Threats & Opportunities for E Business

EJISDC (2009) 36, 8, 1-31

IT IN PAKISTAN: THREATS & OPPORTUNITIES FOR EBUSINESS
Ghulam Muhammad Kundi
Department of Public Administration
Gomal University, D. I. Khan,
Pakistan
[e-mail]

Department of Public Administration
Gomal University, D. I. Khan,
Pakistan
[e-mail]

ABSTRACT
This study identifies the characteristics of the independent variables i.e. governmental, organizational, human and technological conditions and the dependent phenomenon of the success/failure of eBusiness projects in the background of Pakistan. A huge body of research is going to be unfolded, which if not managed properly, can nullify all the investments and efforts on eBusiness in the country. The study is based on survey approach; a questionnaire on continuous scale was used, where t-test, ANOVA, correlation and regression analysis were done for statistical analysis of primary data. Out of 31 hypotheses, 22 were substantiated and the rest were rejected. This study finds that though the conditions are not much promising for eBusiness at the moment, yet growing interest of the private sector through viable investment and gradual improvement in infrastructure indicates more opportunities than threats for eBusiness in Pakistan.
Key Words: eBusiness, Government, IT-Policy, Bureaucracy, Infrastructure, Political
Environment, Organization, Organizational IT-Maturity, Structure and Size, Organizational
Culture, Power and Politics, Management Styles, Technology, IT Professionals, eSecurity, eTransactions, Opportunities and Threats.
1.
INTRODUCTION
Information Technology (IT) has revolutionized the organizational structures and performance of all the public, private and other social organizations round the globe. Since
1990s IS applications have penetrated into almost all dimensions of human life. The initial usage of computer-artifacts was ‘automation’ of the routine tasks, therefore, the technology played ‘back-office’ role in the organizational environments. Gradually the technology developed by ‘offering multiple packages to be used at different levels of the management and the organizational practices’ (Laudon, 2003).
Pakistan is on its way to digital modes of governance and business. Like any other developing country, Pakistan is also passing through good and bad experiences, however, unless adequate measures are introduced in customizing the technology, mismanagement always results in wastage of resources, problems in usage and sometimes total termination of the projects (Glass, 1998). Survey after survey reveals that most IT projects fail, cause new organizational problems and eat budget (Glass, 1998; Deva, 2003).
In many industries, such as banking and telecommunication, it is virtually impossible for an organization to compete unless its customers are given the level of service that is only possible with high technology systems. Now organizations are conducting business online i.e. eBusiness. According to (Rogers, 2002) “eBusiness means interacting and serving the customers online” which uses IT to expedite the exchange of information for communication and coordination both inside and outside of the organization and to manage the internal processes and external relationships with customers, suppliers and other entities.
This research aims at identification of organizational, human and environmental context of the eBusiness in Pakistan as computerization in the developing countries has several common problem, however, each country also has its own issues, which must be
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accommodated by the system developers through the customization of the new systems. Thus the research problem for this research can be stated as ‘given the dangers of IT-projects both in private and public sector how are the conditions for eBusiness in Pakistan with regard to its contextual factors and how could they be streamlined according to the requirements of new systems’? 2.
REVIEW OF THE EXISTING LITERATURE
2.1
Global Perspective of eBusiness
2.1.1 Technological Dimension
IT is considered as a magic potion for all management and business problems (Lee and
Wang, 2001). Developed world is enjoying the benefits while developing countries are on way to digitization yet, there are technological gaps between the developed and developing countries in use of IT. Advanced nations are using leading-edge technologies, while developing countries lack state-of-the-art technology, consequently they are lagging behind.
Willcocks and Plant (2001) share the same view. In developing countries like Pakistan acquisitions, installation, use, and maintenance of IT along with training of user is a barrier to eBusiness. Similarly, due to poor and below standard IT-education institutions, developing countries are facing the challenge of the scarcity of qualified IT-professionals in order to meet their national requirements of the eBusiness.
2.1.2 Social and Cultural Dimension
Several social and cultural factors threaten implementation of IT in business. Turban,
McLean and Wetherbe (2004) considered following as major issues: “codes of ethics, intellectual property rights (primarily digital property), accountability (for actions are non actions), personal and data privacy (including “dataveillance” electronic monitoring, data accuracy and data accessibility), censorship, and ownership of information which fall under the umbrella of IT ethics”, while Wise and Morrison (2000) opine that “social and cultural differences between the developed and developing nations are the barriers to IT diffusion and growth of eBusiness in the developing countries”.
The conditions and environment of the developing and technically advanced nations is almost different. Bhatnagar and Schware (2000) points that “the needs, requirements and resources of countries and organizations vary according to their human and capital resources, goals and objectives, structures, size, business operations and management, so is the case of the technology”. Similarly, banking, telecommunication, public and private sectors have their own limitations with reference to digitization. Furqan (2004) observed “the unavailability of proper infrastructure, frequent failures of power, faulty telephone cables, limited use of internet, the issue of security of transactions on internet and high bandwidth rates as notable barriers of eBusiness”.
IT for good is a reality and no country and sector can be imagined without use of IT.
With reference to overcome barriers for development of IT and eBusiness, several options are available which developing countries can opt according to their local conditions and requirements. These include: Leading vs Tested Technologies, Technological vs Business
Projects, and Tailored vs Off-the-Shelf Development Systems. Yet, developing countries like
Pakistan cannot afford costly off-the-shelf systems because of its economic constraints, where it has its own IT-workforce, which can tailor the systems that best suit the businesses, however, quality of IT professionals and brain drain of qualified professionals is a question for policy makers.

