Business Use of the Internet: An Analytical Framework and Exploratory Case Study

Abstract:

While the Internet and the World Wide Web (WWW) appear to have gained fairly rapid acceptance, some key questions remain: What could be the underlying motivation for businesses to adopt and make use of the Internet? How can businesses effectively manage this technology and its use? What are likely to be the major organizational consequences from its use? This study offers a theoretical framework for analyzing the use of the Internet for business. Innovation-specific characteristics (the social and technological context) and organization-specific characteristics (organization boundaries, transaction cost economics, and organizational cognition) are proposed to be the determinants of business use of the Internet. Building on the model and propositions in the theoretical framework, this study presents the results and analysis of an exploratory case study, which finds preliminary support for the proposed model. This study is intended to spur future empirical research in this increasingly important area.

Key Words and Phrases:

• Innovation
• Internet
• intranet
• learning and absorptive capacity
• morphogenesis
• organizational boundaries
• population ecology model
• rational model
• transaction costs
• World Wide Web

Additional information

Notes on contributors

Anand Vadapalli

ANAND VADAPALU has more than seven years of industry experience in major multinational corporations operating in India, specializing in IT strategic planning, IT architecture and technology management, and project management and implementation. He received an undergraduate degree in mechanical engineering and an M.B.A. in India. He is currently pursuing his Ph.D. in information systems from the School of Business, University of Wisconsin–Milwaukee, and he works full-time in the telecommunications industry specializing in IT architecture and planning. His current research interests include IT planning, business value and role of IT, cross-functional teams and IT implementation management, IT architecture/infrastructure design and management, influence of IT on organization structural forms in global corporations, and electronic commerce on the Internet and the Web. His work has appeared in the proceedings of the Pacific Asia Conference on Information Systems held in Queensland, Australia, in 1997.

K. Ramamurthy

K. RAMAMURTHY is an associate professor of management information systems at the University of Wisconsin–Milwaukee. He received his bachelor’s degree in mechanical engineering and a graduate diploma in statistical quality control and operations research in India, an M.B.A. in Canada, and a Ph.D. in management information systems from the University of Pittsburgh. He has more than nineteen years of industry experience and has held several senior technical and executive positions. His current research interests include adoption, implementation, and diffusion of modern information technologies; strategic IS planning; electronic commerce, including interorganizational systems/EDI and the Internet; data resource management in distributed environments; decision systems for individual and group support; self-directed teams; business process reengineering; TQM; and management of computer integrated manufacturing technologies. He has published extensively in major journals including MIS Quarterly, Journal of Management Information Systems, Decision Sciences, European Journal of Information Systems, International Journal of Man–Machine Studies, IEEE Transactions on Engineering Management, International Journal of Production Research, Omega, Transportation Journal, and INFOR, and in a number of conference proceedings. He is a member of INFORMS, AIS, and the Beta Gamma and Sigma Honor Society.