Small Businesses as Social Formations: Diverse Rationalities in the Context of E-Business Adoption

Small-business adoption of electronic business has been analyzed largely in conventional business terms such as benefits and costs, returns on investment, and competitive advantage. While these factors are important, small businesses are also embedded in social contexts which shape the rationalities with which they approach e-business. These rationalities are different from those that characterize larger businesses. They involve personal relationships, social esteem, lifestyle issues, and family considerations. Drawing on the theoretical work of Granovetter and Weber, this chapter examines interview data from a number of Australian studies of e-commerce by small businesses. These interviews illustrate the influence of the social context on the adoption (or deferral) of e-commerce. By recognizing that small businesses are social as well as economic formations, governments can tailor their programs to assist this important group of businesses in their approach to e-business.