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Customers' View of Agility: the Expectation-Confirmation Theory

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Customers' View of Agility: the Expectation-Confirmation Theory Asia Pacific Journal of Information Systems ISSN 2288-5404 (Print) / ISSN 2288-6818 (Online) Vol. 26 No. 1 (MARCH 2016), 80-108 http://dx.doi.org/10.14329/apjis.2016.26.1.80 Customers’ View of Agility: The Expectation-confirmation Theory Perspective Maura Atapattua,*, Darshana Sederab, T. Ravichandranc, Varun Groverd a Postdoctoral Research Fellow, Information Systems School, Queensland University of Technology, Brisbane, Australia b Associate Professor, Information Systems School, Queensland University of Technology, Brisbane, Australia c Professor of Information Systems, Dean, Lally School of Management, Rensselaer Polytechnic Institute, Troy, USA d William S. Lee (Duke Energy) Distinguished Professor of Information Systems, Department of Management, Clemson University, USA A B S T R A C T Contemporary organizations strive for customer agility through the deployment of digital technologies on cus- tomer-focused operations to build enduring customer relationships, with mobile apps being one of its prominent examples. Drawing on prior agility and ECT literature, this study proposes a model to examine customers’ view of a firm’s customer agility. Our empirical test of conceptual model from data collected in a field study from 128 customers demonstrated that the conceptual model offers good explanation for customers’ view of a firm’s customer agility through relationships among customer expectations–customer perceived firm’s re- sponsiveness-satisfaction. Data were analyzed using PLS, polynomial modeling, and response surface method- ology to examine the relationships between customers’ digital interactions with the firm, influence of digitized interactions on customer expectations, customers’ evaluation of firm’s responsiveness, and subsequent customer satisfaction. Keywords: Agility, Mobile Apps, Expectation Confirmation Theory, Customer Satisfaction, Competitive Advantage Ⅰ. Introduction Grover, 2012a; Tallon and Pinsonneault, 2011). In consequence business agility and speed to market Achieving sustained competitive advantage is elu- were ranked as the top two management concerns sive in highly volatile contemporary business envi- in 2011-2012 globally, whilst business intelligence, ronments, thus firm success is heavily determined mobile wireless applications (apps) and customer re- by its agility; that is, the ability to constantly sense lationship management were featured in five most the rapidly changing customer demands and respond influential technologies recently (Luftman et al., quickly to opportunities and threats (Atapattu and 2012). These novel technologies are now influencing Sedera, 2014a; Overby et al., 2006; Roberts and agility by driving the proliferation of dynamic service *Corresponding Author. E-mail: [email protected] Tel: 610430940705 Maura Atapattu･Darshana Sedera･T. Ravichandran･Varun Grover delivery channels (Weinhardt et al., 2009), and in- al., 2003) but it has not been discussed in detail venting novel interactive customer touch-points, thus until recently (Roberts and Grover, 2012a; Roberts presenting organizations with a great opportunity and Grover, 2012b). Whilst Kidd (2000) defined the to connect with techno-powered digital natives two types of agility – internal agility and external through ubiquitous smart technology whilst the digi- agility, Sambamurthy et al. (2003) classified the ex- tal natives, and ubiquitous technologies, networks ternal agility into two forms – customer agility and and associated systems are also increasingly weaving partnering agility, where they used the concept of themselves into the very fabric of everyday life of operational agility to describe a firm’s internal agility. both individuals and firms (Vodanovich et al., 2010b). In the interim, Roberts and Grover (2012a) have Such dynamics not only allow organizations to better discussed firm’s customer agility taking the firm’s deliver services through their traditional use, but viewpoint. However, the customers appraisal of or- more importantly allow innovative ways of connect- ganizational agility, or the customers’ view of firm’s ing with profitable techno-powered digital native cus- agility remains largely absent in the current agility tomers to identify their needs and wants better than literature (Atapattu and Sedera, 2012; Atapattu and ever before (Atapattu and Sedera, 2014b), possibly Sedera, 2013b; Atapattu and Sedera, 2013a). However, better than the competitors through the resultant understanding customer agility from customers’ user generated actionable intelligence (Susarla et al., standpoint is important as how customers perceive 2012). Roberts and Grover (2012b) referred to this firms would ultimately