E-business implementation and performance: analysis of mediating factors

Abstract

Purpose – The purpose of this paper is to examine the impact of e-business implementation (in terms of internal integration and external diffusion) on organizational performance through the mediating effects of differentiation, enterprise agility, customer relationship development and partner attraction. Design/methodology/approach – A survey of franchisors was conducted across the USA and Spain. Before running the model, the paper tests for measurement invariance across the two country samples. The paper uses structural equation modeling to test the conceptual model. Findings – The results of the measurement invariance suggest that all the constructs supported this characteristic, except for internal integration. External diffusion leads to differentiation, enterprise agility, relationship development and partner attraction for American and Spanish firms. However, internal integration has no impact on any outcome in the USA while, for Spanish firms, it has a positive and direct effect on economic performance. The full mediating role of non-financial performance between external diffusion and organizational performance depends on the country analyzed. While differentiation and relationship development fully mediate this relationship in the US sample, in the Spanish sample, the advantages of external diffusion are transferred through differentiation, enterprise agility and partner attraction. Practical implications –The paper suggests that franchise firms should not focus on the direct effect of e-business implementation on performance. Instead, franchisors should consider that its effect on performance is achieved through greater differentiation, relationship development, enterprise agility and partner attraction. So, the paper suggests that franchisors should think about the long-term effects of the advantages obtained from implementing e-business. Originality/value – This study contributes to IS research by identifying the link between internal integration and external diffusion and organizational performance through the examination of the mediating role of non-financial performance measures in two countries. Compared with previous research, the paper first analyzes measurement invariance across countries to provide unbiased results.