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2.2 eBusiness in Pakistan
Impact of IT and eBusiness is most visible in the context of developing economies, as it plays a significant role in the development of today’s economies (Bhatnagar, 2000). In Pakistan, eBusiness is still in its infancy but it is growing, where banking and telecom sectors are playing leading role. Yet the pace is slow because of many unfavorable conditions i.e. governmental, organizational and technological. Nizamuddin and Khalid (2001) and Ibrahim
(2004) reports that in Pakistan, “IT business is growing at annual rate of 50% per annum, where PCs growth rate is 30% per year; similarly Pakistan imported 350,000 new systems in
2002-2003, out of which 65% were non-branded, where sale of laptops grew to 35% from
15% and in the same period Pakistan’s import of computer hardware and associated devices was around $20 million”. The numbers of “PCs in the country are between 1.5-1.6 million, currently s/w exports reached $2.2 billion and expected to cross $10 billion in 2010”
(Zarmeene, 2006). Likewise, according to (PTA, 2006) “in 1991, 90% telephone lines were converted to digital; in 1995 Internet Service Providers started providing Internet facility, now out of 250 more than 85 ISPs are operational with 7.5 million users. Moreover, government has reduced the bandwidth tariff from $87,000 to $1,400 per mbps to encourage the development of IT culture by providing relief to the end users”.
IT policy and action plan was announced in 2000, new IT educational institutes were opened and IT professionals were hired to impart IT training in universities (Ara, 2001).
Nationwide IT seminars, exhibitions and competitions were arranged and Cyber Cafes were opened to create awareness for IT and Internet use. Several task forces have been established to take care of the multiple areas of the technology and its continuing support to certain areas of the life (Naeem, 2003).
There is an increasing trend of internet users which reached to 7.5 million in 2008 from 0.01 million in 1997-98, similarly, development of telecom and internet infrastructure is a prerequisite of eBusiness. In Pakistan, telecom sector is growing at 170.2% with total teledensity of 43.52 in July 2007 (Pakistan Economic Survey (PES), 2005-2006; Shabbir,
2004; Pakistan Telecommunication Authority (PTA), 2008). Moreover, government has announced incentives to enhance telecom sector i.e. Telecom Deregulation Policy-July 2003,
Mobile Cellular Policy-January 2004 and Broadband Policy-December 2004 (PES, 20052006). Currently there are more than 60.97 million cellular phone subscribers throughout the country including Azad Jammu & Kashmir with an addition of 1.6 million subscribers each month (PTA, 2008).
Most of the banks in developed world are providing eBanking services to their customers which refers generally to “all forms of financial transactions relating to commercial activities, including both organization and individuals that are based upon the processing and transmission of digitized data, including text, sound and visual images”
(Adeel, 2004). Similarly, Ashar (2002) is of view that “the concept of anytime, anywhere, anyplace banking is a big convenience for all concerned, where internet or digital banking is really making anytime, anywhere, anyplace banking practical”.

Categories
Domestic
Banks
Foreign
Banks
Total

Table 1: Branches of Domestic & Foreign Banks in Pakistan
June
June
June
June
June
December
2001
2002
2003
2004
2005
2005
7,272
7,280
6,829
6,872
7,089
7,301
80

78

70

67

82

105

7,352

7,358

6,889

6,939

7,171

7,406

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According to Shamshad (2006) 3,424 branches are providing real-time online banking facility to the account holders in Pakistan as against 7,406 branches of 41 banks which mean that 47.27% branches are working online. The commercial banks have registered a growth of
45% in opening new online branches in the 2nd quarter of 2006 (Shakaib, 2006) however pace of digitization is still slow due to several factors. Similarly, mobile banking is introduced officially in 2006, is also in its initial stages as its services has limited advantage due to mini-statements retrieval facility (Zarmeene, 2006).
Recent survey (Bakhtiar, 2005) conducted in Peshawar, Mardan and DIKhan have found that “only 5% of the customers know about Automated Teller Machine (ATM), while
95% have no knowledge of ATM. Moreover, only 8% are aware of online account facility and 92% know nothing. Likewise, 12% customers were aware about debit and credit cards facility where 88% customer’s response was negative”.
Table 2: Comparison of eBanking Services in Pakistan
Debit Credit eBankin mBanking
ATM
Card
Card
g*
**
Locator
ABN AMRO
§
BANKS

Askari
Commercial Bank
Bank Alfalah
Citi Bank

1LINK
MNET

***

Faysal Bank
Habib Bank Ltd
MCB
Metropolitan Bank
NBP
Soneri Bank
Standard
Chartered Bank
UBL
Union Bank

