International Journal of Information Management Data Insights 4 (2024) 100285

Contents lists available at ScienceDirect

International Journal of Information

Management Data Insights
journal homepage: www.elsevier.com/locate/jjimei

Factors influencing the adoption of artificial intelligence in e-commerce by

small and medium-sized enterprises
Soliman Aljarboa
Department of Management Information Systems, College of Business and Economics, Qassim University, Buraidah, 51452, Saudi Arabia

A R T I C L E I N F O A B S T R A C T

Keywords: The rapid evolution of technology has fundamentally transformed business operations. Therefore, companies are
Artificial intelligence increasingly leveraging technology to enhance their processes and gain a competitive edge. In this context, the
SMEs adoption of artificial intelligence (AI) in e-commerce has become a crucial area for business development.
Dynamic capabilities
However, there is currently a lack of understanding regarding the key factors that determine the adoption of AI in
Entrepreneurial orientation
Saudi Arabia
e-commerce by small and medium-sized enterprises. Thus, to fill this gap, this study aims to investigate the
factors influencing the adoption of AI tools in e-commerce for SMEs. This study will also explore how the
adoption of AI by SMEs contributes to the business performance of these organizations. To achieve this, the study
proposes an integrated model based on the dynamic capabilities framework, entrepreneurial orientation, and
customer-centric systems. Empirical data for the current study were collected using a digital survey, which was
disseminated to a purposive sample of SMEs in Saudi Arabia. Analysis of the collected data was performed using
structural equation modeling (SEM), and the results support the role of both dynamic capabilities and entre­
preneurial orientation in facilitating the adoption of AI in e-commerce. The study confirms of the significant role
of AI adoption in enhancing the business performance of SMEs. This study seeks to make several theoretical
contributions and implications for practice. This will also provide small and medium-sized companies with
valuable insights that help in making decisions and building strategies. However, it is important to acknowledge
the limitations of this study, which will be discussed later in the paper.

1. Introduction methods that help solve problems and make decisions (Saleem et al.,
2024). Therefore, AI tools help to exploit and analyze the big data
Many companies seek to adopt e-commerce to increase sales and available to many companies and organizations to help speed up busi­
services and achieve greater customer satisfaction. E-commerce con­ ness and provide information that contributes to making effective and
tributes significantly to increasing the revenues and profits of SMEs if appropriate decisions in real time (Kushwaha et al., 2021; Sestino & De
successful strategies and tools are relied upon in e-commerce (Abbas Mauro, 2022). AI tools analyze customer data to generate valuable in­
et al., 2023; Ojha et al., 2023). However, the success of adopting such formation and help make strategic decisions based on a wide range of
electronic platforms for companies may be affected by the degree of data (Verma et al., 2021).
their commitment and reliance of smart technologies and tools that There are many scientific studies that have investigated the role of AI
contribute to providing the best technical services to customers (Mishra in e-commerce with regard to customer services, facilitating sales, and
et al., 2023). The adoption of AI in e-commerce is one of the most collecting information (Xu & Ruan, 2023; Li et al., 2023). However,
important reasons for business success, as AI tools contribute to there is a dearth of research related to the role of adopting and
exploiting the available data for products and customers to find oppor­ enhancing AI tools in sustaining e-commerce business performance and
tunities that help promote goods and services (Bawack et al., 2022; He & supporting the role of entrepreneurship in the performance of SMEs.
Liu, 2024). Therfore, this paper seeks to investigate and research the factors
E-commerce is defined as all activities of buying, selling, and affecting the adoption of AI in e-commerce in SMEs to promote entre­
providing various services via the internet (Leonard, 2012). AI is preneurship and increasing and activating the role of these companies in
referred to as a set of actions carried out by the system, similar to those the advancement and development of the country’s economies.
carried out by humans, with more efficient and accurate procedures and North et al., (2020) state that SMEs play a substantial and influential

E-mail address: [email protected].

https://doi.org/10.1016/j.jjimei.2024.100285
Received 19 March 2024; Received in revised form 1 September 2024; Accepted 4 September 2024
Available online 12 September 2024
2667-0968/© 2024 The Author. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
S. Aljarboa International Journal of Information Management Data Insights 4 (2024) 100285

role in the high economy, as they have a high share of employment and entrepreneurial orientation, and customer-centric systems, this study
commercial value. Despite this, these companies face many difficulties will provide a comprehensive theoretical basis for analyzing the adop­
and challenges in adopting many new technologies and keeping pace tion process and its effects in the context of e-commerce.
with technological development (Barata et al., 2023; Cheng et al., 2024). The results of this study will have practical implications that
Consequently, understanding the factors in adopting AI in e-commerce contribute to identifying the key factors influencing the adoption of AI in
can provide diverse solutions that contribute to supporting the adoption e-commerce among SMEs. This will help stakeholders understand the
of AI tools and thus enhance the market value of their products and critical determinants of successful implementation of such emerging
services. Moreover, SMEs face challenges in making decisions that systems. This knowledge can guide small and medium-sized companies
improve their business performance due to the lack of exploitation of in various procedures and help address obstacles that hinder the adop­
data (Sharma et al., 2022). Thus, this study contributes to learning more tion of AI. Understanding the role of dynamic capabilities in AI adoption
about the obstacles and also presenting strategies for adopting AI tech­ will enable companies to assess and enhance their internal and external
nology in e-commerce for SMEs. capabilities. Examining and studying entrepreneurial orientation in
The limited understanding of how SMEs can leverage AI tools in e- depth is an important parameter for AI adoption, as it provides insight
commerce significantly impacts their development and ability to gain a into the importance of enhancing the role of entrepreneurship and
competitive advantage.There is also a need for more in-depth studies in encouraging innovation in the context of applying AI in e-commerce.
this field in order to address challenges, exploit opportunities, and This paper contributes to identifying the advantages and opportu­
provide effective recommendations through AI tools (Salah & Ayyash, nities of adopting smart systems in the field of e-commerce for SMEs.
2024). Likewise, Bawack et al. (2022); Kumar et al., (2021); and Chung Additionaly, exploring additional methods for implementing and
et al., (2022) mentioned that there is a scarcity of research in studies adopting the best strategies for entrepreneurship development, while
related to the adoption of AI in e-commerce for SMEs. This requires selecting the most effective tools. The findings of the research provide
further collection and analysis of relevant data to meet research needs as valuable insights for companies to learn about the role of AI tools and
well as support for SMEs. how to achieve a competitive advantage.
Over the context of SMEs in Saudi Arabia, Fakieh and Wali (2024) The rest of the current paper is structured as follows: In Section 2, a
pointed to a number of factors that support the adoption e-commerce in careful review of the main body of literature related to AI and SEMs is
Saudi Arabia in SMEs. The factors included the importance of knowledge provided. Section 3 discusses the theoretical background, the proposed
awareness, the lack of understanding of the technology, and the lack of conceptual model, and hypothesis development. Section 4 elaborates on
skilled IT personnel. Baabdullah et al., (2021) also state that the sig­ the main research methodology employed in the current study. Data
nificance of designing AI solutions in the e-commerce websites is to be analysis and empirical results are presented in Section 5. Finally, Section
more suitable for the end user’s preferences when communicated with 6 provides an in-depth analysis of the main findings with sufficient
SMEs. Despite the technical and commercial prosperity in Saudi Arabia, practical and empirical justification. In this section, theoretical contri­
there are some challenges facing SMEs to take full advantage of butions and practical implications are also discussed and presented.
e-commerce opportunities. Challenges include lack of digital skills,
funding sources, and intense competition between companies (Ballerini 2. Literature review
et al., 2023). Data privacy is also considered an important and influ­
ential factor in building trust with shoppers and customers in Saudi Artifical Intelligence plays a crucial role in providing accurate and
Arabia (Gull et al., 2022). Therefore, this study gives high additional highly efficient information while processing data without human
value and accurate data that contributes to supporting the aim of the intervention (Cubric & Li, 2024). This not only saves time but also helps
study and related topics. customers meet their needs and preferences, leading to increased satis­
In the light of the above-mentioned discussion, and to comprehen­ faction with the website. This includes supporting various aspects of
sively explore the adoption of artificial intelligence (AI) in e-commerce e-commerce, including product marketing, payments, and shipping,
by small and medium-sized enterprises (SMEs), this study aims to ensuring smooth and effortless operations. This can enable organiza­
address several critical aspects that drive and influence this adoption. tions to gain valuable insights into the market, customer behavior, and
The following key research questions have been formulated to guide the business performance over specific periods (Qi et al., 2023). By
investigation and provide a structured approach to understanding the analyzing customers’ clicks on products, AI tools can provide solutions
various factors involved:: and suggestions based on their preferences and needs (Sharma et al.,
2021). It can also assist in addressing customer inquiries through chat
1. What factors influence the adoption of AI in e-commerce by SMEs? platforms, enhancing the company’s ability to respond promptly (Gupta
2. To what extent do dynamic capabilities and entrepreneurial orientation et al., 2024) (Table 1).
contribute to the adoption of AI in e-commerce for SMEs? According to Pallathadka et al. (2023), AI in the field of e-commerce
3. To what extent does a customer-centric system contribute to the adoption helps increase sales, forecast sales, achieve a higher level of safety,
of AI in e-commerce within SMEs? combat fraud, manage business, and manage key services on the site. AI
4. To what extent does an entrepreneurial orientation play in affect the can perform human actions that require intelligence in its procedures,
adoption of AI in e-commerce among SMEs? such as visual recognition of people or language translation. Therefore,
5. To what extent does the adoption of AI in e-commerce impact SMEs’ it is imperative for SMEs to leverage AI tools to obtain maximum value
Business performance? and competitive advantage, which includes reducing human errors,
analyzing customer data, and providing highly efficient services. AI also
This study aims to make several theoretical contributions and im­ contributes to providing new and smart innovations that serve both
plications for practice. It will contribute to the development of an in­ institutions and customers, such as forecasting sales and attracting more
tegrated model that includes dynamic capabilities, entrepreneurial customer (Dwivedi et al., 2023). Furthermore, AI tools in e-commerce
orientation, and customer-centric systems. This model will explain in- help to find ways that contribute to the acceptance of specific products,
depth the impact of AI adoption on e-SMEs in the field of commerce. such as presenting offers that suit customers’ desires, finding promo­
The findings of this study will provide valuable insights to SMEs, tional solutions, and answering customer inquiries in easy, accurate, and
assisting them in making informed decisions and developing effective fast ways.
strategies. Additionally, the model will help in leveraging AI tools within Wei and Pardo (2022) and Alalwan et al. (2023) pointed out that
e-commerce operations to enhance customer experience and satisfac­ many SMEs face challenges in financial, as well as technical resources,
tion. By integrating the framework of dynamic capabilities, which is considered a challenge that needs to be addressed in order to

