Performance and Effort Expectations in Implementing ESG Practices in Bosnian and Herzegovinian SMEs: An Application of the Technology Acceptance Model

This paper explores the impact of performance expectancy (PE) and effort expectancy (EE) on the behavioral intention (BI) of managers to implement environmental, social, and governance (ESG) practices in small and medium-sized enterprises (SMEs) in Bosnia and Herzegovina. Using the Technology Acceptance Model (TAM), the study analyzes how these factors influence decision-makers’ engagement in sustainable business activities. A survey of 247 managers was conducted to assess their BI, PE, and EE for each ESG component. The collected data were analyzed using structural equation modeling (SEM) to construct a second-order latent model that measures the combined effects of these factors. The study fills a gap in the literature by examining sector-specific differences in the factors influencing ESG implementation. The results reveal that both PE and EE significantly affect an organization’s intention to adopt ESG practices, with varying impacts between the manufacturing and service industries. The findings highlight the different challenges and complexities each industry faces in implementing ESG practices. While focusing on PE and EE, it is acknowledged that other factors such as organizational culture, stakeholder pressure, and industry-specific dynamics also play roles in ESG adoption. The main contribution of this work is the use of a second-order latent construct within the TAM model for ESG practices, offering a unique perspective on understanding behavioral intention.