E-Business Adoption and its Impact on Performance

E-Business Adoption and its Impact on Performance

Sabah Abdullah Al-Somali (Aston University, UK), Ben Clegg (Aston University, UK) and Roya Gholami (Aston University, UK)
DOI: 10.4018/978-1-61520-611-7.ch010
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Organizations today face intense competitive and economic pressures leading to large scale transformation of existing business operations and transactions. In addition, organizations have adopted automated business processes to deal with partners and customers. E-business diffusion is a multi-phase process, moving from initiation through to routinisation and an insight into the adoption processes helps organizations to adopt e-business more effectively. It is imperative that organizations effectively manage the e-business environment, and all associated changes to accommodate the changing relationships with customers and business partners and more importantly, to improve performance. This chapter discusses the process of e-business implementation, usage and diffusion (routinisation stage) on business performance.
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The Internet provides an excellent opportunity to increase sales while maintaining lower overheads. Indeed, firms that pass up this tremendous opportunity will possibly not survive in the 21st century competitive environment (Saunders, 2000).

E-business is commerce conducted online; it is the result of combining digital communication networks, typically the Internet with existing information technology (IT) systems and infrastructures. E-business is an innovation that has enabled modern day organizations to undertake transactions, share information, collaborate across geographical boundaries and across computing platforms and networks. E-business has helped organizations benefit from improved competitiveness, efficiencies, increased market share, and business expansion (Singh, 2003). Research on organizational adoption of IT and e-business, continues to be popular and a sizable body of literature (Cooper & Zmud, 1990; Moore & Benbasat, 1991; Ramamurthy et al., 1999; Frambach & Schillewaert, 2002; Zhu et al., 2003; Lin & Lin, 2008; Zhao et al., 2008) continues to grow.

E-business can be considered as a cluster of interrelated technologies and innovations working in concert with each another (Van Slyke, 1998). Subsequently, e-business implementation is often seen as a multi-phase process, moving from an organization’s first awareness of e-business technologies to potentially, acquisition and widespread deployment (Meyer & Goes, 1988; Zhu et al., 2006). Correspondingly, organizational adoption of e-business is judged by the degree of implementation of activities such as the use of online advertising, e-mail for inter-organizational communication, electronic supply chain management (e-SCM), website presence, online ordering and payments (Hong & Zhu, 2006; Levenburg,2005). E-business technologies help companies to develop the appropriate functionalities to capitalize on the Internet’s potential; such as using open standards, public networks, and global connectivity (Zhu & Kraemer, 2005). However, despite the increasing pervasiveness of studies on e-business (Wu et al., 2003; Zhu et al., 2003; Lin & Lin, 2008) very few have attempted to holistically explore the process of e-business and Internet technologies adoption (e.g. Dholakia & Kshetri, 2004; Zhu et al., 2006).

This chapter therefore considers innovation diffusion and e-business implementation literature (e.g. Zhu et al., 2006; Fichman, 2000; Meyer & Goes, 1988) focusing on three stages, namely from a firm’s initial evaluation of e-business at the pre-adoption stage (initiation), to its formal adoption decision being made by the appropriate decision maker(s), and finally to its full scale deployment and installation at the routinisation stage (post-adoption). It is in this last stage that e-business becomes a routine feature of the firm and it is fully utilized by its members, clients and customers.

The aim of this chapter is to provide an understanding of the process of e-business implementation and the impact of e-business on business performance in terms of revenue generation, cost reduction and operational efficiency. This chapter will be of value to organizations considering e-business and those at the early stages of e-business adoption, since it delineates the route travelled by other similar firms.

Key Terms in this Chapter

E-business assimilation: is a multi-phase process which refers to an organization’s first awareness of e-business technologies to, potentially, acquisition and widespread deployment (Meyer & Goes, 1988; Zhu et al., 2006).

E-business impact: refers to the actual benefits adopters receive from utilising e-business (Wu et al., 2003; Zhu et al., 2004; Clayton & Goodridge, 2004; Levenburg, 2005; Zhu & Kraemer, 2005; Sanders, 2007).

Diffusion: refers to the process by which innovations spread to individuals within an organization or organizations within a population over time through various channels (Rogers, 1995; Fichman & Kemerer, 1999)

Implementation: concerns the extent to which development, feedback, and adjustment activities are performed so that it becomes embedded in business operations (Thompson, 1965).

E-business adoption: is the process during which a firm becomes able to make full use of e-business technologies as the best course of action available, while rejection is the decision to not to adopt (Rogers, 1995)

Electronic business or e-business: refers to the use of Internet technologies (e.g. e-mail, World Wide Web) combined with information technologies to support companies’ business activities and functions such as purchasing from suppliers and selling products and services to customers (Zhu et al., 2006).

Innovation: is ‘an idea, practice or object that is perceived as new by individuals or other units of adoption’ (Rogers, 1995. pg.11).

Routinisation: is defined as the stage in which e-commerce is widely used as an integral part in a firm’s activities (Zhu et al, 2006).

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