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Table 1
Studies of AI and SEMs.
Study Methodology Factors Tested Theory Adopted Context Limitations and Future Direction
and Data
Instrument Used

Alalwan Self- RMO; entrepreneurial alertness; Relationship marketing e-crowdfunding in Saudi This study has explored the aspects
et al. administered system quality; and service quality; orientation (RMO); Kirzner’s Arabia of e-equity crowdfunding primarily
(2022) online entrepreneurs’ engagement in e- alertness theory; and the from the perspective of
questionnaire equity crowdfunding, which in DeLone and McLean model of entrepreneurs, rather than
turn, predicts both knowledge information systems supporters. Therefore, it would be
acquisition and innovation valuable for future research to
performance investigate the relevant aspects of e-
equity crowdfunding from both
viewpoints: those of the
entrepreneurs and the supporters.
Upadhyay Quantitative Business innovativeness; Digital entrepreneurship and This study examines Further studies could explore
et al. survey affordances, culture; flexible entrepreneurship contributing factors contextual factors and their
(2023) methodology design, entrepreneurial orientation, orientation explaining the adoption contributions, such as
generativity, openness and intention of AI in the context infrastructure, change, risk, trust,
technology orientation; adoption of family businesses. leadership, governance, politics, and
intention of AI; ownership type.
Salah and Survey business partner pressure; AI The Technology-Organization- SMEs in Palestinian The generalizability of the study is
Ayyash Integration; customer tech- Environment (TOE) another notable limitation. The
savviness; innovation culture; findings mainly apply to Palestinian
competitive pressure. SMEs and, to a lesser extent, to
SMEs’ E-Commerce adoption and countries with similar conditions
Marketing performance and cultures. However, this study
did not encompass all SME industry
sectors within the Palestinian
context. Consequently, there is
considerable scope for future
research to investigate the adoption
of e-commerce across different
industries, sectors, and even other
countries, thereby paving the way
for a more comprehensive
understanding.
Octavia Survey Entrepreneurial Orientation; Entrepreneurial Orientation Entrepreneurial business in Governments, academics, and
et al. Marketing orientation; Indonesia related institutions must play a role
(2020) E-Commerce adoption and business in assisting SMEs in adapting to the
performance. use of technology. Programs should
be designed to provide support and
reinforcement from the
technological side.
Alalwan Online Survey entrepreneurial orientation and Kirzner’s alertness theory Entrepreneurial Businesses/ This study focused solely on
et al. marketing orientation Saudi Arabia entrepreneurial financial alertness
(2023) entrepreneurial finance-based as a key capability predicting digital
digital transformation (EFDT), transformation. However, other
which in turn, is expected to predict capabilities such as human capital,
both innovation entrepreneurial social capital, financial condition,
finance (IEF) and SMEs’ and information capital may also
entrepreneurial performance play significant roles and should be
(SMEEP) assessed in future research.
Kwarteng Survey performance expectancy (PE), effort structural equation modeling Competitive pressure for The study recommends that future
et al. expectancy (EE), facilitating (PLS-SEM) techniques SMEs digitalization researchers adopt a mixed approach,
(2023). conditions (FC) and competitive adoption in two European allowing for the triangulation of
pressure (CP) nations findings between the two
approaches.

adopt AI. Barata et al. (2023) pointed out, there are perceived concerns facilitating interactions between companies and customers. The results
among some SMEs that include operational efficiency, concerns about of the study identified four main enabling results for AI, including the
job displacement and ethical implications as factors in the adoption role of AI in improving work performance and assisting in
process. For a smooth and successful implementation, SMEs need decision-making. It was also found to play a significant role in obtaining
training programs for end users to remove any ambiguity and empower trust by providing recommendations, in addition to analyzing consumer
them by acquiring the necessary skills to utilize AI tools effectively behavior and feelings, and providing various theories of AI with tech­
(Chung et al., 2022; Wei & Pardo, 2022). nologiesThe knowledge and skills of the human element in companies
Salah and Ayyash (2024) conducted a study on the impact of the role play a role in the successful management of information systems. Wei
of marketing through e-commerce with the integration of AI in small and Pardo (2022) identified that knowledge in information technology
companies, where 305 small companies participated. The study results matters in SMEs and plays an important role in the level of their oper­
indicated that AI and business innovation positively affected the adop­ ation and their provision of business intelligence tools.
tion of e-commerce. In addition, the adoption of e-commerce has a There are various smart tools commonly used by SMEs on their
positive impact on supporting the marketing aspects of SMEs. In another commercial websites to enhance the customer experience and stream­
study by Qi et al. (2023), the focus was on establishing a sustainable line tasks. One of these tools frequently utilized on e-commerce sites is
supply chain through the support of AI tools for e-commerce business, chatbots (Dwivedi et al., 2023). Chatbots are employed to address

