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The Impact of Internet Use on Inter-Firm Relationships in Service Industries

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The Impact of Internet Use on Inter-Firm Relationships in Service Industries The Impact of Internet Use on Inter-Firm Relationships in Service Industries Author Rao, Sally L. Published 2003 Thesis Type Thesis (PhD Doctorate) School School of Marketing DOI https://doi.org/10.25904/1912/3178 Copyright Statement The author owns the copyright in this thesis, unless stated otherwise. Downloaded from http://hdl.handle.net/10072/366887 Griffith Research Online https://research-repository.griffith.edu.au The impact of internet use on inter-firm relationships in service industries Sally L. Rao B.Bus (1st Class Honours) (USQ) Submitted in fulfilment of the requirement for the degree of Doctor of Philosophy of Marketing School of Marketing Faculty of Commerce and Management Griffith University December 2002 Abstract Internet marketing and relationship marketing are becoming prevalent in Australian firms. The advent of the internet has created numerous opportunities for marketing professionals to enhance current marketing practices, including relationship marketing. However, the investigation of marketing relationships in an internet environment is scant. Further, there appears to be no investigation of this phenomenon within the context of Australian service industries. Thus this research attempts to bridge the gap that exists between academia and practitioners by investigating internet-facilitated relationship marketing. Given these gaps in the literature, the research problem investigated in this research is: How does B2B internet use affect inter-firm relationships in service industries? The literature does not investigate this research problem in any depth. However, a framework about internet-facilitated marketing relationship in the extant literature was integrated and synthesised with literature about internet marketing and relationship marketing to arrive at three research issues: RI 1: How does level of internet use affect structural and social bonds in an inter-firm relationship? RI 2: How do structural bonds interact with social bonds in an internet environment? RI 3: How do structural and social bonds determine relationship outcomes in an internet environment? To investigate these three research issues, a combination of qualitative and quantitative two-stage methodological approach was used. The first stage was eleven convergent interviews to build on the extant literature and to further confirm and refine the theoretical framework. In the second stage, a survey methodology was used to test the model about internet-facilitated inter-firm relationships in Australian business internet banking users. Data was analysed and the hypotheses specified in the main model were tested using structural equation modelling techniques. Thus this research involved both theory building and theory testing. The findings of this research have implications for the three research issues. The results for the first research issue showed that the internet has little negative impact on relational bonding in the B2B context. That is, technology-mediated transactions in financial services may not be detrimental to established relationships because trade ii efficiencies are more of a concern for businesses rather than the social aspects. Information technology-enabled connectivity can facilitate trade efficiency, therefore the relationship. Moreover, the impact of internet use on relational bonds of trust and dependence is moderated by the length of B2B internet use. That is, a longer period of dealing with an exchange partner on the internet facilitates relational bonding. The findings for the second research issue were that most interrelationships between structural and social bonds in an internet environment are in line with the generic literature. The findings for the third research issue are related to the relational outcome as a result of bonding. Although the internet has little direct impact on commitment and intention to stay, it contributes indirectly to the relational outcomes through structural and social bonding. In addition, the findings of this research highlight some important issues in relationship marketing research. That is, inter-relationships of the relational constructs depend on the context in which the relationship exists. The main contribution of this theory building research is the development and confirmation of a final theoretical framework about internet-facilitated inter-firm relationships. That framework is a contribution because it is the first rigorously researched step towards understanding the important confluence of two new and powerful streams of business activity of internet marketing and relationship marketing. This thesis has both theoretical and practical implications in the