The driving forces of internetadoption

An empirical examination from the Portuguesenon-profit sector

Jose Carlos Pinho and Isabel Maria MacedoSchool of Economics and Business, University of Minho, Braga, Portugal

Abstract

Purpose – This study aims to analyse the driving forces that either favour or inhibit internetadoption by organisations operating in the non-profit sector.

Design/methodology/approach – Following a quantitative methodological approach, a nationalsurvey was applied to a sample of 392 Portuguese non-profit organisations to empirically test theproposed conceptual model. Logistic regression, which enables to test models to predict categoricaloutcomes with two categories was used to analyse the data.

Findings – Findings drawn from this study identify key factors that facilitate or inhibit internetadoption by non-profit organisations. The internet is perceived as a potential tool for the disseminationof social values and programs of action, the improvement of public image, the enhancement ofcustomer satisfaction, and the improvement of service delivery. By contrast, lack of expertise andstart-up costs have been identified as the most significant inhibitors. In addition, size, age andinternational affiliation are shown as important internet adoption facilitators.

Practical implications – This study offers the opportunity to rethink existing policies and to setforth specific measures that can be designed to encourage and foster the use of the internet bynon-profit organisations.

Originality/value – The relevance of this study is set against a lack of consistent, detailed researchon the factors determining internet adoption within the context of the non-profit sector.

Keywords Non-profit organizations, Internet, Communication technologies, Portugal

Paper type Research paper

IntroductionNon-profit organisations (NPOs) have been acknowledged as a major economic force,playing an increasing role in the worldwide economy as well as in the social, politicaland economical context (Salamon, 1994; Salamon and Anheier, 1992). As noted by theprevious authors, the expenditures of the non-profit sector, if considered as a separatenational economy, would make it the seventh largest economy in the world. PortugueseNPOs are not an exception to this trend.

In a context within which organisations are increasingly committed to enhance theirorganisational efficiency, the network economy in general and internet technologies inparticular, have been generally recognised as critical tools for promoting innovativeand strategic management activities while giving organisations the possibility toobtain important competitive advantages (Castells, 2000). In broad terms, thesepotential benefits justify the increasing adoption of internet technologies that hasoccurred particularly in the last decade. However, despite general acknowledgment ofthe widespread use of internet technologies by organisations across various industry

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EuroMed Journal of BusinessVol. 3 No. 3, 2008

pp. 305-319q Emerald Group Publishing Limited

1450-2194DOI 10.1108/14502190810906455

sectors, differences exist in the extent of internet adoption within corporate, public andnon-profit organisations, with this trend being less significant in the latter. Internetadoption has occurred in different ways and at different paces in organisations acrossindustry sectors. While internet adoption has been most visible in business firms andgovernment agencies, organisations pertaining to the non-profit sector have integratedthis new technology more gradually (Pinho and Macedo, 2006; Tuckman et al., 2004;Napoli et al., 2000). Previous studies comparing the level of resources invested ininternet technologies revealed that either in relation to business firms (Sheh, 1993) or topublic organisations (Corder, 2001), non-profits are the least committed with investingin internet adoption.

Yet, in light of the growing scope and scale of the non-profit sector, one could expectthat the organisations within this sector would follow suit as that of business andpublic organisations, particularly if considering the impact that internet technologiescan have in its potential to facilitate transactions, promote relationships and enhancecommunication and social interaction (Te’eni and Young, 2003). In the face of this, thepresent article aims at investigating the driving forces that either favour or inhibit theadoption of the internet by organisations operating in the Portuguese non-profit sector.Findings derived from this research can have important implications for more generaltheories of non-profit organizational management thereby proving its relevance to bothpolicy makers and individual NPOs. In other words, this study may contribute towardsthe design of more adequate strategies for bringing NPOs up to speed with the newInformation era while allowing them to benefit from its numerous advantages. Despiteexisting studies regarding the way in which non-profits have integrated internettechnologies (Finn et al., 2006; Tuckman et al., 2004; Napoli et al., 2000), few empiricalstudies, based on representative national samples including a broader range ofnon-profit areas of activity, have effectively investigated the critical factors thatexplain internet adoption in this sector. This is particularly important whenconsidering that this sector has commonly been acknowledged as extremely diverseand heterogeneous with respect to its activities, motivations, ideologies and functions(Kendall and Knapp, 1995). This article begins with the conceptual frameworkaddressing the facilitating and the Inhibiting factors of internet Adoption, after whichthe research methodology is provided. Next, analysis and results are presented anddiscussed. Finally, the paper concludes with implications for both theory and practicehighlighting possible areas for future research.