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customer inquiries and requests, check order statuses, provide technical external experiences, resources, and job competencies (Wu et al., 2024).
support, facilitate payment procedures, and offer shipping details Integrated dynamic capabilities, combined with effective and good
(Gupta et al., 2024). Another commonly employed tool is the recom­ strategies, enable organizations to become more market-oriented and
mendation system, which plays a significant role in analyzing customer enhance the role of entrepreneurship (Liu et al., 2023). Laguir et al.
behavior, predicting sales, and influencing customer decisions (Bawack (2022) stated that dynamic capabilities work to improve and develop
et al., 2022). the performance of organizations and work to adapt, rebuild, and
modernize them in a way that helps and enhances competitive
3. Theoretical background, proposed conceptual model, and advantage.
hypotheses development It shows the importance of accreditation and activation of dynamic
capabilities in the field of e-commerce in order to improve and develop
This study will rely on the theory of dynamic capabilities in businesses and obtain a competitive advantage (Nasution et al., 2021).
enhancing the role of AI in supporting e-commerce and knowing the In a study by Sunday and Vera (2018), the adoption of information and
entrepreneurial role in providing more efficient products and services communication technology in SMEs was examined using the framework
(Teece, 2010). Dynamic capabilities are among the theories commonly of dynamic capabilities. The study employed a qualitative approach,
used in studies that are interested in investigating how companies obtain specifically in-depth interviews, to gather data. The results of the study
competitive advantage by focusing on the role of changes in the external indicate that using the dynamic capabilities approach to examine the
environment (Yáñez-Valdés & Guerrero, 2024). Dynamic capabilities process of adopting information technology helps identify the iterative
also refer to the competencies and capabilities of the company to obtain nature of the process and that the factors differ in each of the individual
opportunities and reshape and exploit internal and external resources in stages. In addition, the study highlighted several factors that influence
rapidly changing work environments (Gao et al., 2024; Karimi & Walter, the adoption of information and communication technology such as
2015; Wang et al., 2023). return on investment, ease of use, managerial time, and adoption cost,
Dynamic capabilities are the companies’ capabilities to integrate, which were all found to consistently impact all stages of ICT adoption.
develop, and build internal and external competencies in order to better Additionally, factors like openness to change, shared support, compe­
perform in dealing with rapidly changing environments (Teece, 2010). It tition, and customer focus were found to have an influence on at least
is also the ability of companies to strengthen, expand, and modify their two stages of the adoption process. These factors significant impact in
resource base in a way that contributes to achieving the goals (Daniel & the decision-making process of small business managers and other
Wilson, 2003). Dynamic capabilities approaches are valuable frame­ stakeholders when considering the adoption of emerging ICT solutions
works that emphasize how businesses can cultivate the essential capa­ Relying on the dynamic capabilities approach is considered appro­
bilities, including HR capabilities, to maintain a competitive advantage priate for this study because it helps to adopt and investigate advanced
amidst changing external environments (Yáñez-Valdés & Guerrero, information systems and contributes to business restructuring and
2024). They can also be used to study how companies could improve and modification in order to reach a competitive advantage (see Fig. 1). This
develop their capacity (Gao et al., 2023). approach is very compatible with the situations of SMEs, as the concept
Aloulou’s (2023) study focused on the relationship among entre­ of dynamic capabilities is considered flexible and not difficult, and there
preneurial orientation, attitudinal dimensions, and company perfor­ are many changes in their conditions due to the external environment.
mance through a sequential mediation framework involving innovation Therefore, dynamic capability helps support these institutions in
capability and company resilience capability. Data collection was con­ developing, coordinating, integrating, reshaping, and exploiting their
ducted through a survey involving 225 SMEs in Saudi Arabia. The results technologies (Sunday & Vera, 2018).
of the study show that the behavioral dimension of entrepreneurial
orientation has a positive influence on firm performance. Furthermore, 3.1. Entrepreneurial orientation
the study indicates that entrepreneurial orientation dimensions signifi­
cantly influence innovation capability. Additionally, innovation capa­ Entrepreneurial orientation is considered one of the important stra­
bility positively influences firm performance. Another study by Daniel tegies that companies adopt in order to develop entrepreneurship, which
and Wilson (2003) about investigating the dynamic capabilities that contributes to achieving higher efficiency in their work and obtaining a
support and develop electronic business while identifying different competitive advantage for the company (Cherbib, 2024). Entrepre­
practices that develop effective capabilities to improve corporate per­ neurial orientation is one of the important methods that companies
formance. The results of the study indicated that companies need to find follow to obtain advantages and benefits that help create new oppor­
and activate innovative services that improve the way they do business tunities (Anderson et al., 2015). Moreover, the entrepreneurial orien­
and how to improve communication and interact with stakeholders. In tation contributes to finding new ideas and methods that enhance and
addition, they pointed out the importance of working in the company as improve the organization’s various products and services (Kamal et al.,
one coherent and cohesive entity in order to achieve and reach a high 2016).
degree of synergy and provide consistent service. This proactive orientation is also reflected in a company’s ability to
In an Indonesian study conducted by Nasution et al., (2021) exam­ adapt to evolving consumer demands and competitor strategies, as
ined the dimensions of entrepreneurial orientation and the process of noted by Majali et al. (2022) and Fitriani et al., (2023)). Firms that
knowledge management and the dynamic ability to adopt e-commerce embody this entrepreneurial spirit are constantly on the lookout for both
for SMEs. The results of this study indicated that innovation and pro­ obvious and hidden opportunities to advance their goals, as discussed
activity have an important relationship with the adoption of e-com­ Peretz-Andersson et al., (2024) and Xin and Ma (2023). This mindset is
merce, and risk was considered insignificant. While it was found that crucial in enhancing a company’s capacity to respond to new opportu­
dynamic capabilities have a very significant relationship with nities and innovations, a viewpoint supported by various researchers
e-commerce. (Khodor et al., 2024; Salah et al., 2024; Shore et al., 2024; Upadhyay
The dynamic capabilities approach provides methods and tools that et al., 2022; Yang & Xiao, 2024).
contribute to the analysis of operations in order to support organizations In examining the relationship between a company’s entrepreneurial
in adapting their resources and plans to adapt to changing environments approach and its outcomes, Annosi et al. (2023); Kusa et al. (2024); and
(Daniel et al., 2014). Teece (2007) indicated that dynamic capabilities more recently, Upadhyay et al. (2023); Upadhyay et al. (2022) suggest
can be divided into three capabilities, which include sensing, seizing, that entrepreneurial orientation is intrinsically linked to a company’s
and transforming. Dynamic capabilities help to adapt to rapidly readiness to identify and capitalize on hidden opportunities through the
changing environments by drawing on the formation of internal and development of essential competencies. Notably, the ability to seek

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Fig. 1. Conceptual model.

opportunities, a critical competency highlighted by Avlonitis and Sala­ restructuring. In Nasution et al. (2021) study on investigating the di­
vou (2007); Fernandes et al. (2022), is central to this orientation. mensions of entrepreneurial orientation and dynamic ability towards
Entrepreneurial orientation, therefore, is fundamentally about main­ adopting e-commerce, the results of the study confirmed that dynamic
taining a proactive and vigilant stance in the pursuit of opportunities, ability has a significant relationship with adopting e-commerce.
along with the willingness to embrace the risks involved, as explained by
H2. Dynamic capabilities will positively influence the adoption of AI-
Avlonitis and Salavou (2007).
enhanced E-commerce in SMEs.
In a study by Octavia et al. (2020) on the role of the impact of
entrepreneurial orientation on the business performance of SMEs in
e-commerce, the findings revealed a significant and positive impact 3.3. Customer- centric management systems
between entrepreneurial orientation and e-commerce. Another study on
the dimensions of entrepreneurial orientation towards the adoption of Customer-centric management systems improve and develop pro­
e-commerce for SMEs, Nasution et al. (2021) found that innovation in cesses in addition to developing structural changes in the organization
entrepreneurial orientation had a positive relationship with the adop­ (Jayachandran et al., 2005). There are many studies that have discussed
tion of e-commerce, but it was not significantly related to risk in that a customer-centric management system is organizational software
entrepreneurial orientation. that was created to support customer relationship management pro­
The key outcome of this entrepreneurial orientation, as posited in cesses (Bahri-Ammari & Nusair, 2015; Shao et al., 2023). In a study by
this study, is the adoption of e-commerce solutions powered by AI. This Bahri-Ammari and Nusair (2015) investigating the contributions of the
relationship is underscored by findings from (George & Marino, 2011; customer-centric management system, in evaluating the performance of
Han et al., 2024; Upadhyay et al., 2023; Zaheer et al., 2019). Further­ customer relationship management. This was achieved by distributing a
more, empirical evidence from reinforces the significant influence of questionnaire to a number of users of the customer relationship man­
entrepreneurial role on the ability of SMEs to adapt operationally to new agement system. The results confirmed that the customer-focused
opportunities, particularly in the realm of AI-driven E-commerce. This management system significantly affects the use of the customer re­
leads to the proposed hypothesis: lations system.

