Do Competitive Priorities Drive Adoption of Electronic Commerce Applications? Testing the Contingency and Institutional Views

Published date01 July 2010
DOIhttp://doi.org/10.1111/j.1745-493X.2010.03198.x
Date01 July 2010
DO COMPETITIVE PRIORITIES DRIVE ADOPTION OF
ELECTRONIC COMMERCE APPLICATIONS? TESTING THE
CONTINGENCY AND INSTITUTIONAL VIEWS
XIAOWEN HUANG
Miami University
THOMAS F. GATTIKER
Boise State University
ROGER G. SCHROEDER
University of Minnesota
This paper expands on recent research by Huang and colleagues examining
the drivers of electronic commerce (e-commerce) adoption. Two competing
theories are evaluated as predictors of e-commerce adoption: contingency
theory and institutional theory. For the contingency view, we focus on three
strategic priorities (cost, flexibility and delivery), and for the institutional
view,we examine three institutional factors(region, industry and information
technology benchmarking). The model is evaluated with logistic regression
analysis using survey data from nine countries and three industries. While
contingency theory is the norm in the literature, we find only limited evidence
that competitive priorities guide e-commerce adoption. By contrast, institu-
tional factors have greater explanatory power.
Keywords: electronic commerce; strategy; competitive priorities; contingency theory;
institutional theory; logistic regression
INTRODUCTION
The operations management (OM) literature posits
that decisions regarding an organization’s structure and
infrastructure should be guided by the organization’s
operations strategy (Hayes and Wheelwright 1984; Adam
and Swamidass 1989; Anderson, Cleveland and Schroe-
der 1989; Leong, Snyder and Ward 1990). An organiza-
tion’s operations strategy can be conceptualized as the
degree to which eachof the following competitive prioritie s
is emphasized: cost, quality, delivery and flexibility (An-
derson et al. 1989). Elementsof structure include capacity,
facilities and technology; while elements of infrastructure
include workforce, quality systems and production
planning systems (Adam and Swamidass 1989; Anderson
et al. 1989; Leonget al. 1990). For example,based on this
perspective, we might expect that an organization that
emphasizes the competitive priority of flexibility to utilize
technologies suchas flexible manufacturing systemsand/
or to invest in workforce practices, such as worker cross-
training. Based on structural and strategic contingency
theory (Burns and Stalker 1961; Chandler 1962; Wood-
ward 1965; Lawrence and Lorsch 1967; Kotha and Orne
1989), this perspective can be considered a strategic con-
tingency view of practice adoption (Ketokivi and Schroe-
der 2004).
While this notion of alignment is widely accepted, it
has received limited empirical investigation and very
limited empirical support. Safizadeh, Ritzman, Sharma
and Wood (1996) find that plants’ process choices (job,
batch, etc.) align with their competitive priorities, al-
though the differences in competitive priorities across
different types of plants are not as great as theory (i.e.,
Hayes and Wheelwright 1979) predicts. Ketokivi and
Schroeder (2004) find that the adoptions of a variety of
innovative practices are not consistent with plants’ stra-
tegic priorities. Focusing more narrowly on advanced
manufacturing technologies (AMT), Boyer (1998) found
little or no alignment between plants’ competitive
priorities and their structural/infrastructural decisions,
including their adoption of various AMT’s. Boyer
July 2010 57

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