Conceptual frameworkThe potential of the network economy for non-profit activityThere is growing consensus over the arguments reiterating that the internet, viewed asa central element of the network economy, has the potential to bring challengingopportunities as well as competitive advantages to non-profit organisations in thesame way as it did for business organisations. Considering the distinctive character ofNPOs, mostly associated with the “non-distribution of profit constraint” (Hannsman,1980), and the specificity of their missions, the internet gains visibility in its potentialto enhance and promote non-profit activities at a low cost while reaching a hugenumber of users. This is in line with some authors who maintain that the internet caneven be more appealing to these organisations than to for-profit firms (Saxton and

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Game, 2001). This is partly justified due to the heterogeneous and intangible nature ofthe services and activities provided by NPOs including ideas and information,attitudes and awareness (Kanter and Summers, 1987). In other words, relevantnon-profit activities such as information sharing, user and donor mobilisation forspecific causes and programs of action, fundraising campaign implementation,advocating causes and building online communities, improving internal and externalcommunications and disseminating information are the types of activities that canmost benefit from internet adoption (Lohmann, 2001; Sargeant and Jay, 2004; Saxtonand Game, 2001). In this line, the importance of ICT can be seen as a critical successfactor for promoting organizational achievements while facilitating potential changesin the role non-profits are increasingly called upon to play (Te’nei and Young, 2003).More specifically, in light of the financial constraints that national governments arefacing with the resulting limited spending on socio-political and economicdevelopment, the non-profit sector has been called on to play an increasinglyprominent role in the social and economic arenas (Corder, 2001). This is even morenoticeable within a context characterized by an increase in service delivery outsourcingfrom government to the private and non-profit sectors on one hand, and a blurring ofthe boundaries between sectors (Smith and Lipsky, 1993) on the other. Along theselines, the challenges associated with an increasingly competitive environment requireNPOs to develop capabilities that enable managing their resources and competenciesmore efficiently while proactively communicating with the diversity of stakeholderswith whom they interact. This last aspect is particularly stressed by authors statingthe impact that ICT, referred to as a “global network of networks”, can have onenhancing the NPO role as a “trusted intermediary in the flow of information of private,public and government-financed services “ (Finn et al., 2006). Since the internet standsout as an important tool for meeting such demands, gaining knowledge of the factorsleading NPOs to integrate this information technology becomes increasingly valuable.

Given the scarcity of empirical research offering insights into NPO internetadoption factors, the present study draws on research undertaken within the context ofsmall and medium-sized enterprises (SMEs), which was applied to the NPO domain.Although possessing different ownership forms, SME and NPO sharing of commonorganisational aspects are recognised elsewhere in the literature. The research reportedin this article examines the role of facilitating and inhibiting factors as well asorganisational features of NPOs in their adoption of internet technology. This is in linewith Levy et al. (2005), who, studying the SME context, suggest that there are threemain factors influencing internet adoption decisions consisting of perceived benefits,organisational readiness and external pressures.