ATM
Network
1LINK &
Cirrus
1LINK

§

MNET
1LINK
MNET &
Cirrus
MNET
1LINK
1LINK
1LINK &
MNET
1LINK
1LINK

* eBanking: Electronic Banking vary from bank to bank but generally includes viewing eStatements and fund transfers. Requires logging into website.
** mBanking: Mobile Banking, may refer to accessing mini-statements of accounts and funds by accessing websites via cell phone
*** Citi Bank has an exclusive eCard for online transactions
§ Only offers viewing/receiving eStatements
Though Pakistan has made sustained efforts to bring its IT sector at par with other leading players, however, if compared to the other countries, there is a long way to achieve desired goals of digitization. Table 3 adopted from Economist Intelligence Unit e-readiness rankings, 2008 points that out of 69 countries Pakistan lies on 64 however, its score increased from 3.79 in 2007 to 4.10 in 2008 which shows gradual progress (The Economist, 2008).
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Moreover, there is huge gap between developed and developing countries especially in comparison to Denmark, US and Sweden, the India, Sri Lanka; Pakistan is far behind in the race of e-readiness for IT advancement.
Table: 3 e-Readiness Annual Rankings 2008 (Source: Economist Intelligence Unit, 2008)
Country
2007 e-readiness
2006 score
Country 2008 e-readiness 2007 score score (of 10) score (of 10)
Denmark
8.88
9.00
Denmark
8.83
8.88
US
8.85
8.88
US
8.95
8.85
Sweden
8.85
8.74
Sweden
8.85
8.85
India
4.66
4.04
India
4.96
4.66
Sri Lanka
3.93
3.75
Sri Lanka
4.35
3.93
Pakistan
3.79
3.03
Pakistan
4.10
3.79
Iran
3.08
3.15
Iran
3.18
3.08
Likewise, Table 4 portrays the readiness of the developed countries with respect to connectivity, technology infrastructure, business environment, social, cultural and legal environment, government policy and vision, consumer and business adoption.
Table: 4 Overall Score of Developed Countries for e-Readiness
Source: Economist Intelligence Unit, 2008
Overall
score

8.83
8.95
8.85

Business envt. Social and cultural envt. Legal envt. Government policy and vision Consumer and business adoption 20%

Category weight Denmark
US
Sweden

Connectivity and technology infrastructure 15%

15%

10%

15%

25%

8.70
8.50
8.80

8.65
9.00
8.52

8.67
9.00
8.60

8.60
9.00
8.60

9.85
9.00
9.35

8.60
9.50
9.05

In comparison to developed countries the score given in table 5 points that developing countries are legging behind in the race of digitization and IT adoption. The figures in Table
5 portray that developing countries, where the overall score of Pakistan is 4.10 as compared to Denmark 8.83, US 8.95 and Sweden 8.85 moreover, within the region, India and Sri Lanka are in better position than Pakistan with reference to digitization efforts standing on the overall score of 4.96 and 4.35.
Table: 5 Overall Score of Developing Countries for e-Readiness
Source: Economist Intelligence Unit, 2008
Legal Government Consumer
Social
Overall Connectivity Business and Envt. Policy and
Envt.
and score and
Business
Vision
Cultural
Technology
Adoption
Envt.
Infrastructure
Category weight India
Sri Lanka
Pakistan
Iran

20%
4.96
4.35
4.10
3.18

15%

15%

10%

15%

25%

3.40
2.95
2.90
3.15

6.53
5.80
5.42
4.40

5.33
4.80
3.40
4.87

5.10
6.30
5.30
2.20

4.95
4.10
4.25
2.50

5.00
3.70
4.10
2.25

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Figure 1a

Average Increase in Sales
Of Individual Business

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Figure 1b

Use of Mobile Phones for Business/Work
Related Activities in Pakistan

Figure 1c Cellular Subscribers & Penetration in Pakistan

The above Figures (1a-1c) demonstrate that cellular phones are penetrating the market in Pakistan, which is an indicator of alternate to landline for businesses, it has positively increased the business from 30.56% to 41.28% after its usage in business.

