Contemporary Management Research: Vol. 1, No.1, September 2005 ISSN:1813-5498

Contemporary Management Research
Vol. 1, No.1, September 2005 ISSN:1813-5498
Contents
Consumer Complaining Behavior: The Case of a South American 3

Country, Chile
Fredy Valenzuela, David Pearson, Roger Epworth, Orlando Llanos, and Sonia
Vilches
Internet-Enabled Mobile Handheld Devices for Mobile Commerce 13

Wen-Chen Hu, Jyh-haw Yeh, Hung-Ju Chu, and Chung-wei Lee
Technological Innovativeness and Organizational Culture in Hong 35

Kong
Gary Y. F. Wong and Richard Y. K. Fung
How do Organizations Implement Downsizing? – An Australian 57

and New Zealand Study
Franco Gandolfi
The Role of Personality Traits in UTAUT Model Under Online 69

Stocking
Hsing-I Wang and Heng-Li Yang
Vol. 1, No.1, September 2005 ISSN:1813-5498
Publisher: Academy of Taiwan Information Systems Research
Editor: Wenchang Fang National Taipei University
“Contemporary Management Research” Editorial Board

Namjae Cho Hanyang University, Korea
Ergun Gide Central Queesland University, Australia
Wen-Chen Hu University of North Dakota, United Status
Ta-Wei Hung Shih Chien University, Taiwan
J.A.S.K. Jayakody University of Colombo, Sri Lanka
Nihat Kasap Sabanci University, Turkey
Hemant Kassean University of Mauritius, Mauritius
Yacov Kedem Shenkar College of Engineering and Design, Israel
Fumikatsu Kubo Chuo University, Japan
Yikuan Lee San Francisco State University, United States
Ting Lie Yuan Ze University, Taiwan
Jinsan Lin Nagoya Sangyo University, Japan
Xiaohua Lin University of Windsor, Canada
Iraj Mahdavi Mazandaran University of Science and Technology, Iran
Guillermo Rodriguez-Abitia ITESM Campus Estado de Mexico, Mexico
Beh Loo See University of Malaya, Malaysia
Ushio Sumita University of Tsukuba, Japan
Muhammad Suryanegara University of Indonesia, Indonesia
Chih-Chien Wang National Taipei University, Taiwan
Chian-Son Yu Shin Chien University, Taiwan
(Ranked by last names)
Editorial Assistant: Yi-Lei Chang
Editorial office: P. O. Box 179-45, Taipei City 116, Taiwan
Website: http://cmr.atisr.org
E-mail: cmr@atisr.org
Fax:+886-2-2517-5924
Pages 3-12,Vol.1, No.1, September 2005
Consumer Complaining Behavior: The Case of a South American

Country, Chile
Fredy Valenzuela
University of New England, Australia, and
University of Talca, Chile
E-mail: fvalenzu@une.edu.au.
David Pearson
University of New England, Australia
E-Mail: dpearson@une.edu.au
Roger Epworth
University of New England, Australia
E-Mail: repworth@une.edu.au
Orlando Llanos
Universidad Católica de la Santísima Concepción, Chile
E-Mail: ollanos@ucsc.cl
Sonia Vilches
Universidad Católica de la Santísima Concepción, Chile
E-Mail: svilches@ucsc.cl
ABSTRACT
Complaining behaviour is a topic that has not been studied much in South America.
Considering this, the aim of this investigation was to determine the customers complaining
behaviour of a South American country, Chile. To do so, a survey was done, which was applied
to a random sample of 498 Chileans. Results show that Chileans do not consider complaining as
a right, they have a regular opinion of the way companies are handling complaints, and that the
product characteristics is the dimension that has the biggest influence on their complaining
behaviour. In addition those Chilean consumers who have complained in the past have a more
positive attitude toward complaining than those who have never done it.
Key Words: Complaining, Consumer Behaviour, South America, Chile

Contemporary Management Research 4
INTRODUCTION
In an ideal world, when consumers are dissatisfied they would immediately speak up so
firms would have the opportunity to respond immediately by improving the quality of their
services. However, not many people complain, so firms do not know that they are incurring in a
service failure. Based on this, it is evident that failure in management is not necessarily through
having a high percentage of consumer complaints to deal with (Zairi, 2000), rather firms should
encourage consumers to speak up every time they are dissatisfied (Barlow and Moller, 1996:26).
One aspect in which there is consensus among researchers is the fact that not all consumers
engage in some of complaint action. In this line, Andreassen (2001) mentioned that the number
of consumers who complain is lower that of those who do not complain. Chakrapani (1998:12)
suggested that only 4% of dissatisfied consumers complain, and this is due to different reasons,
which are: a) consumers might not know to whom to complain, b) negative experiences related
to having their complaints handled poorly, and c) consumer belief that complaining is an
exercise in futility because they will be either ignored or patronized. In general, these reasons
can be categorized coming from two sources: company attitude toward responses to complaints
and consumer attitude toward complaining. The latter is the personal tendency of dissatisfied
costumers to seek compensation from the firm (Beardon and Mason, 1984).
Several studies have been done to cover different issues related to consumers complaining
behaviour however a very important issue that has not been addressed in the literature is the
situation of developing countries, and in particular South American countries. There are only few
studies that focus on consumer complaining behaviour, such as Valenzuela (1999) and
Valenzuela et al. (2002a; 2002b), but all them give only an overall picture of Chileans
complaining behaviour, covering aspects such as percentage of consumers who complain and
gender and social class differences. Due to this, firms in these countries have to use information
gathered in a totally different setting to make decisions as to the design mechanisms for
encouraging consumers to speak up every time they are dissatisfied with what have purchased.
Considering this, this study aims to gather information regarding Chilean consumers
complaining behaviour.
LITERATURE REVIEW
Barlow and Moller (1996:43) presented the results of study done by the Case Western
Reserve University, in which interviewed dissatisfied consumers fell into four clusters and were
identified as voicers (37%), passives (14%), irates (21%), and activists (28%). Voicers will tell
the company that something is wrong, passives will not say anything and will remain purchasing
from their suppliers at least for a while, irates will not say a word to the firms but they will
engage in negative word of mouth, and activists more than redress, they look for revenge.
Regarding the variables that influence consumers complaining behaviour, several studies
have shown that there is a relationship between complaining and demographic variables,
psychographic variables (e.g. consumer personality and attitude toward firms) and product
characteristics.
Demographic variables have been subject of attention and different conclusions have been
obtained by different researchers. For instance, Keng et al. (1995) and Heung and Lam (2003)
concluded that female consumers are more inclined to complain, while Manikas and Shea (1997)
findings show totally the opposite. Relative to the role of education, research has shown that
there is a direct relationship between level of education and complaining (Beardon and Mason,
1984; Day and Lando, 1977; Heug and Lam, 2003; Jacoby and Jaccard, 1981; Morganosky and
Buckely, 1986).
In relation to psychographic factors, such as personality and attitude, Davidow and Dacin
(1997) concluded that these factors are the major reasons of complaint behaviour. In the same
line, other researchers have concluded that consumers who complain are more social responsible
and willing to take risks such as the risk of embarrassment when complaining (Fornell and
Westbrook, 1979; Keng et al., 1995; Lau and Ng, 2001). If differences between complainers and
non-complainers are considered, non-complainers considered that complaining was done by
people with little else to do and it would be futile (Keng et al., 1995).
Concerning attitude toward firms, several researchers have concluded that there is a positive
relationship between responsiveness and complaining (Keng et al., 1995; Lau and Ng, 2001;
Richins and Verhage, 1985). Sometimes consumers are discouraged from speaking up by
negative complaint handling procedures, such as simple apologies and nothing more, rejection
(verbal or non verbal), promises that are not acted upon, no response at all, rude treatment, being
passed on to someone else, employees who avoiding personal responsibility or consumer
interviews that turn into interrogations (Barlow and Moller, 1996:59-61).
With regard to the relationship between product characteristics and complaining behaviour,
Day and Lando (1977) and Keng et al. (1995) concluded that is more likely for consumer to
complain if the product is not performing as promised and this situation can have a negative
impact on their image of the firm. It was also demonstrated that there is a direct relationship
between price and complaining behaviour, meaning that consumer will engage in complaining
behaviour if the product they are dealing with is more expensive.
METHODOLOGY
The main method used in this study was a survey. To do so, a questionnaire was designed,
which was in Spanish and had open-ended and close-ended questions. The first ones were used
to allow respondents to give a description of the situation that provoked the complaint. Close-
ended questions were used to gather data related to the Chilean consumers complaining
behaviour, which in this study was divided in four dimensions: a) Consumer Personality, b)
Consumer Social Responsibility, c) Product Characteristics, and d) Attitude toward firms. To
measure these dimensions, scale items used in other research were used, but with some small
modifications to adapt them to the Chilean context (Keng et al., 1995; Phau and Puspita Sari,
2004). These scale items were translated to Spanish by the researcher, and the translation was
checked by two Chilean Marketing Research Professors, so to ensure that the translation was
appropriate. Table 1 show examples of scale items used in this investigation.
Table 1 Example of Scales Items Used to Measure Consumer Attitude toward Complaining
Dimension Scale Item
Consumer Personality I find it embarrassing to complain
Consumer Social Responsibility Complaining about an unsatisfactory product is my duty
Product Characteristics The more frequently I have to use the product, the more likely I
am to complaint if it is faulty
Attitude Toward Firms Firms are usually willing to provide repairs for faulty products
Concerning sampling and because it is intended to get data related to complaint issues, it
was key to interview people who have had a bad purchase experience, this means, they have
been dissatisfied with what they bought. Due to this, the question ‘have you ever been
dissatisfied with the product/service you purchased?’ was included in the questionnaire, and all
people who answered ‘no’ were dropped from the study.
The exploratory research consisted in a survey that was applied to 498 Chileans. It also
important to mention that from those 498 consumers, 98 or 20% indicated that they have never
been dissatisfied with the product or service they got from a supplier. From the rest (n=400), 317
or 79% mentioned to have complained in the past (See Figure 1).
20% Satisfied
Total
Sample 79% Complainers
80%
Dissatisfied
Non-
21% Complainers
Figure 1 Sample Data Distribution
Regarding data analysis, several approaches were used in order to check validity and
reliability. First factor analysis was done using Varimax Rotation. To check reliability of each
factor Alfa Cronbachs were calculated. Then Confirmatory Factory analysis was done using
AMOS 5.0
MAIN FINDINGS
Main finding were divided into four: a) Complaints per Industry, b) Consumer Complaining
Behaviour Construct, c) Overall Results for each Consumers Complaining Behaviour
Dimension, and d) Influence of a Series of Variables on Consumers Complaining Behaviour
Complaints per Industry

As can be seen in Table 2, the industry that got most complaints was the department store
category with a 31.4% of all complaints followed by specialist stores with 30.5% of all
complaints, supermarkets 10.2%, telephone industry with 6.3%, and bank industry with 5.7%.
Table 2 Complaints per Industry Type

Industry Percentage
Department Store 31.4%
Specialist Store 30.5%
Supermarkets 10.2%
Telephone 6.3%
Banks 5.7%
Transport 3.8%
Others 12.1%
Regarding data analysis, this was divided into three types: 1) validity and reliability of the
construct “Consumer Complaining Behaviour”, 2) overall results for each dimension considered
in this study, and 3) Influence of several variables (e.g. gender, social class, city and complainer
or non complainer) on consumers complaining behaviour.
Consumer Complaining Behaviour Construct

Four factors resulted from factor analysis, each of them with three scale items. The lodging
values of the scales items in their respective factor went from 0.60 to 0.80. Regarding reliability,
Alfa Cronbachs were not very high ranging from 0.57 and 0.65. In relation to the total explained
variance this was only 59% (See Table 3).
Regarding the meaning of each factor, the first one represents the consumer’s personality
affecting complaining, the second one consumer’s social responsibility, the third one is related to
product characteristics affecting consumer complaining behaviour, and the last one to
consumer’s attitude toward the way firms handle complaints.
Table 3 Consumer Complaining Behaviour Construct: Factor Analysis

Consumer Consumer Social Product Attitude toward
personality Responsibility characteristics firms
Consumer Personality 1 0.61
Consumer Social Resp.1 0.80
Product Characteristics 1 0.75
Attitude toward firms 1 0.71
Reliability 0.57 0.59 0.65 0.64
Explained Variance 15% 14.6% 14.5% 14.2%
Accumulate Variance 15% 29.6% 44.3% 58.5%
To further validate these dimensions, confirmatory factor analysis was done, using the
software AMOS 5.0. The values of all goodness of fit indexes are very good (e.g. GFI, AGFI and
CFI are above 0.9 and RMSEA below 0.8) confirming the existence of a multidimensional
structure in the sample data. The values obtained in this analysis can be observed in Table 4
Table 4 Confirmatory Factor Analysis Goodness of Fit Indexes

Goodness of fit Index Value
GFI 0.96
AGFI 0.94
CFI 0.92
RMSEA 0.05 [0.039-0.068]
Chi-Square 102.114
Degree of Freedom 48
Chi-Square to Degree of Freedom ratio 2.12
Overall Results for each Consumers Complaining Behaviour Dimension

Regarding the four dimensions considered in this study, only one of them got a high mean,
two of them were in the average and one of them got a very low score (See Table 5). The
dimension ‘product characteristics’ got a high score, meaning that Chilean consumers
complaining behaviour depends on the characteristics of the product. If the product is considered
important for them it is very likely that they will complain. The dimension ‘attitude toward
firms’ got a regular score, meaning that Chilean consumer believe that Chilean companies do not
care for solving their complaints so it would be a wasted of time engage in a complaining
behaviour. The dimension ‘consumer personality’ got also a regular score, meaning that Chilean
consumers see themselves as passive people regarding complaining. Regarding the last
dimension, consumers’ social responsibility, this dimension got the lowest score, meaning that
Chilean do not see complaining as a right or/and as an obligation.
Table 5 Chilean Consumer Complaining Behaviour Means

Mean Standard Deviation
Product Characteristics 4.32 0.71
Consumers’ Personality 3.35 0.99
Attitude toward firms 3.30 0.97
Consumers’ Social Responsibility 2.33 0.89
Influence of a Series of Variables on Consumers Complaining Behaviour

In order to further understand the behaviour of Chilean consumers, several additional
analyses were done with the aim of comparing the attitude score obtained by different variables,
such as gender and type of complainer. The main findings are show next.
Gender Differences
The percentage of women and men who have complained to the supplier is very high,
78.4% and 80%, respectively. The difference between these two percentages is not statically
significant. It is important to mention that this result does not mean that every time that they are
dissatisfied these consumers have complained, it is just saying that they have done it at least
once.
Regarding the four dimensions considered in this study, the main results of this analysis can
be seen in Table 6. In this Table is very clear that there is almost no difference in the answers of
men and women. The only aspect that differs in the latter is the social responsibility aspect in
where men scored higher than women, meaning that they are much more social responsible than
women.
Table 6 Difference between Men and Women

Mean Difference Significance
Product Characteristics -0.109 0.131
Attitude toward firms -0.110 0.260
Social Class
To determine if there is any difference among social class, ANOVA analysis was done,
which shows no statistical difference among the attitude of consumers belonging to the low,
medium and upper class (see Table 7).
This conclusion was further supported by the fact that there is no statistical difference in the
percentages of consumers from upper, medium and low social classes who have complained at
least once in the past. These percentages are 81%, 77% and 83%, respectively.
Table 7 ANOVA for difference among Social Class

F Significance
Product Characteristics 0.787 0.456
Attitude toward firms 2.235 0.108
Complainers versus non Complainers

In order to determine if there is any difference in the attitude regarding complaining of
consumers who have complained in the past versus those who have never done it, mean
differences were calculated for each of the four dimensions of the consumer complaining
behavior. Results show statistical differences in the mean of three of the four dimensions, these
being consumers’ personality, consumers’ social responsibility and the influence of the product
characteristics. The only dimension that shows no significant difference is attitude toward firms,
meaning that complainers and non complainers have a similar perception regarding the attitude
that firms have for solving complaints. Table 8 shows the main results of this analysis.
Table 8 Difference between Complainers and Non-Complainers

