Sean Xin Xu

The Process of Innovation Assimilation by Firms in Different Countries: A Technology Diffusion Perspective on E-Business

This paper extends our previous studies on the assimilation of Internet-based e-business innovations by firms in an international setting. Drawing upon theories on the process and contexts of technology diffusion, we develop an integrative model to examine three assimilation stages: initiation → adoption → routinization. The model features technological, organizational, and environmental contexts as prominent antecedents of this three-stage assimilation process. Based on this model, we hypothesize how technology readiness, technology integration, firm size, global scope, managerial obstacles, competition intensity, and regulatory environment influence e-business assimilation at the firm level. A unique data set of 1,857 firms from 10 countries is used to test the conceptual model and hypotheses. To probe deeper into the influence of the environmental context, we compare two subsamples from developed and developing countries. Our empirical analysis leads to several key findings: (1) Competition positively affects initiation and adoption, but negatively impacts routinization, suggesting that too much competition is not necessarily good for technology assimilation because it drives firms to chase the latest technologies without learning how to use existing ones effectively. (2) Large firms tend to enjoy resource advantages at the initiation stage, but have to overcome structural inertia in later stages. (3) We also find that economic environments shape innovation assimilation: Regulatory environment plays a more important role in developing countries than in developed countries. Moreover, while technology readiness is the strongest factor facilitating assimilation in developing countries, technology integration turns out to be the strongest in developed countries, implying that as e-business evolves, the key determinant of its assimilation shifts from accumulation to integration of technologies. Together, these findings offer insights into how innovation assimilation is influenced by contextual factors, and how the effects may vary across different stages and in different environments.

Electronic business adoption by European firms: a cross-country assessment of the facilitators and inhibitors

In this study, we developed a conceptual model for studying the adoption of electronic business (e-business or EB) at the firm level, incorporating six adoption facilitators and inhibitors, based on the technology–organization–environment theoretical framework. Survey data from 3100 businesses and 7500 consumers in eight European countries were used to test the proposed adoption model. We conducted confirmatory factor analysis to assess the reliability and validity of constructs. To examine whether adoption patterns differ across different e-business environments, we divided the full sample into high EB-intensity and low EB-intensity countries. After controlling for variations of industry and country effects, the fitted logit models demonstrated four findings: (1) Technology competence, firm scope and size, consumer readiness, and competitive pressure are significant adoption drivers, while lack of trading partner readiness is a significant adoption inhibitor. (2) As EB-intensity increases, two environmental factors – consumer readiness and lack of trading partner readiness – become less important, while competitive pressure remains significant. (3) In high EB-intensity countries, e-business is no longer a phenomenon dominated by large firms; as more and more firms engage in e-business, network effect works to the advantage of small firms. (4) Firms are more cautious in adopting e-business in high EB-intensity countries – it seems to suggest that the more informed firms are less aggressive in adopting e-business, a somehow surprising result. Explanations and implications are offered.

Migration to open-standard interorganizational systems: network effects, switching costs, and path dependency

Migration to Open-Standard Interorganizational Systems: Network Effects, Switching Costs and Path Dependency RESEARCH PROJECT REPORT June 2005 KEVIN ZHU The Paul Merage School of Business, and CRITO University of California, Irvine 949.824.2619 Tel. kzhu@uci.edu KENNETH L. KRAEMER The Center for Research on Information Technology and Organizations (CRITO) The Paul Merage School of Business University of California, Irvine 949.824.5246 Tel. kkraemer@uci.edu VIJAY GURBAXANI The CRITO Consortium The Paul Merage School of Business University of California, Irvine 949.824.5215 Tel. vgurbaxa@uci.edu SEAN XU The Paul Merage School of Business, and CRITO University of California, Irvine sxu00@uci.edu This research has been supported by grants from the CISE/IIS/CSS Division of the U.S. National Science Foundation and the NSF Industry/University Cooperative Research Center (CISE/EEC) to the Center for Research on Information Technology and Organizations (CRITO) at the University of California, Irvine. Industry sponsors include: The Boeing Company, IBM, IDC, Intel, Microsoft, and the U.S. Department of Defense. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the National Science Foundation.

