           
Softcopy (Removable and non-removable disks)                   
10.  Type of ICTs in your Enterprise
Computers                               Mobile phones                                    
Phones i.e. land lines               Fax machines               VHF radio                   
11.  No. of Computers in your enterprise
Less than 5                              5 – 10                                      11 – 20                                   
12.  Are your computers networked?
            Yes                                                      No      
13.  How often do you use the following E-business tools in your workplace? Please tick where appropriate.


STATEMENT
Very often
Often
Not sure 
Rarely
Never
A
Computers
1
2
3
4
5
B
Email
1
2
3
4
5
C
Website
1
2
3
4
5
D
Galileo system
1
2
3
4
5
E
Internet
1
2
3
4
5
F
Social networking sites such as facebook, twitter
1
2
3
4
5

SECTION B: ICT Knowledge and Experience as a factor affecting adoption of ICT

14.  Do you think ICT knowledge and experience is a major factor affecting adoption of ICT in your firm?
1. Yes       2. No.
15.  The following items related to why ICT knowledge and experience affect its adoption among tours and travels firms. Tick appropriately


STATEMENT
Strongly
disagree
Disagree
Neutral 
Agree
Strongly agree
A
Lack of ICT knowledge and skills especially in e-business application and qualified personnel
1
2
3
4
5
B
 Lack of managerial understanding and skills for e-business
1
2
3
4
5
C
Lack of awareness of available and applicable technology
1
2
3
4
5
D
 Lack of knowledge of existing ICT policies
1
2
3
4
5
E
Lack of knowledge of the available rules and regulations applicable to e-business
1
2
3
4
5
F
Lack of awareness about business opportunities/benefits that e-business can bring
1
2
3
4
5


SECTION C: Cost as a factor affecting the adoption of ICT

16.  Do you think cost is a major factor affecting adoption of ICT in your firm?
1. Yes       2. No.
17.  The following items related to why cost affect the ICT adoption among tours and travels firms. Tick appropriately


STATEMENT
Strongly
disagree
Disagree
Neutral 
Agree
Strongly agree
A
High cost of buying ICT applications/equipments
1
2
3
4
5
B
Lack of finance for developing and maintaining e-business system
1
2
3
4
5
C
Lack of capital to train staff on ICT and e-business
1
2
3
4
5
D
 Lack of finance to employ qualified staff for technical advice
1
2
3
4
5
E
High cost of maintaining connectivity
1
2
3
4
5
F
Low level of ICT knowledge among the customers
1
2
3
4
5

SECTION D: Infrastructure as a factor affecting the adoption of ICT in the Tour and Travel Firms
18.  Does infrastructure affect the adoption of ICT in your firm?
1. Yes 2.No
19.  The following table indicates items related to infrastructures that affect adoption of ICT. Tick where appropriate.

STATEMENT
Strongly
disagree
Disagree
Neutral 
Agree
Strongly agree
A
Unreadiness for e-business in terms of infrastructure
1
2
3
4
5
B
Lack of compatibility between our current technical infrastructure and e-business technologies
1
2
3
4
5
C
Internet inaccessibility to most of the customers due to poor infrastructure
1
2
3
4
5
D
Lack of network coverage due to problems of infrastructure in some firms
1
2
3
4
5

SECTION E: Government and Institutional ICT Policies on Performance

20.  The following items relate to the effects of government on ICT policies on performance. Please tick where appropriate.


STATEMENT
Strongly
disagree
Disagree
Neutral 
Agree
Strongly agree
A
Establish an interministerial committee to incorporate ICT into government operations
1
2
3
4
5
B
Investing in adequate ICT education and training
1
2
3
4
5
C
Implementing tax reduction and tax incentives on both computer software and hardware so as to make them affordable to travel agencies and low income earners
1
2
3
4
5
D
Reviewing of legal framework to remove impediments
1
2
3
4
5
E
Help in improving service delivery
1
2
3
4
5
F
Transform government operations
1
2
3
4
5
G
Promote democracy
1
2
3
4
5

21.  How much influence does the government have on ICT institutional policies on performance in the tours and travel firms

 

 

 
None                            Very Little                   Unsure                                   

 

 
Some                                       A lot


22.  In your opinion, what are the ways to improve constraints in the adoption of e-business among tours and travel firms in Nairobi
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………


If you would like to receive a copy of the research findings, please put your email here:………………………………………………………….
 
 







END OF QUESTIONNAIRE
Thank you for taking your time to fill it.

 

 

 






APPENDIX V: INTERVIEW SCHEDULE

Questions to guide the researcher during the interviewing sessions:
i)                    What is the relationship between cost and adoption ICT and performance of the firm?
ii)                  How do infrastructures affect performance by tours and travel firms.
iii)                What is role of ICT experience and knowledge and   performance in tours and travel firms?
iv)                What is the effect of government and institutional ICT policies on performance?



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