define the competitive posi- trait as a ‘firm’s customer agility’. Whilst firm’s cus- tion (advantage) of the firm. Simply because unless tomer agility relates to positive organizational out- its customers do not recognize that the firm is re- comes, how customers perceive firm’s agility ulti- sponding well to their needs the firm run the risk mately defines the positive outcomes that a firm is of losing its customers hence the competitive position. ultimately able to achieve (e.g., competitive advant- Taking the firm standpoint, Roberts and Grover age, customer satisfaction, market share) (Atapattu (2012a) defined a firm’s customer agility as “the de- and Sedera, 2014a). Thus, this discussion investigates gree to which a firm is able to sense and respond the customer’s view of firm’s agility and firm perform- quickly to customer-based opportunities for in- ance, which is absent in extant agility discussions. novation and competitive action”. Capturing the cus- In the broadest sense, enterprise agility is defined tomer perspective, we define the customers’ view as the firm’s ability to sense environmental change of a firm’s agility as “the degree to which a firm is and respond rapidly (Overby et al., 2006). While able to identify customers’ needs and wants, and how the definition of agility consists mainly of two compo- well the firm is able to fulfil those requirements quickly nents - sensing and responding - a firm may articulate and effectively”. The first half of our definition is its agility in many areas such as in customer-based about the customers’ view of firm’s sensing processes, in supply-chain interactions or in its capabilities. It showcases the extent to which a firm day-to-day operations (Roberts and Grover, 2012b) is able to identify customers’ expectations. The latter ultimately leading to customer agility. The notion part of the definition focuses on the firm’s responsive- of customer agility have been mentioned in the liter- ness, which symbolizes how a customer views a firm’s ature for some time (Kidd, 2000; Sambamurthy et responsiveness through customer’s experience. The Vol. 26 No. 1 Asia Pacific Journal of Information Systems 81 Customers’ View of Agility: The Expectation-confirmation Theory Perspective sensing component of agility fundamentally focuses ation-experience gap and its implications for custom- on identifying and interpreting customer expect- er satisfaction will be of great value to both research ations, while the responding component of agility and practice. This becomes even more significant focuses on fulfilling such expectations quickly, effi- and important in contemporary business environ- ciently and expertly. In other words, the notion of ment as the firms are increasingly deploying new a firm’s customer agility can be explained with a technologies to sense customer needs and wants, the priori customer expectations and a posteriori custom- customer expectations are heavily influenced by the er experiences. amount of sensing these firms. Prior customer expectations and post-experience Advancements in IT offer organizations more op- evaluations provide the contextual underpinning for tions (Adomavicius et al., 2013), for innovative cus- this discussion thus, this study apply the notion of tomer engagements, and allow firms to know their expectation-confirmation theory (ECT) (Oliver, customers retail expectation better (sensing), while 1980a) to appreciate firm agility from the customers’ customers expect that their ‘unique’ needs are met perspective. ECT is widely used in the consumer by the retailer with ease, speed and deftness behaviour and service marketing literature to exam- (responding). In other words, the customers are ex- ine customer satisfaction and post-purchase behav- pecting these firms to know their unique require- iour (Brown et al., 2012; Dabholkar et al., 2000; Oliver, ments better and to that the firm responds to their 1980a; Patterson et al., 1997). Different models of individual needs are personalized. While the organ- expectation confirmation, with varying underlying izations’ objective with the mobile shopping systems theoretical explanations, have been put forth in or- is to better connect with their customers to gain ganizational behaviour, marketing, psychology and insights about their shifting needs, customers expect information systems research (Anderson, 1973; that organizations be more knowledgeable about their Klein, 1999; Oliver, 1977; Oliver, 1980a; Yi, 1990). individual requirements through specific deals, dis- Meanwhile, a stream of research within the IS context counts and promotions that are tailored for them. has been conducted to understand expectations and As such, the context of this research provides an IS outcomes multiple contexts; such as system con- ideal opportunity to gauge agility through the per- tinuance
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