Advancing SME performance: a novel application of the technological-organizational-environment framework in social media marketing adoption

Abstract

This study advances the body of knowledge on social media utilization within Small and Medium-sized Enterprises (SMEs) by integrating complexity, cost, and capability into the Technology-Organization-Environment framework. It critically examines the influence of these factors on the adoption of social media marketing strategies to improve SMEs performance. Integrating these dimensions, this study elucidates their collective impact on SMEs’ operational efficacy. We collected data from 508 Indonesian SMEs and employed Structural Equation Modeling to test our hypotheses. The results elucidate a discernible hesitancy among SMEs to adopt social media marketing strategies, primarily due to technological apprehensions concerning perceived advantage, complexity, and cost. Inversely, organizational influences such as top management support and perceived employee capability, alongside consumer and vendor pressure, are shown to significantly propel the adoption process. Importantly, the results confirm a substantial positive relationship between the strategic incorporation of social media marketing and the enhancement of SME performance. This research study makes a substantial contribution to the advancement of the TOE model as an effective solution for overcoming challenges faced by SMEs when embracing social media marketing and making impactful investments in digital marketing. By exploring the factors that shape social media marketing adoption in the context of SMEs, this study provides valuable insights for both industry practitioners and academic researchers.