H1. Entrepreneurial orientation positively influences the adoption of AI- H3. Customer-centric management system positively influence the adoption
enhanced e-commerce in SMEs. of AI-enhanced E-commerce in SMEs.

3.4. Adoption of AI-enhanced E-commerce

3.2. Dynamic capability
Modern innovations in information technology and AI tools used in
Dynamic capability refers to the effectiveness, efficiency, and
e-commerce have contributed greatly to finding solutions in how to
amount of capabilities that a company possesses in order to identify new
market products, improve business performance, and learn more about
opportunities and the ability to shape the resources available to it and
customer behavior. AI offers many tools that help meet many re­
adapt to rapidly changing business environments (Teece, 2010). Many
quirements and businesses in e-commerce (Qi et al., 2023).
studies have been conducted applying the dynamic capability theory in
the field of e-commerce (Zhang et al., 2022; Nasution et al., 2021; Wu & H4. The adoption of AI-enhanced E-commerce will positively influence
Hisa, 2008). Dynamic capabilities are important for enhancing organi­ SMEs Business Performance.
zational flexibility and finding innovative solutions to improve business
performance and increase competition (Teece et al., 2010). In a study by 4. Methodology
Drydakis (2022) on AI’s support for SMEs companies in their business
operations. The results indicate that AI contributes to and enhances their The study adopts a quantitative approach using questionnaires to
dynamic capabilities by exploiting technology to process many requests, obtain data from officials in SMEs. This aim is to explore factors related
accelerate the performance of business operations, and enhance effi­ to AI adoption in the e-commerce context, while considering the rele­
ciency, which is beneficial in reducing risks. In another study, Priyono vant literature to enhance the study’s results. The questionnaire is
et al. (2020) found that digital transformation enhances dynamic ca­ designed to identify factors relating to the current level of AI adoption,
pabilities and improved the effectiveness and productivity of SMEs perceived benefits and challenges. In addition, identifying the factors
during the Covid-19 pandemic. influencing the adoption of AI in the e-commerce context.
Dynamic capabilities are considered essential in implementing in­ Data for this study were collected by distributing an internet ques­
novations that help achieve greater efficiency, integration, and business tionnaire to a sample of 183 decision makers and officials in SMEs in

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Saudi Arabia who work in e-commerce. The sample focused on store 5. Data analysis
owners and supervisors regarding their primary jobs. The owners of
electronic stores were contacted through visits to SMEs, as well as Structural Equation Modelling was employed to analyze the data
through calls, WhatsApp, and email, to encourage participation in the collected from the questionnaires and test the hypotheses. SEM is
survey. A digital questionnaire was designed and distributed to decision considered one of the popular techniques for conducting statistical
makers and officials in SMEs Saudi Arabia who work in e-commerce. The analysis that gives more accurate results than simpler statistical tech­
questionnaire included many different aspects required for the purpose niques such as linear regression (Benitez et al., 2020). SEM is a tech­
of the study which included entrepreneurial orientation, dynamic nique that combines aspects of factor analysis and multiple regression by
capability, customer-oriented management systems and adoption of AI testing several measured variables and latent constructs (Hair et al.,
enhanced e-commerce. This contributed to collecting in-depth and ac­ 2010). In addition, it enables researchers to analyze many complex re­
curate data that helped test hypotheses and obtain results that support lationships through more modeling between multiple dependent and
the aim of the study. independent variables (Hair et al., 2010).
The questionnaire was designed to get more details regarding the
current level of AI adoption, perceived benefits and challenges. In
addition, the factors influencing the adoption of AI in the e-commerce 5.1. Demographic profiles of sample participants
context. The quantitative approach is considered appropriate and
effective for this study, as the questionnaire results contribute to The majority (63.4 %) of the individuals in this sample were male.
providing accurate and efficient quantitative results in a short time with This suggests a gender imbalance in favor of males. As for age distri­
a large sample size. In addition, questionnaires provide a unified and bution, the largest age group was 18–25 years (60.7 %), indicating a
similar method in the way of collecting data from study participants, predominantly younger demographic. The 26–35 years age group was
which allows consistent results to be given and easily compared and also significant (25.1 %). The representation decreases notably for older
analyzed. age groups, with those above 35 years collectively constituting less than
Quantitative research provides generalizability, which helps support 15 %. In terms of educational level, a large majority (72.7 %) have a
scientific research by providing more knowledge on the subject and university education (either diploma or bachelor’s degree). Only a small
providing valuable information that is applicable to SMEs in the field of fraction (16.9 %) had an education level of secondary school or below.
e-commerce. There is also better cost effectiveness compared to other This indicates a highly educated population, with postgraduate degree
methods such as interviews and observations in terms of effort, time, and holders (Master’s/PhD) accounting for 10.4 % (see Table 2).
material cost (Gable, 1994). Accessibility is considered an additional The data shows diverse employment sectors. The most significant are
advantage for quantitative research to access the large sample faster and Retail Trade (23.5 %) and Agriculture (19.1 %), followed by ’Other’
more accurately in diverse geographical locations (Venkatesh et al., categories (36.1 %) which could include various unspecified industries.
2013). This helps provide more diverse results, which contributes to The most represented functional area is Marketing (38.3 %), followed by
achieving more validity and accuracy. ’Other’ (25.7 %) and Operations and Sales (15.3 %). This indicates a
All key factors measured in the study were derived from various strong focus on marketing activities within these organizations (see
sources of valid and established studies. Regarding the sensing (SNS) Table 2).
factor, it was measured using four items (Bianchi et al., 2022). Likewise, A significant portion (46.4 %) are Operations Managers, suggesting a
coordinating (CRD) was measured through four items extracted from
(Yeow et al., 2018; Stornelli et al., 2024). Also, four items were derived Table 2
regarding the learning component (LRN) test based on studies Demographic profiles of participants.
(Hernández-Linares et al., 2021; Huang et al., 2022). In addition, the Category Frequency Category Frequency (
integrating factor (INT) was tested through four dimensions that were (%) %)
taken from a number of studies (Hernández-Linares et al., 2021; Mikalef Gender Human Resources 10 (5.5 %)
et al., 2019, 2021). The reconfiguring factor (RCF) was tested on 6 items Male 116 (63.4 %) Finance 5 (2.7 %)
Female 67 (36.6 %) Marketing 70 (38.3 %)
derived from (Mikalef et al., 2019, 2021). As for the customer-centric
Age Operations and Sales 28 (15.3 %)
management system, six items were identified in order to be tested 18–25 years 111 (60.7 %) Other 47 (25.7 %)
based on studies (Albert et al., 2004; Jayachandran et al., 2005). Five 26–35 years 46 (25.1 %) Role/Nature of Work Inside the
items were also derived from the items for the entrepreneurial orienta­ Organization
tion (EO) test (Alshanty & Emeagwali, 2019). Finally, adoption e-com­ 35–26 years 18 (9.8 %) Executive Director 22 (12.0 %)
36–45 years 4 (2.2 %) Head of Information 11 (6.0 %)
merce powered by AI was measured through five items derived from
Department
studies (Baabdullah et al., 2021). 45–55 years 4 (2.2 %) General Manager 12 (6.6 %)
This study made a significant contribution by collecting data and Educational Level Mentor Manager 2 (1.1 %)
testing hypotheses, leading to important results that enhance the un­ Secondary or below 31 (16.9 %) Marketing Manager 35 (19.1 %)
derstanding of the factors influencing the adoption of AI in e-commerce University (Diploma/ 133 (72.7 %) Owner 13 (7.1 %)
Bachelor’s)
within SMEs. The results of the study benefit many beneficiaries in this Postgraduate (Master’s/ 19 (10.4 %) Operations Manager 85 (46.4 %)
field, researchers, professionals, employers and technicians. The quan­ PhD)
titative approach was adopted in this study by analyzing questionnaires Nature of Work and Activity Duration of Employment in the
submitted by those responsible for e-commerce in SMEs, where accurate Organization
Food Industries 2 (1.1 %) Less than 2 years 96 (52.5 %)
results were obtained that supported the objectives of the study. Col­
Retail Trade 43 (23.5 %) 2–5 years 54 (29.5 %)
lecting data from a large number of SMEs is considered a major chal­ Services 19 (10.4 %) 6–10 years 19 (10.4 %)
lenge due to the inflexibility of some companies in responding to Agriculture 35 (19.1 %) More than 10 years 14 (7.7 %)
questionnaires, but in this study an appropriate number of participants Wholesale Trader 4 (2.2 %) Number of Employees in the
in the questionnaire was obtained, which contributed to providing more Company
Pharmaceutical 8 (4.4 %) 1–50 128 (69.9 %)
important and relevant information for the purpose of the research. Industry
Moreover, this study will contribute to increasing knowledge and Detergent Industry 6 (3.3 %) 51–100 20 (10.9 %)
awareness among investors in SMEs of the importance of using AI tools Other 66 (36.1 %) 100–200 15 (8.2 %)
in e-commerce, which helps in achieving a competitive advantage and Functional Area More than 200 20 (10.9 %)
Information Technology 21 (11.5 %)
efficiency in business performance.

