Information Technology Use and Firm's Perceived ...

Journal of Business-to-Business Marketing, 17:336–364, 2010 Copyright © Taylor & Francis Group, LLC ISSN: 1051-712X print/1547-0628 online DOI: 10.1080/10517120903574649

Information Technology Use and Firm’s Perceived Performance in Supply Chain Management SARA CAMPO, NATALIA RUBIO, and MARÍA JESÚS YAGÜE Department of Finance and Marketing Research, Autonoma University of Madrid, Madrid, Spain

Purpose: This article proposes a theoretical model to investigate (a) a positive direct relationship between the specific use of ITs (applied to management) and the firm’s performance as perceived by retailers and (b) a positive indirect relationship through information quality and information sharing. Design/Methodology/Approach: The theoretical model proposed in this paper is contrasted using structural equation modelling of the retail distribution channel for home appliances. Findings: The research shows that there is no positive direct relationship between the specific use of ITs and the retailer’s perceived performance in the relationship with the provider. The results do, however, provide evidence for a positive indirect relationship through both information sharing and satisfaction obtained from the relationship with the provider. Research Limitations: The analysis has been developed from the retail perspective. We suggest that future research focus on the retailer’s and the provider’s perspectives. Practical Implications: In the context of SCM, the competitive advantages achieved through IT use derive from a better network of relationships between the firms involved as a result of

We acknowledge the financial support of Ministry of Education and Science (research project ref.: ECO2008-00488/ECON) and Madrid Regional Ministry of Education (research project ref.: S2007/HUM-0413). Address correspondence to Natalia Rubio, Department of Finance and Marketing Research, Business Studies Faculty, Autonoma University of Madrid, Avda. Tomás y Valiente, 5, Campus Cantoblanco, 28049 Madrid, Spain. E-mail: [email protected] 336

IT Use and Perceived Performance

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greater information quality and information sharing. Specific use of ITs stimulates greater information sharing between retailer and provider and thus greater satisfaction and better perceived performance of the retailer in the relationship with the provider. However, the effect of IT use on information sharing occurs only through the quality of the information shared. Originality/Value: The study shows that information quality is an antecedent of information sharing and that both information quality and information sharing act as necessary conditions for improving the retailer’s perceived performance in the relationship with the provider. This article develops a measurement scale to evaluate the intensity of IT use. Finally, the research confirms that firm performance can be modeled as a second-level latent variable composed of three different dimensions (economic benefits, marketing benefits, and adaptation benefits). KEYWORDS information technology, supply chain management, performance, relationship, information quality, information sharing

Society’s widespread use of information technologies (ITs) requires firms to consider the adoption and use of these technologies as a necessary condition of maintaining competitiveness in the market. Their current development has created an economic space identified by new terms in the literature, such as e-conomy, digital economy, information economy, or new economy (among others). The revolution in information technologies began in the United States in the 1970s. The first academic papers, which appeared during this period, stress the importance of information systems (Galbraith 1973) applied to management. In the 1980s, academic studies of IT developed theoretical work and case studies (Porter and Millar 1985). It is only in the last two decades that considerable technological advances have promoted the acceptance and adoption of ITs in society. Their development has created significant changes in firms, in their organizational structures and relationships with other firms, and in their processes. These changes have helped to improve the firms’ economic performance (Bharadaj 2000) and relational performance (Vijayasarathy and Robey 1997). Different authors have developed definitions of the concept of IT. Porter and Millar (1985: 149–150) understood that “Information technology must be conceived of broadly to encompass the information that businesses create and use as well as a wide spectrum of increasingly convergent and linked technologies that process the information. Then, computers, data recognition equipment, communications technologies, factory automation,

