Organizational Factors
Innovation is depicted as a cultural element of an organization which should be instilled by managers in order to communicate to employees the organization’s mission, drive them to search for unique opportunities, ensure that those opportunities align with the organization’s strategic direction, and both define the measurements needed to evaluate the success of such opportunities and continually reassess them so as to ensure that they remain relevant and beneficial (Isidre & Jeef, 2010).
Innovation, by its nature, embraces change. However, embracing changes requires building a culture and associated organizational structures and processes that make innovation a daily way of life. Top management must address both the organizational- and individual-level risks associated with innovation (Coffman, 2011). The literature also supports the idea that innovative culture has a number of benefits for innovative performance, market orientation, and brand performance (O’Cass & Ngo, 2007), and enhance the innovative capability, quality, and efficiency of the firm (Miron, Erez, & Naveh, 2004). Further, an innovative culture facilitates senior management implementation of innovative strategies (Isidre & Jeef, 2010). Overall, it is one of the most important determinants of the organizational performance (O’Cass & Ngo, 2007). An innovation culture would thus be valuable for a firm implementing e-banking. Organizations having a history of continuous innovations are more likely to build an innovative culture (Coffman, 2011) and perceive and exploit the value of e-banking. While the idea of innovation culture is commonly applied to firms within high-technology industries (Isidre & Jeef, 2010), it may be useful in online banking as banks as well as their potential customers often have proved reluctant to innovate when adopting e-banking (Singer, Ross, & Avery, 2010).Coordination refers to matching available development services, support, or resources with the real needs of recipients through interaction among stakeholders. In the present study, coordination refers to the synchronization of a financial institution and its customers. The degree of coordination of financial institutions with other financial as well as non-financial institutions has changed significantly. It is becoming more salient for them as vertically coordinated ties are reportedly more effective responses to the uncertainties in rapidly changing environments (Buvik & John, 1999). Due to feasibility of the supplementary communication modality facilitated by e-banking, traditional relationship banking is undergoing transformation. Bank regulators are concerned that fierce competition among financial institutions is conducive to the buildup of banking system vulnerabilities. Improved coordination is referred as improved compatibility (Economides & White, 1994) that offers e-banking value due to corporate transaction flexibility. Therefore, corporate coordination with the supply chain members, especially customers, is salient because it creates value (Xu, Sun, & Hua, 2010). Each firm’s utility value is likely to increase as more firms opt for e-banking. The greater the coordination between the bank and firms, the greater the value of e-banking to the firms. Better coordination of a bank with firms is likely to deliver value to customers as well as employees by enhancing their operational performance.
Readiness is defined as an employee’s beliefs, thoughts, and behaviors that accept the needs and capability of an organization. It is known as a cognitive precursor to behaviors of either resistance or support (Shah & Irani, 2009). E-readiness is the level of preparedness pertaining to the ability of being able to exploit Internet technology for economic purposes through the rapid adoption of e-business (Jutla, Bodorik, & Dhaliwal, 2002).
The organizational context represents the factors internal to an organization. From the employee perspective, employee technology readiness is recognized as an organizational factors. Scupola (2009), using the TOE framework, treated “employee knowledge and attitude” as an organizational factor. The present study operationalizes employee knowledge and attitude as employee technology readiness. The attitude of employees towards technology, employee technological readiness, plays a significant role in organizational implementation of new technologies (Ho & Ko, 2008; Parasuraman, 2000). Employee readiness is an important and dominant factor for promoting effective and successful organizational change programs (Shah & Irani, 2009). Employees who are strong in both interpersonal skills and technology readiness are likely to be much more effective in tech-support roles (Jaafar, Aziz, Ramayah, & Saad, 2007). Employee misunderstandings of new technology can be very costly for business; not only in terms of time and money, but also in terms of customer relations and business reputation. Though, employee use of online content may lead to increased productivity for organizations, only when the integrity of information is maintained can employees make good decisions from the information aggregation (Jutla et al., 2002). Therefore, we hypothesize:H3: The higher the innovative organizational culture of a firm, the greater the online B2B banking value;
H4: The higher the coordination intensity a firm has with banks, the greater its online B2B banking value;
H5: The higher the employee technology readiness of a firm, the greater its online B2B banking value.