Effect of Strategy and Internet Business Adoption on Performance

Author

Shu-Hung Hsu, Lynn University

Date of Award

6-2007

Document Type

Dissertation

Granting Institution

Lynn University

Degree Name

Doctor of Philosophy (PHD)

Degree Program

Global Leadership - with a specialization in Corporate and Organizational Management

Department

College of Business and Management

First Advisor

Ralph Norcio

Second Advisor

Jeanette Francis

Third Advisor

James Miller

Abstract

Organizations that implement competitive strategies and Internet business adoption in the market place can gain a competitive advantage and improved financial performance. The purposes of this explanatory and exploratory, mixed method study, were threefold: 1) to describe the relationship between competitive strategies and Internet business adoption, the relationship between competitive strategy and financial performance, and the relationship between Internet business adoption and financial performance; 2) to examine the effects of the different levels of Internet business adoption (prospecting, business integration and business transformation) and different strategic types (cost leadership and differentiation) on financial performance (profit margin, asset turnover, return on assets and return on equity); and 3) to generate implications for the effect of strategic types and Internet business adoption levels on financial ratios of business organizations.

The entire accessible population of this study was used as a sample; 961 U.S. companies met the eligibility criteria. Among the 961 companies, 327 (34%) provided useable secondary data. This study proposed that strategy types supported by higher levels of Internet business adoption can contribute to financial performance of business organizations. In addition, a hypothesized model was examined. A paragraph approach was used to report a firm's strategic types and Internet business adoption levels, and financial ratios evaluated a firm's profitability and efficiency. A 2x3 factorial research design using ANOVA statistical analysis explained the effects of an Internet business adoption level and a strategic type on performance.

The study results revealed that the type of competitive strategy used or the level of Internet business adoption employed, were important factors influencing financial performance of U.S. business organizations. The results indicated that the effect of strategic types and Internet business adoption levels on financial performance of firms was supported. The findings provided useable information that a firm, which implemented a differentiation strategy and a higher level of Internet business adoption, can earn higher profit from the Internet business markets.

The limitations of the study and recommendations for future research were also included. A limitation of the study was the question of the reliability of the secondary data used. Future research should assess the effect of the level of Internet business adoption and type of competitive strategy used in countries other than the United States and conducts the data collection procedure with a mail or on-line survey instead of using secondary data. This study could be benefited academic research and provided practical implications for managers.

Recommended Citation

Hsu, S. (2007). Effect of Strategy and Internet Business Adoption on Performance [Doctoral dissertation, Lynn University]. SPIRAL. https://spiral.lynn.edu/etds/235