Management
Science
Forthcoming in 2006
The Process of
E-Business Assimilation in Firms:
A Technology Diffusion
Perspective
Kevin Zhu*,
Kenneth L. Kraemer, and Sean Xu
Abstract
This paper studies
the assimilation of Internet-based e-business innovations by firms in an
international setting. Drawing upon theories on the stages and contexts of
technology diffusion, we developed an integrated model to examine the influence
of contextual factors on three stages of e-business assimilation: initiationàadoptionàroutinization. We
propose that assimilation is a function of technical, organizational and
environmental contexts, which are captured by technology readiness, technology
integration, firm size, global scope, managerial obstacles, competition
intensity, and regulatory environment. A large dataset of 1,857 firms from ten
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 analyses lead to several key
findings: (1) competition positively
affects initiation and adoption, but negatively impacts routinization,
suggesting that too much competition is not necessarily a good thing for
technology assimilation as 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)
while technology readiness is the
strongest factor in developing countries, technology integration is the strongest facilitator in developed countries,
suggesting that as e-business evolves, the key determinant of its assimilation
shifts from accumulation to integration
of technologies; (4) the negative effect of global scope on routinization is
mitigated by technology integration, suggesting that technological capability
and firm structure interact and jointly affect innovation assimilation; and (5)
economic environments shape innovation assimilation, and regulatory environment
plays a more important role in developing countries than in developed
countries. 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.
Keywords
Technology
Diffusion, Innovation Assimilation, E-Business, Competition, Firm Size,
Technology Integration, International Perspective