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and other hardware and services are involved.” Likewise, Ryssel, Ritter, and Gemünden (2004: 198) hold that the term IT refers to any form of technology used to create, gather, analyze, communicate, exchange, present and use information in its various forms. This article studies ITs in the context of supply chain management (SCM). In SCM, ITs are important for developing information systems that enable efficient management of the wide variety of channel members’ activities (Handfield and Nichols 1999). Information systems in SCM should contribute to developing shared activities between the channel members, such as electronic transactions, quality and cost control, supply planning, and prediction of demand (Kim, Cavusgil, and Calantone 2006: 41). Good integration of different activities in the supply chain should enable the achievement of competitive advantage by improving relationships between the participating firms (Handfield and Nichols 1999). This research has two objectives. First, it seeks to establish whether specific use of ITs in management activities has a direct influence on the firm’s perceived performance (retailer’s satisfaction and retailer’s performance in the relationship with the provider defined by economic benefits, marketing benefits and adaptation benefits). Second, it seeks to analyze and evaluate whether there is an indirect relationship, through information integration. Information integration can be defined as the degree to which firms in the supply chain share information accuracy, completeness, relevance, and usefulness effectively for management of their business. The literature reviewed presents conflicting results on the direct and positive relationship between specific IT use and firm performance. However, it indicates an indirect effect of information integration on the relationship between the specific use of ITs and perceived performance of the firm (Devaraj, Krajewski, and Wei 2007; Sanders 2008). Information quality and information sharing are considered to be the elements that compose information integration. Both components have been identified as potential impediments to adoption of technology-based integration options (Power and Sohal 2002). This research provides evidence that there is no positive direct relationship between the specific use of ITs and the retailer’s perceived performance in the relationship with the provider, but there is a positive indirect relationship through the integration of information and through the satisfaction obtained from the relationship with the primary provider. Particularly, the research shows that information quality is a necessary antecedent of information sharing, and both act as basic conditions for obtaining improvement in the retailer’s perceived performance in the relationship with the provider. The paper develops a measurement scale to evaluate the intensity of IT use and also shows and confirms that the retailer’s perceived performance in the relationship with the provider can be modeled as a second-level latent variable composed of three different dimensions (economic performance, marketing performance, and adaptation performance).


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EFFECT OF INFORMATION TECHNOLOGY USE ON PERFORMANCE SCM has traditionally focused on the physical flows of materials. However, the development of ITs and interorganizational information systems has encouraged the use of information flows as a basis for improving the management of physical flows of materials. Currently, organizations combine both flows—physical and information—to achieve superior performance (Lin, Huang, and Lin 2002; Shah et al. 2002). Firms invest in ITs on the assumption that these technologies will influence performance. On the one hand, as Sriram and Stump (2004) argued, investment in ITs brings improvement in productivity and benefits for firms. On the other hand, this investment facilitates integration of the supply chain, improves interfirm relationships, and thus improves performance. According to D’Avanzo, Von Lewinski, and Van Wassenhove (2003), “supply chain planning,” “linkages with customers,” and “linkages with suppliers” offer the best opportunities for operational improvement. All these abilities are transformed by ITs. IT use has brought significant changes in products, processes, structures, and infrastructures. These changes have affected firm performance (Porter and Millar 1985). ITs alter profitability because they generate competitive advantages, primarily in costs and marketing. While investment in ITs decreases the firm costs of obtaining economies of scale (Zhao, Dröge, and Stank 2001), it also reduces inventory costs (Power and Sohal 2002) and transaction costs (Steinfield, Kraut, and Plummer 1995). On the other hand, IT use offers advantages in marketing, as firms (industrial and distribution) can know their customers better, interact with them, and respond more rapidly to changes in the market. Firms can thus develop new products to meet the needs detected (i.e., consumer relationship management [CRM]; Stein and Sweat 1998; Yu, Yan, and Cheng 2001). The IT literature continues to debate a crucial issue: whether the use of IT in itself produces value for the firm. The authors who propose a positive direct relationship between the specific IT use and the firm performance (Bharadwaj 2000; Feng and Yuan 2006) ground their work in a resource-based view (RBV; Barney 1991; Peteraf 1993; Wernerfelt 1984). They postulate that a firm’s performance is based on its specific resources and capacities, which are difficult to imitate. This perspective views ITs as firm resources related to the management of knowledge and intellectual capital and conceives of them as components of the structural capital of the organizations that support all of the business processes (Sher and Lee 2004). In contrast, some studies demonstrate the absence of a positive direct relationship between the specific use of ITs and firm performance, a finding currently termed the IT paradox (Devaraj and Kohli 2003; Devaraj et al. 2007; Hitt and Brynjolfsson 1996; Porter 2001; Powell and Dent-Micallef 1997; Campos and Yagüe 2007; Sriram and Stump 2004). Studies such as those