Factors facilitating internet adoptionThe main perceived benefits linked to internet adoption may be seen as key driversinfluencing decisions concerning internet technologies investment within thenon-profit context (Pinho and Macedo, 2006). This is in line with research that hasaddressed e-business adoption in the SME setting (Levy et al., 2005; Walczuch et al.,2000; Abell and Limm, 1996). However, it is important to note that not all benefits areperceived as being equally important. For example, while Abell and Limm (1996) foundeffectiveness in information gathering and availability of expertise as the most

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important benefits, Poon and Strom (1997) emphasised the importance of direct andindirect advertising, low cost communication and easy access to potential customers.Improving service delivery and operating efficiency are identified as key drivers forinternet adoption by a number of authors (Teo and Pian, 2003; Levy et al., 2001). Inturn, Kaynak et al. (2005) have acknowledged that particular emphasis should beplaced on the means of information sharing with potential and actual customers as wellas with the entire supply and distribution chain in conducting e-commerce. Moreover,Walters and Lancaster (1999) have stressed the importance of developing new productsand services for existing and new customers. Like SMEs, non-profit organisations canalso benefit greatly from using the internet. Existing studies have emphasised the roleof internet-based networking as a tool for broadening the manner in which NPOs fulfilthe needs of their beneficiaries and how they share information with their multiplestakeholders (Finn et al., 2006; Frenza and Hoffman, 1999). Several authors (Pinho andMacedo, 2006; Olsen et al., 2001; Saxton and Game, 2001) have likewise contended thatthe internet enhances core activities for the accomplishment of NPO purposes ingaining access to information, attracting resources and promoting interactions withtheir stakeholders.

Drawing upon the previous analysis, the following hypotheses have been proposed:

H1. The greater the potential of the internet to provide information, the greater thepredisposition towards its adoption.

H2. The greater the capability of the internet to attract resources andcompetencies, the greater the predisposition towards its adoption.

H3. The greater the capability of the internet to form and extend networks withother stakeholders, the greater the predisposition towards its adoption.

Despite the aforementioned perceived benefits associated with internet use, theperception of a number of obstacles may well account for its non-adoption (Pinho andMacedo, 2006; Doherty et al., 1999; Hoffman et al., 1997).

Factors inhibiting internet adoptionUnfamiliarity with the internet, the degree of complexity, difficulties of integrating newand old information systems and security concerns have been pointed out as chiefobstacles for internet adoption (Chen and Leteney, 2000). According to Kaynak et al.(2005) obstacles can be categorised in terms of technical and non-technical limitations.Technical obstacles are mainly linked with the safeguarding of critical company dataand related IT infra-structure. Additionally, security breaches are likely to occur whenan NPO is vulnerable to risks that serve to compromise confidential client and serverdata and place on-line transaction at risk. Parallel to this, other technical hindrancesinclude inadequate telecommunications bandwidths, or the absence of internet accessthroughout the organisation.

Drawing from Kaynak et al. (2005) non-technical obstacles slowing down the spreadof internet-based activities among NPOs include start-up costs and the lack ofgovernmental regulations and standards. Similarly, a set of internet related obstaclesfaced by for-profit firms can be applicable to NPOs. In addition to the limiting factorsthat have been raised by the literature to date, particular emphasis should be given to

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unfamiliarity with the internet; lack of appropriate and continuing technical support(or lack of expertise); reluctance of staff and volunteers to use the internet; decreasedproductivity due to frivolous use, high staff and volunteer turn-over rates (Walczuchet al., 2000; Cravens, 2004), and resource constraints under which NPOs operate leadingto weaknesses in adopting information technologies. Considering the above, it isproposed that:

H4. The higher the technical obstacles associated with the use of the internet, thelower the predisposition towards its adoption.

H5. The higher the non-technical obstacles associated with the use of the internet,the lower the predisposition towards its adoption.

Organisational featuresAmong the key influencing factors of internet adoption, several organisational featuressuch as size and age have also been addressed in relevant literature. According toDholakia (1995), size, as measured by the number of employees, is particularlyimportant for facilitating information exchange through e-mail benefits and mobilecommunications. Flanagin (2000) maintains that organisational size is considered to bethe most relevant structural determinant of innovation and, as a result, an importantpredictor of internet adoption. Owing to better resources and easy access to hightechnological skills (Baldridge and Burnham, 1975), large organisations tend toconsistently adopt innovations earlier than smaller ones. In this line, it is assumed thatlarger organisations more readily adopt the internet (LaRose and Hoag, 1996). Thus, itis suggested that:

H6. The greater the organisational size, the higher the predisposition for internetadoption.

