The purpose of this study is to examine the relationship of perceived benefits and perceived risk towards the intention to adopt smart home technology among home owners

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The copyright © of this thesis belongs to its rightful author and/or other copyright owner. Copies can be accessed and downloaded for non-commercial or learning purposes without any charge and permission. The thesis cannot be reproduced or quoted as a whole without the permission from its rightful owner. No alteration or changes in format is allowed without permission from its rightful owner.

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SMART HOME TECHNOLOGY ADOPTION:

A STUDY OF MALAYSIAN HOME OWNERS

TEOH CHAI LENG

MASTER OF SCIENCE (MANAGEMENT) UNIVERSITI UTARA MALAYSIA

AUGUST 2020

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i

SMART HOME TECHNOLOGY ADOPTION:

A STUDY OF MALAYSIAN HOME OWNERS

BY

TEOH CHAI LENG

Thesis submitted to

Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia

In Partial Fulfilment of the requirement for the Master of Science (Management)

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iii

PERMISSION TO USE

In presenting this dissertation in partial fulfilment of the requirement for a Post Graduate degree from Universiti Utara Malaysia (UUM), I agree that the Library of this university may make it freely available for inspection. I further agree that permission for copying this dissertation in any manner, in whole or in part, for scholarly purposes may be granted by my supervisor(s) or in her absence, by the Dean of Othman Yeop Abdullah Graduate School of Business where I did my dissertation. It is understood that any copying or publication or use of this dissertation parts of it for financial gain shall not be allowed without my permission.

It is also understood that due recognition shall be given to me and to UUM in any scholarly use which may made of any material in my dissertation.

Request for permission to copy or to make other use of materials in this dissertation in whole or in part, should be addressed to:

Dean of Othman Yeop Abdullah Graduate School of Business Universiti Utara Malaysia

06010 UUM Sintok Kedah Darul Aman

Malaysia

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iv ABSTRACT

Despite many benefits of Smart home technology in improving people live, the technology has not been widely adopted. The purpose of this study is to examine the relationship of perceived benefits and perceived risk towards the intention to adopt smart home technology among home owners. A convenience sampling technique was used to select respondents among home owners in Selangor, Malaysia. This quantitative approach employ structured questionnaire developed from previous research. Out of 400 questionnaires distributed, only 316 questionnaires are usable for analysis. The Pearson Correlation and Multiple Regression analysis were conducted using the SPSS Version 23.0 to analyse the data. Overall, the findings revealed that perceived benefits has positive and significant relationship to intention to adopt Smart home technology. However, perceived risk has no significant relationship to intention to adopt smart home technology. The result present that home owners tend to ignore the potential risk and focus more on potential benefits of smart home technology. Future research should explore other dimensions of risk factors towards adopting smart home technology.

Keywords: Intention to adopt, Smart home technology (SHT), perceived benefits, perceived risk, Net Valence Model (NVM)

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v ABSTRAK

Walaupun terdapat banyak faedah teknologi rumah pintar untuk menambahbaik kehidupan, teknologi ini tidak digunakan secara meluas. Tujuan kajian ini adalah untuk mengkaji hubungan manafaat yang dijangkakan dan risiko yang dijangkakan ke atas hasrat pemilik rumah untuk menggunakan teknologi rumah pintar.

Teknik persampelan mudah digunakan untuk memilih responden daripada pemilik rumah di Selangor, Malaysia. Kajian ini menggunakan pendekatan kuantitatif melalui soal selidik berstruktur yang dibangunkan dari kajian terdahulu. Sebanyak 400 borang soal selidik telah diedarkan, iaitu hanya 316 soal selidik yang boleh digunakan untuk analisis. Analisa Korelasi Pearson dan Regresi Berganda telah dijalankan menggunakan SPSS Versi 23.0 untuk menganalisis data. Secara keseluruhannya, kajian menunjukkan bahawa manfaat yang dijangkakan mempunyai hubungan yang positif dan signifikan ke atas niat menggunakan teknologi rumah pintar. Bagaimanapun, risiko yang dijangkakan tidak mempunyai hubungan yang signifikan ketara ke atas niat menggunakan teknologi rumah pintar. Dapatan menunjukkan pemilik rumah mengabaikan risiko yang dijangakan dan memberi tumpuan kepada manfaat yang dijangkakan dari teknologi rumah pintar. Penyelidkan akan datang harus meneroka dimensi lain faktr risiko ke atas penerimaan teknologi rumah pintar.

Kata kunci: niat untuk guna, teknologi rumah pintar, faedah yang dijangka, risiko yang dijangka, Model Valensi Bersih (NVM).