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by Brynjolfsson (1993) and Hitt and Brynjolfsson (1996) offer explanations for the apparent lack of a positive direct relationship between IT use and firm performance. Among other issues, they stress the methodological problems involved in estimating the different concepts, inappropriate selection of the study sample, problems of overinvestment due to agency costs, and delayed performance as a result of “adjustment costs” or learning curves. The findings of prior studies on the absence of a positive direct relationship between the specific use of ITs and the firm performance lead us to consider the complementarities theory (Milgrom and Roberts 1995). According to this theory, merely investing in and/or using ITs does not generate improvements in the firm performance. Investment in and use of ITs can act as a necessary but not a sufficient condition for improving profits. Although ITs are directly related to obtaining a sustainable competitive advantage (Porter and Millar 1985; Porter 2001), competitive advantage is achieved through effective and efficient use of the ITs. The existence of complementary resources and their use with ITs would explain the apparently contradictory results of the research performed to date. Following the complementarities theory, Bergeron and Raymond (1999) stressed the need for a fit between IT management and complementary resources, such as firm strategy, organizational structure, human resources, and organizational resources. Because ITs must be well-integrated in the firm and its environment (Hitt and Brynjolfsson 1997), firms should consider making additional investments in organizational and strategic coordination when adopting ITs (Devaraj and Kohli 2003; Sanders 2008). This socio-technological focus emphasizes that there should be an alignment between the technological imperative (E. Miller and Rice 1967) and the organizational imperative (Markus and Robey 1988) to maximize the results of the technology. Various studies have shown that a firm’s capacity to develop and exploit new technologies and organizational processes, including e-business capabilities, generates sustainable competitive advantages (Straub and Klein 2001; Teece, Pisano, and Shuen 1997; Zhu 2004; Sanders 2007). The research performed to date provides evidence for a positive effect of IT use on firm performance. Although one group of authors (Bharadwaj 2000; Feng and Yuan 2006, among others) finds a direct positive relationship, others such as Devaraj and Kohli (2003), Devaraj et al. (2007), or Campo and Yagüe (2007) warn that this relationship is produced indirectly through the factors affected by IT use. Adopting both stances, this paper establishes an open hypothesis, H1, concerning the direct relationship between the use of ITs and the firm performance. We propose that the relationship can be positive and significant or non-significant (see Figure 1). Particularly, our goal is to contrast whether the effect on the retailer’s perceived performance in the relationship with the provider is direct (in this case, the relationship studied would obtain a positive and significant sign) or indirect through

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H2b (+)

Satisfaction in the relationship H1 (+/n.s.)

IT use

H2c (+)

H2a (+)

Information quality

H2e (+) Perceived performance in the relationship H2d (+)

Information sharing

FIGURE 1 Proposed relationship model.

elements that encourage information integration in the supply channel (such that the relationship studied would be non-significant).

Moderating Elements of IT Use In the context of SCM, Kim et al. (2006) find that only when ITs promote the integration of the organization’s systems for planning and shared prognostics does IT use affect information exchange. Likewise, Dewett and Jones (2001) described two of the main benefits of ITs: information efficiencies and information synergies. Higher levels of information sharing in the SCM are associated with greater potential performance (Carr and Kaynat 2007; Sanders 2007, 2008). Similarly, Shah et al. (2002) showed a link between the kind of relationship that firms maintain in the supply chain and the degree of information integration. They find that fit between both aspects leads to better performance. These results are supported by Boone and Ganeshan (2001) and Sriram and Stump (2004), who indicate that the relationship between IT implementation and productivity is determined largely by the use of the information. The more detailed the information shared by the members of the supply channel, the greater the benefits obtained from IT use (Lin et al. 2002). The exchange of detailed information improves knowledge of the business of the different members in the channel, creating positive repercussions for the relationship to satisfy the end customer. In applying this focus, we start from the assumption that the influence of IT use on the firm performance is mediated by its effectiveness in improving the relational performance. Cavusgil, and Calantone (2005) and Sanders (2007, 2008) proposed using coordination or collaboration mediating the relationship between the IT use and firm performance. Seggie, Kim, and Cavusgil (2006) incorporated a degree of integration of parts

