e-Commerce Metrics for Net-Enhanced Organizations: Assessing the Value of e-Commerce to Firm Performance in the Manufacturing Sector
Authors: Zhu, Kevin; Kraemer, Kenneth L.
Journal: Information Systems Research (2002)
<jats:p> In this study, we developed a set of constructs to measure e-commerce capability in Internet-enhanced organizations. The e-commerce capability metrics consist of four dimensions: information, transaction, customization, and supplier connection. These measures were empirically validated for reliability, content, and construct validity. Then we examined the nomological validity of these e-commerce metrics in terms of their relationships to firm performance, with data from 260 manufacturing companies divided into high IT-intensity and low IT-intensity sectors. Grounded in the dynamic capabilities perspective and the resource-based theory of the firm, a series of hypotheses were developed. After controlling for variations of industry effects and firm size, our empirical analysis found a significant relationship between e-commerce capability and some measures of firm performance (e.g., inventory turnover), indicating that the proposed metrics have demonstrated value for capturing e-commerce effects. However, our analysis showed that e-commerce tends to be associated with the increased cost of goods sold for traditional manufacturing companies, but there is an opposite relation…