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vi

ACKNOWLEDGE

First and foremost, I would like to express my gratitude to everyone who has supported me in completing this research. Throughout the journey in completing this research, I was guided and assisted by Dr. Nor Pujawati Md. Said from Universiti Utara Malaysia. Her feedbacks have helped me in improving some of the gaps and limitations as well as providing the direction of this research. She has my utmost respect for her generosity in providing advice, patience, precious time and encouragement throughout the whole process.

A special note of appreciation goes to my parents and siblings who have unwavering supported me emotionally and physically. They have continuously given me positive advice opinion, constant demonstration of love and moral support throughout my year of study. Last but not least, I would like to extend my deepest appreciation to all respondents who helped me in this study and thank you to everyone who has directly and indirectly guided me in producing this dissertation, especially my friends and also other individuals who have shared their knowledge and suggestion for the improvement of this research.

I am sincerely appreciative and thankful to all.

Teoh Chai Leng Matric: 823573

Master of Science (Management)

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vii

TABLE OF CONTENT

CONTENT Page

PERMISSION TO USE iii

ABSTRACT iv

ABSTRAK v

ACKNOWLEDGE vi

TABLE OF CONTENT vii

LIST OF TABLES xi

LIST OF FIGURES xiii

LIST OF ABBREVIATIONS xiv

CHAPTER 1 1

INTRODUCTION 1

1.0 Background of the Study 1

1.1 Problem Statement 4

1.2 Research Questions 7

1.3 Research Objectives 8

1.4 Significance of the Study 9

1.5 Scope and Limitation of Study 9

1.6 Definition of Key Term 10

1.7 Organization of the Dissertation 11

CHAPTER 2 13

LITERATURE REVIEW 13

2.0 Introduction 13

2.1 Smart home technology (SHT) Adoption 13

2.2 Perceived Benefit (PB) 17

2.3 Perceived Risk (PR) 19

2.4 Underlying/Underpinning Theory 21

2.5 Summary 25

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viii

CHAPTER 3 26

METHODOLOGY 26

3.0 Introduction 26

3.1 Research Framework 26

3.2 Hypotheses Development 27

3.2.1 Perceived Benefits 28

3.2.2 Perceived Risk 28

3.2.3 Intention to Adopt 29

3.3 Research Design 29

3.4 Sampling 30

3.4.1 Population 30

3.4.2 Sample Size 30

3.4.2 Sampling Design 31

3.4.3 Unit of Analysis 31

3.5 Measurement of Variables 32

3.5.1 Items 32

3.5.2 Scale 34

3.5.3 Format of Questionnaire 35

3.6 Data Collection Procedure 36

3.7 Pilot Test 36

3.8 Data Analysis 37

3.8.1 Reliability Test 38

3.8.2 Validity Test 38

3.8.3 Factor Analysis 39

3.8.4 Data Screening 39

3.8.5 Missing Value 40

3.8.6 Normality Test 40

3.8.7 Inferential Analysis 40

3.8.8 Pearson‟s Correlation Analysis 40

3.8.9 Multiple Regression Analysis 41

3.9 Summary 41

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ix

CHAPTER 4 42

FINDINGS 42

4.0 Introduction 42

4.1 Respond Rate 42

4.2 Data Cleaning 43

4.2.1 Missing Data 43

4.2.2 Normality Test 43

4.2.3 Factor Analysis 45

4.3 Reliability Analysis 47

4.4 Background of Respondents 48

4.4.1 Demographic 48

4.4.2 Knowledge of Smart Home Technology 49

4.5 Descriptive Analysis 50

4.7 Correlation Analysis 53

4.8 Regression Analysis 56

4.8.1 Perceived Benefit 56

4.9 Results of Hypotheses Testing 58

4.9 Summaty 59

CHAPTER 5 60

CONCLUSION AND RECOMMENDATION 60

5.0 Introduction 60

5.1 An Overview of the Study 60

5.2 Conclusion 61

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x

5.2.2 Perceived Risks 63

5.3 Implication of Research 65

5.4 Future Research 66

5.5 Conclusion 66

REFERENCES 68

APPENDICES 73

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xi

LIST OF TABLES

TABLES PAGE

Table 1.1 The evolution of Smart House Technologies 4

Table 1.2 Definition of Key Term 11

Table 3.1 Hypotheses Statement for Perceived Benefits 28 Table 3.2 Hypotheses Statement for Perceived Risk 28 Table 3.3 Hypotheses Statement for Intention to Adopt 29 Table 3.4 Table for deciding Sample Size of a Known Population 31