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through communications systems and creation of brand capital as intermediary variables in the effect of ITs on market and financial performance. This focus thus leads us to expect a positive but indirect relationship between ITs and the retailer’s perceived performance in the relationship with the retailer. To summarize, the literature reviewed supports the hypothesis about the indirect, positive effect of IT use on the retailer’s perceived performance in the relationship through elements that encourage information integration (information quality and information sharing) and on the retailer’s satisfaction with the provider (H2). Formulating this hypothesis involves recognizing several subhypotheses. First, we expect that IT encourages information quality and information sharing (H2a). Second, the use of ITs affects satisfaction with the relationship directly (H2b) or indirectly through information quality and information sharing (H2c). Finally, good perceived performance of the retailer in the relationship with the provider is fostered by both the improvement of information quality and information sharing (H2d) and the increase in the retailer’s satisfaction with the relationship (H2e; see Figure 1). Sharing and quality of information have been identified as potential impediments to adoption of technology based integration options (Anselmi, Robert, and Whipple 2002; Power and Sohal 2002). They are two fundamental components of information integration: information sharing and information quality. Information sharing indicates the degree to which critical and proprietary information is communicated to a member of the chain (Monczka et al. 1998). Shared information can be strategic or tactical, involving logistical activities or general knowledge of the market and the customer (Mentzer, Min, and Zacharia 2000). Many researchers have stressed the importance of information sharing in SCM, as gathering and sharing information in real time can be crucial to improving supply chain performance. Information quality indicates the degree to which the information fits the firm’s needs. It is especially relevant when information is shared for collaborative planning in the supply chain. One group of authors (Bailey and Pearson 1983; Mahmood 1987; J. Miller and Doyle 1987; Monczka et al. 1998; Raymond 1985; Srinivasan 1985; Whipple, Frankel, and Daugherty 2002) determines that high-quality information should fulfill the criteria of accuracy, timeliness, relevance, completeness, and credibility. While information sharing is important, the significance of its impact on SCM will depend on the quality of the information shared, that is, on what information is exchanged, when and how (Chizzo 1998; Holmberg 2000). The information shared becomes a source of competitive advantage, as the supply chain facilitates the availability of high-quality data and the sharing of these data with other supply chain members (Balsmeier and Voisin 1996; Novack, Langley, and Rinehart 1995; Towill 1997).


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Second, satisfaction is one of the main variables used to measure the relational performance achieved in exchange processes. There are two approaches to the study of customer satisfaction: (a) analysis of the performance obtained from the transaction and (b) analysis of the satisfaction with the process of the relationship (Boulding et al. 1993, cited in Anderson, Fornell, and Lehmann 1994). The focus on satisfaction with the process is the best approach for analyzing the SCM (Sramek, Mentzer, and Stank 2008), as it uses an indicator clearly linked to the long-term firm performance (Anderson et al. 1994). In this context, the academic literature defines satisfaction with the relationship as a positive affective state that results from the evaluation of all aspects of one firm in its commercial relation to another firm (Frazier et al. 1989; Gaski and Kevin 1985, cited in Geyskens, Steenkamp, and Kumar 1999). The results of the relationship models contrasted by Vijayasarathy and Robey (1997) and by Whipple et al. (2002) enable us to affirm that the use of ITs for information exchange by agents in the retail distribution channel contributes to the cooperation of the members in the channel, showing a positive but indirect influence on the agents’ satisfaction. However, in adapting the study by Van de Ven and Ferry (1980), Sánchez (2000) found that the relation between intensity of information and satisfaction with the relationship is direct and significant. Further, satisfaction with the relationship varies between manufacturers (sellers) and distributors (buyers). The effect of the information exchange on satisfaction with the relationship is more intense for the distributors (buyers; Whipple et al. 2002). Because satisfaction with the relationship constitutes the main axis of the result of the relationship with the channel (Geyskens et al. 1999; Geyskens and Steenkamp 2000), analysis of its effects is crucial (Ruekert and Churchill 1984). The empirical literature on the effects of satisfaction has focused on analyzing how satisfaction affects commitment and trust between the members in the channel (see, e.g., the literature review by Geyskens et al. 1999). However, fewer studies analyze the relation between satisfaction and the firm performance. One study that does is that of Anderson et al. (1994), who argued that customer satisfaction leads to greater profitability for firms. Fornell (1992) described the main ways in which the positive effect of satisfaction on profitability is produced. First, satisfaction increases consumer loyalty and the likelihood of maintaining a lasting relationship with the customer. This costs less than obtaining a new consumer. Second, customer satisfaction makes the consumer less sensitive to price (Garvin 1988), making it possible for the firm to increase its commercial margins and obtain greater economic profits. Third, the consumer becomes less sensitive to the competition’s efforts to attract customers (Anderson et al. 1994). Fourth, the firm reduces the cost of performing transactions and attracting new customers (Fornell 1992). This reduction can improve the reputation of the firm’s brand and its commercial image.