Mean Difference Significance
Consumers’ Personality +1.005 0.000
Consumers’ Social Responsibility +0.340 0.001
Product Characteristics +0.411 0.000
Attitude toward firms +0.001 0.916
CONCLUSIONS
Several conclusions can be obtained from this study. The first one is the validity of the four
dimensions to measure consumers complaining behavior. In this study results of the
confirmatory factor analysis were excellent which further reaffirm the existence of this
multidimensional structure.
Regarding Chileans’ complaining behavior it was determined that there are several aspects
that are negatively influencing their behavior. It seems that Chilean are more likely to complain
when the product that is in involved in the complaint situation has attributes that are considered
important for the consumer, such as, high price, long-term expectancy life, or a product that they
use often.
In relation to the way firms are handling complaints Chilean consumers have a regular
opinion of the willingness of these firms for handling their complaints in a proper way. This
could imply that Chilean consumers may not be willing to speak up when they are dissatisfied
with the product, because they will consider it a waste of time and energy.
The other dimensions considered in this study consumer personality shows also a medium
score, meaning that Chilean feel some how embarrass when complaining, and if this
characteristics is added to the fact that Chilean do not consider complaining as a right or social
responsibility, it might lead to low rate of consumers complaints.
Relative to some variables that might influence the consumer complaining behavior, there is
evidence that gender and social class are not relevant in this matter, which is different from those
conclusions made in other research (Keng et al., 1995; Phau and Puspita, 2004).
The variable that shows a statistical difference in consumers complaining behavior is the
type of complainer. Active complainers have a more positive attitude while passive or non-
complainers have a more negative attitude toward complaining. This result is in line with what
was concluded by Chulmin et al. (2003) regarding that is more likely that consumers who have a
more positive attitude toward complaining will engage in such a behavior.
All these conclusions have very important managerial implications. Firms that want to
increase the number of consumers who complain when they are dissatisfied should:
a) Focus on consumers who are active complainers, who are not defined by gender of
social class. The reason for this is because it would be more likely to achieve a greater
impact from these consumers, because they have a positive attitude toward
complaining.
b) Have in place mechanisms for handling complaints otherwise the consumers will
increase their negative perception regarding the attitude that firms have to solve
complaints.
LIMITATIONS
The main limitation of this investigation is the ability to generalize its conclusions, mainly
because all data were gathered only in two Chilean cities, and hence there is the opportunity for
validation of its conclusions in other Chilean cities and other South American countries.
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Internet-Enabled Mobile Handheld Devices

for Mobile Commerce
Wen-Chen Hu
University of North Dakota
E-Mail: wenchen@cs.und.edu
Jyh-haw Yeh
Boise State University
E-Mail: jhyeh@cs.boisestate.edu
Hung-Ju Chu
University of Florida
E-Mail: hchu@cise.ufl.edu
Chung-wei Lee
Auburn University
E-Mail: chwlee@eng.auburn.edu
ABSTRACT
The emergence of wireless and mobile networks has made possible the introduction of
electronic commerce to a new application and research area: mobile commerce. Internet-enabled
mobile handheld devices are one of the core components of a mobile commerce system, making
it possible for mobile users to directly interact with mobile commerce applications. Much of a
mobile user’s first impression of the application will be formed by his or her interaction with the
device, therefore the success of mobile commerce applications is greatly dependent on how easy
they are to use. This article first explains the role of handheld devices in mobile commerce
systems and then discusses the devices in detail. A mobile handheld device includes six major
components: i) a mobile operating system, ii) a mobile central processor unit, iii) a
microbrowser, iv) input/output devices, v) a memory, and vi) batteries. Each component is
described in detail and major products and technologies for the component are given. The
technology needed for synchronization with desktop PCs and various mobile commerce
applications is also presented.
Key words: Mobile Commerce, Internet
INTRODUCTION
With the introduction of the World Wide Web, electronic commerce has revolutionized
traditional commerce and boosted sales and exchanges of merchandise and information.
Recently, the emergence of wireless and mobile networks has made possible the extension of
electronic commerce to a new application and research area: mobile commerce, which is defined
as the exchange or buying and selling of commodities, services, or information on the Internet
through the use of mobile handheld devices. In just a few years, mobile commerce has emerged
from nowhere to become the hottest new trend in business transactions. Despite a weak
economy, the future of mobile commerce is bright according to the latest predictions:
Figure 1 Forecast of demand for mobile handheld computing devices
• Figure 1 shows the growth in demand for handheld computing devices (not including smart
cellular phones) through 2007, as predicted by the research firm In-Stat/MDR
(PalmInfocenter.com, 2003).
• It is estimated that 50 million wireless phone users in the United States will use their
handheld devices to authorize payment for premium content and physical goods at some
point during the year 2006. This represents 17 percent of the projected total population and
26 percent of all wireless users (Reuters, 2001).
• Mobile commerce is an effective and convenient way of delivering electronic commerce to
consumers from anywhere and at any time. Realizing the advantages to be gained from
mobile commerce, companies have begun to offer mobile commerce options for their
customers in addition to the electronic commerce they already provide (The Yankee Group,
2002).
A mobile commerce system involves a variety of components, among which mobile

handheld devices feature largely as they provide the equipment mobile users need to interact
with mobile commerce applications. Therefore, much of a mobile user’s first impression of the
application comes from how easy the devices are to use. The success of mobile commerce
applications is thus greatly dependent on the devices. This paper discusses mobile handheld
devices and their role in mobile commerce. A handheld device includes six major components: i)
a mobile operating system, ii) a mobile central processing unit, iii) a microbrowser, iv)
input/output devices, v) a memory, and vi) batteries. The six components, along with
synchronization with desktop PCs and peripherals, are described in detail and their related
technologies and products are introduced. Mobile commerce applications are also discussed.
Requirements of a Mobile Handheld Device

It is first necessary to examine which of features a handheld device is expected to have in
order to conduct effective and efficient mobile commerce transactions and the challenges that
must be overcome in the process of developing new mobile handheld devices. The requirements
for a mobile handheld device are:
• It should be small enough to be held in one hand.
• Input methods must be easy to use and learn.
• The screen must be large enough for mobile users to read the contents effortlessly and use the
stylus without difficulty.
• Processors should be powerful enough to process users’ requests with short latencies, while
at the same time consuming less power to lengthen the battery life.
• Maximum interoperability is desirable because many technologies are now available for
handheld devices and new techniques are constantly being introduced.
• The memory must be large enough for most mobile commerce applications.
• Battery life must be sufficient for operations lasting several hours before the batteries need to
be recharged.
• Synchronization with desktop PCs or peripherals should be convenient and easy.
MOBILE COMMERCE SYSTEMS

Internet-enabled mobile handheld devices play a crucial role in mobile commerce, as they
are the devices with which mobile users interact directly with mobile commerce applications.
This section first introduces a mobile commerce system and then illustrates how it is used to
carry out a mobile transaction.
System Structure
A mobile commerce system is inherently interdisciplinary and could be implemented in various
ways. Figure 2 shows the structure of a mobile commerce system and a typical example of such
a system (Hu, Lee, & Yeh, 2003). The system structure includes six components: i) mobile
commerce applications, ii) mobile handheld devices, iii) mobile middleware, iv) wireless
networks, v) wired networks, and vi) host computers.
1. Mobile commerce applications: Electronic commerce applications are numerous, including
auctions, banking, marketplaces and exchanges, news, recruiting, and retailing, to name but a
few. Mobile commerce applications not only cover the electronic commerce applications,
but also include new applications, which can be performed at any time and from anywhere by
using mobile computing technology, for example, mobile inventory tracking.
2. Mobile handheld devices: An Internet-enabled mobile handheld device is a small general-
purpose, programmable, battery-powered computer that is capable of handling the front end
of mobile commerce applications and can be operated comfortably while being held in one
hand. It is the device with which mobile users interact directly with mobile commerce
applications.
3. Mobile middleware: The term middleware refers to the software layer between the operating
system and the distributed applications that interact via the networks. The primary mission
of a middleware layer is to hide the underlying networked environment's complexity by
insulating applications from explicit protocols that handle disjoint memories, data replication,
network faults, and parallelism (Geihs, 2001). The major task of mobile middleware is to
seamlessly and transparently map Internet contents to mobile stations that support a wide
variety of operating systems, markup languages, microbrowsers, and protocols. WAP and i-
mode are the two major kinds of mobile middleware. According to an article in
Eurotechnology.com (Eurotechnology Japan K. K., 2002), 60 percent of the world’s wireless
Internet users use i-mode (NTT DoCoMo, n.d.), 39 percent use WAP (Wireless Application
Protocol Forum Ltd., n.d.), and 1 percent use Palm middleware. Table 1 compares i-mode
and WAP.
4. Wireless and wired networks: Wireless communication capability supports mobility for end
users in mobile commerce systems. Wireless LAN, MAN, and WAN are the major
components used to provide radio communication channels so that mobile service is possible.
In the WLAN category, the Wi-Fi standard with 11 Mbps throughput dominates the current
market. However, it is expected that standards with much higher transmission speeds, such
as IEEE 802.11a and 802.11g, will replace Wi-Fi in the near future. Compared to WLANs,
cellular systems can provide longer transmission distances and greater radio coverage, but
suffer from the drawback of much lower bandwidth (less than 1 Mbps). In the latest trend for
cellular systems, 3G standards supporting wireless multimedia and high-bandwidth services
are beginning to be deployed.
5. Host computers: A user request such as database access or updating is actually processed at
a host computer, which contains three major kinds of software: i) Web servers, ii) database
servers, and iii) application programs and support software.
Table 1 Comparisons of the two major types of mobile middleware

WAP i-mode
Developer WAP Forum NTT DoCoMo
Function A protocol A complete mobile Internet service
WML (Wireless Markup
Host Language CHTML (Compact HTML)
Language)
Major Technology WAP Gateway TCP/IP modifications
Key Features Widely adopted and flexible Highest number of users and easy to use
Users Users
MC applications User interface
Mobile devices Internet-enabled PDAs
Mobile middlew are WAP
Wireless netw orks Wireless LAN
Wired netw orks Wired LAN/WAN
Host computers Host computers

Web servers MC application programs
Database servers
Databases
Databases association
bidirectional data/control flow
optional component
An MC System Structure A Typical Implemention
Figure 2 A mobile commerce system structure
An Example of Mobile Commerce Transaction Processing

To explain how the mobile commerce components work together, Figure 3 shows a
flowchart of how a user request is processed by the components in a mobile commerce system,
along with brief descriptions of how each component processes the request.
Figure 3 A flowchart of a user request processed in a mobile commerce system
1. Mobile commerce applications: A content provider implements an application by providing

two sets of programs: client-side programs, such as user interfaces on microbrowsers, and
server-side programs, such as database access and updating.
2. Mobile handheld devices: Handheld devices present user interfaces to the mobile end users,
who specify their requests on the interfaces. The devices then relay the user requests to the
other components and later display the processing results using the interfaces.
3. Mobile middleware: The major purpose of mobile middleware is to seamlessly and
transparently map Internet contents to mobile stations that support a wide variety of
operating systems, markup languages, microbrowsers, and protocols. Most mobile
middleware also encrypts the communication in order to provide some level of security for
transactions.
4. Wireless networks: Mobile commerce is possible mainly because of the availability of
wireless networks. User requests are delivered to either the closest wireless access point (in a
wireless local area network environment) or a base station (in a cellular network
environment).
5. Wired networks: This component is optional for a mobile commerce system. However,
most computers (servers) usually reside on wired networks such as the Internet, so user
requests are routed to these servers using transport and/or security mechanisms provided by
wired networks.
6. Host computers: Host computers process and store all the information needed for mobile
commerce applications, and most application programs can be found here. They include
three major components: Web servers, database servers, and application programs and
support software.
MOBILE HANDHELD DEVICES

Mobile users interact with mobile commerce applications by using small wireless Internet-
enabled devices, which come with several aliases such as handhelds, palms, PDAs, pocket PCs,
and smart phones. To avoid any ambiguity, a general term, mobile handheld devices, is used in
this article. Mobile handheld devices are small general-purpose, programmable, battery-powered
computers, but they are different from desktop PCs or notebooks due to the following special
features:
• Limited network bandwidth,
• Small screen/body size, and
• Mobility.
Short battery life and limited memory, processing power, and functionality are additional
features, but these problems are gradually being solved as the technologies improve and new
methods are constantly being introduced. The limited network bandwidth prevents the display of
most multimedia on a microbrowser. Though the Wi-Fi and 3G networks go some way toward
addressing this problem, the wireless bandwidth is always far below the bandwidth of wired
networks. The small screen/body size restricts most handheld devices to using a stylus for input.
Figure 4 shows a typical system structure for handheld devices, which includes the following six
major components: i) a mobile operating system, ii) a mobile central processing unit, iii) a
microbrowser, iv) input/output devices, v) a memory, and vi) batteries. Brief descriptions of all
the components follow, with more details in the next sections.
Data
Mobile I/O devices Wireless adapter
users
Instructions
I/O bus
System Memory
bus bus
Mobile CPU I/O bridge Memory
Mobile OS Microbrowser Batteries
Figure 4 System structure of mobile handheld devices
1. Mobile operating systems: They are the core software of handheld devices. Mobile
operating systems are different from those in desktop computers as they include the
following additional features: i) power management to prolong the battery life, ii) real-time
capability for time-critical operations such as voice communication, and iii) wireless
infrastructure for wireless communication.
2. Mobile central processing units: Mobile CPUs are the core hardware of mobile handheld
devices and the performance and functionality of the devices are heavily dependent on the
capabilities of the processors.
3. Microbrowsers: Microbrowsers are Internet browsers specifically designed for use in mobile
handheld devices. They differ from desktop browsers in several ways, specifically the
languages they use, security, footprint, and smaller windows. The last feature, smaller
windows, enables them to provide simplified interfaces, although it also eliminates much of
the desktop browser's multimedia functionality, such as streaming -audio and -video support.
4. Input/output devices: There is only one major output device, the screen, but there are several
popular input devices, in particular keyboards and touch screens/writing areas that require the
use of a stylus.
5. Memory: Three types of memory are usually employed by handheld devices: i) random
access memory, ii) read-only memory, and iii) flash memory.
6. Batteries: Rechargeable Lithium Ion batteries are the most common batteries used by
handheld devices.
Major Devices
Mobile handheld devices are usually divided into two types:
Figure 5 Sony Ericsson® P800
• Smart cellular phones: They are voice-based devices

with data-processing capability. An example is the
Sony Ericsson P800, shown in Figure 5, which is
basically a cellular phone with a built-in camera,
speakerphone, Bluetooth and IR connectivity,
wireless e-mail and Internet access, and MP3 audio
and MPEG-4 video capability. It can be
synchronized with Microsoft Outlook via the included
USB docking station.
• PDAs (Personal Digital Assistants): In contrast to Figure 6 Palm® Tungsten C

smart cellular phones these are data-based devices,
although they usually also have voice capability.
Advanced PDAs provide the functions of
telephone/fax, e-mails, PIM (personal information
managers) such as calendars and address books, and
networking features. A typical example is the Palm
Tungsten C, shown in Figure 6, which includes
features such as built-in Wi-Fi, an integrated
keyboard, email and Internet access, a transflective
screen, and a 400 MHz processor.
These two kinds of devices started out as very different products, but they have gradually
blended into each other. In the near future, it will be difficult to tell the difference between these
two types of device. The newest products such as tablet PCs belong to the category of PDAs
because both have similar functionality.
There are numerous mobile devices available in the market today. Table 2 lists some major
mobile device specifications, although several table entries are incomplete as some of the
information is classified as confidential due to business considerations.
Table 2 Specifications of some major mobile handheld devices

Vendor & Operating Installed Input Key
Processor
Device System RAM/ROM Methods Features
206 MHz Intel
Compaq iPAQ MS Pocket Wireless
StrongARM 32-bit 64 MB/32 MB Touchscreen
H3870 PC 2002 email/Internet
RISC
Handspring Palm OS 33 MHz Motorola Keyboard/
16 MB/8 MB CDMA network
Treo 300 3.5.2H Dragonball VZ Stylus
Motorola Wisdom 33 MHz Motorola
8 MB/4 MB Keyboard GPRS network
Accompli 009 OS 5.0 Dragonball VZ
Nokia 9290 Symbian
32-bit ARM9 RISC 16 MB/8 MB Keyboard WAP
Communicator OS
Innovative
Nokia 6800 Series 40 Keyboard keyboard
integration
Palm OS 33 MHz Motorola Wireless
Palm i705 8 MB/4 MB Stylus
4.1 Dragonball VZ Email/Internet
66MHz Motorola Touchscreen/
Samsung SPH- Palm OS
Dragonball Super 16 MB/8 MB Color screen
i330 4.1 Stylus
VZ
66 MHz Motorola Keyboard/
Sony Clie PEG- Palm OS
Dragonball Super 16 MB/8 MB Stylus/ Multimedia
NR70V 4.1
VZ Touchscreen
Multimedia
Sony Ericsson
800KB Keyboard Messaging
T68i
Service
MS Pocket 400 MHz Intel Stylus/ Wireless
Toshiba E740 64 MB/32 MB
PC 2002 PXA250 Touchscreen Internet
MOBILE OPERATING SYSTEMS

