Abstract
Purpose
Firms are adopting Web 2.0 technologies to improve collaboration, participation and communication; however there are few empirical studies testing the impact of this adoption. The purpose of this article is to analyze if there is a linkage amongst market orientation, Web 2.0 adoption and innovativeness.
Design/methodology/approach
Structural equation modeling was used to test the relationships amongst the variables. A sample of 244 firms of the hospitality industry was used. The theoretical approach is based on the market orientation and innovativeness, concepts, which have been studied by various authors in the literature.
Findings
A positive relationship was found between market orientation and Web 2.0 adoption and between Web 2.0 adoption and innovativeness.
Research limitations/implications
The study was developed in one industry, so in order to generalize the findings, additional testing in other industries should be developed. In addition a longitudinal study is encouraged.
Practical implications
Managers are advised to adopt Web 2.0 technologies to strengthen market orientation behaviors and innovativeness.
Originality/value
This article empirically tested the relationship between market orientation and Web 2.0 adoption and the impact of Web 2.0 adoption on innovativeness. Although some managers and researchers have reported some positive impacts of Web 2.0 on different aspects of the organization, there are still few empirical studies, and the authors contributed to fill this void.
Keywords
Citation
Palacios‐Marques, D., Zegarra Saldaña, A. and Enrique Vila, J. (2013), "What are the relationships among Web 2.0, market orientation and innovativeness?", Kybernetes, Vol. 42 No. 5, pp. 754-765. https://doi.org/10.1108/K-03-2013-0057
Publisher
:Emerald Group Publishing Limited
Copyright © 2013, Emerald Group Publishing Limited
Introduction
The relationship between market orientation and innovation has been previously studied by various authors (Baker and Sinkula, 1999; Han et al., 1998); however there are few authors that have included Web 2.0 adoption in this linkage.
Web 2.0 technologies have three distinctive characteristics: collaboration, participation and communication and they are being used by customers and firms for different purposes, such as: information gathering and sharing. Some authors mention that organizations are using Web 2.0 technologies to improve decision cycle times, organizational effectiveness and innovation (Lim et al., 2010). In this article we want to empirically analyze if the adoption of these technologies is related to market orientation and to innovativeness.
We believe that on one hand, Web 2.0 adoption might help the organization to generate and disseminate market intelligence and on the other hand, that they have the potential to increase firm's innovativeness by fostering knowledge creation and sharing.
Based on the above discussion the purpose of this article is to analyze if there is a linkage amongst market orientation, Web 2.0 adoption and innovativeness.
In order to fulfill the above purpose the article seeks the following objectives:
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analyze the relationship among the variables;
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test the correlations in the hospitality industry; and
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discuss the implications of the findings and suggest future lines of research.
Literature review
Market orientation
Market orientation can be viewed from different perspectives (Lafferty and Hult, 2001). Two of the most mentioned perspectives are market orientation as a philosophy and market orientation as a behavior (Cadogan and Diamantopoulos, 1995).
Narver and Slater (1990, p. 21) defines market orientation as “the organizational culture that most effectively and efficiently creates the necessary behaviors for the creation of superior value for buyers”.
Market orientation is composed of three behavioral components, customer orientation, competitor orientation and interfunctional coordination. Customer orientation refers to the continuous understanding of customers' needs. Competitor orientation is related to the understanding of the capabilities and strategies of competitors. Interfunctional coordination is the coordination of all business functions that use customer and other market information to create superior value.
For Kohli and Jaworski (1990) market orientation is composed of market intelligence generation, intelligence dissemination and responsiveness to intelligence. Market intelligence generation refers to the current and future needs of customers and exogenous factors that could affect them. Intelligence dissemination is the communication of the generated intelligence to relevant departments and individuals who can response upon it. Responsiveness can take two forms, response design and response implementation (Cadogan and Diamantopoulos, 1995).
The most common inquiry about market orientation since 2001 has been its relationship with performance. However, various authors affirm that this relationship is through innovation (Han et al., 1998) others that the relationship between market orientation and performance is strengthened by innovativeness.