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focus on operational aspects in the organizations. The next largest group 5.2. Descriptive statistics of measurement items
is Marketing Managers (19.1 %), aligning with the high representation
in the Marketing functional area. Executive Directors form 12.0 % of the Table 3 presents a summary of survey-based metrics across several
dataset, indicating a considerable number of high-level decision-makers. model constructs, each evaluated through multiple items. The constructs
Over half of the individuals (52.5 %) have been employed for less than 2 include Sensing (SNS), Coordinating (CRD), Learning (LRN), Integrating
years, suggesting either a high turnover rate or recent growth in (INT), Reconfiguring (RCF), Customer-centric management systems
employment. Those employed for 2–5 years make up 29.5 %, indicating (CCMS), Entrepreneurial orientation (EO), Adoption of E-commerce
a moderate level of employee retention. A majority of the companies powered by AI (BDA-AI), and Business Performance (BP). For the
(69.9 %) are small-sized (1–50 employees), which might indicate a large Sensing construct, item scores vary from 3.311 to 3.749 with a relatively
number of small businesses or startups. Only a smaller fraction of the moderate overall average of 3.598, indicating that respondents gener­
companies have more than 100 employees (see Table 2). ally sense environmental factors to a reasonably high degree. The
standard deviation across these items is 1.3, pointing to a moderate
spread in perceptions among respondents (see Table 3).
Coordinating activities score slightly higher on average (3.620) with
individual item scores ranging from 3.503 to 3.728. This suggests a
Table 3 consistent level of coordination efforts perceived by the participants,
Descriptive Statistics of Measurement Items. underscored by slightly lower variability in responses as reflected by the
standard deviation. Learning within organizations, as assessed by the
Construct Items Mean Std. Dev.
LRN items, shows higher agreement among participants with scores
Sensing (SNS) SNS1 3.311 1.3286 stretching from 3.672 to 3.831 and an average of 3.755. This indicates a
SNS2 3.749 1.3102
strong inclination towards learning practices. The standard deviation
SNS3 3.738 1.2996
SNS4 3.596 1.2926 remains moderate, signaling a general consensus in responses (see
Average 3.598 1.3078 Table 3).
Coordinating (CRD) CRD1 3.623 1.2688 The INT process has an average score of 3.721, with individual items
CRD2 3.727 1.2889
ranging from 3.667 to 3.858, suggesting that integration mechanisms
CRD3 3.503 1.2398
CRD4 3.628 1.3066 are well perceived by the respondents. The standard deviation is a bit
Average 3.620 1.2760 higher for some items, especially INT_1, indicating more diversity in
Learning (LRN) LRN1 3.732 1.2707 how respondents view these integration practices. Reconfiguring capa­
LRN2 3.672 1.2630 bilities have the broadest range of item scores, from 3.388 to 3.803, and
LRN3 3.831 1.2876
the lowest overall average of 3.572 among the constructs, which may
LRN4 3.787 1.3023
Average 3.755 1.2809 indicate varying degrees of agility in organizational structures and
Integrating (INT) INT_1 3.858 1.3512 processes. The standard deviations are in line with other constructs,
INT_2 3.667 1.3479 pointing to a moderate level of agreement among the responses (see
INT_3 3.694 1.2685
Table 3).
INT_4 3.667 1.2767
Average 3.721 1.3111
The CCMS scores consistently, with an average of 3.684 and indi­
Reconfiguring (RCF) RCF_1 3.568 1.2815 vidual items scoring between 3.497 and 3.798. This consistency is also
RCF_2 3.803 1.2290 reflected in the standard deviation, which is narrow, suggesting a uni­
RCF_3 3.492 1.3337 form perception of the customer-centric approach among respondents.
RCF_4 3.388 1.2913
EO displays a slightly lower average of 3.554, with item scores ranging
RCF_5 3.519 1.2173
RCF_6 3.661 1.2021 from 3.333 to 3.716. The spread of the standard deviation is fairly
Average 3.572 1.2591 consistent, although EO6 shows more variability, indicating a diverse
Customer-centric management system CCMS1 3.716 1.2342 view on this specific aspect of entrepreneurship among participants (see
CCMS2 3.694 1.2555
Table 3).
CCMS3 3.798 1.2348
CCMS4 3.497 1.3337
Adoption of e-commerce powered by AI shows moderate agreement
CCMS5 3.716 1.2562 with an average score of 3.472. The scores for individual items vary from
CCMS6 3.683 1.2395 3.186 to 3.667, reflecting the evolving nature of technology adoption
Average 3.684 1.2590 and its impact on the surveyed individuals. The standard deviation is a
Entrepreneurial orientation (EO) EO1 3.552 1.2163
bit higher, suggesting that experiences with AI-powered e-commerce are
EO2 3.689 1.2431
EO3 3.716 1.1608 not uniform across respondents. Lastly, BP is rated the highest among all
EO4 3.333 1.2329 constructs with an average of 3.788. The scores for this construct are
EO5 3.519 1.2218 quite high, ranging from 3.754 to 3.836, reflecting a positive perception
EO6 3.464 1.3250 of business performance among the survey participants. The lower
EO7 3.607 1.3002
Average 3.554 1.2429
standard deviation indicates a strong consensus on this positive view
Adoption of e-commerce powered by AI BDA-AI1 3.186 1.3336 (see Table 2).
BDA-AI2 3.579 1.3148
BDA-AI3 3.497 1.3419
BDA-AI4 3.667 1.3149
BDA-AI5 3.508 1.4137
5.3. Structural equation modelling analysis
BDA-AI6 3.519 1.3170
BDA-AI7 3.279 1.3603 A two stage SEM method was applied by AMOS 22 in the current
BDA-AI8 3.508 1.4020 study to validate what was proposed in the current study model and to
BDA-AI9 3.503 1.3419
assure an adequate level of reliability and validity of the main latent
Average 3.472 1.3489
Business Performance BP1 3.760 1.2912 constructs and their corresponding scale items (Byrne, 2013; Fornell &
BP2 3.803 1.2858 Larcker, 1981; Hair et al., 2010). It is also worth mentioning that DYC
BP3 3.754 1.2578 has been treated in the current study as a second order factor while five
BP4 3.836 1.2114 dimensions (SNS; CRD; LRN; INT; and RCF) were tested as first order
Average 3.788 1.2790
factors (see Fig. 2).