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2.3
Major Issues of eBusiness in Pakistan
A vision of ‘wired Pakistan (widespread connectivity)’ (Hussain, 2001) has become buzzword among almost every literate and even illiterate Pakistani and it is being used as a status symbol. People talk about IT to learn more and thus be part of newly emerging ‘cybercommunity.’ It cannot, however, be taken for granted, because the risks involved in ITadoption process are evident from finding of Sauer (1993) that “70% of IS projects are failing”. Thus zest and zeal of community need to be administered at all bureaucratic, political, educational, social and cultural levels besides streamlining the technology. eBusiness in Pakistan like other developing countries is facing different challenges in process of computerization, because digitization is a socio-technical and multidisciplinary activity, though computerization is comparatively easy in developed countries because of the availability of technical, financial and human infrastructure but it is difficult in developing nations like Pakistan due to non availability of required resources, infrastructure and skills.
With this context, eBusiness in Pakistan is facing many challenges (e.g. governmental, organizational and technological), that is why growth and pace of eBusiness is slow. According to Moreno (2001) “low computer education, technology sensitization, lack of basic understanding of how-to use Internet, high cost of computers, lack of understanding of English language, unstable political and legal environment, poor regulatory framework for eBusiness and brain drain are notable barriers of eBusiness in Pakistan”.
The most fundamental need of eBusiness is provision of infrastructure to encourage eTransactions, which is a challenge for the developing countries to overcome. The infrastructure needs to have sufficient bandwidth, it needs to be able to support high traffic, and provide secure and reliable connections. The availability of sufficient infrastructure and consistency of electric power within the country plays significant role in the success of eBusiness. “The issue of security in the age of Cybercrime is costlier to businesses than physical crime and major area of concern, and it is one of the main barriers to eBusiness (Weill and
Vitale, 2002)”. eBusiness in Pakistan is mushrooming at a very humble pace, yet security and privacy are the issues which are discouraging customers to enjoy facilities of eShopping and eBusiness. Though Pakistan has taken initiatives to improve the security and provide legal cover to eSignatures and eDocuments through promulgation of Electronic Transactions
Ordinance (ETO) 2002 and Electronic Crimes Act (ECA) 2007, yet “theses meet only about
15 to 20% needs of eBusiness (Dawn, 2006)”.
Researchers suggests that in ISD scenario and use problems, organizational context is mostly characterized by: for example, structural complexities; imposing management styles; political conflicts between different organizational stakeholders; users developers gaps and cultural diversities among different groups involved in the system development and use environments (Markus 1983; Drummond 1996). With reference to Pakistan, eBusiness is facing the issues in the areas of organizational culture, organizational power and politics, management styles and organization structure and size due to organizational IT immaturity.
Development of an eBusiness system is a socio-technical venture, which needs well contrived feasibility studies. Misalignment of IT with business objectives may leads to the failure where Sauer (1993) states that “more than 70 % IT-projects fail due to miscommunication and misalignment of the new system with business”. An analysis of the failure phenomena suggests that whatever level of failure is, the major cumulative reason is
‘misalignment’ between IT and the characteristics of the organization, while degree of alignment determines degree of success and failure. Misalignment results in misunderstanding and thus conflicts, which reveals in several forms such as ‘user resistance’ to change demanded by technological transformation (Kundi and Nawaz, 2006). Experts

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suggests humanization of technology for IT-business alignment i.e. computer should be given human face.
When Berners-Lee (1996) developed World Wide Web in 1989, he wanted it to become a communications facilitator free from regulations, but its misuse has created many social problems for the business and societies. Though Pakistan has implemented laws regarding computer crimes, yet these laws do not affect offenders outside of that sovereign state. With passage of time, advanced countries infused technology into their socio-cultural setup, however as a developing country, Pakistan is on way to achieve the targets of digitization, but still lack proper legal infrastructure to regulate IT associated socio-cultural and ethical problems.
Hussain (2001) noted that major issues for IT-education in Pakistan include the poor quality of teaching, poor monitoring of the progress of IT institutes on part of government and lack of uniformity in the courses offered by so called IT institutions besides the outdated curricula. Likewise, bureaucracy is another hurdle for eBusiness in Pakistan, there is wide evidence that success and failure of an IT infusion process significantly depends on ‘senior management’s support’ in any organization (Khan, 2003).Same is arguable for Pakistan, where senior management (related political and bureaucratic structure such as Ministry of
Science & Technology (MoST) and IT Commission) has to play dominant role in making or breaking the IT strategies, which are initiated both at public and private levels of development. If there is a wider gap between what senior executives are saying in the
‘official statements’ and ‘the reality’, the process of development is more likely to be pulled back instead of pushed ahead. Educated and motivated administrative machinery can effectively formulate and implement the policies.
The existing literature upholds that government (government IT policy, bureaucracy, stability of the political environment, and development of physical and legal infrastructure for
IT); organization environment (structure, size, management, culture and organizational IT maturity) and technology (h/w, s/w and IT professionals) are the critical success factors of eBusiness which if favorable offer unprecedented opportunities for eBusiness in Pakistan and become threats in case of unfavorable conditions.
3.
RESEARCH MODEL AND INCLUSION OF RESEARCH VARIABLES
The existing review of studies provides basis for the research objectives. Model shown in
Figure-2, is a one-stage model which relates independent and dependent variables. The relationship as indicated in the model is associative and casual in nature. In this study eBusiness is dependent variable and there are ten major independent variables grouped into three categories ‘Government, Organization and Technology’. The independent variables emerged from literature are ‘government IT policy’, ‘bureaucracy’, infrastructure’, ‘political environment’, ‘organizational IT maturity’, ‘organizational culture’, organizational power and politics’, management style’, hardware and software, IT professionals’ and the dependent variable is ‘eBusiness’. The schematic diagram of theoretical framework of this research is illustrated below with detailed justification for inclusion in the IT projects.