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METHODOLOGY To analyze the direct influence of ITs on the retailer’s perceived performance in the relationship with the provider and their indirect influence through the retailer’s satisfaction with the provider and through the elements that encourage information integration (information quality and information sharing), we performed an empirical study addressed to store managers in retail establishments that sell home appliances and are associated with wholesale purchase groups. We used a telephone survey for obtaining information. The research was performed during May and June 2006 in the two main Spanish provinces: Madrid and Barcelona. In Spain, the commercialization of home appliances occurs through four channels: the independent business, specialized large distribution firms (e.g., Media Markt, Boulanger, etc.), generalist large distribution firms (hypermarkets and department stores) and partnerships. In specific sectors, like that of the sale of home appliances, small and medium-sized independent merchants have a very difficult time maintaining their business and competing with the large firms. Thus, many opt to associate themselves with chains or purchasing centrals that operate with commercial trademarks shared by all of the partnerships. In 2006, the partnership of home appliances in Spain was formed of nine purchasing centrals. The merchants associated with a purchasing central preserve the property and management of the activities of their establishments but can benefit from agreements that their purchasing central negotiates for them. These agreements seek to obtain competitive tariff prices, products exclusive to the chain, or the launching of a common marketing campaign, among other benefits. Further, in this sector in particular, associated businesses can share a logistical distribution platform and warehouse to save the purchase or rental of a place to store their products. Given the foregoing, partnerships in a purchasing central enable small and medium-sized merchants to benefit from some aspects of the negotiation with the provider enjoyed by those who participate in large commercial networks. It is very important to point out, however, that the firms associated with a purchasing central have a wide range of freedom in managing their relationships with their main provider. That is, the purchasing centrals are primarily service firms. They authorize and validate providers or deliverers of services and negotiate conditions for their associates based on the volume of sales accumulated. But generally, the providers themselves or the deliverers of services perform the commercial activities. Thus, the relation of partner establishments to their purchasing central is based fundamentally on the formal interest of the partner in wishing to cooperate with other establishments to achieve better negotiation agreements. The link between the partner establishment and its purchasing central is partial and does not involve integrated decision-making.

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The empirical research performed in this study of the impact of IT use on the retailer’s perceived performance in the relationship with the provider applies exclusively to the supply channel of the partnership. This supply channel is responsible for nearly 50% of the sales of home appliances every year in Spain (Fernández et al. 2006). The establishments that compose the universe and the study sample for each supply chain can be seen in Table 1. The study universe is composed of 744 outlets, 405 (54%) in Madrid and 399 (46%) in Barcelona. We perform a random sampling with proportional allocation for each province, respecting the proportionality of the size of each chain in the universe of the province. The initial sample was composed of 320 establishments (174 [54%] for Madrid and 146 [46%] for Barcelona), which would mean a sampling error of 2.93%. The final sample is composed of 166 establishments, 97 in Madrid and 69 in Barcelona, which represent a response rate of 56% and 47%, respectively. In both provinces, we achieve a sample size lower than we had hoped for, and representation of each chain is different from the proportion of its size in the universe of the province. As a result, the sampling error obtained is higher than that initially expected. For the total sample of 166 establishments, the sampling error is 5.10%. This is higher than we initially wanted but fully within the limits admitted in similar academic studies. The questions used to measure the variables in the model are listed in the appendix.We developed two questions to measure IT use. The first was a nominal multi-response scale that included 7 different technologies, TABLE 1 Universe and Sample Size by Chaina Madrid Chain or Purchasing Central Activa Hogar Cedise Asel Condidgesa Idea Consorcio Euronics Densa Dinel Milar Fadesa Expert Gestesa Master Segesa Redder Total