Innovation Diffusion in Global Contexts: Determinants of Post-adoption Digital Transformation of European Companies

Grounded in the diffusion of innovation theory and the technology–organization–environment framework, we develop an integrative model to study the determinants of post-adoption stages of innovation diffusion, using enterprise digital transformation as an example of technology-enabled innovations. We specify four innovation characteristics (relative advantage, compatibility, costs and security concern) and four contextual factors (technology competence, organization size, competitive pressure and partner readiness) as determinants of post-adoption usage, and postulate usage as an intermediate link to impact on firm performance. We test the proposed model using a dataset of 1415 companies from six European countries. We find that the innovation needs to be used extensively in value-chain activities before its impact can be realized. Among the innovation characteristics, we find that compatibility is the strongest driver, and security concern outweighs cost as a usage inhibitor. Among the contextual variables, technology competence, partner readiness and competitive pressure significantly drive e-business usage, and the structural inertia of large firms tends to slow down its penetration. Collectively, these results indicate that innovation diffusion can be better understood by including both innovation characteristics and contextual factors, whereas earlier literature has traditionally treated the two separately. Finally, we evaluate an international dimension among European countries and tease out important boundary conditions that would not have been evident in a single-country dataset. Our results show that careful attention must be paid to the economic and regulatory factors that may result in uneven innovation diffusion even among developed European countries.

Research Note---Information Technology in Supply Chains: The Value of IT-Enabled Resources Under Competition

In this study, we seek to better understand the value of information technology (IT) in supply chain contexts. Grounded in the resource-based theory in conjunction with transaction cost economics, we develop a conceptual model that links three IT-related resources (backend integration, managerial skills, and partner support) to firm performance improvement. The model differs from previous studies by proposing a moderating effect of competition on the resource-performance relationships. Using data of 743 manufacturing firms, our analysis indicates significant contribution of IT to supply chains, which is generated through development of the digitally enabled integration capability and manifested at the process level along the supply chain. The technological resource alone, however, does not hold the answer to IT value creation. In fact, managerial skills, which enable adaptations on supply chain processes and corporate strategy to accommodate the use of IT, are shown to play the strongest role in IT value creation. Furthermore, backend integration and managerial skills are found to be more valuable in more competitive environments. While commodity-like resources have diminishing value under competition, integrational and managerial resources become even stronger. Overall, our results shed light on the key drivers of IT-enabled supply chains, and provide insights into how competition shapes IT value.

Global Technology, Local Adoption: A Cross-Country Investigation of Internet Adoption by Companies in the United States and China

To gain a better understanding of the global diffusion of e-business among organizations in developed and developing countries and to investigate the relationships among e-business contexts, economic environment, and organizational adoption, we conducted a firm-level survey in two countries — the United States and China — and tested a research framework built upon the technology-organization-environment framework. Empirical data from 262 US firms and 175 Chinese firms provided evidence about the extent of organizational adoption of ebusiness. Major findings include: 1) Chinese firms lag in using e-business-related technologies, especially interorganizational technologies; 2) US firms make more extensive use of the Internet; and 3) government regulation plays a more important role in China than in the US. Moreover, using structural equation modelling, we further teased out four adoption facilitators in general — technology competence, enterprise integration, competition intensity, and regulatory environment. These factors played different roles in different economic environments. The paper concludes with a discussion of the major results and implications. Keyword: Internet, electronic business, adoption, innovation diffusion, global environment, cross-country study, technologyorganization-environment framework A u t h o r s Sean Xu (xxu00@gsm.uci.edu) is a doctoral student of Information Systems in the Graduate School of Management at the University of California, Irvine. His research focuses on e-business adoption/diffusion in a global environment and the business value of IT and e-business. Kevin Zhu (kzhu@uci.edu) received his PhD from Stanford University and is currently an Assistant Professor of Information Systems in the Graduate School of Management at the University of California, Irvine. His research focuses on e-business, global electronic markets, strategic IT investments, and economic/organizational impacts of IT. Jennifer L. Gibbs (jlgibbs@uci.edu) is Senior Research Fellow at the Center for Research on Information Technology and Organizations (CRITO), at the University of California, Irvine. Her research focuses on social impacts of information technology in global teams and organizations. She is currently researching global e-commerce diffusion across numerous countries. Global Technology, Local Adoption: A Cross-Country Investigation of Internet Adoption by Companies in the United States and China SEAN XU, KEVIN ZHU, AND JENNIFER GIBBS

Psychological Ownership Motivation and Use of Social Media

We build on and extend research on psychological ownership by developing the concept of psychological ownership motivation. Drawing on psychological ownership theory that has identified the underlying motives (i.e., the need for effectance, self-identity, and for having a place) that are the roots of psychological ownership, we define psychological ownership motivation as the drive to engage in behaviors to satisfy the motives that underlie psychological ownership. We submit that psychological ownership motivation drives individuals to engage in social media use because social media have affordances to fulfill the underlying needs of psychological ownership. We develop measurement scales for these needs and our empirical results suggest that these needs collectively contribute to psychological ownership motivation, which, in turn, drives social media use.