Web 2.0 technologies
Some authors define Web 2.0 as the adoption of open technologies to facilitate participative computing. Others define it as a collection of open‐source, interactive and user controlled online applications (Constantinides and Fountain, 2008). The adoption of Web 2.0 technologies by organizations was coined as Enterprise 2.0 (McAfee, 2006). The distinctive characteristics of Web 2.0 technologies are participation, collaboration and communication (O'Reilly, 2005).
The technologies mostly used are blogs, wikis and Really Simple Syndication (RSS). Blogs are like personal diaries presented in a chronological order. Wikis are a more structured web site. RSS, permits users to receive updates from web sites (Levy, 2009).
According to the results of Andriole (2010) the areas in which managers believe Web 2.0 technologies would contribute the most include: knowledge management, training, communication, collaboration and innovation. Additionally Brynjolfsson and McAfee (2007) also believe that Web 2.0 have a great potential to positively influence innovation.
Innovativeness
In order to review the concept of innovativeness we need to start with the concept of innovation. Thompson (1965, p. 2) defines innovation as the generation, acceptance and implementation of new ideas, processes products and services. Other author defines innovation as the process to alter an established practice or objective O'Toole (1997, p. 116) and the Oslo manual argues that innovation is the introduction of a new or a significantly improved product, process, commercialization or organizational method. Finally, a more general definition, conceptualizes innovation as the production or adoption, assimilation and exploitation of a valued added novelty in social and economic spheres, renovation and enrichment of products, services and markets; the development of new production methods and the establishment of new management system (Crossan and Apaydin, 2010).
There are various classifications of innovations such as: incremental, radical, technological, administrative, product innovations, process innovations and market innovations. On the other hand, Gopalakrishnan and Damanpour (1997) elaborated a table distinguishing how economists, technologists and sociologist define innovation.
According to Crossan and Apaydin (2010) there are three groups of innovation's antecedents: external antecedents, context and organizational variables, individual and group determinants. Like innovation, innovativeness or the capacity to innovate (Subramanian, 1996) has various conceptualizations. For example, Hurley and Hult (1998) refer to innovativeness as the openness to new ideas as a part of the organizational culture.
In this article we will use the definition by Calantone et al. (2002) that conceptualize innovativeness from two perspectives. The first sees it as a behavioral variable that is, as the rate of innovation adoption and the second as the organizational will to change.
Theoretical relations
In this section we will establish the relationships amongst the variables. First, we will start discussing the relationship between market orientation and innovativeness. Then we will analyze the relation between market orientation and Web 2.0 technologies adoption, afterwards we will discuss the relationship between Web 2.0 adoption and innovativeness. Finally, we will formulate the hypotheses.
Market orientation and innovativeness
The relationship between market orientation and innovativeness have been studied by various authors (Johnson et al., 2009; Tajeddini et al., 2006; Hult et al., 2004; Han et al., 1998; Hurley and Hult, 1998). Some authors have tested the relationship using a general conceptualization of market orientation, and others have tested the three components of market orientation simultaneously.
For example, Johnson et al. (2009) confirmed that innovativeness partially mediate the market orientation‐to‐firm performance relationship. The results of Tajeddini et al. (2006) indicate that customer orientation, competition orientation and inter‐functional coordination are each antecedents to innovativeness. Other previous studies also provided empirical evidence that market orientation facilitates organization's innovativeness (Han et al., 1998).
Market orientation and Web 2.0 adoption
Previous studies establish that market orientation and internet are interrelated. In the past, firms have used internet to monitor environmental changes, acquire information and to develop business intelligence (Pawar and Sharda, 1997; Graef, 1996). For instance Prasad et al. (2001) has pointed out that internet‐marketing integration can enable the firm to obtain critical competitive intelligence. In addition Gray et al. (2000) found that the most highly market‐oriented service firms make greater use of new information technologies such as email and web, for business purposes.