area of internet marketing and relationship marketing. The framework was built from theory and empirical research to represent this process and provides a foundation for further research. iii TABLE OF CONTENTS Abstract ii Table of Contents iv Statement of oringianl authorship xi Acknowledgements xii Related papers and presentations during this research xiii CHAPTER 1 INTRODUCTION 1 1.1 Background to the research problem 1 1.2 Research problem and research propositions 2 1.3 Justification for this research 3 1.4 Methodology 7 1.5 Delimitation of scope 8 1.6 Definitions used in this research 9 1.7 Outline of the dissertation 11 1.8 Conclusion 12 CHAPTER 2 RESEARCH ISSUES 13 2.1 Introduction 13 2.2 Parent theory one: the internet and internet marketing 13 2.2.1 Identification of core terms in a new economy 14 2.2.2 The internet and internet marketing 16 2.2.3 B2B internet use in internet marketing 28 2.3 Parent theory two: relationship marketing 39 2.3.1 Definitions of relationship marketing 39 2.3.2 Evolution of relationship marketing 41 2.3.3 Process of relationship development 44 2.3.4 The role of information technology in relationship marketing 46 2.4 Focus theory: developing a theoretical framework for this research 48 2.4.1 Inter-firm relationships in an internet environment 48 2.4.2 Key constructs in the exchange processes in relationship marketing 51 2.4.3 Developing theoretical models 73 2.5 Conclusion 93 iv CHAPTER 3 STAGE ONE: CONVERGENT INTERVIEW RESEARCH 94 3.1 Introduction 94 3.2 Plan of this research 95 3.3 Selecting convergent interviewing for exploratory stage of this research 95 3.4 Convergent interviewing processes 99 3.5 Validity and reliability of the convergent interviewing research 102 3.6 Implementing the convergent interviewing technique 104 3.6.1 Defining the information required 104 3.6.2 Deciding sample size 105 3.6.3 Deciding the sampling method 106 3.6.4 Conducting the interviews 107 3.7 Analysis and interpretation of the convergent interview data 110 3.7.1 Introduction of convergent interview respondents 110 3.7.2 Findings from the convergent interviews 111 3.8 Conclusion 121 CHAPTER 4 STAGE TWO: SURVEY METHODOLOGY 124 4.1 Introduction 124 4.2 Justification of survey methodology for the second stage of this research 125 4.2.1 Research paradigm 125 4.2.2 A two-stage research design for this research 125 4.3 Questionnaire design and administration 127 4.3.1 Step one: specifying the data needed and operational definitions 128 4.3.2 Step two: specifying the survey method 136 4.3.3 Step three: selecting the format of responses 139 4.3.4 Step four: assessing reliability and validity of the questionnaire 141 4.3.5 Step five: preparing draft questionnaire 143 4.3.6 Steps six: pretesting, revising, and placing the questionnaire online 145 4.3.7 Step seven: questionnaire administration 145 4.4 Sampling strategy 148 4.5 Data analysis strategy 152 4.6 Ethical considerations 155 4.7 Conclusion 156 v CHAPTER 5 DATA ANALYSIS 157 5.1 Introduction 156 5.2 Data preparation 156 5.2.1 Coding the data 157 5.2.2 Data cleaning and screening 157 5.3 Structural equation modelling and hypothesis testing 161 5.3.1 Step one: model conceptualisation 161 5.3.2 Step two: preparing for model evaluation 162 5.3.3 Step three: Measurement model evaluation and specification 165 5.3.4 Step four: structural model evaluation 186 5.4 Conclusions 195 CHAPTER 6 CONCLUSIONS AND IMPLICATIONS 197 6.1 Introduction 196 6.2 Conclusions about the three research issues 199 6.2.1 Research issue 1 200 6.2.2 Research issue 2 205 6.2.3 Research issue 3 206 6.2.4 Conclusions about the research problem 209 6.3 Implications for theory 212 6.3.1 Internet and relationship marketing theory 212 6.3.2 Implications for methodology 215 6.4 Implications for pratice amd policy 215 6.5 Limitations of this research and implications for further research 222 6.5.1 Limitations of this research 222 6.5.2 Implications for further research 223 6.6 Conclusion 226 List of references Appendices vi List of tables Table 1.1 Summary of research issues and hypotheses 3 Table 1.2 Global and Australia B2B e-commerce estimates 5 Table 2.2 Summary of representative scholarly literature on internet marketing 19 Table 2.3 Internet marketing elements synthesised from representative literature in chronological order 25 Table 2.4 Business applications using internet-based technologies 34 Table 2.5 Scholarly literature of the intersection of internet and relationship marketing, in chronological order 49 Table 2.6 Summary of research issues and propositions 92 Table 3.1 Qualitative versus quantitative research 95 Table 3.2 Differences between convergent interviews, in-depth interviews, case research and focus groups 98 Table 3.3 Tests for validity and reliability of research design 104 Table 3.4 Interviewees’ background for the convergent interviews 112 Table 3.5 Summary of
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