Simply adapting desktop operating systems for mobile handheld devices has proved to be a
futile endeavor; an example of this effort is Microsoft Windows CE. A mobile operating system
needs a new architecture and different features in order to provide adequate services for handheld
devices. This section presents a mobile operating system structure and discusses some major
systems.
System Structure
Several mobile operating systems are already available and each employs a different
architecture and implementation. Figure 7 shows a generalized mobile operating system
structure, which can be visualized as a six-layer stack:
1.
Applications
2.
Graphical user interface (GUI)
3.
Application programming interface (API) framework
4.
Multimedia Communication infrastructure Security
5.
Computer kernel Power management Real-time kernel
6.
Hardware controller
Figure 7 A generalized mobile operating system structure
1. Mobile applications: This level refers to customer-level applications such as microbrowsers

and mobile retailing. Details of various mobile applications will be given in a later section.
2. Graphical user interface (GUI): Applications use the API to display information on the GUI,
which is more limited in a mobile operating system than the GUI in a desktop OS.
3. Application programming interface (API) framework: This level provides the framework
between the low-level architecture components and the application layer. By using this
framework, application developers do not need to know the underlying low-level details in
order to take full advantage of their capabilities.
4. This level consists of three components:
• Multimedia: Widely adopting multimedia is one of the reasons for the success of
electronic commerce. The same can be applied to mobile commerce, in particular more
and more smart cellular phones are equipped with cameras. This module involves
image/video related functionality, audio recording and play back, etc.
• Communication infrastructure: Wireless and mobile networks make a crucial difference
between mobile commerce and electronic commerce. This module may contain wide-
area networking stacks including TCP/IP and WAP, personal area networking stacks
including infrared (IrDA), Bluetooth, and USB, abstract API for cellular standards, and
GSM and CDMA circuit-switched voice and data and packet-based data.
• Security: Security in mobile commerce is more vulnerable than in electronic commerce
generally since mobile commerce communication is through wireless and mobile
networks, which are more exposed to attacks. Mobile commerce security involves a
wide variety of technologies, including authentication, cryptography, secure
communications, secure mobile payment methods, etc.
5. The 5th level also consists of three components:
• Computer kernel: This is the central module of an operating system and it provides all
the essential services required by the other parts of the operating system and applications.
For example, it is responsible for resource allocation, low-level hardware interfaces, and
process and task management, etc.
• Power management: Battery life is short. This component manages the power
consumption to prolong the battery life.
• Real-time kernel: This component is not required for desktop PCs because they can
usually take a few seconds, or even minutes, to react. Mobile handheld devices need
real-time responses for some time-critical applications such as voice communication.
6. The bottom level is the hardware controller. The hardware includes displays and memory.
It is expected that hard disks will be added to the list in the near future.
Major Systems
Although a wide range of mobile handheld devices are available in the market, the
operating systems, the hub of the devices, are dominated by just three major organizations. The
following two lists show the operating systems used in the top three brands of smart cellular
phones and PDAs in descending order of market share:
• Smart cellular phones: Microsoft Smartphone 2002, Palm OS 5, and Symbian OS 7. (Vaughan-
Nichols, 2003)
• PDAs: Palm OS 5, Microsoft Pocket PC 2002, and Symbian OS 7. (PCTechGuide, 2003)
The market share is changing frequently and claims concerning the share vary enormously.
It is almost impossible to predict which will be the ultimate winner in the battle of mobile
operating systems. The following four sub-sections briefly describe the above four systems in
turn.
Palm OS
Palm OS (Palm Source, Inc., 2003) runs on almost two out of every three PDAs. Its
popularity can be attributed to its many advantages, such as its long battery life, support for a
wide variety of wireless standards, and the abundant software available. The plain design of the
Palm OS has resulted in a long battery life, approximately twice that of its rivals. It supports
many important wireless standards, including Bluetooth and 802.11b local wireless and GSM,
Mobitex, and CDMA wide-area wireless networks. The type of software often used on PCs is
gradually becoming available for Palm OS such as spreadsheets, databases, document processors,
messaging programs, and multimedia tools. To offset the increasing challenge from Pocket PC
2002, Palm introduced Palm OS 5, which runs an ARM processor, has a high-resolution
(320×320) color screen, 16 MB of memory, and built in voice recorder, directional pad, built-in
Bluetooth and media playback capability (MP3/OGG/WAV), and is complete with a speaker and
headphone jack.
Microsoft Smartphone
The Smartphone (Microsoft Corp., 2003b) functions include: voice, SMS, and instant
messaging services; email that can be received from sources such as the Outlook messaging and
collaboration client, Exchange, IMAP, and POP3 services; and personal information
management (PIM) applications such as calendar and contacts. The Smartphone 2002 platform
is based on the Microsoft Windows CE 3.0 operating system, and contains many of the same
core applications that are available on Pocket PC-based computing devices, including email, PIM
tools, and Pocket Internet Explorer Web software. The primary Smartphone architecture consists
of four layers:
• Applications/UI: The top level refers to the Smartphone shell and customer-level
applications such as Pocket Internet Explorer, the Inbox, the control panel, and the phone
dialer.
• Logic: This level contains system application logic that can be used by the application layer.
Examples of this include the control of network connections and synchronization capabilities.
• Core APIs: This level provides the interfaces between the low-level architecture components
(Operating System, Smartphone software, and radio stack) and the application/logic layers.
• Radio Stack: The bottom level refers, in general, to the architectural components responsible
for voice and data control and data transmission.
Microsoft Pocket PC
In 1996, Microsoft launched Windows CE, a version of the Microsoft Windows operating
system designed specially for a variety of embedded products, including mobile stations.
However, it was not well received primarily because of battery-hungry hardware and limited
functionality, possibly due to the way that Windows CE was adapted for mobile stations from
other Microsoft 32-bit desktop operating systems. To compete with Palm OS, Microsoft later
introduced Pocket PC (Microsoft Corp., 2003a), which was designed with better service for
mobile users in mind and offers far more computing power than Windows CE. Moreover, the
latest version introduces support for Bluetooth, IEEE 802.11b, and mobile phone technologies
such as CDPD, CDMA, and GSM, and allows access to corporate information via a number of
connectivity options, including VPN, WAN, LAN, and PANs.
Symbian OS
EPOC16 from Psion Software is a 16-bit version of an operating system that has been
available for several years and is embedded in many mobile stations; EPOC32 is a 32-bit open
operating system that supports preemptive multitasking. In mid-1998, Psion joined forces with
Ericsson, Nokia, and Motorola to form a new joint venture called Symbian OS (Dixon, 2003),
with the aim of establishing EPOC as the de facto operating system for mobile stations. Unlike
Windows CE, it was planned from the beginning to be a full operating system of mobile stations.
It includes the following key features: integrated multimode mobile telephony, an open
application environment, multi-tasking, multimedia, and data synchronization.
MOBILE CENTRAL PROCESSING UNITS

The core hardware in mobile handheld devices is the mobile processors, and the
performance and functionality of the devices are largely dependent on the capabilities of the
processors. There used to be several brands available, but recently mobile processors designed
by ARM Ltd. have begun to dominate the market.
Requirements of a Mobile CPU

Handheld devices are becoming more sophisticated and efficient every day and mobile
users are demanding more functionality from the devices. For example, in 2002 In-Stat/MDR
predicted that worldwide mobile Internet access device unit shipments would increase from
approximately 430 million that year to approximately 760 million in 2006 (In-Stat/MDR, 2002).
To achieve this advanced functionality, in addition to the obvious feature, low cost, today’s
mobile processors must have the following features:
• High performance: The clock rate must be higher than the typical 30 MHz for Palm OS
PDAs, 80 MHz for cellular phones, and 200 MHz for devices that run Microsoft’s Pocket PC.
• Low power consumption: This prolongs battery life and prevents heat buildup in handheld
devices that lack the space for fans or other cooling mechanisms.
• Multimedia capability: Audio/image/video applications are recurring themes in mobile
commerce.
• Real-time capability: This feature is particularly important for time-critical applications such
as voice communication.
ARM Processors
A few mobile processors such as Motorola Dragonball and Intel Pentium M were designed,
manufactured, and sold by chip-making companies such as Motorola, Intel, and Texas
Instruments. Now, however, the cores and architectures designed by Cambridge-based ARM
Holdings Ltd. have begun to dominate the market. ARM is the industry's leading provider of
16/32-bit embedded RISC microprocessor solutions. The company does not actually produce
chips, but instead licenses its RISC processors, peripherals, and system-chip designs to
electronics companies. ARM's microprocessor cores specifically address the needs of advanced
operating systems, real-time, and multimedia applications.
Figure 8 ARM11 microarchitecture, © 2003 ARM, Ltd. Reprinted with permission
Figure 8 shows the ARM11 pipeline structure. This is the first implementation of the
ARMv6 instruction set architecture (ISA), and was developed specifically with the needs of
next-generation consumer, wireless, networking, automotive products, and consumer-
entertainment applications in mind (Cormie, 2003). The ARM11 microarchitecture targets a
330-400 MHz worst case on 0.13µm foundry processes, delivering 400 to 500 Dhrystone MIPS.
The ARM11 microarchitecture was designed to meet the low power requirement of battery-
powered and high-density embedded applications, consuming less than 0.4mW/MHz on 0.13µm
foundry processes. In addition to supporting 32-bit ARMv6 ISA, it has the following features:
• Supporting Thumb 16-bit instruction set,
• ARM DSP extensions,
• SIMD (Single Instruction Multiple Data) media processing extensions deliver up to 2×
performance for audio and video processing,
• Better power/performance trade-off (0.4mW/MHz in 0.13µm),
• An 8-stage integer pipeline improving performance,
• Separate load-store and arithmetic pipelines,
• A 64-bit memory system speeding data access,
• Speedy interrupt response and real-time performance, and
• Vector Floating Point coprocessor for automotive controls and 3D graphics acceleration.
MICROBROWSERS
Microbrowsers are a miniaturized version of desktop browsers such as Netscape
Navigatorsand Microsoft Internet Explorers. They provide graphical user interfaces that enable
mobile users to interact with mobile commerce applications.
Features
Due to the limited resources of handheld devices, microbrowsers differ from traditional
desktop browsers in the following ways:
• smaller windows,
• smaller footprints, and
• fewer functions and multimedia features.
Several microbrowsers, such as Microsoft Mobile Explorer and Wapaka Java Micro-
Browser, are already available. America Online, Inc., the parent company of the Netscape
Network, and Nokia are developing and marketing a Netscape-branded version of Nokia's WAP
microbrowser, with AOL enhanced features, for use across a wide variety of mobile handheld
devices. Figure 9 shows a typical microbrowser, a Mobile Browser version 7.0 from Openwave
Systems, which includes the following features: compatibility with WAP or i-mode, multimedia
support, color images and animation, and dual network stack, HTTP and WSP, support
(Openwave Systems Inc., 2003).
Figure 9 Openwave® Mobile Browser version 7
Technologies
Several markup languages are used to present mobile contents on microbrowsers. These
may not be able to handle all the languages currently used, therefore certain contents may not be
displayed by some microbrowsers. Microbrowsers usually take the following four approaches,
as shown in Figure 10, to display mobile contents (Lawton, 2001):
1. Wireless language direct access: A microbrowser supports some kinds of wireless languages,
such as WML, CHTML, and XML, and directly displays the contents written in a wireless
language supported by that microbrowser.
2. HTML direct access: This approach displays the HTML contents directly with, no
intervention, but it may distort the contents. For example, large images can not be displayed
on the small screens of microbrowsers.
3. HTML to wireless language conversion: Some mobile middleware provides conversion
software to convert an HTML script to a script of the wireless language supported by that
microbrowser. For example, i-mode includes a Corporate Conversion Server that converts
existing HTML files into i-mode-compatible HTML, the CHTML.
4. Error: If the microbrowsers are not able to handle the contents, they simply display an error
code such as “Invalid WML code.”
Some microbrowsers, like most desktop browsers, can automatically send and receive
information via cache, which is known as Web caching (Davison, 2001). Web caching has
significant advantages such as reduced bandwidth consumption, server load, and latency.
Together, the advantages make the Web less expensive and improve its performance.
Microbrowser Microbrowser Microbrowser Microbrowser
Wireless
language
Wireless
language HTM L Converter Error
HTM L
Wireless HTM L HTM L A language

language
Web servers
Figure 10 Four approaches for microbrowsers to display mobile contents
INPUT/OUTPUT DEVICES, MEMORY, BATTERIES, AND SYNCHRONIZATION

The three components of mobile handheld devices, mobile OSs, mobile CPUs, and
microbrowsers, result in a significant difference between handheld devices and desktop PCs.
However, the remaining components do not play such a crucial role. This section briefly
introduces the remaining components of handheld devices, which include: i) input/output devices,
ii) memory, and iii) batteries, as well as synchronization with desktop PCs, notebooks, and other
peripheral devices.
Input/Output Devices
Various I/O devices have been adopted by mobile handheld devices. The only major output
device is the screen, whereas there are several popular input devices, including:
• Keyboards: There are two kinds of keyboards: built-in keyboards and external, plug-in
keyboards. The problem with the former is that they are too small for touch-typing, whereas
the latter suffers from inconvenience. Fabric keyboards that can be rolled up or folded
around the handheld devices are being developed to relieve the problem of external
keyboards.
• Touch screens/writing areas with a stylus: A touch screen is a display that is sensitive to
human touch, allowing a user to interact with the applications by touching pictures or words
on the screen, and a stylus is an input device used to write text or draw lines on a surface as
input to a handheld device. A handheld device equipped with a writing area and a stylus
needs a handwriting recognition function, but existing systems do not yet have a satisfactory
recognition rate. Graffiti, employed by many handheld devices, is the most popular writing
software.
Some mobile handheld devices can also react to voice input by using voice recognition
technology.
Memory
Desktop PCs or notebooks usually have between 64 to 256 Mbytes of memory available for
users, whereas handheld devices typically have only 4 to 64 Mbytes. PDAs normally have more
storage space than smart cellular phones. The former commonly have 16 Mbytes, and the latter
may have a memory size as low as a few Kbytes. Three types of memory are usually employed
by handheld devices:
• Random access memory (RAM): There are two basic types of RAM, dynamic RAM
(DRAM) and static RAM (SRAM). Dynamic RAM, the more common type, needs to be
refreshed thousands of times per second in order to hold data, whereas static RAM does not
need to be refreshed, making it faster but also more expensive than dynamic RAM. Both
types of RAM are volatile; i.e., they do not retain their contents when the power is switched
off.
• Read-only memory (ROM): ROM is manufactured with fixed contents, and it is usually used
to store the programs that boot the device and perform diagnostics. It is inherently non-
volatile storage, in contrast to RAM.
• Flash memory: This is a kind of non-volatile storage similar to EEPROM (electrically
erasable programmable read-only memory), but updating can only be done either in blocks or
for the entire chip, making it easy to update. Flash memory is not as useful as random access
memory because RAM can be addressable down the byte (rather than the block) level.
It is expected that hard disks, which provide much more storage capacity, will be adopted
by handheld devices in the near future. A comprehensive survey of storage options can be found
in Scheible (2002).
Batteries
Rechargeable Lithium Ion batteries are the batteries most commonly used by handheld
devices. The life of this kind of battery is short, generally only a few hours of operating time.
Battery technology will not significantly improve unless and until manufacturers begin to switch
to fuel cells, which is unlikely in the near future. A fuel cell operates like a battery, but unlike a
battery, a fuel cell does not run down or require recharging and will continue to produce energy
in the form of electricity and heat as long as fuel is supplied. Since the fuel cell relies on
chemical energy rather than combustion, emissions would be much lower than emissions from
the cleanest existing fuel combustion processes.
Synchronization
Synchronization connects handheld devices to desktop computers, notebooks, and
peripherals in order to transfer or synchronize data. The traditional method of synchronization
uses serial cables to connect handheld devices and other computing equipment. Now, however,
many handheld devices use either an infrared (IR) port or Bluetooth technology to send
information to other devices without needing to use cables:
• IrDA Data (Infared Data Association, 2003), a standard formulated by the Infrared Data
Association to ensure the quality and interoperability of infrared hardware, is designed for
data transfer over distances of up to one meter, acting as a point-to-point cable replacement.
• Bluetooth wireless technology is a specification aiming at simplifying communications
among handheld devices, printers, computers, and other devices based on short-range radio
technology. The Bluetooth 1.1 specifications (Bluetooth SIG, Inc., 2003) consist of two
documents: the Core, which provides design specifications, and the Profile, which provides
interoperability guidelines.
MOBILE COMMERCE APPLICATIONS

The applications of electronic commerce are already widespread; mobile commerce
applications not only cover these existing transactions but also include new ones. For example,
some tasks that are not feasible for electronic commerce, such as mobile inventory tracking and
dispatching, are possible for mobile commerce. This section will discuss these new applications
and explore the new opportunities that are arisen from this new area.
Categories of Mobile Commerce Applications

Table 3 lists the major mobile commerce applications (Gordon & Gebauer, 2001; Sadeh,
2002), along with details of each.
Table 3 Major mobile commerce applications

Mobile Category Major Applications Clients
Commerce Mobile transactions and payments Business
Education Mobile classrooms and labs Schools and training centers
Enterprise resource
Resource management All
planning
Games/images/music/video downloads and on-
Entertainment Entertainment industry
line gaming
Health care Accessing and updating patient records Hospitals and nursing homes
Inventory tracking and Delivery services and
Product tracking and dispatching
dispatching transportation
Global positioning, directions, and traffic Transportation and auto
Traffic
advisories industries
Travel industry and ticket
Travel and ticketing Travel management
sales
Commerce
Commerce is the exchange or buying and selling of commodities on a large scale involving
transportation of goods from place to place. It is boosted by the convenience and ubiquity
conveyed by mobile commerce technology. There are many examples showing how mobile
commerce helps commerce. For example, consumers can buy products from a vending machine
or pay a parking fee by using their cellular phones, and mobile users can check their bank
accounts and perform account balance transfers without needing to go to a bank or access an
ATM.
Education
Many schools and colleges are facing problems due to a shortage of computer lab space,
separation of classrooms and labs, and the difficulty of remodeling old classrooms for wired
networks. To relieve these problems, wireless LANs are often used to hook PCs or mobile
handheld devices to the Internet and other systems. As a result, students are able to access many
of the required resources without taking up valuable lab space.
Enterprise Resource Planning (ERP)

