w.Hong, K. Zhu/Information Management 43(2006)204-221 and research tools, and conduct online transactions with P4a. The use of EDI is negatively associated with e- suppliers [46]. Therefore, firms that are capable of commerce adoption providing more web functionalities are better posi and capable web functio P4b. The use of EDI is negatively associated with e- alities will make customers as well as trading partners commerce migration more willing to conduct transactions online with greater migration to e-commerce. This suggests the proposi 3.2.5. Partner usage Many firms have relied on partners or contractors P3a. Web functionalities are positively associated for their is design and implementation tasks. An with e-commerce adoption outsourcing approach has been popular in driving the growth of applications service providers. Relying on P3b. Web functionalities are positively associated partners for e-commerce lementation may speed with e-commerce migration up the initial adoption of e-commerce, bypassing the potentially slow process associated with in-house development [3, 27]. However, this may slow down an 3.24. EDI use organization's subsequent migration to e-commerce. Electronic data interchange was an antecedent of e- Outsourcing may seem to be a"shortcut"for e- commerce. As an interorganizational information commerce adoption, but business processes may not system, it had some features in common with be fully aligned with the internet; employees may not internet-based e-commerce [30), but it also exhibited get the exposure of e-commerce and thus lack of"buy significant differences, as EDI was typically a in", and organizational culture may remain separated proprietary technology over a private network con- fre trolled by one large manufacturer or supplier [50] here are conflicting views about the effect of pr P5a. Greater partner usage is positively associated technology, such as EDI, on the adoption of internet- with e-commerce adoption based e-commerce. On the one hand, the experience with EDI made organizations more familiar with P5b. Greater partner usage is negatively associated electronic media. Prior It infrastructure such as edi with e-commerce migration was necessary to leverage and integrate the new technologies [16]. In addition, the organizations 3.2.6. Perceived obstacle culture and operational processes may have already The adoption of e-commerce requires a substantial been adapted to fit to an electronic platform, thus degree of technical and organizational competence for reducing the adjustment cost and shortening the smooth transition. This assumes a higher dimension of learning curve On the other hand, the implementation organizational knowledge and the role of human factors of EDI often involved relationship-specific investment in facilitating the adoption process. The notion of between the firm and its trading partners. This could learning by doing argues that it takes time and expertise translate into switching costs in migrating to the to incorporate complex technologies in an organization internet. Also, the incremental benefits of investing in [1]. Adoption of a complex technology can also be e-commerce may be viewed as small described as a process of knowledge accumulation, Considering the conflicting effects of EDI use on e- especially when the innovations( 1)have an abstract and commerce adoption and migration, we expected the demanding scientific base, (2)are fragile because they negative effects to be stronger than the positive ones. do not always function as expected, (3)are difficult to Adopting internet-based e-commerce would induce try before the end system is implemented, and (4) ignificant switching costs on both end users and cannot be treated as a black box but it must be business processes [36]. Even after adoption of e- incorporated into the business processes to become commerce, some portion of the transactions may still be effective [2]. The adoption of e-commerce seems to conducted over EDI. This leads to the following possess these properties. When managers perceive such propositions obstacles, they become reluctant to adopt e-commerce
and research tools, and conduct online transactions with suppliers [46]. Therefore, firms that are capable of providing more web functionalities are better positioned to adopt e-commerce and capable web functionalities will make customers as well as trading partners more willing to conduct transactions online with greater migration to e-commerce. This suggests the propositions: P3a. Web functionalities are positively associated with e-commerce adoption. P3b. Web functionalities are positively associated with e-commerce migration. 