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Fig. 2. Validation of DYC Dimensions.

5.4. Measurement model of DYC dimensions value not less than 0.50, all first order factors have a CR value ranging
from 0.865 (SNS) to 0.911 (LRN) (Fornell & Larcker, 1981; Hair et al.,
Fig. 2 illustrates that each primary factor demonstrated an adequate 2010). Likewise, AVE values were noticed to be above their threshold
and significant loading on DYC. The standardized regression weights for level (0.50) and ranged from 0.557 (RCF) to 0.630 (LRN) (Fornell &
these factors did not fall below 0.50, with values ranging from 0.93 Larcker, 1981; Hair et al., 2010). The squared root of AVE calculated for
(contributed by RCF and INT) to 0.97 (contributed by LRN). Addition­ each latent first order factor of DYC was higher than the intercorrelation
ally, the measurement model’s fit indices for DYC were observed to be values with other corresponding factors as well. This, in turn, supports
within acceptable limits, as follows: CMIN/DF= 2.370; GFI= 0.935; the discriminant validity of DYC dimensions proposed and tested in the
AGFI = 0.907; RMSEA= 0.035; NFI = 0.964; CFI = 0.974 [84, 87, 88]. current study (Kline, 2005) (see Table 4).
Scale items used to measure the first order factors also account for a
standardised regression weight value not less than 0.50 as seen in Fig. 2. 5.5. Measurement model of all constructs
Furthermore, aspects related to CR and average variance extracted
(AVE) were attained by first order factors of DYC. For example, with A measurement model was then tested for all latent constructs

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Table 4 hypotheses were tested. Initially, fit indices yielded were close to those
Construct validity and reliability of DYC first order factors. reported in the first stage of SEM and were found as follows: CMIN/DF =
CR AVE INT SNS CRD LRN RCF 2.888; GFI = 0.915; AGFI = 0.881, RMSEA = 0.041; NFI = 0.951; CFI =
0.959 (Anderson & Gerbing, 1988; Bagozzi & Yi, 1988; Byrne, 2013). As
INT 0.866 0.617 0.786
SNS 0.865 0.619 0.604 0.787 seen in Fig. 2, between 0.58 and 0.65 of variance (R2) was accounted for
CRD 0.863 0.612 0.674 0.730 0.782 by BDA and BP, respectively. This, in turn, supports the predictive val­
LRN 0.911 0.630 0.727 0.620 0.728 0.794 idity of the current study model. Further, DYC (γ=0.70, p < 0.000) and
RCF 0.882 0.557 0.717 0.672 0.684 0.673 0.746 EO (γ=0.19, p < 0.039) were able to significantly predict BDA. However,
*Diagonal values indicate the square roots of the Average Variance Extracted CCMS does not have an impact on BDA (γ=0.038, p < 0.734). In line
(AVE), while the off-diagonal values show the estimated inter-correlations with what has been proposed in the conceptual model, a strong signif­
among the latent constructs. icant relationship was identified between BDA and BP (γ=0.806, p <
0.000) (see Table 6).
proposed in the current study model. Fit indices adequately support the An examination using variance inflation factors (VIF) was conducted
goodness of fit of the full measurement model as all indices exist within to determine the presence of multicollinearity among independent
their suggested level as such CMIN/DF= 2.847; GFI= 0.919; AGFI = variables and their relation to dependent variables. The data in Table 6
0.887, RMSEA= 0.039; NFI = 0.955; CFI = 0.961 (Anderson & Gerbing, reveals that the VIF scores for each causal link remained below the
1988; Bagozzi & Yi, 1988; Byrne, 2013) (Anderson & Gerbing, 1988; crucial threshold of 10. This result confirms that there were no multi­
Bagozzi & Yi, 1988). An inspection of AVE values suggests that CCMS; collinearity issues in this study, consistent with the guidelines suggested
BDA; BP; and DYC were able to have a value not less than 0.50 as sug­ by Brace et al. (2006) (see Fig. 3).
gested by Fornell and Larcker (1981); Hair et al. (2010). However, the
AVE value of EO was 0.47 which is less than the threshold value 0.50. 6. Discussion
Thus, a careful inspection of the standardised regression weight of EO
scale items was conducted and identified that EO1 and EO6 have a factor This study was designed to investigate the factors influencing the
loading value less than 0.50; and therefore, both were removed from the adoption of AI in e-commerce within SMEs. The study’s approach and
revised version of the measurement model. The AVE value of EO after findings are structured around a conceptual model, formulated research
revision was 0.52 which is within the recommended level (Hair et al., hypotheses, and empirical evidence. The core finding of the study is that
2010). As seen in Table 5, CR values for all latent constructs were found dynamic capabilities and EO are significant predictors of AI adoption in
to be above the suggested value of 0.50; ranging from 0.812 (EO) to e-commerce among SMEs. This is supported by a substantial R2 value of
0.977 (DYC) (Fornell & Larcker, 1981; Hair et al., 2010). Finally, the 0.58, indicating a strong degree of variance in AI adoption explained by
discriminant validity of full model was attained in the current study as these two factors. Moreover, the study reveals a strong link between the
the squared root of AVE calculated for all latent constructs were found to adoption of AI in e-commerce and enhanced business performance
be above the intercorrelation values with other corresponding factors among SMEs. This relationship is numerically supported by an R2 value
(see Table 5). of 0.65, suggesting that a significant proportion of the variance in
business performance can be attributed to how effectively these enter­
prises adopt AI technologies. The research highlights the pivotal role of
5.6. Common method bias
dynamic capabilities and EO in driving the adoption of AI in the e-
commerce sector of SMEs, which in turn can substantially contributes to
To validate the absence of common method bias in the recent study,
improved business performance. This highlights the importance for
the data underwent a comprehensive review using Harman’s single-
SMEs in the e-commerce sector to develop these capabilities and ori­
factor approach. This technique scrutinizes nine key constructs - SNS,
entations to effectively leverage AI technologies for their growth and
CRD, LRN, INT, RCF, a CCMS, EO, the utilization of AI-driven e-com­
success.
merce, and business performance - as well as 46 specific scale items.
Dynamic capabilities are defined as "the firm’s ability to integrate,
These procedures are grounded in the methodologies of Harman (1976)
build, and reconfigure internal and external competences to address
and further developed by Podsakoff et al. (2003). All scale items were
rapidly changing environments" (Teece et al., 2007). This concept is
analyzed through exploratory factor analysis using an unrotated factor
crucial in understanding how companies adapt to technological in­
solution. The outcome of this analysis revealed that no solitary factor
novations like AI. Teece, Peteraf and Leih (2010) emphasize the
emerged as predominant. The foremost factor explained only 48.029
importance of dynamic capabilities in enhancing organizational flexi­
percent of the variance, staying below the 50 % benchmark set by
bility and innovating to improve business performance and
Podsakoff et al. (2003). This result indicates the dataset is free from the
competitiveness.
risks associated with common method bias.
Logically, the application of AI in business operations, as highlighted
by Drydakis (2022), directly aligns with the definition of dynamic ca­
5.7. Structural model results pabilities. AI enables firms to process large amounts of data efficiently,
enhancing their ability to identify new opportunities and reshape re­
In the second stage of SEM, a conceptual model and the research sources swiftly. This capability is particularly beneficial in reducing risks
and improving decision-making, which are core elements of dynamic
Table 5 capabilities.
Construct validity and reliability of full model. Study by Salah and Ayyash (2024) confirmed that the integration of
CR AVE EO CCMS BDA BP DYC

EO 0.812 0.520 0.721 Table 6

CCMS 0.884 0.561 0.620 0.749 Hypothesis testing.
BDA 0.920 0.563 0.671 0.665 0.751
BP 0.910 0.771 0.586 0.699 0.612 0.878 Estimate S.E. C.R. p-Value VIF
DYC 0.977 0.893 0.589 0.691 0.655 0.742 0.945 BDA ← CCMS 0.038 0.092 0.340 0.734 1.025
* Diagonal values indicate the square roots of the Average Variance Extracted BDA ← DYC 0.702 0.137 5.259 *** 4.122
BDA EO 0.195 0.105 2.060 0.039 2.145
(AVE), while the off-diagonal values show the estimated inter-correlations
←
BP ← BDA 0.806 0.106 9.848 *** 4.273
among the latent constructs.