ERP is an industry term for the broad set of activities supported by the type of multi-module
application software that assists a manufacturer or other organization manage important aspects
of its business, including product planning, purchasing parts, maintaining inventories, interacting
with suppliers, providing customer service, and tracking orders. The ERP issues that are
particularly relevant to mobile commerce include tracking the location of goods and services,
locating specific items, and transmitting warnings about aging components.
Entertainment
Entertainment has always played a crucial role in Internet applications and is probably the
most popular application for the younger generation. Mobile commerce makes it possible to
download game/image/music/video files at anytime and anywhere, and it also makes on-line
games and gambling much easier to access and play. It is projected that by 2005, 80 percent of
all mobile users in the United States and Western Europe will play mobile games at least
occasionally (Leavitt, 2003).
Health Care
The cost of health care is high and mobile commerce can help to reduce it. By using the
technology of mobile commerce, physicians and nurses can remotely access and update patient
records immediately, a function which has often incurred a considerable delay in the past. This
improves efficiency and productivity, reduces administrative overheads, and enhances overall
service quality.
Inventory Tracking and Dispatching

Just-in-time delivery is critical for the success of today’s businesses. Mobile commerce
allows a business to keep track of its mobile inventory and make time-definite deliveries, thus
improving customer service, reducing inventory, and enhancing a company’s competitive edge.
Major delivery services such as UPS and FedEx have already applied these technologies to their
business operations worldwide with great success.
Traffic
Traffic is the movement of vehicles or pedestrians through an area or along a route. The
passengers in the vehicles and the pedestrians are all mobile objects, ideal clients of mobile
commerce. Also, traffic control is usually a major headache for many metropolitan areas. Using
the technology of mobile commerce can easily improve the flow of traffic in many ways. For
example, a mobile handheld device can have the capabilities of a GPS (Global Positioning
System), such as determining the driver’s exact position, giving directions, and advising on the
current status of traffic in the area. A traffic control center could also monitor and control the
traffic according to the signals sent from mobile devices in the vehicles.
Travel and Ticketing

Travel expenses can be costly for a business. Mobile commerce could help reduce
operational costs by providing mobile travel management services to business travelers. It can
be used to provide assistance to customers by using the mobile channels to locate a desired hotel
nearby, purchase tickets, make transportation arrangements, and so on. It also extends the reach
of relationship-oriented companies beyond their current channels and helps the mobile users to
identify, attract, serve, and retain valuable customers.
SUMMARY
The emerging wireless and mobile networks have extended electronic commerce to another
research and application area: mobile commerce. Internet-enabled mobile handheld devices are
one of the core components of mobile commerce systems, as they are needed for mobile users to
directly interact with mobile commerce applications. Understanding the devices and knowing
their functions and capabilities is vital for the success of mobile commerce applications. A
handheld device relies on a wide range of disciplines and technologies for its success. To
facilitate the understanding, this paper broke down the functions of a handheld device into six
major components, which can be summarized as follows:
1. Mobile operating systems: Simply adapting desktop operating systems for handheld devices
has proved to be futile. A mobile operating system needs a completely new architecture and
different features to provide adequate services for handheld devices. A generalized mobile
operating system structure can be visualized as a six-layer stack: i) applications, ii) GUI, iii)
API framework, iv) multimedia, communication infrastructure, and security, v) computer
kernel, power management, and real-time kernel, and vi) hardware controller.
2. Mobile central processing units: Handheld devices are becoming more sophisticated and
efficient every day and mobile users are demanding more functionality from their devices.
To achieve this advanced functionality, in addition to the obvious feature, low cost, today’s
mobile processors must have the following features: i) high performance, ii) low power
consumption, iii) multimedia capability, and iv) real-time capability. The cores and
architectures designed by Cambridge-based ARM Holdings Ltd. have begun to dominate the
mobile CPU market.
3. Microbrowsers: Microbrowsers are miniaturized versions of desktop browsers such as
Netscape Navigator and Microsoft Internet Explorer. They provide graphical user interfaces
that allow mobile users to interact with mobile commerce applications. Microbrowsers
usually use one of the following four approaches to return results to the mobile user: i)
wireless language direct access, ii) HTML direct access, iii) HTML to wireless language
conversion, and iv) error.
4. Input/output devices: Various I/O devices have been adopted by mobile handheld devices.
The only major output device is the screen, but there are several popular input devices,
among them: i) keyboards and ii) touch screens/writing areas that need a stylus.
5. Memory: Three types of memory are usually employed by handheld devices: i) RAM, ii)
ROM, and iii) flash memory. Hard disks, which provide much more storage capacity, are
likely to be adopted by handheld devices in the near future.
6. Batteries: At present, rechargeable Lithium Ion batteries are the most common batteries used
by handheld devices. However, the life of this kind of battery is short and the technology
will not significantly improve unless and until manufacturers begin to switch to fuel cells,
which may not happen for at least several years.
Synchronization connects handheld devices to desktop computers, notebooks, or peripherals
to transfer or synchronize data. Without needing serial cables, many handheld devices now use
either an infrared (IR) port or Bluetooth technology to send information to other devices. The
applications of electronic commerce are already widespread and new mobile commerce
applications are also becoming possible.
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ses/news_09102002_wmec.htm
Technological Innovativeness and Organizational Culture in

Hong Kong
Gary Y. F. Wong
City University of Hong Kong
E-Mail: gary.w@student.cityu.edu.hk
Richard Y. K. Fung
City University of Hong Kong
E-Mail: richard.fung@cityu.edu.hk
ABSTRACTS
This paper attempts to explore the relationship between technological innovativeness and
organizational culture in Hong Kong. It measures both technical and administrative innovations
status of organizations. A questionnaire survey is conducted to collect information from various
industries in Hong Kong. Also included is the temporal information of innovations. The research
uses path analysis to measure the impacts of three organizational factors on innovativeness.
Organizational characteristics, organizational climate and organizational context are the factors
that used in the research. As shown in the research, learning ability, centralization, specialization,
external orientation, formalization, sufficient slack, achievement orientation and risk orientation
are influencing the innovativeness in various perspectives.
Keywords: Organizational culture; Technological innovation; Organizational learning; Hong

Kong
INTRODUCTION
In today’s business world, organizations are strengthening their competitive advantage in
their marketplaces. They are improving their organization’s efficiency and shortening their
response time to markets. In order to achieve their goals, organizations must strengthen their
internal processes to make themselves ready to react to market needs, as well as to competitors.
Nowadays, most organizations recognized that business process reengineering is a useful tool to
maintain their competitive advantage.
However, business process reengineering is a huge project for an organization. Possibly, the
project will span across the entire organization and affect every aspect of operations. Besides,
business process reengineering is also a risky process, as many cases ended up in failure because
the changes were not handled well.
To this end, most organizations employ management tools, which are available from
markets to support the business process reengineering. Information technology solutions are
widely used in different industries for business process reengineering. It is widely accepted that
information technology innovations are providing guidance to organizations on effective
business process reengineering.
Innovation is commonly viewed as creativity – creating new ideas and knowledge.
However, new ideas will not contribute to businesses until people un-shelf the new ideas from
the laboratory, implement them, and generate values to customers. Kaner (1990) states, “A good
new idea means little-except risk-without….excellence in execution.” That means if an
organization has a lot of new idea, the organization is creative. If the organization can turn its
idea to generate values, the organization is innovative.
The Society of Management Accountants describes “innovation…fundamental to the quest
for profitable, sustainable growth.” A research done on the rate of return for 17 successful
innovations shows a mean return of 56% compared with an average ROI of 16% (Horibe, 2001).
In today’s business world, organizations have recognized that innovation is the most important
criterion for success in the future.
Technological innovations are playing a major role in today’s IT world, from desktop
applications, such as Windows, Microsoft Offices, etc to sophisticated enterprise solutions.
Information technologies provide effective tools or best practices to business processes.
Especially on business process enhancements, information technology solutions automate and
integrate the majority of an organization’s business processes. They enable data sharing and
standardized practices across the entire organization. Aladwani (2001) states that IT systems help
the different parts of the organization share data and knowledge. Information technologies enable
an organization to produce and access information on a real-time basis. For those On Line
Transactions Processes systems (OLTP), such as Enterprise Resources Planning (ERP), they
provide a backbone for the further extension of functionality through bolt on and other solutions,
for example, business intelligent systems (BI) for marketing analysis. Costs reductions and
improvement on management of business processes are the other “gains” from IT systems.
PREVIOUS RESEARCH
The Influence of Organizational Culture to Technological Innovation
Different aspects of organizational culture were reviewed to explore the interrelationship
between organizational culture and technological innovation in the past. The reviews focused on
organizational culture’s influence on an organization’s technological innovations (Claver et al.,
1998; Martins and Terblanche, 2003). In referring to the research carried out by Claver et al.
(1998), the research suggests that technological innovations were the intersection of several
factors. They were Innovation Culture, CEO’s Acceptance and Technology Culture. On the other
hand, Martins and Terblanche (2003) suggest that the determinants of organizational culture that
influence creativity and innovation included Strategy, Structure, Support Mechanisms, and
Behaviour that encourages innovation and Communication.
The Impact of Information Technology on Organizational Structures

The research performed by Burn (1989) focused on the impact of information technology
on organizational structures, which was a project in the Department of Computing Studies of
Hong Kong Polytechnic. The project aimed to 1) Identify whether any correlation exists between
the Structure of an organization and its usage of Information Technology; 2) Measure the
effectiveness of usage and identify whether a direct relationship exists between specific
approaches adopted by organizations, the organization structure and the benefits; and 3) Develop
a framework for organizations on strategic planning in the development and use of information
systems/technology.
Burn (1989) based on Michael Earl’s theories, which identified three types of framework
for the analysis of IT and IS strategies. They are 1) Awareness: Helps to identify where strategic
opportunities exist, 2) Opportunity: Provides more detailed techniques or models for analysis or
identification of strategic uses of Information Technology and 3) Positioning: Helps to assess the
strategic importance of Information Technology and how the information system functions can
be managed.
Earl also suggests that with a workable set of all three frameworks, it is able to create a
three-level complementary set of frameworks for an analysis that: 1) Shows what is possible; 2)
Helps identify applications; 3) Guides how to get there. The concepts are shown in Table I.
Table 1 Three-level complementary frameworks (Source: Burn, 1989)

Frameworks
Quality
Awareness Opportunities Positioning
Purpose Vision Ends Means
Scope Possibility Probability Capability
Use Education Analysis Implementation
Instead of providing detailed models to all three levels (Awareness, Opportunities and
Positioning), Burn (1989) provided an integrated approach to integrate all three levels at a Meta
level and set the groundwork by doing a micro-level analysis of Awareness models.
Furthermore, at the Awareness level, Burn (1989) concentrated on evaluating the usage of
information technology in Hong Kong and identifying specific organizational configurations
where proven opportunities exist to exploit information technology. Detailed case studies were
done to assess the potential impact of information technology and hence to provide a general
awareness of what was happening. The Awareness model in which Burn (1989) provided was
examples by analogy rather than direct guidance for usage.
According to Burn (1989), businesses in Hong Kong comprise mainly small and medium
enterprises that account for around 75% of the total. These small organizations commonly show
little segregation of management from ownership or formal organizational structures. Besides,
many listed companies are family controlled. They grow by acquiring subsidiaries and the style
of management is still very much owner centred with family members dominating the core
management.
CATEGORY OF INNOVATION ADOPTION RESEARCH

Innovation adoption research can be divided into two major categories. One category of
research focuses on the relationship between government policy, social status and economic
situation, and innovativeness of organizations. This category is defined as “external influence
research” in this research. Another category of research concerns with exploring the
interrelationship between organizational culture and technological innovation. This category is
defined as “internal influence research” in this research.
External Influence Research

Research studies in this stream concentrate on the influences from social status, economic
and historical profiles, and the policies to promote economic and technological progress. The
focus is on the identification of influence from external environment to the innovativeness of
organizations.
Internal Influence Research

Research studies in this stream concentrate on the internal factors that contribute to the
innovativeness of organizations, such as organizational climate, organizational characteristics,
learning abilities, number of innovation adoptions, and the consistency of adoptions. The
innovativeness of an organization is determining by the number of innovation adoptions and
consistency of adoptions in comparing with other organizations.
The internal influence research forms the framework of this research. One of the areas of
this research is identifying the organizational determinants of innovation adoptions, especially of
organizations in Hong Kong. Cultural factors that are affecting innovativeness may vary from
country to country. This research uses results from other researcher as reference and examines
determinants that appear to contribute to the adoption of innovations, they are including the
climate of organizations, the characteristics of organizations and the context of organizations.
The other area of this research is to identify the correlation between these organizational
determinants of innovation adoptions and administrative, technical innovativeness.
MODEL DEVELOPMENT
In considering past research on organizational culture and innovativeness (Nystrom et al.,
2002; Subramanian and Nilakanta, 1996), Nystrom et al. (2002) points out that organizational
slack is a key factor that affecting the adoptions of innovations. Slack is a resource that enables
an organization to handle demands raised internally and externally (Ahmed, 1998). Judge et al.
(1997) states sufficient and continue available resource would have positive impact to
innovation. Only those new projects that have sufficient funding and staffing resources, and
management commitment have chance to succeed (Christensen, 2000).
Nystrom et al. (2002) also suggests that organizational climate, in terms of risk orientation,
external orientation, and achievement orientation also influence the innovativeness of
organizations. Lewin and Douglas Mcgregor define the term climate by social climate and
organizational climate, which is reflected by the practices, procedure and rewards systems of an
organization. Climate is closely allied with culture in which climate is the practices of peoples
operate an organization and create procedures and policies for an organization. Culture, on the
other hand, is reflects beliefs and values of an organization (Ahmed, 1998). Besides,
organizational characteristics, in terms of formalization, centralization and specialization
moderate the relationship between characteristics and innovativeness (Subramanian and
Nilakanta, 1996).
Three aspects measure the innovativeness of organizations. Nystrom et al. (2002) measured
it in terms of the degrees of radical of adopted innovations, relative advantage of adopted
innovations and number of adopted innovations. On the other hand, Subramanian and Nilakanta
(1996) measured innovativeness in terms of number of innovation adoptions, time of innovation

adoptions and consistency of innovation adoptions. It is found that except the measurement of
number of adopted innovations, the other measurements are different. Considerable research
exists on the organizational culture and innovativeness, like the research of Nystrom et al.
(2002), the temporal dimension of innovativeness was not examined. Therefore, this research
adopts the measurements used by Subramanian and Nilakanta (1996) in order to capture the
temporal dimension. As Subramanian and Nilakanta (1996) suggest, “truly innovative
organizations are those that exhibit innovative behaviour consistently over time”. Research
activities of Nystrom et al. (2002) and Subramanian et al. (1996) were done in USA for the
banking and the medical industries. As mentioned earlier in this paper, organizational culture
that is affecting innovativeness may vary from country to country. Therefore, this research
intends to examine the culture of organizations in Hong Kong using the research model shown in
Figure 1.
Moderator Variables Outcome Variables

Organizational Climate Organization Innovativeness
1. Risk Orientation 1. No. of Innovation
2. External Orientation Adoptions
3. Achievement Orientation 2. Time of Innovation
Organizational Characteristics Adoptions
1. Formalization 3. Consistency of
2. Centralization Innovation Adoptions
3. Specialization
Influence Variables
Organization Context
1. Learning Abilities
2. Organization Slack
Figure 1 Research Model
RESEARCH METHODOLOGY
This research adopted the “dual core” typology of innovations. Subramanian and Nilakanta
(1996) also adopted this typology in their previous research named as technical innovations and
administrative innovations. A list of the innovations was compiled using a literature search and
an empirical search. The list covered systems and mechanisms that are popular to organizations.
The final list contained 7 technical innovations and 17 administrative innovations elements and a
questionnaire was used to collect data.
Administrative Innovations and Technical Innovations

This research differentiated the technical innovations and administrative innovations
according to the criteria suggested by Damanpour et al. (1989).
“Administrative innovations are defined as those that occur in the administrative component
and affect the social system of an organization. The social system of an organization consists of
the organizational members and the relationships among them. It includes those rules, roles,
procedures, and structures that are related to the communication and exchange between
organizational members. Administrative innovations constitute the introduction of a new
management system, administrative process, or staff development program. An administrative
innovation does not provide a new product or a new service, but it indirectly influences the
introduction of new products or services or the process of producing them.
Technical innovations are defined as those that occur in the operating component and affect
the technical system of an organization. The technical system consists of the equipment and
methods of operations used to transform raw materials or information into products or services.
A technical innovation, therefore, can be the adoption of a new idea pertaining to a new product
or services, or the introduction of new elements in an organization’s production process or
service operations.”
Evan (1966) suggests administrative and technical innovations are reflecting the difference
between social structure and technology. According to Damanpour (1984) and Daft (1982),
technical innovations are processes and technologies that directly related to the production of
products or provide services directly related to the business activity an organization. While
administrative innovations are related to back office administrations, such as human resources
management, administrative management, which are indirect to the production of products and
services (Damanpour, 1984; Kimberly, 1981). However, there is no standard on the definition of
innovation dimensions (Gopalakrishnan and Damanpour, 1997). Therefore, this research defined
innovation dimensions by the criteria suggested by Daft (1982), Damanpour, (1984, 1989), Evan
(1966), Gopalakrishnan and Damanpour (1997) and Kimberly (1981).
TEMPORAL DIMENSIONS MEASUREMENT