Organisational age has also been reported to be an important influencing factor forinternet adoption. In this respect, Kimberly and Evanisko (1981) have acknowledgedthat organisational age is negatively correlated with the earlier adoption of innovationsin the sense that newer organisations are in the forefront of employing newtechnologies as a strategy to reinforce their market position whereas older, more firmlyestablished organisations tend to be slower in new technology adoption in general andof the internet in particular. Thus, it is suggested that:

H7. The greater the organisational age, the lower the predisposition towardsinternet adoption.

As an influencing factor of internet adoption, this study includes the internationaldimension, defined in terms of affiliation and/or membership of an NPO with aninternational organisation. In light of the fact that the internet offers a vast range ofopportunities to those organisations wishing to market their products/servicesworldwide (Tiessen et al., 2001), this study similarly assumes that NPOs with anexisting international affiliation have a higher likelihood for internet adoption. Thisrelationship can be understood by the fact that the internet not only reduces theinfluence of geographic boundaries, but also promotes both the coordination andintegration of global activities throughout an international network (Porter, 1986) and

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lends additional competitiveness by increased flexibility in responding to beneficiaries,donors and other stakeholders. Therefore, the following hypothesis is formulated:

H8. Organisations affiliated to other International NPOs tend to evidence higherpredisposition to adopt the internet.

MethodologyResearch settingThe aim of this research was to identify the facilitating and inhibiting factors thatinfluence the adoption of internet technology by non-profit organisations. To obtainadequate information on these factors, a triangulation approach was adopted, so thatqualitative data gathered from exploratory interviews were combined withquantitative data collected by means of a postal survey. During the exploratorystage, a set of interviews were undertaken with NPO’s managers to gain insights and amore thorough knowledge on the topic under analysis. As Yin (1994) notes applying amixed methodological approach is appropriate for examining “what questions” and atthe same time, “how” and “why” questions. Additionally, such an approach enables aconvergent validation or “triangulation”, giving the researcher an in-depth knowledgeof all aspects, details and dimensions of the research object.

Survey instrument developmentThe instruments used to measure the constructs involved in this study derived mainlyfrom existing literature and from exploratory research. In the survey instrumentdevelopment, a preliminary questionnaire addressing basic information aboutidentification, environment, benefits and obstacles associated with internet adoptionwas pre-tested with a number of senior NPO managers. The pre-test was undertaken inorder to evaluate the clarity of questions, to determine the length of time required forcompletion and to examine the relevance of the subject matter for the target population.As a result, final changes were made to the questionnaire in which some items weredropped, others were slightly changed and new items were added. The initial pool ofitems to measure the perceived benefits associated with internet adoption was based onthe relevant literature (Pinho and Macedo, 2006). Perceptions of benefits and obstacleswere measured using a five-point Likert type scale ranging from 1 ¼ not benefit at all;5 ¼ benefit strongly (Fishbein and Ajzen, 1975).

In the present study, non-response bias was assessed by comparing the responses ofearly respondents with those of late respondents (Armstrong and Overton, 1977).Several t-tests were performed for testing the null hypothesis that the mean of theanswers across the two groups were the same. No significant differences were found ona number of characteristics between early and late respondents. The questionnaire wasaddressed to the heads of each organisation due to the need for complete and in-depthinformation which could not be gathered from general respondents, To ensure thevalidity of the questionnaire, the level of confidence each respondent had with respectto issues raised by the questionnaire was assessed along a five-point scale (Kumar et al.,1993). Those respondents indicating non-confidence (rating 1 and 2 on a five-pointLikert scale) were discarded from the analysis.