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Figure: 2. Theoretical Framework

Government
Govt. IT Policy

Political

Opportunities
Infrastructure

Organization
Management
Organization al Structure

Organizational
IT-Maturity

eBusiness

Correlation

Bureaucracy

Technology
H/W & S/W

IT-Professionals

Threats

3.1
Government IT Policy
Consistency in policy and regular support of government helps in promotion of IT culture in a country that fuels eBusiness as it is a technology driven business. Pakistan is facing with several challenges in IT adoption. Ahmad (1994) Aasiya and Rana (2000) Naeem (2003)
Ibrahim (2004) and Zarmeene (2006) concludes that IT policy of government is the most significant factor that may cause serious bottlenecks if not addressed carefully. Likewise
(Hussain, 2001; Aslam, 2001; Kundi, 2006; Kundi and Nawaz, 2006; Kundi et al., 2007;
Khan, 2007) also included government IT policy as the most important variables which if made favorable will boost eBusiness in the country. Based on the previous studies we propose the following hypothesis:
H1:
H2:

Government IT-policies significantly influence the national pattern of IT-Growths
Process in the country.
Private sector is of the view that Government IT policies are inconsistent for IT promotion than view of public sector.

3.2
Bureaucracy
The administrative machinery of a country plays a key role in success or otherwise failure of computerization of the country. The major issues include negative and non cooperative attitude and poor support for implementation of IT policies besides cumbersome procedures and lack of IT know how on part of the bureaucracy. This is supported by studies for example
(Argyris and Schon, 1978; Brynjolfsson, 1993; 1998; Hussain, 2001; Aslam, 2001; Higgo,
2001; Kohli and Sherer, 2002; Checchi et al, 2003; Kundi, 2006; Kundi and Nawaz, 2006;
Kundi et al., 2007; Khan, 2007). Moreover development of sufficient infrastructure for online transactions and eGovernment needs both physical and legal infrastructure which again depends on interest and enthusiasm of government officials who provides funds for

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development of physical infrastructure and regulate legal infrastructure (Joseph, 1995; Kundi,
2006). Based upon the review of previous studies, we propose the following hypotheses:
H3:
H4:

Public sector says that bureaucracy is playing positive role in the promotion and development of IT in Pakistan than the views of the private sector.
Public sector holds that attitude of bureaucracy is cooperative and effective than the views expressed by private sector.

3.3
Political Environment
Abbasi and Zubair (2001) point that “availability of sufficient financial resources is the prerequisite for adoption of computer based business”, while Jenster (1987) and Palvia et-al.
(1990) argue that “stability of political environment and peaceful law and order encourage investment in all sector including the IT”. Scupola (2003) shared the same view and point that “governmental intervention both in terms of influence and regulation plays significant role in the development of an environment conducive for implementation of eBusiness both in private and public sector organizations”. Political stability of government ensures peaceful and conducive political environment for computerization in a country, this further encourage foreign investment and business activities to grow. Moreover within organization there exists political conflicts between developers and users in information system development due to IT organization immaturity. These are significant factors and considered by several studies which if not addressed properly may hamper the digitization process and results into failure.
Following studies measured this construct as key critical success factor for digitization in developing countries (Markus, 1983; Jenster, 1987; Ewusi-Mensah and Przasnyski, 1994;
Korpela 1996; McGrath, 1997; Warne, 1997, Flowers, 1997; Palvia et al., 1990; Rodriguez and Wilson 2000; Kalathil et al, 2001; Kundi, 2006). Based upon the previous studies we propose the following hypotheses:
H5:
H6:

Private sector perceives political instability as threat to eBusiness than the view of the public sector.
Political stability of the government itself reflects in either reinforcing or threatening the IT in Pakistan

3.4
Infrastructure
Physical and legal infrastructure is a very commonly studied factor in Information Systems
(IS) research (King et al., 1994; Zwass, 1998; Wolcott et al., 2001). Zarmeene (2006) Furqan
(2004) Khan (2003) Naeem (2003) Seyal et al. (2004) and Ibrahim (2004) concludes that
‘provision of infrastructure could be important for the success of IS within a country’.
Moreover, Pauline (2001) has measured availability of sufficient infrastructure and found it a significant predictor of eBusiness success or otherwise failure. The availability of physical and legal infrastructure is measured in this study by a construct as used by Heeks (2002) for his study on “critical failure factors that discourage the growth of electronic commerce and information systems in developing countries: failure, success, and local improvisations”. Rate and growth of internet and eBusiness depend on number of computers and digitization of organizational structures besides availability PC per user. This is supported by studies for example Joseph (1995). Nizamuddin and Khalid (2001) emphasized that “PC penetration is an important predictor for the growth and development of eBusiness besides development of physical and legal infrastructure for eBusiness”. Based upon this we therefore prose the following hypotheses:

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H7
H8
H9
H10
H11
H12
H13
H14
H15
H16

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Public sector says that the rate of PCs penetration is satisfactory than the views of the private sector
Public sector is of the view that infrastructure is sufficiently available than the view of the private sector.
Private sector views that Internet connection is not accessible than the view of the public sector.
Private sector says that the cost of being connected is not affordable than the view of the public sector.
Telecom sector opines that users are unable to execute credit transactions than the view of the banking sector.
Telecom sector is leading in eBusiness than Banking sector.
Telecom sector says that eTransactions are not secure for eBusiness than the view of the banking sector.
Telecom sector claims that regulatory environment is suitably developed than the banking sector.
Banking sector is of view that ePayment systems are developed enough than views expressed by the telecom sector.
Commercial banks are more involved in eBusiness than the Development and investment banks.