Barcelona

Universe

Sample

Universe

Sample

16 52 21 69 80 9 86 72 0 405

6 6 9 12 17 4 20 23 0 97

42 0 13 42 53 30 73 75 11 339

14 0 4 11 8 5 15 9 3 69

a

The sampling error (5.10%) for the total sample (166) was calculated from the expression of sample size (n) allocated proportionally according to Scheaffer, Mendenhall, and Lyman Ott (2007, pp. 147–153). This expression is: n =

L N 2 pi qi i ai

i=1

L N 2 D+ Ni pi qi i=1

, where Ni is the population size for the chain or purchasing central

i, pi is the population proportion for the chain or purchasing central i, qi = 1−pi , ai is the fraction of observations allocated to the chain or purchasing central i, and D = B2 /4, where B is the sampling error.

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the option “other technologies (indicate which)” and the option “I do not use any kind of technology.” We asked the respondent to indicate which of the technologies included in the questionnaire he or she used in managing the business. A second nominal question listed 12 different management tasks and asked the respondent to mark which were used for each task in the relationship with the primary provider. The scale used is an adaptation of that employed by Williamson, Harrison, and Jordan (2004). These two questions constitute a variable that measures IT use for each of the management tasks considered. This variable ranges from 0 (no technology) to 8 (all of the technologies). To measure information quality, we considered three items frequently used in the academic literature: accuracy, completeness, and relevance (Bailey and Pearson 1983; Mahmood 1987; J. Miller and Doyle 1987; Monczka et al. 1998; Raymond 1985; Srinivasan 1985; Whipple et al. 2002). To measure information sharing, we adapted the scales employed by Monczka et al. (1998) and Whipple et al. (2002). The latent variable of satisfaction with the relationship was measured using a single-item scale following the methodology of Michie and Sibley (1985) and Sánchez (2000). Finally, we used three dimensions to measure the retailer’s perceived performance in the relationship with the provider. Two of these, the economic and the marketing benefits, are adapted from the scale developed by Robicheaux and Coleman (1994). Third, the adaptation benefits are based on the paper by Noordewier et al. (1990). Following Kim et al. (2005, 2006), Seggie et al. (2006) and Sanders (2007, 2008), among others, we used a perceptual measurement for firm performance, specifically, the distributor’s perception of the benefits that the relationship with the main provider brings in the three dimensions considered. The measurement of the results through perceived performance has been demonstrated that correlates with the actual results (Agarwal, Erramilli, and Dev 2003). We can thus assert that the perceptual variable is a proxy variable of actual results, which are usually difficult to obtain.

RESULTS Table 2 shows some of the results obtained from the study sample, particularly results concerning the use of the ITs considered and the intensity of their use in specific management activities. In analyzing the results, we find that the technologies included in the study are used by a large percentage of the home appliance establishments that compose the sample.1 We see that the different ITs considered in the research achieve relatively high use. Each is employed by at least 40% of the sample. ITs that facilitate communication of information between provider

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TABLE 2 Percentage of Retail Establishments That Use Each IT (Generally and Specifically) Software provider General use Use in the specific management tasks

