The Impact of Capabilities and Prior Investments on Online Channel Commitment and Performance.

Author List: Hulland, John; Wade, Michael R.; ANTIA, KERSI D.;
Journal of Management Information Systems, 2007, Volume 23, Issue 4, Page 109-142.
Attracted by the promise of greater market exposure and increased revenues, firms across a wide variety of industries have undertaken significant investments in online channels. However, while some firms' entire business models revolve around this initiative, others have made only limited commitments to online channel ventures. What accounts for these marked differences in commitment to online initiatives, and do firms reap the performance benefits of increased levels of commitment? Furthermore, how do firms' internal and external capabilities affect their propensity to establish and succeed with online channel ventures? Drawing on marketing, innovation, and information systems perspectives, along with insights from the resource-based view of the firm, we propose an integrative conceptual framework that helps answer these questions. We ground our hypotheses in the context of retailers' online channel development efforts, and test our conceptual framework with data collected via a Web-based survey of 550 retailers. We find evidence of significant positive returns to investments in online channels. Furthermore, we observe the divergent effects of different sets of capabilities on commitment and performance. Importantly, although we find that the direct effect of firms' information systems capabilities on online performance appears to be negative, the indirect effect (mediated by commitment) is positive. Our study also examines the impact of firms' established distribution channels on levels of commitment to, and performance of, the online channel. We find that firms' established distribution channels act as double-edged swords, with divergent effects on commitment and performance. We also find evidence of diminishing returns to commitment as a function of established distribution presence, thereby suggesting that the rewards of commitment do not accrue equally to all firms.
Keywords: B2C e-commerce; commitment; distribution channel; e-tail; IT capabilities; online firm performance; resource-based view; retailing
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#247 0.155 online evidence offline presence empirical large assurance likely effect seal place synchronous population sites friends increases isomorphism rewards drop intermediaries
#59 0.153 capabilities capability firm firms performance resources business information technology firm's resource-based competitive it-enabled view study value infrastructure results organizational model
#227 0.132 commitment need practitioners studies potential role consider difficult models result importance influence researchers established conduct investigated establishing appear clearly determining
#173 0.101 effect impact affect results positive effects direct findings influence important positively model data suggest test factors negative affects significant relationship
#93 0.091 performance results study impact research influence effects data higher efficiency effect significantly findings impacts empirical significant suggest outcomes better positive
#23 0.088 channel distribution demand channels sales products long travel tail new multichannel available product implications strategy allows internet revenue technologies times
#168 0.086 firms firm financial services firm's size examine new based result level including results industry important account does suggests characterize limited
#176 0.073 e-commerce value returns initiatives market study announcements stock event abnormal companies significant growth positive using methodology investments period time initiative
#145 0.051 differences analysis different similar study findings based significant highly groups popular samples comparison similarities non-is variety reveals imitation versus suggests