3.5
Organizational IT Maturity
Computerization is not an easy job rather it has profound repercussion for both the organizations and management, it not only bring opportunities for organizations and its human force, it also poses threats and opportunities to management of organizations. The most important is the level of organizational readiness and maturity to infuse technology into organizational culture. In Pakistan, organizations are undergoing the transformation from traditional businesses to computer based eBusiness. The successful computerization depends on organizational IT maturity from technical, organizational and human point of view. With regard to IT, organizations should be mature enough in hardware, software, orgware and peopleware. Major organizational and managerial issues of eBusiness in Pakistan include: organizational structure and size, culture, power and politics and management styles.
Benjamin and Scott (1992: 131-142) are of the view that “eBusiness is the technology driven activity where introduction of computer based information systems and largely affect the organizational contextual factors and get influences too”, similarly King et-al. (1994) argues that “organizational contextual factors include: the over all organizational environment, organizational culture, power and politics, the managerial styles, structure and size of organization which determine organization IT-maturity”. Many researchers have suggested that aligning organizational design with the environmental, technological and organizational aspects determine the success and failure of computerization (Masoud and
Paul, 1996). Base on the exiting studies we propose the following hypotheses:
H17
H18

Developers are of the view that organizational IT-Maturity is more significant for the success of eBusiness than the views hold by users.
Management perceive a gap between users and developers due to organizational ITimmaturity than the views of IT Professionals.

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3.6

Organizational Structure & Size, Culture, Power & Politics and Management
Style
Ennals (1995) believes that “the internal threat is greater than the outside dangers”, so “the major organizational threat emanate within organizations is organizational structure and the management style (Warne, 1997)”. Structural issues are related to size and the resulting complexities which add to the environmental uncertainty while ‘the size of an organization often indicates complexity’ (Kwon and Zmud 1987). Researchers like (Markus 1983; Staw and Ross 1987; Drummond 1994; Keil 1995a; Drummond 1996a, b; Hauser, 1998; Schein,
1996b; Dann et al., 1998; Seyal et al., 2004; Poulymenakou and Holmes, 1996) suggest that in the scenario of IS development and use problems, organizational context is mostly characterized by: for example, structural complexities; poor reporting structures; imposing management styles; political conflicts between different organizational stakeholders; and cultural diversities among different groups involved in the system development and use environments because it forms basis for political maneuvering. While, Flowers (1997;
Markus, 1983; Drummond, 1996a, 1996b; Sauer, 1993; Checkland and Scholes, 1990;
Mintzberg, 1989; Lederer and Mendelow, 1988; Markus and Bjorn-Andersen, 1987;
Lyytinen, 1988; Weill and Olson, 1989; Lederer and Sethi, 1994; Ewusi-Mensah and
Przasnyski, 1995; McGrath, 1997) considered the politically motivated resistance as a major contributing factor to the poor success rate. The success or otherwise failure of a computerization is equally reliant on the social, economic and political settings within which it is constructed (Ewusi-Mensah and Przasnyski, 1995; Beyer, 1981; Kwon and Zmud, 1987;
Markus and Bjorn-Andersen, 1987). Based on these studies we propose the following hypotheses: H19
H20
H21

Management holds that employees resist computerization as it is perceived by employees as threat to their economic and social status in the organizations than the views expressed by the employees.
Users says that politics in IT projects is impeding the growth and development of IT in the country than the views expressed by the developers.
End users are of the view that IT and management education is adequate for eBusiness than the view of the developers.

3.7
Hardware, Software and IT Professionals
IS researchers considers computer and telecommunication technology as the most important vehicle that drives eBusiness. “The acquisition and use of technology is still a problem for the developing counties especially in Pakistan (Khawaja, 2001: 2-3; Hassan, 2006)”. Due to financial constraints developing countries are unable to adapt into these modern giants.
Similarly studies have found that even if someone afford, they lack the expertise to ensure optimum use of technology. Pakistan lack the required number of qualified IT professionals, though Pakistan has handsome amount of qualified IT-professionals yet uncompetitive market salary led them to fly to the Silicon Valley for professional growth. Currently
Pakistan is producing some 2500-3000 IT graduates annually, compared to the growth of eBusiness this number seems to be low. Experts believe that “success of eBusiness is influenced by quality of IT professionals (Wise and Morrison, 2000)”. Many studies stressed on the competitive use of IT and suggest that management should focus on acquisition of right person for right job at right time (Damanpour and Evan, 1984).
Development of human resource is the prerequisite of eBusiness and it should be the main focus of government IT policies as eBusiness needs hybrid managers not only specialized in managing the affairs of organizations and humans but also equally competent in computer based technology in order to run eBusiness effectively because it is a socioThe Electronic Journal on Information Systems in Developing Countries http://www.ejisdc.org EJISDC (2009) 36, 8, 1-31