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Data collection procedureSince the primary objective of this study is to present a snapshot of the use of theinternet by NPOs and to determine the factors that influence its adoption, a samplesurvey approach was used. A mailing was sent to a random sample of 1,500 NPOsdrawn from a set of national lists. The questionnaire was accompanied by a cover letterexplaining the objectives and the relevance of the study for the sector. A total of 437questionnaires were returned, from which 45 were excluded due to unknown addressesand incomplete responses. Thus, 392 valid responses were considered for analysis(response rate of 26 per cent). It should be emphasized that the total sample representsa diversity of NPOs in terms of their field of activity, geographical location, size andlegal status. A broad range of non-profit activities were represented in the survey.Although the areas of Culture/Recreation (41.8 per cent) and Social Services (40.3 percent) were slightly over-represented, the same did not apply to Environment/CivicAdvocacy (7.4 per cent), Health (6.6 per cent) and Development/International Activity(3.8 per cent). All the sampled organisations within the population had fewer than 250employees and therefore qualified to be defined in a similar manner as SMEs(European Commission, 2006). The sample included organisations spanning in sizefrom small organisations representing nearly 87 per cent (less 50 employees) tomedium-sized NPOs representing 13 per cent (51-250 employees). With regard toorganisational age, the sample included 23 per cent of NPOs with less than ten years,53 per cent between 11 to 50 years and 12.3 per cent with more than 51 years. In thesample, while nearly 60 per cent of the NPOs did not possess any internationalaffiliation, the remaining did. In the present study, 38 per cent of 392 studied non-profitorganisations employ internet in their activities. In line with Avlonitis and Karayanni(2000), internet adoption is considered as the usage of e-mail, usernet, file transferprotocol (ftp) and world wide web. Responses to the questionnaires were analysedusing the SPSS package.

Analysis and discussionThis section provides a summarized discussion of the main results. In order to reducethe data into a manageable set of constructs, a factor analysis using the principalfactors method was performed to determine the items that formed factor clusters. Theitems, which account for the benefits associated with the internet were factor analysedand the PCA was applied to all NPOs (n ¼ 392). Prior to performing PCA, thesuitability of data for factor analysis was assessed. Major assumptions such asdepartures from normality, homogeneity of variance and linearity were not anobstruction for the use of factor analysis (Hair et al., 1995). A correlation of 0.40 orhigher on one factor was required to retain an item in a factor cluster. The KMO valuewas 0.86, exceeding the recommended value of 0.60 and the Bartlett’s test of sphericityreached statistical significance (1,917.34; p ¼ 0:00) supporting the factorability of thecorrelation matrix. PCA revealed the presence of four components with eigenvaluesexceeding one, explaining 69 per cent of the total variance. To add furtherinterpretation to these components, the varimax rotation was performed. For lengthconsiderations, a summarised description of the results is presented.

Factor one was labelled as Information Dissemination; it scores highest ondissemination of programs of action; availability of expertise regardless of location;

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improving the public image; low cost communication; greater customer satisfactionand dissemination of social values. Factor two was labelled as Resource Attraction andincluded the following items: fundraising source; recruitment of staff and volunteersand saving in advertising costs. Factor three was designated as Networking and scoreshighest on interconnectivity with state agencies and form and extent of non-profitnetworks. Finally, factor four was termed Service Delivery as it includes two items,namely improvement of service delivery and improvement of operating efficiency.

In order to evaluate the internal consistency of the items in each factor, a Cronbach’sAlpha reliability test was employed (Nunnally, 1978). Results indicate that the first,second and third factors were considered good, based on the values of 0.85, 0.79 and0.80 respectively. Although the last factor obtained a Cronbach value of 0.60 (Georgeand Mallery, 1995), it was accepted for the purpose of the present analysis inconsideration of the fact that reliability values of 0.60 can be considered as satisfactoryin exploratory research (Nunnally, 1978). Next, those scales that presented highinternal consistency were aggregated and averaged to form a composite score to beused in the subsequent analysis. The present analysis employed logistic regressionanalysis to determine the factors impacting on internet adoption. Several Pearsoncorrelations for the independent, dependent and control variables were computed. Asresults did not present magnitudes higher than 0.70, there was no evidence ofmulticollinearity (Tabachnick and Fidell, 2001). The choice of logistic regression isused when the dependent variable is binary in nature and the independent measuresare both quantitative and qualitative. This technique is also relevant when the datadoes not meet the assumption of multivariate normality (Ekeledo and Sivakumar,2004). Sequential logistical regression was the adopted method in which the researcherspecifies the sequential order of entry for predictors into the model. At a final stage, thedifference between the first and the last model (block) is evaluated to determine if thestrongest predictors improved the prediction of internet adoption (Tabachnick andFidell, 2001). Table I presents the unstandardised parameter estimates (b), the Waldstatistics and the level of significance for each predictor.