Table 3.5 Number and Source of Items 32

Table 3.6 Items for Perceived Benefits and Its Antecedents 33 Table 3.7 Items for Perceived Risk and Its Antecedents 33 Table 3.8 Items for Intention to Adopt Smart Home Technology 34

Table 3.9 Measurement Scales 35

Table 3.10 Summary of the Questionnaire Design 36

Table 3.11 Results for Pilot Test 37

Table 3.12 Internal Consistency Measurement 38

Table 3.13 KMO value and Variance Level 39

Table 3.14 Strength of Pearson Correlation Coefficient 41

Table 4.1 Total Rate of Reaction of Respondents 42

Table 4.2 Factor Analysis Statistics for Perceived Benefits and its 46 Antecedents

Table 4.3 Factor Analysis Statistics for Perceived Risk and its Antecedents 46 Table 4.4 Factor Analysis Statistics for Intention to Adopt 47

Table 4.5 Reliability Analysis Statistics 48

Table 4.6 Demographic of Respondents 49

Table 4.7 Respondents Knowledge on Smart Home Technology 50 Table 4.8 Mean and Standard Deviation for Perceived Benefits and its 51

Antecedent

Table 4.9 Mean and Standard Deviation for Perceived Risk and its 52

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xii Antecedents

Table 4.10 Mean and Standard Deviation for Intention to Adopt 53 Table 4.11 Correlation Analysis for Perceived Benefits 54 Table 4.12 Correlation Analysis for Perceived Risks 55 Table 4.13 Correlation Analysis for Intention to Adopt 56 Table 4.14 Regression Analysis Statistics for Perceived Benefits 57 Table 4.15 Regression Analysis Statistics for Perceived Risk 57 Table 4.16 Regression Analysis Statistics for Intention to Adopt 58

Table 4.17 Results of Hypotheses Testing 58

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xiii

LIST OF FIGURES

FIGURES PAGE

Figure 3.1 Research Framework 27

Figure 4.1 Normal Q-Q plot of Intention to adopt Smart home technology 44

Figure 4.2 Normal Q-Q plot of Perceived Benefits 44

Figure 4.3 Normal Q-Q plot of Perceived Risk 45

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xiv

LIST OF ABBREVIATIONS

C Compatibility

DV Dependent Variable

EE Effort Expectancy

FR Financial Risk

I Image

IoT Internet of Things

IV Independent Variable

KMO Kaiser-Mayer-Olkin

NVM Net Valence Model

PB Perceived Benefits

PE Performance Expectancy

PR Perceived Risk

PfR Performance Risk

PVR Privacy Risk

SHT Smart Home Technology

SR Security Risk

TR Time Risk

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1 CHAPTER 1

INTRODUCTION

1.0 Background of the Study

Internet of Things (IoT) has revolutionized the real estate landscape. It caused the way of people life changed. IoT allows many of the electronic devices around us to interconnect over the network. The rise of the IoT has also provided a newly thinking for “smart home” concept.

According Hendricks (2014), the smart home concept began with a remote control invented by Nikola Tesla in 1898. Beginning 20th century, many major household equipment was introduced due to the industrial revolution (Hendricks, 2014). In 1901, the vacuum cleaner was the first household equipment introduced to the consumer market and followed by other equipment such as the refrigerator and washing machine (Hendricks, 2014). In recent years items such dishwasher and dryer were also introduced.

Although these are not "smart" equipment, it has changed the people living in the 20th century. Inventors changed their focus to smart home in 1930s. The idea only materialized in 1996 through Echo IV, the first intelligent home system. These appliances are design to enables users to establish computational shopping records, control home temperatures, and on-off switch. In 1969, came smart kitchen with its purpose to create new recipes, but because of its price it was never commercially successful. The development of microcontrollers led to lower prices for electronic devices, making technology easily approachable in 1971. Gerontechnology concept

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68

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73 APPENDICES

QUESTIONNAIRE

Questionnaire

Smart Home Technology Adoption: A study of Malaysian Home Owners Dear Respondent,

The purpose of this questionnaire is study on the intention of home owners to adopt Smart home technology in Malaysia. Smart home technology (SHT) comprises sensors, monitors, interfaces, appliances and devices networked together to enable automation as well as localised and remote control of the domestic environment. The questionnaire contains 3 sections: Section A, Section B and Section C. All information provided is considered CONFIDENTIAL and for academic purpose only.

Thank you your time and cooperation in completing this research.

Researcher‟s Name: Teoh Chai Leng (823573) Master of Science (Management)

Universiti Utara Malaysia (UUM)

Email: teoh_chai_leng@oyagsb.uum.edu.my

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Section A: Demographical Background of the Respondent

This section is to obtain information of the respondent background: Please tick (/) in the appropriate selection.