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technical activity (Mumford, 1985; Griffin, 1998; Dudeja, 2001; Glass, 1998), they further postulate that both developers and users (managers) must have expertise in their respective fields. Similarly, management’s lack of IT know-how impedes digitization is another issue of eBusiness in Pakistan. Likewise, management is a force that runs the business and ultimately responsible for its success or failure. Computer and IT knowledge is a compulsory requirement of today’s managers as they not only manage human resources, but also time and materials including physical equipments (h/w, s/w and telecommunication equipments) that fuel and run eBusiness. Based on the existing studies following hypotheses are proposed:
H22
H23
H24
H25
H26
H27
H28
H29
H30
H31

Technology shapes and reshapes the IT-growth (eBusiness) process in the organizations. Within organization eBusiness is more dependent on IT-Professionals than on
Hardware and Software
Users holds that IT professionals lack the required knowledge and skills than the views of the developers.
Users says that IT professionals do not know about organizational and human aspects than the views expressed by the developers.
Users are of the opinion that IT professionals are unable to keep on updating their systems than the views of the developers.
Developers says that IT professionals are competent and meets the international standards than the views hold by users.
Developers perceives the non cooperative attitude of management & lack of IT-know how as bottleneck to eBusiness in the country.
Independent variables are mutually correlated.
Government, organization environment and technology determine the success/failure of eBusiness in Pakistan
Private sector says that eBusiness has fewer threats in Pakistan than the view of the public sector.

4.
DESIGN OF INSTRUMENT
From review of the literature, an instrument was developed with the aim of covering the basic research objectives. The questionnaire based on nominal and Likert scale was developed. Part
1 captured data about the demographic profile covering organizational characteristics such as, name, nature, type, sector, IT experience, types of machine and software-used, users, developers, level usage and size of the organizations, while part 2 consists of the questions measuring the major variables on 5 point Likert scale.
4.1
Instrument Reliability and Validity
Several techniques were used to assess Cronbach’s (1971) coefficient reliability (face construct and convergent validity). In order to assert face validity, an initial questionnaire was passed through routine editing, after that it was handed over to the expert panel
(academicians, practitioners and business managers). They were asked to respond to the questionnaire and, based upon their comments the questionnaire was reordered to enhance clarity, thereafter, a pilot study was undertaken to further test the instrument. Table 6 shows the reliability coefficients and convergent validity for various constructs.

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Table 6. Reliability and Validity Analysis
Constructs

No of Items

Govt. IT Policy
Bureaucracy
Infrastructure
Political Envt.
Orgzl. IT Maturity
Structure & Size
Orgzl. Culture
Management Style
Orgzl. Power & Politics
H/W & S/W
IT Professionals eBusiness 3
6
6
2
4
2
2
2
3
6
7
7

Alpha value
0.83
0.69
0.84
0.76
0.81
0.84
0.65
0.63
0.88
0.79
0.83
0.82

Mean Variance Explained
4.23
3.78
3.59
3.41
3.55
4.15
3.12
3.04
3.67
3.01
3.06
3.00

Reliability
0.59
0.75
0.71
0.67
0.70
0.82
0.71
0.72
0.61
0.58
0.67
0.66

The closer the reliability coefficients get to 1.0, the better, however, generally agreed upon lower limit for Cronbach’s alpha is 0.7 (Robinson, et al., 1991), although it may decrease to 0.6 in an exploratory research (Robinson et. al., 1991; Hair et al., 1998), yet,
Nunally (1967) suggests that the score for each construct should be greater than 0.6 for it to be reliable. Hence, a score of 0.63 and above were accepted in this study.
In general, validity refers to the degree to which an instrument truly measures the constructs that are intended to be measured. There are several types of validity; however,
Campbell and Fiske (1959) “propose two types of validity i.e. convergent and discriminating validity”, while convergent validity is measured by average extracted for each construct during the reliability analysis that “should be 0.5 or 50% of better (Igbaria and Iivari, 1995)”.
Table 7 shows that all the constructs do have a considerable validity support. To further analyze for discriminating validity of these twelve constructs, the principal component method with varimax rotation was used to assess variance explained. Testing discriminant validity required checking cross loading of items on multiple factors. Table 7 shows all items loaded highly on their associated constructs but not other thus showing sufficient discriminant validity.