This research also adopted the idea of Subramanian and Nilakanta (1996) to measure the
temporal dimensions of innovativeness. The questionnaire was used to collect time dimension
information of organizations when they adopted an innovation item. Three temporal dimensions
of innovativeness were measured on both administrative innovations and technical innovations.
Mean Number of Innovation Adoptions (MNIA)

The mean number of innovation adoptions of an organization was calculated by the
following formula.
Total number of innovations adopted
MNIA =
No. of years between last innovation and first innovation
The number of years between the adoption of the first and the last innovation in an
organization was firstly calculated. Secondly, the total number of innovations that an
organization adopted over the period was determined. Finally, the mean number of an
organization on innovation adoptions was computed by dividing the total number of innovation
adoptions by number of years taken.
Mean Time of Innovation Adoptions (MTIA)

The mean time of innovation adoptions of an organization was calculated by using the
following formula. As suggested by Subramanian and Nilakanta (1996), use the mean time of
innovation adoptions to measure the time of innovation adoption of each organization relative to
the other organizations.
MTIA = (Last year of adoption of an innovation among organizations + 1) –

The year of adoption of an innovation in an organization
This formula was applied to each innovation of organizations to calculate the mean time of
adoptions. Firstly, the last year of adoption of an innovation among organizations was
determined and one was added to the year. Secondly, the year of an organization adopted the
innovation was subtracted by the value.
For example, in the case of computerized customer billing system innovation, if
organization “ABC” adopted the system in 1985, and if the last adopter of the system was on
2002, therefore, the MTIA of computerized customer billing system innovation of “ABC” is
calculated by 2003 (i.e. 2002 + 1) – 1985 and the score is 18. However, if another organization
adopted the system on 1999, the MTIA would be calculated by 2003 (2002 + 1) – 1999 and the
score is four. Hence, organizations that adopted an innovation earlier among the others would
have a higher score. The last adopter would have a score of one. For those organizations that did
not adopt the innovation would have a zero score. The mean time of innovation adoption of an
organization was calculated by using the score of each innovation.
Consistency of the Time of Adoptions (CTA)

As suggested by Subramanian and Nilakanta (1996), this variable was used to measure the
consistency of organizations that adopted innovations early or late. It was computed by dividing
the standard deviation of a set of scores by the mean value of that set of scores. Hence,
organizations that adopted innovations consistently earlier or later than others would have lower
coefficients of variability. The CTA itself did not measure the early or late innovation adoption
of organizations.
ORGANIZATIONAL CHARACTERISTICS
Montes et al. (2003) defines the structural characteristics of innovations. The structural
characteristics defined as environment, size, complexity, differentiation, formalization,
centralization and strategy. This research covered three organizational characteristics. They
measured the extent of formalization, the extent of centralization and the extent of specialization
of organizations. Each category consisted of several questions in the questionnaire. The mean
value of each extent was calculated for each organization. In the other words, each organization
had three scores for the organizational characteristics measurement.
ORGANIZATIONAL CLIMATE
From the research of DeDreu et al. (1999), two dimensions of climate influence the
innovation process of organizations. They are communication and freedom to express opinions.
This research examined three types of organizational climates. They measured the extent of risk
orientation, the extent of external orientation and the extent of achievement orientation. Similar
to the organizational characteristics, each category consisted of several questions in the
questionnaire. The mean value of each extent was calculated for each organization.
ORGANIZATIONAL CONTEXT
The organizational context consists of organizational slack and learning abilities.
Considerable research exists on innovativeness points out that learning abilities are the key factor
of organizations (Ansoff, 1988; Colin, 2000; Grusky, 1970; Judson, 1966; Kaufman, 1971;
Kotter et al., 1986; Lawrence, 1954; McNurry, 1973; Nystrom et al., 2002; Sayles, 1960;
Waddell et al., 1998). Besides, organizational slacks also a key contributor to innovativeness of
an organization (Nystrom et al. 2002; Subramanian et al., 1996). This research covered these
contexts in the questionnaire and measured by mean scores.
Table 2 gives a description of the dimensions of climate, slack, characteristics and learning
abilities used in this research. The dimensions were measured by using a five-item scale. The
questionnaire used measurements from Subramanian et al. (1996), Nystrom et al. (2002) and
Dixon (1994) as guidelines and were modified to suit the requirement of this research. The
Appendix A reproduces the questionnaire used in this research.
Table 2 Dimensions of climate, slack, characteristics and learning abilities

Dimensions Concepts
Organizational climate This dimension examines three well-known
dimensions: risk orientation, external
orientation, achievement orientation and
organizational slack.
Organizational characteristics This dimension examines some structural
characteristics of an organization, such as
formalization, centralization and
specialization.
Learning abilities This dimension examines the abilities of an
organization to maintain as a learning
organization and sustains the competitive
edge.
Innovativeness This dimension examines an organization’s
adoption of technical and administrative
innovations. It also collects temporal
information of innovation adoptions.
Note: Modified from Subramanian et al. (1996), Nystrom et al. (2002) and Dixon (1994)
CASE STUDY
Data collection
Data collection was carried out during the period from January to March 2004, using a
questionnaire survey. The realm of the sample was organizations in Hong Kong from various
industries. Approximately, 266 organizations participated in the survey. Questionnaires were
distributed by means of email systems and personally. The respondents were primarily senior
managers and engineers, from fourteen industries, mainly in the manufacturing, finance,
transportations and construction industries. 74 responses were received. However, there were
missing and invalid data in some questionnaires. These questionnaires were excluded from the
data analysis. Therefore, the final sample embraced 70 questionnaires. The technical details of
the survey are shown in Table 3.
Table 3 Technical details of the survey

Universe Entities
Geographical area Hong Kong SAR, China
Type of interview Emailed structured questionnaire
Sample size N = 70
Confidence level 95 percent
Sampling error +/- 0.2 scale points
Scaling From 1 to 5
Sample design Random selection of sampling units
Minimum sample size N = 66
Validity and Reliability

Table 4 shows the reliabilities of items used to measure the about mentioned factors. All
items show acceptable levels of reliability.
Table 4 Reliabilities of organizational measures
Inter-item Correlation
Elements No. of Items
(Cronbach's Alpha)
Organizational Climate
External Orientation 9 0.843
Achievement Orientation 2 0.620
Organizational Slack 4 0.651
Organizational Characteristics
Formalization 2 0.868
Centralization 2 0.745
Specialization 2 0.673
Learning Abilities 10 0.916
Path Analysis
Path analyses were performed on the data collected by questionnaire survey. Two separate
path analyses were carried out for the two types of innovations. Figure 2 and Figure 3 show the
results of the analysis of administrative innovations and technical innovations respectively. Table
5 and Table 6 depict the correlations among all the relevant variables.
0.317
Risk
0.215 Formalization
Orientated
Mean of
0.307 Administrative
0.215
Innovation
Adoption
Learning External
0.513 0.407 Centralization -0.305
Abilities Orientated
Mean Time of
Administrative
0.385
Innovation
0.367 Adoption
0.488
0.313-0.243
Achievement
Orientated
Consistency of
Specialization Administrative
0.214
Innovation
Adoption
0.436
Organization
Slack
Figure 2 Path analysis of administrative innovations
Table 5 Correlation matrix of administrative innovations

Consi
Mean Time Risk Exter Achie Slack Form Cent Spec Learn
st
Mean 1
Time -.279* 1
Consist -.657** .616** 1
Risk .092 .012 .060 1
Exter .192 .385** .138 .383** 1
Achie .313** .040 -.165 .128 .491** 1
Slack .019 .118 .114 .368** .339** .239* 1
Form .075 .166 -.041 .197 .307** .407** .367** 1
Cent .215* -.305** -.243* .196 .028 .068 .056 .031 1
Spec -.088 -.035 .214* -.010 -.100 -.135 .090 -.067 -.183 1
Learn .317** .092 -.195 .215* .513** .488** .436** .524** .084 .007 1
Mean = Mean number of administrative innovations

Time = Mean time of administrative innovations
Consist = Consistency of administrative innovations
Risk = Risk orientation
Exter = External orientation
Achie = Achievement orientation
Slack = Organizational slack
Form = Formalization
Cent = Centralization
Spec = Specialization
Learn = Learning abilities
Table 6 Correlation matrix of technical innovations

Mean Time Consist Risk Exter Achi Slack Form Cent Spec Learn
Mean 1
Time -.345** 1
Consist -.669** .494** 1
Risk .229* -.043 -.088 1
Exter .185 .192 .223 .383** 1
Achi -.022 .117 .056 .128 .491** 1
Slack .150 -.028 -.056 .368** .339** .239* 1
Form -.014 .246* .096 .197 .307** .407** .367** 1
Cent -.166 -.201 -.122 .196 .028 .068 .056 .031 1
Spec -.193 -.030 .388** -.010 -.100 -.135 .090 -.067 -.183 1
Learn .073 .169 .156 .215* .513** .488** .436** .524** .084 .007 1
Mean = Mean number of technical innovations

Time = Mean time of technical innovations
Consist = Consistency of technical innovations
Risk = Risk orientation
Exter = External orientation
Achie = Achievement orientation
Slack = Organizational slack
Form = Formalization
Cent = Centralization
Spec = Specialization
Learn = Learning abilities
0.229
0.307
Risk
0.215
Orientated
Mean of
Technical
Formalization
Innovation
Adoption
Learning External
0.513 0.407
Abilities Orientated
0.246
Mean Time of
Technical
Centralization
Innovation
Adoption
0.488
0.367
Achievement
Orientated
Consistency of
Technical
Specialization 0.388
Innovation
Adoption
0.436
Organization
Slack
Figure 3 Path analysis of technical innovations
Administrative Innovation
For administrative innovation, learning ability, centralization, specialization, and external
orientation significantly associate with administrative innovativeness. High levels of learning
ability associate with larger number of administrative innovation adoptions. High levels of
learning ability also associate with the levels of risk orientation and the early adoption of
administrative innovations. The research also indicates that high levels of centralization associate
with larger number of administrative innovation adoptions. However, the high levels of
centralization do not support the consistency adoptions and the early adoption of administrative
innovations. Furthermore, high levels of specialization in an organization associate with the
consistency of administrative innovations and high levels of external orientation associated with
early adoptions. Table 7 shows the total causal effect analysis of administrative innovations.
Table 7 Total of causal effect analysis of administrative innovations

Exogenous Variable Endogenous Variable Total Causal Effect
Learning Ability Number of Administrative Innovation 0.47
Learning Ability Risk Orientation 0.215
Learning Ability Time of Administrative Innovation 0.198
Centralization Number of Administrative Innovation 0.215
Centralization Time of Administrative Innovation -0.305
Centralization Consistency of Administrative Innovation -0.243
Specialization Consistency of Administrative Innovation 0.214
External Orientation Time of Administrative Innovation 0.385
Technical Innovation
For technical innovation, learning ability, formalization, specialization and risk orientation
significantly associate with technical innovativeness. High levels of learning ability associate
with larger number of technical innovation adoptions. Formalization associate with early
technical adoptions. Furthermore, high levels of specialization associate with consistency of
technical innovation and the high levels of risk orientation lead to a larger number of technical
innovations. External orientation, sufficient slack and achievement orientation contribute to early
adoption of technical innovations. However, centralization does not have contribution to
technical innovations. Table 8 shows the total causal effect analysis of technical innovations.
Table 8 Total of causal effect analysis of technical innovations

Learning Ability Number of Technical Innovation 0.049
Formalization Time of Technical Innovation 0.246
Specialization Consistency of Technical Innovation 0.388
External Orientation Time of Technical Innovation 0.076
Organizational Slack Time of Technical Innovation 0.09
Achievement Orientation Time of Technical Innovation 0.1
Risk Orientation Number of Technical Innovation 0.229
Common Factors of Administrative Innovation and Technical Innovation

Addition to the specific factors that support the administrative innovations and technical
innovations, these cores also share some factors. The factors are not depicted in the about
sections and are listed in Table 9 separately in the interest of clarity. The result illustrates,
learning ability, external orientation, achievement orientation and organizational slack
significantly associated with formalization.
Table 9 Total of causal effect analysis of common factors

Learning Ability Formalization 0.516
External Orientation Formalization 0.307
Achievement Orientation Formalization 0.407
Organizational Slack Formalization 0.367
SUMMARY
In summary, the survey results illustrate that organizational climate and organizational
characteristics do not have an indistinguishable relationship with dimensions of innovativeness.
Besides, organizational factors have different effects on the adoption of administrative
innovations and technical innovations. High degrees of learning ability and specialization affect
the three dimensions of administrative innovations. Centralization affects the number of
administrative innovations. However, it does not positively contribute to the consistency and
early of administrative innovations. External orientation has direct effects on the early adoption
of administrative innovations. In technical innovations, learning ability and risk orientation
positively affect the number of innovation adoptions. Formalization affects the early adoptions
positively while specialization significantly influences the consistency of technical innovations.
The dimensions of external orientation, sufficient slack and achievement orientation influence
the early adoption of technical innovations. However, centralization does not have contribution
to technical innovations. Learning ability, external orientation, achievement orientation and
organizational slack positively affect the formalization of organizations in both administrative
and technical innovations.
DISCUSSION
The result of this questionnaire survey demonstrates various relationships between
administrative innovativeness, technical innovativeness and organizational culture. The result of
causal effect analysis of administrative innovations suggests the learning ability of an
organization influences the number of administrative innovation adopted, the early adoption of
administrative innovation. It seems to support a past research (Passfield, 2002) that learning
ability is a major factor of an organization to innovate. The result also suggests that an
organization has higher learning ability is comparatively risk orientated. It may due to a learning
organization has a strong reviewing skills and high tolerance of ambiguity and able to take risk
during an innovation process (Chaharbaghi and Newman, 1996). Besides, the result suggests an
organization with a centralization characteristic is benefit from the large number of
administrative innovation adoptions. It may due to the reason that it is more efficient for an
organization to implement policies and procedures using a top down approach. That is, the top
management team decide policies and procedures, which can suit the needs of an organization’s
operation and escalate down to employees in the down stream. However, the centralization
characteristic is not necessarily influences the early and consistency of administrative innovation
adoptions. It seems that when a small group of people in an organization acts the decision-
making role, usually the top management team, policies and procedures implementations are
became inconsistent. It could be the result of the management team needs to handle a variety of
operational issues of an organization and the efforts that the team can devote to the
administrative innovation are limited. Therefore, the top management team may implement new
policies and procedures when there is an urgent need to the operation. It also explains why
centralization characteristic influences the number of administrative innovation adoption. On the
other hand, specialization characteristic result in consistency of administrative innovation. It is
likely that, in contrast to the centralization characteristic, which does not promote the
consistency of administrative innovation adoption, a group of people that dedicate to the
development and implementation of policies and procedures can make the adoption more
consistent. For example, some manufacturing organizations have a team of people focus on
process reengineering. They review processes on shop floors and develop new working
procedures to improve efficiencies and qualities. As discussed earlier, administrative innovation
and technical innovation are associated with each other. A successful administrative innovation
would require a certain degrees of technical innovation, and vice versa.
In addition to the administrative innovation, the questionnaire survey result also
demonstrates the causal effect analysis of technical innovations. The result suggests the early
adoption of technical innovation is statistically associated with the formalization, external and
achievement orientation characteristics and sufficient slack of an organization. The result seems
to support the arguments of past researches that organization slack is essential to technical
innovation. It may be due to the fact technical innovations projects are require sufficient
financial support and expertise of perspective areas in order to carry out implementations and to
resolve technical problems. The formalization of an organization can define the role of an
individual in an organization by describing the job duty clearly using written job description.
Therefore, employees in an organization can understand their role and perform the duties that are
defined by the organization. It could help employees to concentrate on their work. The external
and achievement orientation characteristics can help an organization to understand customer
needs as well as the strategies of its competitors. Therefore, the organization can make a timely
change on its strategies and it may involve the deployment of technological systems that help the
organization to maintain its market place. It may explain an organization that is external and
achievement orientations adopt technical innovation earlier than other organizations. The survey
result also suggests the learning ability and the risk orientation of an organization influence the
total number of technical innovation adoption. There appear to be a strong probability that an
organization, which has higher ability to learn and able to tolerate failures and manage
uncertainly will result in larger number of technical innovation adoption. The similar reason can
be extended from the administrative innovation. It may due to a learning organization has a
strong reviewing skills and high tolerance of ambiguity and able to take risk during an
innovation process (Chaharbaghi and Newman, 1996). High degrees of specialization lead to
consistency of technical innovation adoptions. The result indicates that employees should fully
match the requirement of their functional areas and they should not often transfer from a
department to another department. It may be the fact that when an employee is working in a
functional area for a considerable period, the employee can have a good understand on the area
and able to identify opportunities for improvement frequently.
The survey also indicates another interesting result. A few organizational factors are
influencing the administrative innovations of an organization, they are learning ability,
centralization, specialization and external orientation. However, in technical innovations,
comparatively more organizational factors are influencing the innovativeness of an organization.

