Environmental Context

Environmental context refers to the external environment in which an organisation conducts its business, including other organisations it interacts with and the relevant standards and regulations (Teo et al., 2009; Tornatzky & Fleischer, 1990). The factors from the environmental context included in the model (see Figure 3-1) were partner readiness and external pressure.

3.4.3.1 H6: Partner Readiness

E-procurement functions are available only when both purchasing organisations and selling organisations implement the relevant technology and can use it effectively. The benefits of e-procurement can be realised by an organisation only if its partners are ready to engage in information exchanges or transactions via e-procurement. The view that partner readiness promotes the use of inter-organisational technologies is consistent with network effect theory (see section 2.6 for an introduction of the network effect theory). Prior studies (see, for example, Lin & Lin, 2008; Soares- Aguiar & Palma-dos-Reis, 2008; Zhu, Dong, Xu, et al., 2006) presented evidence suggesting that organisations are more likely to adopt and use inter-organisational information systems when their trading partners are ready to engage in using such systems. For instance, Zhu, Dong, Xu, et al. (2006), in the study introduced in section 3.4.1.2 (in conjunction with justifying hypothesis H2), found that partner readiness affected the extent of e-business use (as measured by the percentage of business transactions conducted online). Studies that presented evidence that partner

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readiness positively affect e-procurement adoption by organisations were discussed in section 2.7.7.3.

Trading partner readiness, in terms of supplier issues, was identified as a barrier to e- procurement use in descriptive studies of e-procurement, as discussed in detail in section 2.4.3.

The readiness of the organisation’s trading partners to engage in information

exchanges or transactions via e-procurement is likely to result in the organisation using a broader range of e-procurement forms and functionalities and in relying more

on e-procurement in the organisation’s core business processes. The following

hypotheses are, therefore, justified:

H6a: There is a positive relationship between partner readiness and the breadth of e-procurement use.

H6b: There is a positive relationship between partner readiness and the depth of e- procurement use.

3.4.3.2 H7: External Pressure

Organisations may adopt and use a technology to keep up with competing organisations (Joo & Kim, 2004). Moreover, external pressures to adopt and use technologies used inter-organisationally (such as e-procurement) may come from the

organisation’s partners. Iacovou, Benbasat, and Dexter (1995) argued that requests

from powerful partners to adopt and use a technology have more influence on organisations than similar requests from less powerful partners. The view that external pressure may promote technology adoption and use is consistent with institutional theory (see section 2.6 for an introduction of the institutional theory). Prior studies (see, for example, Chan & Ngai, 2007; Chong et al., 2009; Forman, 2005; Lin & Lin, 2008; Looi, 2005; Pearson & Grandon, 2005; Premkumar, 2003; Premkumar et al., 1997; Premkumar & Roberts, 1999; Soares-Aguiar & Palma-dos- Reis, 2008; Soliman & Janz, 2004; Teo et al., 2007; Teo et al., 2009; Wu et al., 2007; Xu et al., 2004; Zhu & Kraemer, 2005; Zhu, Dong, Xu, et al., 2006; Zhu, Kraemer,

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Gurbaxani, et al., 2006) presented evidence suggesting that organisations are more likely to adopt and use a technology when pressured by other organisations to do so. For instance, Xu et al. (2004), in a survey of companies in multiple industries in US and China, found that external pressures from competing organisations affected the extent of Internet use for e-business (as measured by the percentage of use of e- business functionalities). Studies that presented evidence that external pressure positively affects e-procurement adoption and the breadth of e-procurement use by organisations were discussed in section 2.7.7.3.

The external pressure on an organisation to use e-procurement to keep up with the

competing organisations or to maintain the relationships with the organisation’s

partners is likely to result in the organisation using a broader range of e-procurement

forms and functionalities and in relying more on e-procurement in the organisation’s

core business processes. The following hypotheses are, therefore, justified:

H7a: There is a positive relationship between external pressure and the breadth of e-procurement use.

H7b: There is a positive relationship between external pressure and the depth of e-procurement use.

3.5

Summary of the Chapter

This chapter presented the overall research model of my study. The model comprised the dependent variables, the breadth and the depth of e-procurement use, and the factors hypothesised to affect the dependent variables from technological (relative advantage, compatibility, and complexity), organisational (top management support and employee knowledge), and environmental contexts (partner readiness and external pressure). The main theoretical foundations for the model were DOI theory and TOE framework; moreover, the inclusion of individual factors was justified by considering the factors found to have effect in prior literature.

The content of the model constructs, the dependent variables and the factors, was discussed in detail, and the individual hypotheses were re-examined one by one and

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justified in view of the results of prior studies of technology adoption and use and in view of the relevant theories (DOI theory, RBV theory, network effect theory, institutional theory, and path dependency theory).

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