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Fig. 3. Validated conceptual model.

AI and an innovative culture has a significant positive impact on the and growth. The theoretical and empirical evidence supports the notion
adoption of e-commerce. Moreover, Fonseka et al. (2022) examined that dynamic capabilities play a crucial role in the successful adoption
management’s perception of the impact of e-commerce adoption on the and utilization of AI in e-commerce, especially for SMEs (Helfat &
business performance of SMEs through the use of AI. The study’s results Winter, 2011; Zhang et al., 2022). These capabilities enable firms to
recommend the adoption of e-commerce as a marketing strategy and navigate the challenges of a rapidly evolving digital landscape, har­
utilizing AI to automate functions that may be challenging for em­ nessing AI’s potential to enhance efficiency, innovation, and
ployees to manage effectively. Also, Digital platforms contribute to competitiveness
enhancing business opportunities and improving the performance of Entrepreneurial Orientation is characterized by the propensity to
SMEs by integrating and utilizing AI in their business processes (Wei & identify, evaluate, and exploit opportunities. This concept, central to the
Pardo, 2022). AI capabilities and tools have a positive impact on com­ works of (Kusa et al., 2024), and Fernandes et al. (2022), is funda­
panies’ business performance and this contributes to making informed mentally about maintaining a proactive and vigilant stance in the pur­
decisions based on AI (Li et al., 2024). suit of opportunities, along with the willingness to embrace the risks
In the context of e-commerce, the rapid evolution of digital tech­ involved. Upadhyay et al. (2023) and Upadhyay et al. (2022) further
nologies demands a high degree of adaptability and responsiveness from expand on this by linking EO to a company’s readiness to develop
businesses. Studies by Nasution et al. (2021), and Wu and Hisa (2008) essential competencies that enable the identification and capitalization
illustrate the application of dynamic capabilities theory in e-commerce, of hidden opportunities. As highlighted by Avlonitis and Salavou (2007)
highlighting the importance of these capabilities in adopting new and Fernandes et al. (2022), seeking opportunities is a critical compe­
technologies and approaches in this sector. During the COVID-19 tency of EO. Firms with a strong EO are adept at spotting both evident
pandemic, the role of dynamic capabilities became even more pro­ and latent opportunities in their market, a trait that is crucial for iden­
nounced. Priyono et al. (2020) found that digital transformation, a key tifying and leveraging new technologies like AI in e-commerce. Majali
aspect of dynamic capabilities, was instrumental in enhancing the et al. (2022) and Preda (2013) note the importance of adaptability in
effectiveness and productivity of SMEs. This transformation was not just EO. This involves adjusting to evolving consumer demands and
about adopting new technologies but also about rethinking business competitor strategies, which is essential for the effective integration of
processes and models – a core aspect of dynamic capabilities. AI into business processes and customer engagement strategies.
Helfat and Winter (2011) further expand on this by suggesting that The entrepreneurial mind-set is crucial in enhancing a company’s
dynamic capabilities are essential in implementing innovations for capacity to respond to new opportunities and innovations. Shore et al.
greater efficiency, integration, and business restructuring. This is (2024) and Khodor et al. (2024) support this viewpoint, emphasizing
particularly relevant in e-commerce, where the ability to swiftly adapt to that firms with strong EO are more likely to be innovative and respon­
market changes and technological advancements is crucial for survival sive to changes, such as those brought about by AI in e-commerce. These

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EO traits, as discussed by Wang and Ahmed (2009), involve not only development programs that foster these capabilities, enabling their or­
recognizing opportunities but also taking calculated risks to capitalize ganizations to be more responsive to technological advancements like
on them. This aspect is particularly relevant in the context of AI adop­ AI.
tion, where firms must be willing to invest in new technologies despite SMEs should also foster an entrepreneurial culture that values
uncertainties. Firms with a strong EO, as suggested by Salah et al. (2024) innovativeness, proactiveness, and a willingness to take risks. This
and Chung et al. (2022), are committed to continuous learning and orientation will not only facilitate the adoption of AI but also encourage
improvement. This approach is vital for leveraging AI effectively, as it a mindset that is open to exploring new technologies and business
requires ongoing adaptation and refinement of strategies and processes. models. Workshops, leadership training, and incentive structures can be
Peretz-Andersson et al. (2024) and Xin and Ma (2023) discuss the sig­ designed to promote and reinforce these entrepreneurial values. The
nificance of market awareness in EO. Firms that are constantly moni­ strong correlation between AI adoption and business performance sug­
toring market trends are more likely to recognize the potential of AI in gests that SMEs should strategically incorporate AI into their business
enhancing their e-commerce strategies and customer engagement. In models. This involves identifying areas where AI can bring the most
conclusion, EO plays a pivotal role in a firm’s ability to successfully value, such as customer service, data analysis, and operational effi­
adopt and leverage AI in e-commerce. This orientation, characterized by ciency, and investing in suitable AI technologies.
opportunity seeking, adaptability, innovation, risk-taking, continuous Given the impact of AI on business performance, SMEs should invest
learning, and market awareness, equips firms to not only recognize the in training their staff in relevant AI technologies and data analytics. This
potential of AI but also to effectively integrate it into their business not only prepares the workforce to work effectively with new technol­
models and processes for improved performance and competitive ogies but also helps in leveraging AI to its full potential. Since adopting
advantage. new technologies involves risks, SMEs need to develop robust risk
assessment and management strategies. This includes evaluating the
6.1. Theoretical contributions financial, operational, and security risks associated with AI technologies
and implementing appropriate mitigation strategies.
The study’s findings empirically support its conceptual model and While the study did not find a significant role for customer-focused
research hypotheses, providing a strong foundation for the theoretical systems, practitioners should still consider the potential of AI to
relationship between dynamic capabilities, EO, and the adoption of AI in enhance customer experiences. This involves using AI for personalized
e-commerce for SMEs. The significant R2 values (0.58 for AI adoption marketing, improved customer service, and better understanding of
and 0.65 for business performance) offer quantitative validation of these customer needs and behaviors. SMEs should view AI adoption not just as
relationships, enhancing the robustness and credibility of the theoretical a technological upgrade but as a strategic move to gain a competitive
framework. edge. This involves using AI to improve product/service offerings,
The study also contributes to the dynamic capabilities theory by streamline operations, and create new value propositions for customers.
empirically demonstrating its applicability in the context of AI adoption Continuous monitoring and evaluation of AI implementations are
in e-commerce. This extends the theory’s relevance beyond traditional crucial. This helps in assessing the impact of AI on business performance
business strategy and innovation, situating it firmly within the domain and in making necessary adjustments to strategies and operations.
of digital transformation and technology adoption in SMEs. The finding
that entrepreneurial orientation significantly predicts the adoption of AI 6.3. Limitations and future research directions
in e-commerce among SMEs adds a new dimension to the entrepre­
neurship literature. It suggests that the characteristics associated with The study centers on understanding how dynamic capabilities (the
entrepreneurial orientation – such as innovativeness, proactiveness, and ability to adapt and reconfigure business strategies and operations) and
risk-taking – are critical in the context of technological adoption and EO (a firm’s strategic posture characterized by innovativeness, proac­
digital transformation. tiveness, and risk-taking) influence the adoption of AI in SMEs. Inter­
The strong predictive relationship between AI adoption and business estingly, it also considers customer-focused systems, which typically
performance (R2 = 0.65) offers theoretical insight into the tangible involve leveraging technology to better understand and cater to
benefits of technological innovation in SMEs. This finding highlights the customer needs.
theory that integrating advanced technologies like AI can lead to sub­ The study’s scope is restricted to the adoption of AI in SMEs. This
stantial improvements in business performance, a key consideration for focus provides valuable insights into how SMEs, which often have
both academic researchers and business practitioners. By linking dy­ different resources and constraints compared to larger companies,
namic capabilities and EO with AI adoption in e-commerce, the study approach and integrate AI into their operations. However, the findings
bridges two important areas of business research: technology adoption may not be fully generalizable to larger companies or different sectors
and strategic management. This integration offers a more comprehen­ that might have distinct dynamics and challenges in AI adoption.
sive understanding of how strategic business capabilities influence The results could be influenced by the specific economic, cultural,
technological adoption and subsequent performance outcomes. The and technological landscape of Saudi Arabia, which might differ
study’s findings have specific implications for SMEs in the e-commerce significantly from other regions. This geographical focus provides
sector, suggesting that these businesses can enhance their competitive­ valuable insights into AI adoption in this specific context but may limit
ness and performance through the strategic adoption of AI. This con­ the generalizability of the findings to other regions.
tributes to a deeper theoretical understanding of how SMEs players in An interesting outcome of the study is that it did not find significant
the digital economy can leverage technology for business success. support for the role of customer-focused systems in the adoption of AI.
This might suggest that, for SMEs in Saudi Arabia, other factors (like
6.2. Practical implications dynamic capabilities and entrepreneurial orientation) are more critical
drivers for AI adoption, or it could indicate that customer-focused ap­
Based on the study’s findings regarding the significant roles of dy­ proaches are not being effectively integrated with AI technologies in
namic capabilities, EO, and the impact of AI adoption on business per­ these SMEs.
formance in SMEs, several practical implications for practitioners. For The study’s methodology did not account for potential mediation or
example, businesses, especially SMEs, should focus on developing and moderation factors. Mediation factors could explain the relationship
enhancing their dynamic capabilities. This involves being agile, adapt­ between the main variables (e.g., how entrepreneurial orientation leads
able, and able to reconfigure resources and strategies in response to to AI adoption), while moderation factors could influence the strength or
changing market conditions. Practitioners should invest in training and direction of these relationships (e.g., how certain industry