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Table 7. Rotated Component Matrix of all Constructs (Varimax factor loadings)
Factor
GITP1
GITP2
GITP3
BCRY1
BCRY2
BCRY3
BCRY4
BCRY5
BCRY6
INFR1
INFR2
INFR3
INFR4
INFR5
INFR6
PENT1
PENT2
OTM1
OTM2
OTM3
OTM4
SS1
SS2
OC1
OC2
MS1
MS2
OPP1
OPP2
OPP3
HS/W1
HS/W2
HS/W3
HS/W4
HS/W5
HS/W6
ITP1
ITP2
ITP3
ITP4
ITP5
ITP6
ITP7
EB1
EB2
EB3
EB4
EB5
EB6
EB7

F1
0.83
0.94
0.62

F2

F3

F4

F5

F6

F7

F8

F9

F10

F11

F12

0.82
0.91
0.66
0.74
0.69
0.72
0.83
0.77
0.69
0.70
0.82
0.93
0.77
0.81
0.81
0.83
0.76
0.83
0.84
0.82
0.65
0.71
0.63
0.66
0.88
0.82
0.86
0.79
0.73
0.84
0.71
0.83
0.74
0.83
0.87
0.81
0.79
0.84
0.88
0.82
0.82
0.85
0.77
0.81
0.81
0.89
0.84

4.2
Population and Sampling
The sample population of this study was the organizations who are practicing any forms of eBusiness i.e. B2B, B2C from banking and telecommunication sectors. The technical distribution of total population is given in Table: 8 which shows the total number of each population category (N) along with its percentage in total population:

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Table: 8. Classification of the Sample Population
S No.
Strata
N
%
3,42
1
Banking Sector
37.73
4
Telecommunication
2
5651 62.26
Sector
Total 9075 100
The sampling unit of this study was the organizations using eBusiness to run their organizations at any level, pilot study was conducted. A random sampling procedure in sample selection was used. Finite population formula was used to compute the sample-size for each population category. In social sciences 95% confidence level is usable, which is equals to 1.96 was used in determining the sample size. Sample size for finite population is given in the table: 9. the figure 397.37 was rounded into 400.
Table: 9. Determination of Sample Size through formula for Finite Population.
SD
SE
N
Sampling Procedure n Banking
Sector
0.46
0.085 3,424
112.51
[SD2/((E2/Z2)+(SD2/N))]
Telecom
Sector
0.62
0.072 5651
284.86
Total (N) = 9075
Total (n) =
397.37
Which was further divided into:
Table: 10. Sub-division of the Samples
Sector Nature
Business Type
Online Conventional
Banking Public
46
22
Private
44
0
Telecom Public
43
100
Private
86
59
5.
FINDINGS
Theoretical framework based on literature was used to get readings from the real-world situation. Primary data collected through questionnaire provided enough material about the problem-situation in the background of ideal theoretical framework extracted from the documented knowledge. The analysis and logical reasoning of the primary and secondary data provides good base for the following findings of the study:
In Pakistan, there is no separate eBusiness policy though an IT policy exists where eB/Commerce is included as part of it, yet it do not fulfill the requirements. This study has found that IT policy by itself is inconsistent due to which, the pace of IT diffusion and growth of eBusiness is slow.
The 2nd finding is that in Pakistan, bureaucracy misuses its powers and abuses authority. Their attitude is negative and non cooperative. The procedures are cumbersome and unfriendly, policy implementation is weak and ineffective, while government functionaries lack IT know-how. Bureaucracy is not playing a promoting role for eBusiness and imposing attitude of government officials resulted into a gap between the expectations and the outcomes among the stakeholders as government’s policies neither accommodates the
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needs nor reflects the aspirations of the business community. This study have found that in
Pakistan, political environment is instable, institutions are weak and law and order is poor due to which investors are reluctant to invest aggressively. Moreover, IT-policy has failed to achieve the goals of development of sound physical and legal infrastructure because high bandwidth cost, slow and poor speed of internet, frequent disconnections due to faulty cables and inconsistency of electric power besides insecurity of ePayments are still barriers to eBusiness in Pakistan.
The country lacks good quality IT institutes along with modern curricula that is why quality of IT and management graduates do not match the organizational requirements, while within organization there is a gap between developers and users due to organizational IT immaturity and politics in eBusiness projects, which causes IT-business misalignment. eBanking and eShopping is progressing in the country, banking sector is leading in eBusiness than telecom sector and within banking sector, commercial banks are more involved in eBusiness than development and investment banks.
The conditions of eBusiness in Pakistan originates that all independent variables are mutually correlated i.e. government, organizational environment and technology determine the success/failure of eBusiness. The environmental conditions in Pakistan are improving gradually, and eBusiness has more opportunities to grow as one of the major indictor is growing interest of the private sector which instead of political turmoil is investing in digitizing their businesses and changing their conventional practices into online operations.
6.
TESTING OF HYPOTHESES
Based on problem statement, literature survey and theoretical framework, 31 hypotheses were developed and tested. To test the significance of mean differences, t-test and ANOVA were applied. Pearson correlation and regression analysis were used to carve-out relations between the research variables. Out of 31 hypotheses, 22 H0 were accepted while in rest of the tests,
Null hypotheses were rejected.

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Table: 11. t-test comparisons to Role of Government, Organization and Technology for eBusiness in Pakistan with Group-1 (Public) Group-2
(Private), and Group-1 (Banking) Group-2 (Telecom), Group-1 (Management) Group-2 (Employees) and Group-1 (Developers) Group-2 (Users) on 5 point scale: 1=Strongly agree, 2=Agree, 3=Neutral, 4=Disagree, 5=Strongly Disagree the p value was (p