3.2.4. EDI use Electronic data interchange was an antecedent of ecommerce. As an interorganizational information system, it had some features in common with internet-based e-commerce [30], but it also exhibited significant differences, as EDI was typically a proprietary technology over a private network controlled by one large manufacturer or supplier [50]. There are conflicting views about the effect of prior technology, such as EDI, on the adoption of internetbased e-commerce. On the one hand, the experience with EDI made organizations more familiar with electronic media. Prior IT infrastructure such as EDI was necessary to leverage and integrate the new technologies [16]. In addition, the organization’s culture and operational processes may have already been adapted to fit to an electronic platform, thus reducing the adjustment cost and shortening the learning curve. On the other hand, the implementation of EDI often involved relationship-specific investment between the firm and its trading partners. This could translate into switching costs in migrating to the internet. Also, the incremental benefits of investing in e-commerce may be viewed as small. Considering the conflicting effects of EDI use on ecommerce adoption and migration, we expected the negative effects to be stronger than the positive ones. Adopting internet-based e-commerce would induce significant switching costs on both end users and business processes [36]. Even after adoption of ecommerce, some portion of the transactions may still be conducted over EDI. This leads to the following propositions. P4a. The use of EDI is negatively associated with ecommerce adoption. P4b. The use of EDI is negatively associated with ecommerce migration. 3.2.5. Partner usage Many firms have relied on partners or contractors for their IS design and implementation tasks. An outsourcing approach has been popular in driving the growth of applications service providers. Relying on partners for e-commerce implementation may speed up the initial adoption of e-commerce, bypassing the potentially slow process associated with in-house development [3,27]. However, this may slow down an organization’s subsequent migration to e-commerce. Outsourcing may seem to be a ‘‘shortcut’’ for ecommerce adoption, but business processes may not be fully aligned with the internet; employees may not get the exposure of e-commerce and thus lack of ‘‘buy in’’; and organizational culture may remain separated from e-commerce. This leads to two propositions: P5a. Greater partner usage is positively associated with e-commerce adoption. P5b. Greater partner usage is negatively associated with e-commerce migration. 3.2.6. Perceived obstacles The adoption of e-commerce requires a substantial degree of technical and organizational competence for smooth transition. This assumes a higher dimension of organizational knowledge and the role of human factors in facilitating the adoption process. The notion of learning by doing argues that it takes time and expertise to incorporate complex technologies in an organization [1]. Adoption of a complex technology can also be described as a process of knowledge accumulation, especially when the innovations (1) have an abstract and demanding scientific base, (2) are fragile because they do not always function as expected, (3) are difficult to try before the end system is implemented, and (4) cannot be treated as a black box but it must be incorporated into the business processes to become effective [2]. The adoption of e-commerce seems to possess these properties. When managers perceive such obstacles, they become reluctant to adopt e-commerce. W. Hong, K. Zhu / Information & Management 43 (2006) 204–221 209
w. Hong, K. Zhu/ Information Management 43(2006) 204-22 Such obstacles could also make it more difficult for Table 2 business to migrate to the internet. These lead to a pair Sample description(sample size= 1036) of P6a. Perceived obstacles are negatively associated United States 838(80.9% with e-commerce adoption 98(19.1%) Title of the respondent P6b. Perceived obstacles are negatively associated President, Owner, or Managing Director 157(152%) with e-commerce mig gration Chief Information Officer(CIOMChief 92(8.9%) Technology Officer/VP of 4. Research methodology IS Manager. Director, Planner 281(27.1%) Other manager in Is department 99(96%) 4.1. Data and sample usiness Operations Manager 52(50%) Administration/Finance Manager 76(7.3%) We adopted a field survey methodology. Telephone Firm size interviews were conducted. which allowed trained Fewer than 50 271(26.2%) interviewers to clarify questions to ensure accurate 74(7.1%) )-199 144(13.9%) and meaningful responses. A computer-aided tele 200.499 171(16.5%) phone interviewing system(CATD) was used. The 85(82%) system provided various automatic data checks while 00-4999 137(13.2%) the respondent remained on the line. The survey was 5000-9999 44(4.2%) 10000 nd April 2001 9609.3%) professional firm specialized in IT-related survey research. Eligible respondents were executives or /wholesale senior managers best qualified to speak about the firms overall e-commerce activities. At the start of the interview, a screening question asked the respondents whether they would felt qualified to answer questions (3)organizations belonging to the public sector, such (see Appendix). Only those who answered positively as government and education, because their main ontinued with