Others authors have even developed a specific concept linking internet and market orientation, such as Min et al. (2002) whom developed the concept of internet‐mediated market orientation (IMO), which refers to internet‐mediated, information rich, agile and process of generating, disseminating and responding to market information on the internet.
According to the authors there are five IMO processes:
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The IMO process enables the interaction of a firm with its stakeholders, through the internet.
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The IMO process provides a focal firm with an opportunity to obtain up‐to‐date market intelligence instantly, easily, and cheaply.
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The IMO enables a focal firm to share information seamlessly without unnecessary transitions between online and offline activities.
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The IMO process allows a focal firm to acquire and utilize relevant information in a timely fashion.
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The IMO process allows a focal firm to “instantly” share information with its supply chain partners and consumers through internet technologies.
Since Web 2.0 technologies are easy to use, customers and employees are using them for different purposes. We believe that thanks to these characteristics customers are sharing on the web a lot of information about their experiences with products and services. Therefore, firms would tend to acquire that market intelligence using Web 2.0 technologies. Additionally it has been argued that internet blog narratives can be used to determine one firm's competitive position (Crotts et al., 2009). Finally, Web 2.0 has the potential to ease the dissemination of market intelligence within the firm.
Web 2.0 adoption and innovativeness
Web 2.0 technologies have the potential to influence information and knowledge sharing, key ingredients of organizational learning, knowledge management and innovativeness. Corso et al. (2001) mention that new information and communication technologies provide an easy and quick access to external sources of knowledge and a more intense communication channel with partner organizations. Furthermore, they argue that these technologies can erase the constraints of SMEs innovation. London and Hall (2011) point out that Web 2.0 has the potential to promote organizational learning, as well as to improve individual and team learning. They affirm that Web 2.0 technologies can support organizational learning by blending work and learning, facilitating cross‐functional and cross‐cultural differences and adopting changing technologies for doing business.
On the other hand, Patrick and Dotsika (2007) affirm that Web 2.0 facilitates knowledge sharing and the empirical evidence of Chen et al. (2010) confirm that knowledge sharing and knowledge creation are drivers of organizational innovativeness. In addition, Boateng et al. (2009) conceptualized the link between Web 2.0 and organization learning using Nonaka's SECI model of knowledge creation. They argued that Web 2.0 tools make knowledge more accessible and thereby facilitate organizational learning. The linkage between knowledge creation processes and Web 2.0 are:
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Socialization. Web 2.0 tools enable sharing and capturing of individual knowledge and create a space for interaction.
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Externalization. Web 2.0 allows multiple streams of externalization events through better diffusion of knowledge and a dynamic and instantaneous flow of information.
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Combination. Web 2.0 such as wikis, blogs and mashups facilitate integration of different bodies of explicit knowledge into one large accessible system.
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Internalization. Web 2.0 tools are communicative, generative and interactive, characteristics that enable internalization. These tools allow individuals to re experience what others have shared as explicit knowledge.
Based on the theoretical relations presented above the following hypotheses were formulated:
H1. The extent of a firm's market orientation is positively related to the adoption of Web 2.0 technologies.
H2. There is a positive relationship between the adoption of Web 2.0 technologies and innovativeness.
Measurement, data and sample
Market orientation measurement
We can use are several scales to measure the MO construct. Amongst the most used we have the MKTOR scale developed by Narver and Slater (1990), the MARKOR scale developed by Kohli et al. (1993) and the MORTN scale developed by Deshpandé and Farley (1998). We have used the ten items of the MORTN scale, measured on a seven‐point Likert scale (1 – strongly disagree and 7 – strongly agree).
The items are:
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M1: our business objectives are driven primarily by customer satisfaction.
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M2: we constantly monitor our level of commitment and orientation to serving customer needs.
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M3: we freely communicate information about our successful and unsuccessful customer experiences across all business functions.
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M4: our strategy for competitive advantage is based on our understanding of customers' needs.
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M5: we measure customer satisfaction systematically and frequently.