This statistical outcome suggests that seven out of the thirteen independentvariables are significant predictors of internet adoption. Consistent with Miles andShevlin (2001), a negative parameter estimate represents an increased odd for adoptingthe internet. As can be seen, the final model is statistically significant (x2 ¼ 198:3,p , 0:01) and 81 per cent percent of the cases are correctly classified. Before runningthe logistic model, a first model including all predictor variables was computed toidentify those with significant values. Subsequently, those predictors, which evidenceda level of significance lower than 0.05 were included in successive blocks and in asequential order. Of the four composite variables accounting for the perceived benefitsassociated with the internet adoption, two were significant predictors. This is the caseof information dissemination (b1 ¼ 20:823; p , 0:01) and service delivery(b3 ¼ 21:307; p , 0:01). This result led to the acceptance of H1. A tentativeexplanation for this could be that, in general terms, a significant number of thoseorganisations who have already adopted the internet use this tool mainly forinformational and communicational objectives, such as information dissemination andfor transactional purposes such as service delivery. Contrary to expectations, thebenefits of resource attraction and the potential of the internet to form and extend NPO

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regression on internetadoption/non-adoption

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networks were not good predictors of internet adoption, hence not supporting H2 andH3. Considering that NPOs are increasingly facing a number of challenges to convertone-time donors into long-term contributors, the above result certainly deserves to beclarified in further research.

Concerning the perception of technical obstacles associated with internet use, H4was not supported by the data suggesting the need for further research. With regard toH5, which maintains that the higher the perceived non-technical obstacles associatedwith internet use, the lower the predisposition to its adoption, results partiallysupported this hypothesis. Concerning the four dimensions used to measure theperceived non-technical barriers associated with internet use, only the start-up costs(b7 ¼ 0:585; p , 0:01) and lack of expertise (b10 ¼ 0:345; p , 0:10), revealed to besignificant inhibitors of internet adoption. A possible justification for the above resultmay be linked to an important feature, which accounts for the specific character ofNPOs. These organisations do not raise capital before they start: they grow in responseto new problems and new funding streams sometimes under conditions of extremeuncertainty (Chambre and Fatt, 2002). The environment within which NPOs operate ischaracterised by significant resource constraints, which influence their resourcestrategies (Froelich, 1999) and subsequently their decision to invest in newtechnologies. Thus, in the context of financial resource constraints and lack ofexpertise, it is likely that the adoption of the internet will not be a priority.

With respect to the organisational features, it is interesting to note thatorganisational size (b11 ¼ 20:449; p , 0:05) and international affiliation (b13 ¼ 22:20;p , 0:01) were found to be important predictors of internet adoption. Concerningorganisational size (H6), results are consistent with literature, which maintains thatlarger organisations are major adopters of the internet when compared to smaller ones.This may suggest that large NPOs have greater resources and competencies forinvesting in internet related activities. Despite this result, it was found that theinternet also enhances the opportunities of small NPOs in a global networked economyenabling them to disseminate their programs of action while fostering service delivery.Additionally, this result highlights the fact that internet based technologies canovercome the limitations linked to size, thereby enabling these organisations tocompete more effectively (Dholakia and Kshetri, 2004). In relation to age (H7), resultsrevealed that young organisations have a major propensity towards adopting theinternet when compared to older organisations. Therefore, the proposed hypothesiswas rejected. Finally, the research results also indicate that organisations withinternational affiliation are more likely to adopt the internet (b13 ¼ 22:20; p , 0:01)leading to the support of H8. This is explainable by virtue of the fact that the internetnot only reduces the relative importance of geographic limits, but also offers betterconditions for coordinating and integrating global activities in an internationalnetwork (Porter, 1986). Coordination refers to the capacity of the organisation tomaximise its competitive advantage by engaging in similar or linked activities across anetwork of countries. In the final analysis, the internet allows for the coordination of aglobal network that would otherwise be hindered by barriers such as distance, timeand resources.