1 Gender:

Male Female 2 Race:

Malay Chinese Indian Others 3 Age:

25 - 35 36 - 45 46 - 55 56 - 65 4 Salary:

Below RM 2500 RM 2501 - RM 3500 RM 3501 - RM 4500 RM 4501 and above

Section B: Smart home technology knowledge of the Respondent

This section is obtaining information on respondents‟ understanding of Smart home technology: Please tick (/) in the appropriate selection.

1 Do you know what Smart home technology is?

Yes No

2 Do you aware of Smart home technology?

Yes No

3 From where did you get to know Smart home technology?

Family Friends Lecturers Internet Surfing Mass Media

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Section C: Questionnaire regarding the factors influences the intention of home owners to adopt Smart home technology in Malaysia.

Please indicate your respond to the following statement according to the scale below:

1 Strongly Disagree

2 Disagree

3 Somewhat

Disagree

4 Neutral

5 Somewhat

Agree

6 Agree

7 Strongly

Agree

Questions Performance Expectancy

1 Smart home technology is very useful. 1 2 3 4 5 6 7 2 Smart home technology increases

housekeeping efficiency.

1 2 3 4 5 6 7

3 Using Smart home technology would enable me to accomplish tasks more quickly.

1 2 3 4 5 6 7

Effort Expectancy

1 Smart home technology devices are easy to use. 1 2 3 4 5 6 7 2 It will be easy for me to learn how to use Smart

home technology.

1 2 3 4 5 6 7

3 Operation of Smart home technology is understandable and clear.

1 2 3 4 5 6 7

Compatibility

1 Using Smart home technology fits with my approach to managing things at home.

1 2 3 4 5 6 7

2 Using Smart home technology fits well with the way I like to live.

1 2 3 4 5 6 7

3 Using Smart home technology fits into my lifestyle.

1 2 3 4 5 6 7

Image

1 People who use Smart home technology have a more prestigious image than people who do not.

1 2 3 4 5 6 7

2 People who use Smart home technology have a high profile.

1 2 3 4 5 6 7

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3 Use Smart home technology present a positive image to other people.

1 2 3 4 5 6 7

4 Having Smart home technology would be a status symbol.

1 2 3 4 5 6 7

Privacy Risk

1 If I use Smart home technology, I would lose control over the privacy of my personal data.

1 2 3 4 5 6 7

2 My personal information will be less confidential if I use Smart home technology.

1 2 3 4 5 6 7

3 Using Smart home technology would lead to a loss of privacy for me because my personal information would be used without my knowledge.

1 2 3 4 5 6 7

Security Risk

1 The security system of Smart home technology is not strong enough to protect my personal information.

1 2 3 4 5 6 7

2 Internet hackers might control my personal information if I use Smart home technology.

1 2 3 4 5 6 7

Performance Risk

1 Smart home technology might not work well. 1 2 3 4 5 6 7 2 Smart home technology might create problem

in my house.

1 2 3 4 5 6 7

3 Smart home technology might not perform well as promised.

1 2 3 4 5 6 7

4 Smart home technology might not meet my expectation.

1 2 3 4 5 6 7

Time Risk

1 A lot of my time could be wasted in setting up Smart home technology.

1 2 3 4 5 6 7

2 I could lose a lot of time learning how to use Smart home technology.

1 2 3 4 5 6 7

3 I would need to invest a lot of time to get Smart 1 2 3 4 5 6 7

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77 home technology to work well in my home.

Financial Risk

1 Smart home technology devices are expensive to purchase.

1 2 3 4 5 6 7

2 Setting up Smart home technology costs a lot of money.

1 2 3 4 5 6 7

3 Keeping Smart home technology running is a financial burden.

1 2 3 4 5 6 7

Perceived Benefits

1 I think using Smart home technology offers me a lot of advantages.

1 2 3 4 5 6 7

2 I consider using Smart home technology to be beneficial.

1 2 3 4 5 6 7

Perceived Risk

1 I expect using Smart home technology would present me problem that I just don't need.

1 2 3 4 5 6 7

2 The benefits of using Smart home technology are unlikely to compensate for the cost, time and effort of using them.

1 2 3 4 5 6 7

Intention to adopt SHT

1 I intend to use Smart home technology in the future.

1 2 3 4 5 6 7

2 Given that there are more and more Smart home technology products or services in the market, I predict that i would intend to use them.

1 2 3 4 5 6 7

3 I plan to install Smart Home technology in my house in the near future.

1 2 3 4 5 6 7

Thank you for your co-operation