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S. Aljarboa International Journal of Information Management Data Insights 4 (2024) 100285

characteristics might strengthen or weaken the impact of dynamic ca­ this work.
pabilities on AI adoption). The absence of these considerations might This work has not received any significant financial support that
limit the depth of understanding of the complex interplay between the could have influenced its outcome.
variables studied. I affirm that there are no known conflicts of interest related to this
publication, and no significant financial support has influenced the re­
CRediT authorship contribution statement sults of this work.
No party with a direct interest in the research outcomes has or will
Soliman Aljarboa: Writing – review & editing, Writing – original provide any benefit to me or any organization with which I am affiliated.
draft, Visualization, Validation, Supervision, Software, Resources, To the best of my knowledge, I have no conflicts of interest, financial
Project administration, Methodology, Investigation, Funding acquisi­ or otherwise, that might affect the results or interpretation of the
tion, Formal analysis, Data curation, Conceptualization. manuscript’s contents.
I acknowledge the importance of this declaration and understand the
Declaration of competing interest potential repercussions of any future indiscretions.

In relation to my submission titled "Factors Influencing the Adoption Acknowledgment

of Artificial Intelligence in E-Commerce by Small and Medium-Sized
Enterprises" to the International Journal of Information Management The author gratefully acknowledges Qassim University, represented
Data Insights, I declare the following: by the Deanship of Graduate Studies and Scientific Research, on the
I do not possess any financial interests that could potentially create a financial support for this research under the number (20027-cbe-2023-
conflict of interest or give the appearance of such a conflict concerning 3-15-w) during the academic year 1444AH / 2023 AD.

Appendix: Scale Items

IT-enabled dynamic capabilities (ITDC): Mikalef and Pateli (2017)

Please indicate how effective your company is in using AI-enabled IT systems for the following purposes:

Sensing (SNS) SNS1 Scanning the environment and identifying new business opportunities
SNS2 Reviewing our product development efforts to ensure they are in line with what the customers want
SNS3 Implementing ideas for new products and improving existing products or services
SNS4 Regularly check the quality of our functional capabilities compared to competitors
Coordinating CRD1 Providing more effective coordination among different functional activities
(CRD) CRD2 Providing more effective coordination with customers, business partners and distributors
CRD3 Making sure from synchronization Outputs the job with a job Units Functional The other or partners the job
CRD4 Reducing redundant tasks, or overlapping activities performed by different operational units
Learning (LRN) LRN1 Identify, evaluate, and import new information and knowledge
LRN2 Transform existing information into new knowledge
LRN3 Assimilate new information and knowledge
LRN4 Use accumulated information and knowledge to assist decision making
LRN5 Gain new abilities to learn new things successfully
LRN6 Easy to obtain external knowledge very quickly
Integrating (INT) INT_1 Easily accessing data and other valuable resources in real time from business partners
INT_2 Aggregating relevant information from business partners, suppliers and customers. (e.g. operating information, business customer performance)
INT_3 Collaborating in demand forecasting and planning between our firm and our business partners
INT_4 Streamlining business processes with suppliers, distributors, and customers
Reconfiguring RCF_1 Adjusting for and responding to unexpected changes easily
(RCF) RCF_2 Easily adding an eligible new partner that you want to do business with or removing ones that you have terminated your partnership
RCF_3 Adjusting our business processes in response to shifts in our business priorities
RCF_4 Reconfiguring our business processes in order to come up with new productive assets
RCF_5 Employees combine existing methods with new ways of doing things without losing their efficiency
RCF_6 Successfully integrate new acquired knowledge with our existing knowledge
Customer-centric management system (Trainor et al., 2014)
CCMS11 We focus on customer needs while designing business processes
CCMS2 In our organization, employees receive incentives based on customer satisfaction measures.
CCMS3 A key criterion used to evaluate our customer contact employees is the quality of their customer relationships.
CCMS4 In our organization, business processes are designed to enhance the quality of customer interactions.
CCMS5 We organize our company around customer-based groups rather than product or function-based groups.
CCMS6 In our organization, various functional areas coordinate their activities to enhance the quality of customer experience.
Entrepreneurial orientation (EO) (Matsuno et al., 2002)
EO1 Firmly believe that a change in market creates positive opportunity for us
EO2 Company emphasizes taking risks .
EO3 Risk-taking Value the orderly and risk-reducing management process much more than the leadership initiatives for change []
EO4 In the past five years, our company has introduced many new products or services to the market.
EO5 Our company focuses on research and development, technology leadership and innovation rather than trusting only those products and services
that we have traditionally found good.
EO6 NO Innovativeness When it comes to problem solving, we value creative solutions more than the solutions of conventional wisdom
EO7 NO Top managers encourage the development of innovative marketing strategies, knowing well that some will fail
Adoption E-commerce powered by artificial intelligence: To what extent your organisation implemented ECA-AI in each area: (Chen et al., 2015)
BDA- Suppliers analysis
AI1
BDA- Customer behavior analysis
AI2
(continued on next page)

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(continued )
IT-enabled dynamic capabilities (ITDC): Mikalef and Pateli (2017)
Please indicate how effective your company is in using AI-enabled IT systems for the following purposes:

BDA- Inventory planning

AI3
BDA- Process/equipment monitoring
AI4
BDA- Transportation planning
AI5
BDA- Demand forecasting
AI6
BDA- Human resource management
AI7
BDA- Costing
AI8
BDA- Warehouse operations improvements
AI9
Business Performance (Baabdullah et al., 2021)
BP1 E-commerce powered by artificial intelligence will help us to gain strategic advantages over our competitors.
BP2 E-commerce powered by artificial intelligence will help us to retain existing clients and to attract new ones.
BP3 Using E-commerce powered by artificial intelligence will increase the levels of business customer satisfaction.
BP4 Using E-commerce powered by artificial intelligence will generate a high volume of sales.

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