Lalalal

Performance Implications of Internet-based Information Technology in Value Chain
Management

Howard S. Rasheed, Ph.D.
Assistant Professor
Scott Geiger, Ph.D.
Assistant Professor
University of South Florida
4202 E. Fowler Ave. BSN 3403
Tampa, FL 33617
813-974-1727
hrasheed@coba.usf.edu

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ABSTRACT
Internet-based information technology (IT) has grown in its importance to valuechain of firms.
This research tests variations of previous IT models that suggest performance is affected by
technology characteristics, organizational technology, resources and system utilization variables.
Data from 165 firms that use the Internet to manage value chain functions suggest that
performance depends on the type of industry and the type of supply chain function involved.

3Introduction
Information technology (IT) has been considered an integral part of a firm’s effort to
sustain competitive advantage or competitive parity based on the assumption that it adds
economic value to a firm (Mata, Fuerst, & Barney, 1995). Some theorists have suggested the
advent of Internet-based commerce presents a strong case for the confluence of entrepreneurship
and strategy (Amit &Zott; 2001; Hitt & Ireland, 2000; McGrath & Mac Millan, 2000). Despite
the recent rash of dot-com failures, projections of growth in e-business world-wide indicate
businesses continue to seek opportunities to use the Internet as an application of information
technology to develop virtual markets within the value chain framework (Porter, 1985).
More specifically, IT has been increasingly used inthe business-to-business (b2b) realm of
electronic commerce as the basis for inter-organizational information systems (IOS) that enable
firms to transcend organizational boundaries, facilitate the flow of information, and manage
linkages between suppliers and customers in the supply chain. In this regard, prior research has
focused on the strategic benefits of private networks of electroniccommerce such as electronic
data interchange (EDI) (Clark and Stoddard, 1996; Angeles, Nath, & Hendon, 1998
Mukhopadhyay, Kekre, and Pokorney, 1998; Chatfield & Yetton, 2000; Ahmad & Schroeder,
2001). As the proliferation of Internet-related information technology increases dramatically, it
is imperative that theory relative to IOS in value chain management is expanded and applied to
web-basedelectronic commerce.
This study presents and tests a model of the performance impact of Internet-based
information technology used in supply chain activities. Based on extant organizational theory,
information systems theory and resource dependency theory, a contextual model proposes that
organizational performance is influenced by a firm’s organizational technology, system
utilization,technology characteristics, and resource investment (Thompson, 1967; Goodhue &
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Thompson, 1995; Mata et al., 1995; Stabell and Fjeldstad, 1998; Li & Ye, 1999; Chatfield &
Yetton, 2000; Afuah and Tucci, 2001). This model is similar to Goodhue and Thompson’s
(1995) model they referred to as the Technology-to-Performance Chain (TPC), in the sense that
it presumes that there must be a fit betweentask and technology and that the technology must be
utilized to maximize performance. However, this study extends this model in a number of ways.
First it builds on the basic structure of the TPC model by proposing IT resource investment
(Chatfield & Yetton, 2000; Li & Ye, 1999) and organization technology (Thompson, 1967;
Stabell & Fjeldstad, 1998; Afuah & Tucci, 2001) as predictors ofperformance. This study also
extends this research stream to organizational performance, rather than individual performance
and to Internet-based information technology, rather than EDI technology. After describing the
theoretical framework supporting the proposed model, this paper will test these relationships
with data from over 165 firms using Internet-based information technology to manage...