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M6: we have routine or regular measures of customer service.
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M7: we are more customer focused than our competitors.
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M8: I believe this business exists primarily to serve customers.
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M9: we poll end‐users at least once a year to assess the quality of our products and services.
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M10: data on customer satisfaction are disseminated at all levels in this business unit on a regular basis.
Web 2.0 adoption measurement
To measure the adoption of Web 2.0 we used the scale proposed by Prause et al. (2010). The scale is composed of eight items measured in a five‐point Likert scale, where 1 – never, 3 – sometimes, and 5 – always. The items are:
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W1: blogs are used to issue firm release or to spread ideas.
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W2: firm uses collaborative software to communicate with the rest of the employees.
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W3: firm uses an intranet for knowledge management.
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W4: the site of the firm allows users to introduce contents and express their necessities.
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W5: employees know suggestions that customers formulate.
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W6: the site of the firm has, apart from text, multimedia files to enable the interaction with the user.
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W7: firm develops practices so that employees share knowledge.
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W8: employees keep the know‐how of the processes in an electronic way.
Innovativeness measurement
There are different scales to measure organizational innovativeness. One of the first ones was developed by Hurt et al. (1977), another scale was developed by Subramanian (1996) which measures innovativeness through three dimensions: the average of the innovation adopted, the average time of innovation adoption and the time consistence of the innovations. The scale used to measure innovativeness in this article was the one of Calantone et al. (2002) which was drawn by other previous authors and that was well validated by subsequent studies. The scale is composed of six items measured on a seven point seven‐point Likert scale (1 – strongly disagree and 7 – strongly agree).
The items are:
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I1: our company frequently tries out new ideas.
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I2: our company seeks out new ways to do things.
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I3: our company is creative in its methods of operation.
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I4: our company is often the first to market with new products and services.
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I5: innovation in our company is perceived as too risky and is resisted.
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I6: our new product introduction has increased over the last five years.
Data and sample
Between January and July 2010, the questionnaire was sent to top managers of Spanish hospitality firms that provide their e‐mail addresses on the main Spanish tourism web pages. We received 255 questionnaires; however 11 were eliminated due to different reasons, leaving a total of 244. We obtain a sampling error of 6 percent for a confidence level of 95 percent.
We used EQS 5.7 to conduct the tests. We followed a two‐step approach for structural equation modeling, in which the estimation of a measurement model using confirmatory factor analysis (CFA) preceded the estimation of the structural model.
Results
First of all, we validate the measurement scales and then we test the theoretical hypothesis. We conducted a CFA on the entire set of measurement items. This step resulted in the elimination of four items. The factor loading magnitudes are presented in Table I.
All the estimated parameters are statistically significant at a 95 percent confidence level (t>1.96). The factor loading magnitudes are high and above the minimum required. The construct's scales presented high compound reliability of 0.86, 0.88 and 0.89 for MO and Web 2.0 and innovativeness, respectively.
Empirical testing of the hypotheses
Results of Table II confirm and adequate global fit, so we can consider the model an adequate representation of the causal relationship between the studied latent variables.
The absolute goodness fit indicators are excellent. The χ2 is significant and the incremental goodness fit indicators reached satisfactory levels, where BB NNFI is closed to 1, the incremental fit index is close to 1 and the RMSR is near zero. Finally the parsimonious goodness fit indicator NC is between 1 and 2.
The structural model adjustments implies and analysis of the significance of the estimated coefficients, since the equation coefficient is statistically significant (95 percent) and the reliability of structural equation is significant we can confirm that there is a positive and statistically significant relationship between MO and the adoption of Web 2.0 technologies (Table III).
For H2 results are presented in Table IV. The results confirm and adequate global fit, so we can consider the model an adequate representation of the causal relationship between the studied latent variables.
The absolute goodness fits are excellent. The χ2 is significant and the incremental goodness fit indicators are according to satisfactory levels, where BB NNFI is close to 1. The GFI index is above 0.9 and the parsimonious goodness fit indicator NC is between 1 and 2 (1.11).