How do competitive environments moderate CRM value

Customer relationship management (CRM) plays a critical role in e-business. In this study we seek to quantify the value of Internet-based CRM applications, and the purpose of our research is to identify the mechanisms underlying CRM value creation. Using a unique dataset collected from vendor archives of CRM implementations, we find an increase in firm value associated with CRM applications. This value implication, however, is attributable to integration of CRM with existing enterprise resource planning (ERP) applications, instead of installing CRM functional modules per se. Further, we find that the integration contributes more value in markets featuring higher product differentiation or lower entry costs. Together these findings shed light on the mechanisms through which CRM applications increase firm value in specific competitive environments.

Social embeddedness and online consumer behavior

Dear Readers of Electronic Markets, Social embeddedness refers to the extent to which organizations are connected to other actors via linkages of a social network or the extent to which human action of consumers (including their economic behavior) takes place within a web of social attachments such as friendship and kinship (Uzzi and Gillespie 2002). Motivated by the increasing popularity and economic significance of online social networks, the overall objective of this special issue is to advance our understanding on how consumer behavior is influenced by online social embeddedness. The emergence of online social networks has substantially shaped, and continues to reshape, the environment for decision making by market actors. Making decisions is a daily function for organizations as well as for individual consumers. Companies, for example, continuously have to select software solutions to business problems, decide about the relevance of new technologies and decide about sourcing in or out parts of IS/T, to name just a few from the perspective of an IS/T manager. Managers and employees in all fields are usually provided with a variety of resources and tools to help them with making decision. This typically involves some use of information systems, because they can bring about greater efficiency in organizational operations and they can effectively support management processes. The proliferation of the World Wide Web provides individuals for the first time with access to hundreds of pieces of relevant information to help them make more informed consumer choices. For example, while people talked with sales personnel and perhaps asked for advice from friends or family before making a major purchase, today, technology-supported access to information and recommendation systems make the process of comparing different options much easier and more effective. Notions of rationality were frequently applied by social scientists as a basis for describing, understanding and evaluating the actions of individuals and organizations in relation to decisionmaking. In the last decades, however, it has been suggested that the usefulness of rationality in describing and explaining decision making is limited. The work by renowned psychologists, such as Kahneman and Tversky (1979) and Thaler (1994), showed various divergences of actual human decision making from neo-classical economic theory and provided evidence that homo sapiens act quite differently in various situations from the idealized homo oeconomicus. Consequently, the strict assumption of rationality has been gradually softened. A change can be seen from the new institutional economics with fully rational agents alongside dynamic theories with opportunistic agents, towards behavioralism based on agents acting with at most bounded rationality (Simon 1947). Sociologists also challenge the utilitarian neoclassical position and have long recognized that economic decisions and behavior of individuals and organizations are profoundly shaped by the social network in which they are embedded. The concept of social embeddedness expresses the idea that social actors exist within relational, institutional, and T. Hess (*) University of Munich, Ludwigstrase 28 VG, 80539 Munich, Germany e-mail: thess@bwl.lmu.de

Communication Platforms in Electronic Commerce: A Three-dimension Analysis

Purpose – This study seeks to develop a general framework for evaluating communication platforms in e‐commerce, and then apply the framework to investigate what factors have impeded m‐commerce from taking off in the specific context of China.Design/methodology/approach – The paper proposes a three‐dimension framework for evaluating a communication platform in e‐commerce, which features reach, richness, and costs of communications as its salient characteristics. Grounded on the framework, a comparative analysis is conducted using data from a survey sponsored by the Ministry of Commerce of China. The analysis, from the users perspective, compares facilitators and inhibitors for using communication platforms in two different contexts, the mobile communication platform in m‐commerce vs the fixed communication platform in the “classical” e‐commerce.Findings – The study finds that, compared with e‐commerce over the fixed communication platform, the m‐commerce in China enjoys relatively great communication reac...