They are learning ability, formalization, specialization, external orientation, organization slack,
achievement orientation and risk orientation. It indicates an organization, which can succeed in
the process of technical innovation need to manage different aspects of organizational culture.
Some past researches also indicate that organization readiness plays a major role of innovations.
Organization readiness is referring to the internal and external environment; vision, mission and
values; knowledge management; management style; organization structure; individual, team and
organizational learning; and organization memory.
CONCLUSION
Focus of Past Researches
Considerable amount of research has done in the past on innovation and organizational
culture by researchers. It covered a range of areas to examine the innovativeness of a specific
country, industry, region, etc. As mentioned earlier, past research activities examined the
relationships between the beliefs of top management team, culture of an organization and
innovativeness. The researches define organizational culture into innovative culture, technology
culture and culture based technological innovation. The researches are focusing on the internal
factors that interrelated to the organizational culture in innovation. Another group of researchers
consider the vision and mission are strategically influencing the innovativeness of an
organization. Employees and employers should have common objectives and means to achieve
objectives. Leadership and interpersonal relationships, as well as external environment, such as
customer focus strategies are the factors that influence the innovativeness of an organization.
Past researches also studied policies of governments and organizational structures that are
promoting innovation. They compared the innovation progress status from the perspective of
social status, economic, historical profiles and policies (Martinsons, 1998). These kinds of
research studies provided conceptual models on managing the organizational culture in
innovation, but did not attempt to measure the relationships between organizational culture and
innovativeness of a specify country, region or industry. This research suggests classifying the
about discussed past researches into two major categories. One category is “external influence
research” while the other is “internal influence research”. This research employed the internal
influence research as a framework and empirically measured the relationships between
organizational culture and innovativeness of organizations of various industries in Hong Kong.
Temporal Dimension Measurements

Although many past researches have measured innovativeness and organizational culture, a
standard methodology that researchers commonly use is not available. Some researchers
measured it in terms of the degrees of radical of adopted innovations, the advantage of adopted
innovations and the number of adoption. Other researchers included the temporal dimensions in
their measurement. Theoretically, the degree of innovativeness of an organization could be
different when it is measured by different methodologies. However, innovation is a continuously
process that allies with the growth of an organization, the external and internal factors, such as
the change of top management team, the vision and mission of an organization, the change of
economic environment and the capability of employees. Therefore, this research measured the
temporal dimensions of innovativeness that are introduced by Subramanian and Nilakanta
(1996).
Administrative and Technical Innovation Measurements

Some past researches suggest separate the administration innovation and the technical
innovation and just measured one of the two aspects in their studies. This research measured both
aspects using different set of questions in the questionnaire survey. It is likely that administrative
innovations are associated with technical innovations, although characteristics that lead to these
innovations are different.
Organizational Factors that Affecting Innovativeness

The results of this research identified learning ability, centralization, specialization, external
orientation, formalization; sufficient slack, achievement orientation and risk orientation are
influencing the innovativeness in various perspectives. It is to be hoped that this research has
contributed by providing an insight to mangers in managing their organizations in innovation
processes. Additional research is recommended to aggregate the findings together and develop a
model to manage organizational culture in technological innovation.
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APPENDIX A
This Appendix reproduces the questionnaire used in this survey.
Score: 1) Strongly Disagree, 2) Somewhat Disagree, 3) Neutral, 4) Somewhat Agree, 5) Strongly Agree
Questions: To which degree do you agree with the following statements? Score
1 Organizational Climate
1.1 Risk orientation
1.1.1 The philosophy of your management is that in the long run we get ahead playing is
slow, safe, and sure.
1.1.2 The business of your organization has been built up by taking calculated risks at the
right time.
1.1.3 Decision making is too cautious for maximum effectiveness in your organization.
1.1.4 Your management is willing to take a chance on a good idea.
1.1.5 It is necessary to take some pretty big risks occasionally to keep ahead of the
competition in the business you are in.
1.2 External orientation
1.2.1 The business objectives of your organization are driven primarily by customer
satisfaction.
1.2.2 Your organization constantly monitors its level of commitment and orientation to
serving the customer needs.
1.2.3 The strategy for competitive advantage of your organization is based on the
understanding of customer needs.
1.2.4 The strategies of your organization are driven by the organization’s beliefs about it can
create greater value for customers.
1.2.5 Your organization measures customer satisfaction systematically and frequently.
1.2.6 Your organization gives close attention to after-service contact with the customers.
1.2.7 Employees freely communicate information about their successful and unsuccessful
customer experiences across all business functions.
1.2.8 All of the business functions in your organization are integrated in serving the needs of
target markets.
1.2.9 All of your managers understand how everyone in the organization can contribute to
creating customer value.
1.3 Achievement orientation
1.3.1 Achievement of goals has a very important place in your organization.
Score: 1) Strongly Disagree, 2) Somewhat Disagree, 3) Neutral, 4) Somewhat Agree, 5) Strongly Agree
1.3.2 Being the leaders in the industry sector is very important in your organization.
1.4 Organizational slack
1.4.1 There is generally no scarcity of financial resources for capital projects in your
organization.
1.4.2 There is usually abundant availability of required labour skills within your organization.
1.4..3 There is usually no shortage of managerial talent to operate your organization
effectively.
1.4.4 The amount of funds already committed for capital projects is a large proportion of the
available financial resources in your organization.
2 Organizational Characteristics
2.1 Formalization
2.1.1 Compared to other organizations in your areas, your organization extensively use
written job description for all classes of employees.
2.1.2 Compared to other organizations in your areas, your organization extensively uses
written policies and procedures to guide the actions of employees.
2.2 Centralization
2.2.1 When an operating department produces results that deviate from its plans, the
instructions to take appropriate corrective actions usually come from top managements
rather from the operating department itself.
2.2.2 Consider a recent project undertaken by your organization that required setting up a
special task force. There may have been situations when this task force encountered
deviation from what was planned. During these situations, the instructions to take
corrective action usually came from top managements rather from the operating
department itself.
2.3 Specialization
2.3.1 Employees in your organization are seldom transferring across departments.
2.3.2 Your organization hire individuals that fully meet the requirements for specific technical
skills in each functional area rather hire individuals with general skills and then train
them in-house in functional areas.
3 Learning Abilities
3.1 Your organization regularly revisits its vision and strategic framework to ensure the
organization is carrying out faster learning.
3.2 Your organization has defined learning targets that are challenging but attainable.
3.3 Employees in your organization understand how their learning contributes to the
organization’s success and the learning is linked up with appropriate rewarding systems.
3.4 When a learning target is achieved, no matter how small, your organization will
celebrates and rewards the employees who succeed.
3.5 Your organization devises and implements a full-scale collaborative-coaching plan with
learners who have a negative view of their learning abilities.
3.6 Your organization has formed project teams to identify improvement opportunities and
define improvement actions.
3.7 Your organization has chosen a champion to closely monitor tasks of a learning target
and convene the respective group whenever necessary to ensure achieving the target. As
soon as one target has been met, set another.
3.8 Your organization continuously benchmark its learning processes against that of other
organizations.
3.9 Your organization uses technology to its greatest advantage for creating learning,
reframing the business as necessary, and providing interactive learning as well as for
documenting, expending, speeding up, transferring, and reinforcing learning.
3.10 Your organization creates its future by changing the ground rules for the industry.
4 Innovativeness (Year of Adoption “N” - not adopted, “NA” - not applicable)

4.1 Technical Innovations
4.1.1 Computerized manufacturing system
4.1.2 Computerized production scheduling or project management system
4.1.3 Web based ordering system
4.1.4 Web based customer services or feedback system
4.1.5 Computerized product design system
4.1.6 Electronic data interchange (EDI) with customers
4.1.7 Electronic data interchange (EDI) with suppliers
4.1.8 Computerized logistic management
4.1.9 Point of sale (POS) system
4.2 Administrative Innovations
4.2.1 Formal strategic plan of innovation
4.2.2 Management by objective
4.2.3 Continuing education programs for employees
4.2.4 Job rotations
4.2.5 Special tasks force for ad-hoc problems
4.2.6 Incentive/reward systems for officers
4.2.7 Incentive/reward systems for non-officers
4.2.8 Formal feedback system for customers
4.2.9 Electronic mailings (email)
4.2.10 Computerized workflow management
4.2.11 Automated fax transmissions
4.2.12 Computerized human resources management
4.2.13 Computerized customer billing
4.2.14 Computerized sales forecasting
4.2.15 Computerized end product inventory forecasting
4.2.16 Organization Internet web site
4.2.17 Remote system access
How do Organizations Implement Downsizing? – An Australian

and New Zealand Study
Franco Gandolfi
Cedarville University
E-Mail: fgandolfi@cedarville.edu
ABSTRACT
The Australian and New Zealand banking industries have been cutting their workforces
steadily since the mid-1990s. With further rounds of workforce downsizing predicted, it was of
considerable interest and importance to examine the implementation strategies that large
Australian and New Zealand banks have adopted in their latest downsizing endeavors. This study
has revealed three major findings. First, Australian banks tended to primarily adopt workforce
reduction strategies, whereas New Zealand banks employed a mixture of organization redesign
strategies, workforce reduction strategies, and systemic strategies. Second, Australian banks
were perceived to have considerable depth in their downsizing, whereas New Zealand banks had
more breadth in their overall strategies. Third, Australian banks favored to adopt reorientation
approaches, whereas New Zealand banks were more inclined to embrace reinforcement
(convergence) approaches. It remains unclear as to why large Australian and New Zealand banks
have diverged in their approaches and strategies to downsizing and in their differing selection of
available implementation strategies. Government interference, executive remuneration, industrial
relations demands, competitive national and international market pressures, and the downsizing
history of individual industries and organizations, on the one hand, and differences in national
cultures and cultural values on the other, may have influenced the adoption of downsizing
implementation strategies. At the same time, it has also been shown that downsizing has
engendered negative financial, organizational, and social consequences in both Australia and
New Zealand.
Key words: Downsizing, implementation strategies, banks
INTRODUCTION
Since the early to mid-1980s, organizational downsizing has become an omnipresent feature
of a multitude of corporations and governmental agencies throughout the industrialized world
(Littler, 1998). The prime catalyst for the majority of downsizing activities is the objective of a
reduction of costs (Cascio, 1993), an increase of an organization’s levels of efficiency,
effectiveness, productivity (Gandolfi, 2002), and competitiveness (Cameron, 1994), and thus an
organization’s overall performance (Thornhill & Saunders, 1998). Therefore, the major raison
d’être of any downsizing endeavor is to make an organization more competitive compared to its
rivals (De Vries & Balazs, 1997). Empirical and anecdotal evidence suggest that the financial,
organizational, and social consequences of downsizing are largely negative (Morris, Cascio, &
Young, 1999). Littler, Dunford, Bramble, and Hede (1997) assert that the after-effects of a
downsizing affect the entire organization and its workforce in a most profound manner. There is
also mounting evidence that suggests that organizations commenced downsizing efforts with
inadequate plans, policies, and programs in place (Appelbaum, Delage, Labibb, & Gault, 1997),
were ill-prepared for the aftermath of downsizing (Gandolfi, 2001), and severely neglected the
employees that remained within the organizational system (Doherty & Horsted, 1995). The
downsizing of organizational workforces is not a business phenomenon of the recent past.
Rather, it has maintained and even increased its popularity and pervasiveness as a deliberate
restructuring strategy in all industries (Morris et al., 1999), across the world (Dolan, Belout, &
Balkin, 2000), and into the new millennium (Baruch & Hind, 2000; Lamsa & Takala, 2000;
Gandolfi, 2003). Given the apparent absence of positive outcomes from downsizing (Cascio,
1993), the frequency of negative implications following downsizing (Morris et al., 1999), the on-
going popularity of downsizing (Harrison, 2000; Gandolfi, 2003), and the assertion of scholars
that downsizing is still regarded as an understudied business phenomenon (Luthans & Sommer,
1999), this study aims to examine the adopted downsizing implementation strategies of large
banks in Australia and New Zealand.
The structure of this research paper is threefold. First, it reviews the literature on
downsizing implementation strategies and presents the main research question. Second, it
determines the implementation strategies that large Australian and New Zealand banks adopted
in their last round of downsizing by means of the case-study methodology. Last, it analyzes and
discusses the empirical findings derived from in-depth interviews.
DOWNSIZING IMPLEMENTATION STRATEGIES

The downsizing literature reveals that a number of distinct implementation strategies have
been identified. Cameron, Freeman, and Mishra (1991, 1993) have conducted one of the most
extensive and systematic studies of corporate workforce downsizing and reported three major
findings regarding downsizing implementation strategies. First and foremost, they identified and
differentiated between three distinct types of downsizing implementation strategies. That is, a
workforce reduction strategy, an organization redesign strategy, and a systemic strategy. An
overview of the downsizing implementation strategies is exhibited in Table 1.
Table 1 Downsizing implementation strategies

Workforce reduction Organization redesign
Systemic strategy
strategy strategy
Focus Workers Jobs and units Culture
Target People Work Status quo processes
Implementation time Quick Moderate Extended
Temporal target Short-term payoff Moderate-term payoff Long-term payoff
Long-term
Inhibits Quick payback Short-term cost savings
adaptability
Workforce reduction Organization redesign

Systemic strategy
strategy strategy
•Natural attrition •Abolition of functions •Staff involvement
•Hiring freeze •Merging of units •Simplification of
•Early retirement •Job Redesign processes
Examples
•Buyout packages •De-layering •Bottom-up change
•Layoffs •Reducing overall work •Continuous
•Retrenchments hours improvement
Source: adapted from Cameron et al. (1991, 1993)
The workforce reduction strategy, often referred to as the “layoff strategy” (Ryan & Macky,
1998: 38), concentrates primarily upon the elimination of headcount and the reduction of the
overall number of employees. It encompasses activities, such as layoffs, retrenchments, natural
attritions, early retirements, hiring freezes, golden parachutes, and buyout packages (Cameron et
al., 1991; 1993). This strategy is frequently implemented in a reactive manner as a cost-cutting
measure and may serve as a short-term response to declining profits (Ryan & Macky, 1998).
According to Cameron (1994), such “grenade-type” (p 198) approaches to downsizing are rarely
successful and tend to be negative in their consequences. The organization redesign strategy
focuses predominantly upon the elimination of work, rather than reducing the number of
employees (Luthans & Sommer, 1999). It encompasses activities, such as abolishing functions,
eliminating hierarchical levels (de-layering), groups, divisions, products, redesigning tasks,
consolidating and merging units, and reducing overall work hours. Organization redesign
strategies are commonly regarded as being difficult to implement quickly as this requires some
advanced analysis of the areas concerned (Cameron et al., 1991). The systemic strategy is
fundamentally different from the former two strategies in the sense that it appears to embrace a
more holistic view of organizational change. Thus, downsizing ought to embrace all dimensions
and aspects of the organization, including suppliers, customer relations, production methods,
design processes, and inventories (Cameron, 1994). Systemic strategy focuses primarily upon
changing the organization’s intrinsic culture and the attitudes and values of its employees
(Luthans & Sommer, 1999). Hence, downsizing is viewed as “a way of life” (Filipowski, 1993:
1) and an on-going, continuous, and incremental process (Cameron et al., 1991). Within this
framework, employees are not seen as the primary target of downsizing, but considered to be
resources in an attempt to produce and incorporate downsizing ideas (Cameron, 1994).
Cameron and his associates have also compartmentalized downsizing on the basis of the
depth and breadth of available downsizing strategies. This is depicted in Table 2.
Table 2 Depth and breadth of downsizing
Increasing depth Increasing breadth
Workforce reduction Organization redesign Systemic strategy

strategy strategy
•Natural attrition •Layer elimination •System analysis

•Layoffs/retrenchments •Unit combination •Culture change
•Early retirements •Product removal •Bottom design
•Buyout packages •Process rearrangement
Source: adapted from Cameron et al. (1991, 1993)
According to Cameron et al. (1991), organizations that incorporate a greater number of

actions of the same category of implementation have more depth in their overall downsizing
strategy. Conversely, organizations that employ a variety of strategy types have more breadth in
their strategy. The results of a four-year study of 30 American organizations that had engaged in
downsizing activities have disclosed that organizations were generally more likely to have depth
rather than breadth in their overall strategy. This revelation can be attributed to the fact that most
downsized organizations embarked upon workforce reduction alternatives rather than employing
a multiplicity of downsizing strategies (Cameron, 1994).
Two archetypal approaches to downsizing have emerged – reinforcement and reorientation.
These approaches were originally developed and empirically tested by Freeman (1994), who had
labeled these concepts “convergence” and “reorientation” (p 214). The approaches of
reinforcement and reorientation are built upon differing models of organizational change. The
concept of reinforcement (convergence) embraces the notion of an evolutionary, incremental,
and gradual change model. As a consequence, reinforced or converged downsizing would be
implemented on a smaller scale and as part of a process aimed at reinforcing an organization’s
mission, strategy, systems, and structure (Ryan & Macky, 1998). The concept of reorientation, in
contrast, encompasses the notion of a revolutionary, metamorphic, and discontinuous change
model. Thus, reoriented downsizing would be implemented on a larger scale, with major
redefinitions of an organization’s mission, strategy, and structure (Cameron et al., 1993). The
two contrasting approaches are depicted in Table 3.
Having reviewed the existing downsizing implementation strategies, the underlying
research question of this study was to examine what main downsizing strategy or strategies large
Australian and New Zealand banks implemented in their last round of downsizing.
Table 3 Reinforcement and reorientation approaches