The estimated parameter is statistically significant at a 95 percent confidence level (t=29.124≥1.96). Table V shows an adequate fit of the structural model; therefore, we could confirm a positive and statistically significant relationship between Web 2.0 technologies adoption and innovativeness.
Conclusions and future research
The purpose of this study was to analyze if there were a relationship between market orientation, innovativeness and the adoption of Web 2.0 technologies. To comply with our purpose we first reviewed the extant literature about the variables and then we theoretically established the linkage among them. Although there are many authors and articles related to the variables the comprehension of the impact of Web 2.0 technologies on different aspects of the organization is yet insufficient.
Based on the results of the structural equation technique, we found a positive relationship among market orientation, Web 2.0 adoption and innovativeness. These findings have various implications. First, many firms are adopting different Web 2.0 technologies to promote collaboration, participation and communication within the organization and with their customers without a clear understanding of their impact, we hope that this results could provide some direction to others that want to use Web 2.0.
On the other hand, previous studies have found that market orientation is related to performance; thanks to Web 2.0 a lot of information and market intelligence is being generated by customers, so managers could use Web 2.0 technologies to gather this intelligence about customers and competitors. In addition, it seems that Web 2.0 technologies have the potential to improve the creation and sharing of knowledge two important ingredients of innovativeness. Based on the results high Web 2.0 adopters have a higher degree of innovativeness, so managers should also take into account the adoption of these technologies to increase their capacity to innovate.
Some limitations should be acknowledged. The first is related to the use of a summary scale of market orientation. Although the scale measures the most significant aspects of market orientation we believe that the measurement of the dimensions of market orientation separately could provide additional insights. The second limitation is related to the single industry studied; in order to generalize the findings, additional industries should be studied in the future.
Future research should analyze other possible effects of Web 2.0 adoption on other aspects of the organization, for instance in knowledge management processes, namely in knowledge sharing. In addition, due to the collaboration and communication characteristics of Web 2.0, it will be interesting to analyze the effects of Web 2.0 technologies on cognitive processes, such as organizational learning. A second line of research should introduce longitudinal works, since we believe that there is a time gap between the adoption of Web 2.0 technologies and the results obtained.
About the authors
Daniel Palacios‐Marques is an Associate Professor of Management at the Technical University of Valencia, Spain. He has an MBA in Quality Management and Business Administration. He has published articles in journals such as Tourism Management, Annals of Tourism Research, Small Business Economics, Management Decision, International Journal of Technology Management, Cornell Quarterly Management, Services Industries Journal, Service Business, International Entrepreneurship and Management Journal, Journal of Knowledge Management, Journal of Intellectual Capital, International Journal of Innovation Management and International Journal of Contemporary Hospitality Management. He has been Editor of the book Connectivity and Knowledge Management in Virtual Organizations, Networking and Developing Interactive Communications. Full editor of JINBAM Journal (published by Kluwer/Springer). Editor‐in‐Chief of Global Business Perspectives. Daniel Palacios‐Marques is the corresponding author and can be contacted at: [email protected]
Alejandro Zegarra Saldaña is a PhD candidate at the Politechnic University of Valencia in Spain and currently he is a Professor at the Bolivian Private University and the student advisor of the undergraduate program in business administration. In addition, he is an international consultant; he has worked in various projects of the International Trade Centre in countries such as Bolivia, Uganda, Brazil and Peru.
Jose Enrique Vila is a Professor of the University of Valencia (Spain) and Research Fellow of the ERI‐CES. He has Master degree in mathematics and PhD in economics. He has published articles in journals such as Econometrica, Games and Economic Behavior, Economic Theory, International Entrepreneurship and Management Journal or Journal of Change Management. He is also General Secretary of INBAM for Asia and Member of the Editorial Advisory Board of Management Decision. Professor Vila also works as consultant for the European Commission, multilateral organizations such as World Bank or the General Secretary of the Andean Community and private companies such as France Telecom or Bayer.
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