IT innovation in business organizations

: three studies on strategic and implementation issues

Abstract

While IT research has been a fertile ground in providing insights on the importance of developing IT in organizations, it remains relatively unclear how IT could strategically support organizations in their quest for innovation and how organizations could benefit from the implementation of IT services for such a quest. This dissertation, which consists of three empirical studies, aims to address these issues. The first study examines how organizations could innovate their business processes through IT capability. It first anchors on the organizational learning framework to theorize that an organization could gain competitive advantage through open innovation (consisting of inbound and outbound strategies) and management innovation. Next, the study theorizes that IT capability plays an important moderating role in the relationship between innovation strategy and competitive advantage. I validate my theorization using a set of matched-sample survey data that contain responses from executives of 112 Chinese companies (i.e., a survey jointly completed by a general manager, an operational manager, and an IT manager). The results revealed that although the influence of IT capability on the relationship between open innovation and management innovation was negligible, it reinforced the competitive consequences of management innovation. The results also showed that management innovation mediated the relationship between open innovation and competitive advantage. Essentially, the unique contribution of the first study is that the research provides new insights for how IT capability influences the fulfillment of organizational innovation. The second and third studies extend the first study by focusing on a specific exemplary case of IT innovation: live-chat. Live-chat is implemented by e-commerce organizations where this IT service innovation bridges two segments of users, namely the product buyers and product sellers. Live-chat, as an IT service innovation, satisfies the requirements of consumers by providing interpersonal communication service. The second study explores the antecedents and consequences of using Live-chat in e-commerce websites; while the third study further decomposes the usage process with the development of a kernel theory of communication. Specifically, the second study builds on the motivation-opportunity-ability framework and trust-oriented perspective to investigate the antecedents of using Live-chat and to extend understanding of one’s eventual intention to transact on the website. Survey data is collected from 222 online consumers to validate the proposed theoretical model. For antecedents, the results suggest perceived information asymmetry and fears of seller opportunism (i.e., motivation factor), existence of Live-chat function (i.e., opportunity factor), and perceived personal expertise (i.e., ability factor) significantly influence consumers’ usage of Live-chat. Using Live-chat enhances consumers’ perceived interactivity, which in turn improves their intention to transact. Interestingly, both of the relationships are weakened by consumers’ trust in the sellers. The third study further develops findings of the second study to investigate how implementation of Live-chat influences actual purchase conversion in online transactions. The usage of the IT service innovation is further decomposed to study how retailers can interpret a shopper’s purchase inclination based on his expression and how a response can be tailored to foster purchase conversion. The existing communication theories, including semantic, linguistic, and mentalist, are integrated into a kernel theory of Live-chat communication, namely the “Dialog Conversion Model,” which elucidates characteristics of online dialog between shoppers and retailers. A dataset consisting of 1,185 communication sessions and the consequent purchase records is developed to validate the theoretical model. The unique contribution of this study is that the results reveal that while cognitive expressions in live-chat messages could facilitate purchase, the impact of the affective expressions found in the same messages varies from retailers to shoppers. Post hoc interviews are conducted to triangulate my findings and gain additional insights. All in all, the entire thesis provides insights of how innovation can be created and how such innovation can be implemented and provided commercially (with insights on how innovation is supported in an IT-mediated communication arena).

Date of Award	2 Oct 2015
Original language	English
Awarding Institution	City University of Hong Kong
Supervisor	J Leon ZHAO (Supervisor)