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Conclusions and avenues for future researchThis study adopts a parsimonious model for analysing the main factors influencinginternet adoption in the specific NPO context. The empirical results from this studylead us to conclude that the adoption of the internet by NPOs is chiefly concerned withdelivering online services as well as with the need to gather and disseminateinformation for improving the public image, providing greater customer satisfactionand promoting social values. This study also provides strong evidence that internetcompatibility with communication and information systems entails lower setup andoperational costs. With regard to the major organisational features of size, age andinternational affiliation, results are consistent with theory inasmuch as largerorganisations are more likely to adopt the internet than smaller ones. This may also beexplained by the fact that smaller NPOs are less able to manage the fixed and variablecosts associated with the use of the internet. It was also found that youngerorganisations are more likely than older ones to invest in their IT systems. Empiricalevidence was also found to support the assumption that the international affiliationdimension is an important predictor of internet adoption. This result is consistent withprevious studies undertaken in the for-profit sector which suggest that the internetcreates the potential to interact with global users, promotes a global corporate imageand reduces the resources needed to operate and expand globally (Dutta and Segev,1999). Future research, should further examine the extent to which and howinternational affiliation impacts on internet adoption.

Contrary to initial expectations, perception of the capability of the internet to attractresources on the one hand and to promote networking on the other did not reveal to beimportant predictors. This is, in part, consistent with the work of Corder (2001) whosustains that decisions about the acquisition of new technology are not driven byresources. In a similar vein, Thatcher et al. (2006), in their study about the diffusion ofinformation technologies across sectors, acknowledged that the type of funding wasnot a meaningful variable to explain sector-wide differences, proposing instead anapproach that depicts institutionalised fields of similar practices. Further research,however, needs to be conducted in order to clarify this point. Additionally, the analysisprovides evidence that start-up costs and lack of expertise negatively affect thedecision to adopt the internet.

In terms of implications, knowledge of the main factors impacting on internetadoption have important implications for both public policy makers and NPOmanagers in the sense that adequate policies and specific measures can be designed toencourage and foster the use of the internet by these organisations. Thus, in attemptingto encourage organisational decisions to invest in internet technologies, public entitiesneed to focus their efforts on smaller and older organisations. Additionally, publicmeasures should be taken to promote the advantages of using the internet whileminimising some shortcomings often associated to its negative use which include butare not restricted to the potential of the internet regarding low productivity due tofrivolous use and security risks.

In terms of theoretical implications, the relevance of this research is set against alack of consistent, detailed research on the factors determining internet adoption in thenon-profit sector. Within this context, an understanding of both the facilitating andinhibiting factors attached to the adoption of this new electronic medium has been

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provided. Yet, more substantial work need to be undertaken to explore other factorsthat are likely to interfere not only on the extent of internet adoption but mainly on thetype of use attached to this medium. This includes, for instance a further examinationof how the manager’s profile determines the use of the internet in this type oforganisations. Additionally, the link between internet adoption and organisationalperformance also merit further attention.

Limitations of the studyOne of the limitations that came to light in the course of the present study refers to thefact that the data collection process was based on a key-informant approach. Althoughdeep care was taken to formulate questions as unambiguously as possible, the presentstudy used perceptual measures to operationalise some of the constructs. This studycould have been more complete by including variables related to the manager profile,whose posture towards the internet could strongly influence its adoption. For example,a conservative, risk-averse orientation of an owner/manager may imply that adominantly negative attitude is displayed. Another limitation, which may beconsidered in future studies relates to the fact that the study did not include externalfactors like macro-economic and public policies towards telecommunications, whichmay well affect the general and competitive environment in which NPOs operate.Finally, the sample used for analysis was drawn only from Portugal, and thegeneralisability of the results to other countries remains to be tested.

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Corresponding authorJose Carlos Pinho can be contacted at: jcpinho@eeg.uminho.pt

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