the interview purpose was not in generating revenues. The sample frame was obtained from a Dun Bradstreet database that contained representative firms This left us with 1036 observations in the usable in the entire local market, regardless of computerization sample replacement was used, with a predetermined number of Table 2 presents the descriptive statistics of the or web access. A stratified sampling method without al sample. Titles of the respondents reflect large firms selected randomly from each firm size and variations in the nature of the It management dustry category to ensure an unbiased representation responsibilities in these organizations. There was also of the sample distribution. It was considered important a wide range of firm size(from fewer than 50 to more to include both adopters and non-adopters in the sample than 10,000 employees). The firms represent three so that we could examine how the proposed factors industries: manufacturing, retail/wholesale, and ser- infuenced both adopters and non-adopters. More than vice. Overall, the sample represented a wide range of 2000 interviews were conducted in the United States firms, increasing the generalizability of the results and Canada. Samples that had any of the following characteristics were excluded 4.2. Variables and constructs (1) interviews that had missing values on the 4.2.1. Dependent variable dependent variable The dependent variable in the model was a cate- (2)firms without a public website: gorica variable with three groups, i.e., non-adopters
Such obstacles could also make it more difficult for business to migrate to the internet. These lead to a pair of propositions: P6a. Perceived obstacles are negatively associated with e-commerce adoption. P6b. Perceived obstacles are negatively associated with e-commerce migration. 4. Research methodology 4.1. Data and sample We adopted a field survey methodology. Telephone interviews were conducted, which allowed trained interviewers to clarify questions to ensure accurate and meaningful responses. A computer-aided telephone interviewing system (CATI) was used. The system provided various automatic data checks while the respondent remained on the line. The survey was conducted between February and April 2001 by a professional firm specialized in IT-related survey research. Eligible respondents were executives or senior managers best qualified to speak about the firm’s overall e-commerce activities. At the start of the interview, a screening question asked the respondents whether they would felt qualified to answer questions (see Appendix). Only those who answered positively continued with the interview. The sample frame was obtained from a Dun & Bradstreet database that contained representative firms in the entire local market, regardless of computerization or web access. A stratified sampling method without replacement was used, with a predetermined number of firms selected randomly from each firm size and industry category to ensure an unbiased representation of the sample distribution. It was considered important to include both adopters and non-adopters in the sample so that we could examine how the proposed factors influenced both adopters and non-adopters. More than 2000 interviews were conducted in the United States and Canada. Samples that had any of the following characteristics were excluded: (1) interviews that had missing values on the dependent variable; (2) firms without a public website; (3) organizations belonging to the public sector, such as government and education, because their main purpose was not in generating revenues. This left us with 1036 observations in the usable sample. Table 2 presents the descriptive statistics of the final sample. Titles of the respondents reflect large variations in the nature of the IT management responsibilities in these organizations. There was also a wide range of firm size (from fewer than 50 to more than 10,000 employees). The firms represent three industries: manufacturing, retail/wholesale, and service. Overall, the sample represented a wide range of firms, increasing the generalizability of the results. 4.2. Variables and constructs 4.2.1. Dependent variable The dependent variable in the model was a categorical variable with three groups, i.e., non-adopters, 210 W. Hong, K. Zhu / Information & Management 43 (2006) 204–221 Table 2 Sample description (sample size = 1036) Variables Frequency (%) Country United States 838 (80.9%) Canada 198 (19.1%) Title of the respondent President, Owner, or Managing Director 157 (15.2%) Chief Information Officer (CIO)/Chief Technology Officer/VP of information systems 92 (8.9%) IS Manager, Director, Planner 281 (27.1%) Other manager in IS department 99 (9.6%) Business Operations Manager 52 (5.0%) Administration/Finance Manager 76 (7.3%) Firm size Fewer than 50 271 (26.2%) 50–99 74 (7.1%) 100–199 144 (13.9%) 200–499 171 (16.5%) 500–999 85 (8.2%) 1000–4999 137 (13.2%) 5000–9999 44 (4.2%) 10000+ 96 (9.3%) Industry Manufacturing 590 (56.9%) Retail/wholesale 70 (6.8%) Services 376 (36.3%)