Reinforcement (convergence) approach Reorientation approach
•Incremental downsizing and redesign •Discontinuous downsizing and redesign
•Lower-level, less radical approaches •Higher-level, more radical approaches
•Stability in management, technology, and •Change in management, technology, and systems
systems
•Changes in work, instead of structure •Changes in structure, instead of work
•Reinforces mission and strategy •Redesign mission and strategy
•Focus upon doing things better •Focus upon doing different things
•Emphasis upon efficiency criteria •Emphasis upon effectiveness criteria
•Downsizing precedes redesign •Redesign precedes downsizing
Source: adapted from Cameron et al. (1993)
LARGE BANKS IN AUSTRALIA AND NEW ZEALAND

Downsizing has occurred throughout the industrialized world (Ryan & Macky, 1998),
affected blue and white collar workers (Littler et al., 1997), targeted lower-level workers,
professionals, middle managers, and higher-level workers (Littler, 1998), and permeated all
industries (Morris et al., 1999). The banking sector has been particularly affected by the
deregulation of the finance industry in both Australia and New Zealand. Some of the more
notable repercussions have been workforce layoffs, redundancies, retrenchments, early
retirements, buyout packages, golden handshakes, and branch closures. In Australia, for
example, the size of the overall workforce in the finance industry has been rapidly declining
since the early 1990s (Finance Sector Union, 2002: 4). According to the Australian Bureau of
Statistics (ABS) (1998), the workforce of the Australian finance industry declined by 8.8 %
between 1991 and 1996. This development was exacerbated by the fact that the implementation
of downsizing in the Australian finance industry has proceeded and further rationalization
activities have been predicted (Finance Sector Union, 2002: 4). In a similar vein, Harrison (2000)
opines that the downsizing of Australian banks is not a phenomenon of the past and predicts that
downsizing will remain a principal strategic managerial tool for the major banking institutions
(Harrison, 2000).
The New Zealand banking industry has also undergone significant structural, political, and
technological changes since the commencement of the deregulation of the finance industry in the
late 1980s. In line with developments in Australia, the workforce of the New Zealand banking
industry has been steadily declining since the mid-1990s. Anecdotal evidence suggests that all
major banks have had at least one round of workforce downsizing since the late 1990s and most
large banks are currently considering further reductions in workforce. The author of this report
was actively involved in the execution and implementation of two separate downsizing activities
in large New Zealand banks in 2001 and 2002. A relatively recent report from a New Zealand
governmental agency revealed that up to two thirds of all finance jobs could potentially
disappear by the year 2015 due to projected restructuring activities and consolidations (New
Zealand Banking Review, 2003).
Having surveyed the literature and examined some of the recent developments of workforce
levels in the Australian and New Zealand banking industries, the fundamental question arises as
to whether there may be differences in the way banks execute downsizing. In other words, do
Australian and New Zealand banks differ in their adoption of downsizing strategies and in their
depth and breadth of downsizing? Do contextual and cultural differences result in differing
downsizing strategies? Are organizations in certain cultural environments more likely to favor
specific downsizing strategies? Are differences in national cultures reflected in organizational
decisions about downsizing? Hitherto, no comparative studies on possible similarities and
dissimilarities between two different countries and their downsizing strategies have been
documented. Analyzing the Australian and New Zealand national cultures and determining the
cultural similarities and divergences in greater detail is beyond the scope of this paper. However,
given the progression of deregulation, the composition and national importance of the banking
sectors, and the geopolitical interdependence of both countries, it was expected that the findings
would depict a consistent and convergent picture.
CASE STUDY METHODOLOGY

Academic research on downsizing should adopt an inductive theory-building rather than a
deductive theory-testing approach (Cameron et al., 1993; Ryan & Macky, 1998). This judgment
corresponds with Littler (1998), Morris et al. (1999), and Dolan et al. (2000). As a consequence,
this study has employed the case study methodology. Case study research is essentially a form of
“empirical inquiry” (Yin, 1994: 23). According to Yin (2003), the case study method focuses
upon a phenomenon within its real-life context by obtaining data from a multitude of sources in
order to comprehensively investigate and analyze the phenomenon in-depth. Thus, the case study
method has the capacity to generate theory (Yin, 2003). The selection of cases in qualitative case
study research is purposeful (Perry, 1998) and involves the use of replication rather than
sampling logic (Eisenhardt, 1989; Yin, 1994; Carson, Gilmore, Gronhaug, & Perry, 2001).
Furthermore, the selection of individual cases depends largely upon the conceptual framework
developed in the literature review and prior theory (Perry, 1998). The ultimate underlying
principle of the selection procedure is selecting “information rich cases” (Patton, 1990: 181).
According to Stake (1994), the importance of information richness (Patton, 1990) exceeds the
issue of representativeness. This study has purposefully selected eight study cases – the four
largest Australian and the four largest New Zealand banks. The research has exclusively
involved large banks, as measured by the total number of employees (Robbins, 1983). The eight
banks are considered the key players in their respective industries and countries. The decision to
involve large organizations was due to Keller’s (1998) observation that “it is the large companies
that appear to have been the prime targets of organizational downsizing” (Keller, 1998: 324).
A considerable number of in-depth, face-to-face interviews and teleconferences with senior,

middle, and operational managers of the eight study cases were conducted between October 2003
and March 2004. The administrative titles of the key informants included Chief Executive
Officer (CEO), Chief Operations Officer (COO), Chief Knowledge Officer (CKO), Director HR,
Director L&D, Manager L&D, and HR Manager. The distinction between executive, middle, and
lower-level management was critical to the success of the study and satisfied the requirement of
conducting interviews at different hierarchical levels within all case study organizations (Perry,
1998; Carson et al., 2001). The qualifying criteria for all involved participants were (1) the status
of being a downsizing ‘survivor’ (Noer, 1993) and (2) the status of being a downsizing ‘driver’
(Dolan et al., 2000). In other words, participants needed to have served the downsized
organization prior to, during, and after the downsizing and must have been actively involved in
the actual planning, development, and execution of the downsizing endeavor.
There was an underlying expectation that participants would provide information that would
in turn have the capacity to build theory. Thus, participants were seen as “informants” (Bogdan
& Biklen, 1998: 32) rather than mere “respondents” (Yin, 1994: 84). All managers were
interviewed only once over the six-month period with each interview lasting from one to one and
a half hours. The interviews were focused (Adams & Schvaneveldt, 1991) in nature. This
allowed the interviewer to probe far beyond the answers to the prepared and standardized
questions (Berg, 1989). With the consent of the participating organizations and individual
managers, each interview was taped and meticulously transcribed and documented. The
interview transcripts constituted the main raw material (Silverman, 1997), and provided “highly
detailed and publicly accessible representations of social interaction” (Silverman, 1997: 203). A
total of thirty-six participants across all eight study cases were interviewed - twelve executive
managers, twelve middle managers, and twelve operational managers. The overall figure was
consistent with the case study literature that suggests the number of conducted interviews to be
in the range of 20 to 50 participants (Larsson, 1993; Perry, 1998).
RESULTS AND DISCUSSION

This case study ascertained the downsizing implementation strategies of large Australian
and New Zealand banks. It also sought to determine patterns, consistencies, and anomalies in
regard to the implemented downsizing strategies among and between the main banks. Three key
findings have emerged. First, the study has shown that all participants declared that their
respective organization has engaged in workforce downsizing practices since the early days of
this millennium. The vast majority of Australians stated that workforce reduction strategies,
including workforce layoffs, retrenchments, early retirements, buyout packages, natural
attritions, and hiring freezes, were the most commonly utilized downsizing strategies and
adopted without restraint in the most recent round of downsizing. A considerable number of
participants indicated that layoffs and staff retrenchments were frequently seen as the bank’s
“first preference”. In this sense, participants understood that workforce reduction strategies were
likely to have a quick implementation time with short-term payoffs. In contrast, organization
redesign strategies, including job redesign, merging of units, abolition of functions, and de-
layering, were not seen as primary strategies. Rather, these secondary strategies were seen as a
direct consequence of the primary downsizing implementation strategies. In other words, in an
Australian context, organization redesign strategies were utilized only in response to and as a
direct consequence of the adoption of workforce reduction strategies. The systemic strategy, that
views downsizing as ‘a way of life’, was rejected by all Australian managers. Participants
perceived systemic strategies to inhibit short-term savings and to only engender long-term
payoffs. Thus, systemic strategies were not seen as suitable implementation strategies.
In stark contrast to Australian banks, New Zealand bank managers perceived organization
redesign strategies to be the preferred downsizing implementation strategy. According to the
New Zealand participants, the primary focus of any downsizing endeavor should be “work”
rather than “people”. In other words, the emphasis should lie with the elimination of work rather
than reducing the number of employees in the first instance. Participants nominated the redesign
of tasks and the consolidation of work, units, products, groups, and divisions as the standard
practices in downsizing efforts. However, New Zealand managers stressed that the adoption of
organization redesign strategies necessitated a profound level of understanding of the individual
operations and tasks and also required some advanced analysis of the targeted areas. Workforce
reduction strategies were seen as a “last resort”. They were also viewed to inhibit long-term
adaptability and perceived to be “extremely disruptive” and “damaging to the image, ethos, and
culture of the organization”. At the same time, New Zealand managers admitted that a number of
workforce reduction strategies, including specific hiring freezes, natural attritions, and limited
retrenchments, were embraced in the last round of downsizing. New Zealand participants also
stated that even though a systemic strategy per se, with its focus on culture, was not adopted,
some distinct elements of a systemic strategy were nevertheless actively being pursued,
including, continuous improvement, staff involvement, and bottom-up change.
Second, this research has revealed that there were differences in the breadth and depth of
downsizing implementation strategies between Australian and New Zealand banks. Australian
bank managers generally resorted to workforce reduction strategies as primary downsizing
implementation strategies and largely forfeited the options of organization redesign strategies
and systemic strategies. More specifically, all Australian study cases reported the adoption of
layoffs, retrenchments, early retirements, natural attritions, hiring freezes, and early buyouts.
Moreover, these strategies were utilized by all Australian banks in their last round of downsizing.
Thus, Australian banks showed great depth in their downsizing. In stark contrast, New Zealand
bank managers tended to embrace a more holistic approach to downsizing and resorted to a
broader variety of implementation strategies. According to the participants, downsizing strategies
comprised (1) the primary tools of redesigning tasks and consolidating of work, units, products,
groups, and divisions, (2) the secondary tools of hiring freezes, natural attritions, early
retirements, voluntary redeployments, and voluntary separation packages, and (3) the “last
resort” tools of involuntary redeployment, retrenchments, and layoffs. At the same time,
participants declared that systemic strategies, such as continuous improvement, bottom-up
change, and staff involvement, were also pursued and implemented. Thus, New Zealand banks
showed great breadth in their downsizing.
Third, the study has shown that Australians had a tendency to embrace “reorientation”
(Cameron et al., 1993) approaches to downsizing, whereas New Zealand bank managers were
more likely to adopt “reinforcement” (Cameron et al., 1993) or “convergence” (Freeman, 1994)
approaches. More specifically, Australians tended to engage in radical, high-level approaches, in
that significant change to mission, strategy, structure, systems, and technology occurred in the
last round of downsizing. Participants viewed the approach to change to be “discontinuous”. The
last round of downsizing was also implemented on a larger scale with major redefinitions.
However, New Zealand participants incorporated less radical and lower-level approaches in their
last round of downsizing, seeing it as a way to “reinforce mission and strategy” and stability in
management, systems, and technology. There also seemed an emphasis upon changes in work
rather than people. Participants perceived the approach to downsizing to be “incremental” and
“gradual”. Participating managers stated that the last round of downsizing was implemented on a
smaller scale and as part of a continuing process.
An overview of the three main findings in regards to comparative inter-countries
downsizing strategies is exhibited in Table 4.
Table 4 Overview of comparative inter-countries downsizing strategies

Australia New Zealand
Implementation strategies Mostly workforce reduction Mostly organization redesign
strategies strategies
Breadth/Depth in overall More depth in overall More breadth in overall downsizing
downsizing downsizing
Approach to downsizing Reorientation approach Reinforcement approach
Source: analysis of field data
CONCLUSION
This study examined the adopted downsizing implementation strategies of large Australian
and New Zealand banks. At the outset of the research, the study reviewed the literature on
downsizing implementation strategies and presented the research question. The adoption of the
case study methodology enabled the researcher to analyze and determine the implementation
strategies adopted by large Australian and New Zealand banks in their last round of downsizing.
Following the processes of data gathering, analysis, and interpretation, three major findings
emerged. First, Australian banks tended to primarily adopt workforce reduction strategies,
whereas New Zealand banks had a mixture of organization redesign strategies, workforce
reduction strategies, and systemic strategies. Second, Australian banks were perceived to have
considerable depth in their downsizing, whereas New Zealand banks had more breadth in their
implementation strategies. Third, Australian banks tended to adopt reorientation approaches,
whereas New Zealand banks were more inclined to embrace reinforcement or convergence
approaches. Prior to this study, there was little comparative data on downsizing implementation
strategies between and among competitors, industries, and countries available. Given the
progression of deregulation, the composition and national importance of the banking sectors, and
the geographical and geopolitical interdependence of both countries, there was an implicit
expectation that the cross-comparison of implementation strategies would show a relatively
convergent picture. However, this study has shown that the differences in the adoption of
downsizing strategies between Australian and New Zealand banks were considerable. This poses
a multitude of questions. For example, do the results show a general pattern? How can the
similarities and dissimilarities be specifically explained? How do the results compare to other
comparative cross-sectional and cross-cultural studies? In the absence of an established
framework and the apparent lack of comparative cross-cultural data, the task of providing a clear
conclusion is problematic. It remains unclear as to why large Australian and New Zealand banks
have diverged in their approaches and strategies to downsizing and in their differing selection of
available implementation strategies. Possible explanations are manifold - government
interference, executive remuneration, industrial relations demands, competitive national and
international market pressures, and the downsizing history of individual industries and
organizations, on the one hand, and differences in national cultures and cultural values, on the
other, may have influenced the adoption of downsizing implementation strategies. Finally, there
is mounting empirical evidence that suggests that downsizing has the propensity to engender
negative financial, organizational, and social consequences. A number of studies in both
Australia and New Zealand have reported negative after-effects following downsizing. The small
sample size in this study limits the generalizability of the findings in that they may not be
generalized across Australian and New Zealand banks and across Australian and New Zealand
industries. The study also solely focused upon large banking institutions and middle-sized and
small-sized banks were not considered for the purpose of this study.
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The Role of Personality Traits in UTAUT Model under Online