46% 34%

Own software Scanner 75% 60%

45% 6%

E-mail 83% 54%

Provider’s Own Web Telephone Web portal page and/or fax 44% 13%

42% 11%

96% 68%

and customer—such as the telephone and/or fax (96%) and e-mail (83%)— are distinguished by their general use, with a participation of over 80%. Other ITs, those used more specifically for managing the business, achieve a lower participation of 40–75%. Second, we see that the percentage of use decreases when it is calculated for the different management tasks in the provider–customer relationship.2 The specific use of ITs in management reveals the existence of three groups of technologies with different participation in use. The first group of ITs, with a relatively broad use in management, consists of the telephone and/or fax, the business’s own software and email. From 54% to 68% of the establishments use these technologies in specific management activities. The second group, those with low specific use, is composed of the Web portal of the provider, the Web page itself and the scanner. Only 6%–13% of the establishments use these technologies in managing the activities proposed. Finally, the software provider achieves moderate specific use in managing the activities included in the questionnaire for 34% of the establishments in the sample. We can thus observe important differences between the percentage of firms that use ITs in general, as a cross-sectional resource in the firm’s value chain applicable to different tasks, and the percentage that use them specifically in some of the concrete management tasks in the provider-customer relationship. We also list the results obtained for the intensity of use of the ITs in the management activities specified. Figure 2 shows the maximum and minimum percentages of firms that use a specific number n of ITs for the 12 management activities. For example, the percentage of firms that do not use any IT in the 12 management activities specified ranges from 1% to 5%. The results obtained show a low intensity of use of the ITs. The home appliance firms that compose the sample usually use one or two technologies in the specified management activities. The percentage of firms that uses three technologies is very low, and the percentage that uses a greater number in any activity is nearly insignificant. No establishment in the sample uses more than five technologies in managing the specified activities.

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S. Campo et al. 80 74% 70 % Retail establishments

68% 60 50 40 30 25% 20 16% 10 0

5% 1% 0

1

8% 2% 2 3 Number of ITs used

2% 1% 4

2% 0% 5

FIGURE 2 Rank of retail establishments (%) that use a defined number of technologies in their specific management tasks.

To analyze the differences observed in the results between the firms that use the most advanced technologies and those that do not, we divide the sample into two groups. The first group, labeled “low use of ITs,” is formed of firms that use either one or no complex and advanced IT or that only use traditional dominant forms such as the telephone, fax, e-mail, or their own software. This first group makes up 59% of the sample (98 firms). The second group, labeled “high use of ITs,” is formed of firms that use more than one complex technology among the following: software furnished by the provider, Web portal with access to providers and/or their own Web page. This group is formed of 68 firms (41% of the sample). Figure 3 presents the perceived benefits of home appliance retail establishments in the relationship with the provider as a function of the use of ITs. The directors of the firms that make more use of advanced ITs perceive that their businesses derive better economic benefits and better benefits of marketing and adaptation from the relationship. We can thus expect that, when a retail establishment adopts new ITs to improve the management of its commercial relationship with its providers, it will perceive an improvement in its firm performance that it would not perceive without these technologies. We have described the use of the ITs in the study sample and their relationship to the retailer’s perceived benefits. We will now test the hypotheses formulated in the theoretical model, using the structural equations methodology through the statistical program AMOS 7.0.3 Figure 4 shows the results obtained from the estimate. First, we can see that the estimated model provides an excellent fit (Hair et al. 1998). The value of X2 is statistically non-significant (p = 0.17), and the

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IT Use and Perceived Performance 7.5 7

6.9** (sd = 1.4) 6.4** (sd = 1.7)

6.5 6.3** (sd = 1.8)

6

6.5* (sd = 1.7)

6.2* (sd = 1.8) 5.6** (sd = 2.1)

5.5 5

7.0* (sd = 1.4)

6.7* (sd = 1.6)

Growth in sales

Increase in profits

Low use of ITs

Customer loyalty

Assortment adaptation to the market environment

High use of ITs

FIGURE 3 Retailer’s perceived benefits in the relationship with the provider as a function of the use of its (mean values). ∗ Retailer’s perceived benefits in the relationship with the provider are measured on a 10-point scale where 0 is the lowest value and 10 the highest. Mean significant at p < 0.10; ∗∗ Mean significant at p < 0.05.

0.14* (H2b)

0.19** (H2a)

Information quality

0.24*** (H2c)

Retailer´s satisfaction in the relationship

0.43*** (H2e)

IT use 0.47*** Information sharing

0.23*** (H2d)

Retailer´s perceived performance in the relationship

Economic benefits

0.84*** 0.91***

Marketing benefits

0.67***

0.09 (H1) Significance level: *** p < 0.001; **p