Stocking
Hsing-I Wang
Overseas Chinese Institute of Technology, and National Cheng-Chi University, Taiwan,
E-Mail: hsing@ocit.edu.tw
Heng-Li Yang
National Cheng-Chi University, Taipei, Taiwan,
E-Mail: yanh@nccu.edu.tw
ABSTRACT
The introduction of a new science and technology will fully reflect its value and its potential
to create value only when individuals are willing to accept and adopt it in their daily works. The
theory of acceptance and use of new technology has been widely discussed for decades and is
still attracting scholars to work toward developing a comprehensive model. The reasons are
because of various latent variables that might affect the model, and moreover, the way how the
variables interfere the model has not reached an agreement. This research combines the theory of
personality traits with the unified theory of acceptance and use of technology. The purposes are
to examine the roles that personality traits play in UTAUT model under the context of online
stocking.
Keywords: Personality Traits, Big-Five Model, UTAUT Model, Online Stocking
INTRODUCTION
The introduction of a new science and technology will fully reflect its value and its potential
to create value only when individuals are willing to accept and adopt it in their daily works. After
the Technology Acceptance Model (TAM) was presented, the model was either refined or
modified. In addition, several other similar models and theories were established to explain why
an individual would adapt himself to a new technology, and in turn, what actions an organization
should take to facilitate the use of that technology. Literature surveys indicated that in the efforts
of understanding the drivers of acceptance, researcher sometimes needed to choose a favored
model from many competing models as well as appropriate variables across models. Venkatesh
et al. (2003) then proposed the Unified Theory of Acceptance and Use of Technology (UTAUT)
that include eight different models in order to get an integrated view of user acceptance.
Nevertheless, it is our belief that some important constructs are still missing in the context of
online stocking. Among those constructs that could be added to predict the intention, this
research focuses on personality traits. Ajzen had taken the relationships between personality
traits, behavior and attitude into consideration while he was developing the Theory of Reasoned
Action (TRA) theory in 1988, and proposed that personality traits must have some indirect
influence on a person’s behavior (Ajzen, 1988). Other literature surveys have also identified the
close relationships between human behavior and personality traits. Nevertheless, personality
traits have never been explicitly examined in TAM or any other related mode. This research aims
at clarifying the affects that personality traits may convey.
Online stocking was chosen to be the area to study with due to the following reasons. (1)
The rise of the internet has lifted the great waves in the industry. For investors, the demands of
faster, more convenient, more elastic investment channel, and the immediate accurate
information are magnified as well. However, the populations of using online stocking have not
increased to an edge as expected. The reasons of hindering the acceptance of using the new
technology are worth being delved. (2) Issues of online stocking are similar to online shopping.
It is suggested in this paper that research results on online consuming can be borrowed to study
online stocking. (3) Although all transactions are also on the Internet, online stocking has more
risks comparing to online shopping. It is noticed that nearly no researches that have addressed
personality traits versus intentions under consciousness of risk.
There are two objectives in this research. First, we hope to examine the role personality
traits in UTAUT model: would they be external variables or moderators? Second, it is expected
that valuable insights would be obtained from this research, and in turn, to provide financial
companies appropriate suggestions to make marketing strategies. The Big Five Factors is
adopted in this research to explain different types of personalities. The Big Five Factors had been
applied to various domains after it was formed (McCrae and John, 1992). Research subjects
include the relationship of personality traits and job satisfaction, personality traits and the
possibility of suffering a certain kind of disease, personality traits and exercise training program,
etc. This research focuses on personality traits and the acceptance and use of a new technology in
financial area. In the following sections, this paper first introduces the concept of the Big Five
Factors and the UTAUT model. Two research models will present after introducing the
methodology. The results of data analysis are interpreted and discussed. Conclusions are then
given in the last section.
LITERATRUE SURVEYS
The Big Five Factors
Personality determines the unique thinking and behaving patterns of an individual (Allport,
1961). Traits, however, are the degree of this emerged uniqueness when an individual is
observed from different angles or dimensions. Most psychologists also agree that human
behaviors relate to personal factors as well as the context (Allport, 1961, Endler & Magnusson,
1976). Eysenc (1991) proposed that personality traits contain five principles, namely
replicability, comprehensiveness, external correlates, source traits and multiple levels. The five
principles were then recognized as Five Factor Model (FFM) or Big Five Factors. FFM
categorized personality traits into Extraversion (E), Conscientiousness (C), Agreeableness (A),
Neuroticism (N) and Openness (O). High Extraversion persons are mostly positive, optimistic,
are willing to take risks, like to be around crowds, have more social activities, and tend to look
for amazement. Conscientious persons are more authoritative, meticulous, responsible, and
tough. Persons, who are more agreeable, are cordial, enthusiastic, will sympathize with or help
others. High Nervousness persons are relatively unstable, easily to be frightened, rash, depressive
and angry, etc. Theoretically, the person of the nervousness type is apt to exercise a certain
behavior under the social pressure. The style of openness refers to the abilities to accept various
experiences, cultures, always express one’s curiosity and has much more imagination.
While TRA theory was under developing, Ajzen thought that the personality traits should
only be the external parameters. Together with other external variables, they would change a
person's faith and motive, and then influence the attitude and subjective norm (Ajzen, 1988).
TRA explained the personal behavior that is always volitional, however, from time to time and
under some certain circumstances, behaviors are considered more involuntary. Therefore, Ajzen
proposed TBP model and added the new construct of perceived behavioral control (Ajzen, 1991).
Perceived behavioral control was further divided into internal and external control. Internal
control refers to an individual’s self-perception to the resources that he owns. These perceptions
could be heavily influenced by one’s personality. Courneya et al. (1999) also added personality
traits in TPB model and tried to prove that personality traits would affect behavior intentions
through attitude, subjective norm and perceived behavioral control. However, their research
model failed to explain the effects of personality traits on intentions completely. Moreover,
Rhodes et al. (2002) considered personality as moderators in their research.
Online Stocking
Online stocking has been recognized as an important mean to conduct investment under the
trend of globalization economy. Online stocking is simple and convenient, its transaction is fast,
its cost is relatively low, and it can offer other value-added financial information services. For
investors, online stocking offers favorable discount of the service charge; has much more privacy
and security; provides much more flexibilities to manage the time, etc. The dealers in securities
have tried to offer multiple favorable services to potential customers. However, by the end of
2002, the population of online stocking was only 15 % of the total security investors in Taiwan
(Find, 2002). Jeng (2002) found that investors perceived online stocking as one of the activities
on the Internet. Online activities are considered boring, lacking of interactions with people, less
trust and more risks. For those who are active on consuming online are mostly aggressive,
adventuresome, enjoying competition and are always fascinated by newish (Swinyard & Smith,
2003). In contrast, people who are more conservative or conscientious, tend to be more prudent
before they take actions. Still, the situation might be able to be changed if businesses would offer
a new design or a new way of doing business (Jahng et al., 2002).
UTAUT
Basically, investments take a lot of risks. Whether investors are willing to adopt online
stocking depends on the degrees of their acceptances of the new technology. TAM model
believes that usefulness and easy to use are the two determinants for an individual to accept a
new technology. Longitudinal researches observed the same subjects from various dimensions
and developed several different models. Venkatesh and Davis (2000) believed that factors such
as personal image and the relevance of jobs would affect the perceived usefulness; they proposed
a revised model TAM2 to include a new construct named social influence. Thompson, Higgins
and Howell (1991) added two more variables including the long-term effects of new technology
and facilitating conditions while exploring users’ behaviors on using PC. The main purposes of
these researches were trying to assist companies to understand how consumers and employees
would react to the introduction of a new technology. Nevertheless, previous researches were
mostly limited to some certain dimensions or constructs. As a result, companies were not able to
get an entire view of the reasons why customers or employees resisted the acceptance of a new
technology. Venkatesh et al. (2003) therefore examined eight prominent models and proposed
the integrated one. UTAUT consisted of four constructs that were extracted from the eight
models and would definitely affect the intention of behavior. The four constructs are
performance expectancy, efforts expectancy, social influence, and facilitation conditions.
The relationships between personality traits and some of the four constructs have been
separately discussed in the previous researches. For instance, researches concerning personality
traits on performances found that the two variables are positively related (Connolly &
Viswesvaran, 2000, DeNeve & Cooper, 1998, Judge et al., 2002). Gellatly (1996) examined the
impact of a single trait “Conscientiousness” on job performance and found that performance
expectancy was the intermediary between personality trait and job performance. The research
findings suggested that conscientious persons believe that they can perform superior in their jobs
and in turn, they set higher expectancy and work harder to achieve that target. The intermediary
relationship did not, however, emerge from Barrick and Mount’s (1991) research. The research
assumed that high nervousness persons were easily to be eliminated from their positions and
hence were not able to give enough time to observe the impacts of their characteristics on job
performances. Moreover, the applications of FFM to medical researches also proved that once
personality traits were classified appropriately, they could be used to predict human behaviors
(Courneya et al., 2002. Hough, 1992).These facts add more values to this research to explore the
role of personality traits in UTAUT.
The Combination of Personality Traits and UTAUT

Moderators have got great attentions in MIS field. And as the interests on moderated
relationship increased, researchers also found that: context matters in MIS researches (Barrick &
Mount, 1991). Previous researches have shown the latent relationship between personality traits
and the acceptance of new technology, only that it has been never included explicitly in the
model. How the personality traits would affect the intention to accept a new technology has not
reached final conclusions. As indicated before in this paper that human behaviors relate to
personal factors and the context, this research focuses mainly on the context of online stocking,
exploring the role that personality traits play on UTAUT model: indirect or intervening.
METHOD AND DATA ANALYSES

Research Model and Hypotheses
Based on the findings of literature surveys, this research has the following observations.
(1)Since personality traits may dominate a person’s behavior, the effects of personality traits on
the intention of behavior will be considered in this research context. (2)Some researches
indicated that personality traits influenced the intention of behavior through the intervening
variables such as performance expectancy, social influences and facilitating conditions. In
contrast, some other empirical studies also identified the moderating effects of personality traits
on the intention of behavior. In other words, personality traits may enhance or weaken an
individual’s willingness or attitude toward behavior. However, some researches were still not
able to validate any relationship between the constructs. Moreover, effort expectancy was never
discussed in the previous researches. (3) Online stocking is full of uncertain risks. Learning how
personality traits affect the behavior may benefit both investors and financial businesses.
Performance expectancy, effort expectancy, social influence and facilitating condition are
considered important constructs under the context of online stocking in this research. Due to the
effects of personality traits on the intention of behavior are still pending, this paper proposes two
research models in Figures 1 and 2.
Figure 1 Research model 1
Figure 2 Research model 2
Model 1 is hypothesized that personality traits will affect the intention of adopting online
stocking indirectly through performance expectancy, effort expectancy, social influence as well
as facilitating conditions. Model 2, however, is hypothesized that personality traits and the
internet experience will moderate the effects of performance expectancy, effort expectancy,
social influence, facilitating conditions on the intention of adopting online stocking. Detail
descriptions of hypotheses are given in table 1. In order to focus on investigating the effects of
personality traits, UTAUT model has been simplified by removing all moderators but
experience. Experience is also renamed as internet experience to fit the context of this research.
Moreover, this research focuses only on behavior intentions. The actual behavior requires a
certain period of time to observe and is thus not included in the models.
Table 1 List of hypotheses

Hypotheses Description
H1a-H1e Extraversion, Conscientiousness, Agreeableness, Neuroticism and Openness
will influence the intention of adopting online stocking through performance
expectancy, respectively.
will influence the intention of adopting online stocking through effort
expectancy, respectively.
will influence the intention of adopting online stocking through social
influence, respectively.
will influence the intention of adopting online stocking through facilitating
conditions , respectively.
H5 The influence of performance expectancy on the intention of adopting online
stocking will be moderated by personality traits and internet experience.
H6 The influence of effort expectancy on the intention of adopting online stocking
will be moderated by personality traits and internet experience.
H7 The influence of social influence on the intention of adopting online stocking
will be moderated by personality traits and internet experience.
H8 The influence of facilitating conditions on the intention of adopting online
stocking will be moderated by personality traits and internet experience.
Measurement and Instrument for Data

The definition of each personality trait is adopted directly from Costa & McCare (1992,
1995); the familiarity with the Internet was defined by Novak & Hoffman (Novak and Hoffman,
1997). All the other variables in model 1 and model 2 remain the same as indicated in the
UTAUT model. Details are given as follows.
Performance expectancy (PE) is defined as the degree to which an individual believes that
using new technology would help on improving his or her working performance. It is
measured by the perceptions of using online stocking system in terms of the benefits, speed,
usefulness and productivity.
Effort expectancy (EE) is the degree of ease associated with the use of the system and is
measured by the perceptions of ease of using or understanding the operations of the online
stocking system.
Social influence (SI) refers to the degree to which an individual perceives that important
others believe he or she should use the technology and is measured by the perception that
other persons of importance or influence think that he or she should use the online stocking
system.
Facilitating condition (FC) refers to the degree to which an individual believes that an
organizational and technical infrastructure exists to support use of the system and is measured
by the perception of having required resources or facilities knowledge to use the online
stocking system or having someone to get helps.
Intention of adopting online stocking (INTEN) is the possibilities of using online stocking
system. Measurements include the intension, plan or estimate of using the online stocking
system in the future.
Extraversion (E) is positive, optimistic, excited, is willing to take risks, and likes to be around
crowds. It is measured by the degrees of positive affect, gregariousness, activity and
assertiveness.
Conscientiousness (C) refers to authoritative, meticulous, responsible, and tough.
Measurements include the degrees of order, dutifulness, achievement-striving, self-discipline.
Agreeableness (A) refers to cordial, enthusiastic, will sympathize with or help others and is
measured by the degrees of trust, straightforwardness, altruism, compliance, and tender-
mindedness.
Neuroticism (N) is unstable, easily to be frightened, rash, depressive and angry. It is measured
by the degrees of anxiety, angry, depression and vulnerability.
Openness (O) is easy to accept various experiences, cultures, always express curiosity and
have much more imagination. Measurements include the degrees of fantasy, feelings, ideas,
values, aesthetics and action.
Internet experience (W) refers to the continuously and frequently use Internet for specific
tasks and is measured by the time spending on and the frequency of using the Internet.
Table 2 shows the sources of questionnaires and their reliabilities and validities. All
questions were translated into Chinese and were proofread by an English teacher. Two professors
(with major in Finance and MIS, respectively) were invited to pretest the questionnaires. All
questions were measured by 5-point scale ranging from 1 (strongly disagree) to 5 (strongly
agree). To financial consulting companies or security businesses, any information concerning
their clients would be extremely confidential. Therefore, it is impossible to get a list of investors
to conduct a systematic sampling. In addition, the questionnaire respondents should have some
investment experiences. So, without any filtering, online survey, e-mail questionnaires or
interviewing people on street are deemed to be inappropriate. Consequently, through
cooperation, the agents in eight major security companies were invited to help distribute the
questionnaires to their clients.
Table 2 Sources of questionnaires

Variables Source of Reliabilit Validity
questionnaire y
UTAUT Constructs Ventkatesh et al. >0.7 Acceptable convergent and
(2003) discriminant validity
(Ventkatesh et al., 2003).
Extraversion NEO-PI (form S) 0.86 Acceptable convergent and
Openness Costa & McCare 0.81 discriminant validity (Barrick
(1992) and Mount, 1991, Costa and
Agreeableness 0.73 McCrae, 1995, Eysenck, 1991,
Conscientiousness 0.77 Narayanan, Menon and Levine,
1995)
Neuroticism 0.68
Internet experience GUV’s WWW 0.58 NA
user surveys
(1998)
Data Analysis
700 questionnaires were distributed to investors who were not necessarily exercising online
stocking. Of the 240 returned questionnaires, 44 were invalid. So, effective response rate is 28%.
The invalid questionnaires include: incomplete answers, answers that were obviously conflict or
answers that were the same to all the questions. Reliabilities and discriminant validities were
reanalyzed with the returned data. Reliability of internet experience is 0.815. All internal
consistency reliabilities except “Openness” and “Agreeableness” are greater than 0.7. The
discriminant validity was calculated by examining all the Chi-square values of each pair of
constructs (Anderson and Gerbing, 1988). Among the 45 pairs of comparisons, “Extraversion”
vs. “Intention”, “Openness” vs. “Intention” and “Agreeableness” vs. “Intention” showed
insignificant χ2 values.
Table 3 Demographic of respondents

sex age # of years on security Has online investment
investment experience
M F -20 20- 40- 50 -1 1- 5- 10+ yes no
29 49 + 5 10
9 9 60 94 31 11 46 7 47 29 76 120
8 8 4
From Table 3, we noticed that 60 respondents were younger than 20. A lot of students had
begun to invest on stocks or securities while they were taking financial courses in colleges. The
majority respondents had 1 to 10 years experiences on stocks investment, and about 38% (76
responses) had already been buying stocks online. In the questionnaire, we further asked whether
the online-experienced person would retain his/her behavior, 73 replied yes. On the contrary,
only 2 persons who had no online experiences would try to adopt new means to engage in
investment.
Table 4 Results of indirect effects

Dependent Independent variable Adjusted R2 β coefficient
variable
Step 1 Intention of Extraversion .083 .216(**)
adopting online Conscientiousness 0.73
stocking Agreeableness -.014
Neuroticism .008
Openness .164(*)
Step 2 Performance Extraversion .216 .351(**)
Expectancy Conscientiousness .040
Agreeableness .060
Neuroticism .027
Openness .123
Efforts Extraversion .186 .269(**)
Expectancy Conscientiousness .042
Agreeableness -.054
Neuroticism -.133(*)
Openness .239(**)
Social Influence Extraversion .044 .209(*)
Conscientiousness .032
Agreeableness .115
Neuroticism .137
Openness -.177(*)
Facilitating Extraversion .140 .220(*)
Condition Conscientiousness .163
Agreeableness -.107
Neuroticism .001
Openness .183(*)
Step 3 Intention of Extraversion .357 -.005
adopting online Performance
stocking .605(**)
Expectancy
Extraversion .330 .036
Efforts Expectancy .567(**)
Extraversion .145 .187(**)
Social Influence .324(**)
Extraversion .399 .076
Facilitating Condition .614(**)
Openness .113
.341
Efforts Expectancy .549(**)
Openness .205 .309(**)
Social Influence .384(**)
Openness .415 .148(**)
Facilitating Condition .605(**)
Method proposed by Barron and Kenney (1986) was adopted in this paper to test the
indirect effect. In the model, independent variables are personality traits; dependent variable is
the intention of adopting online stocking. The mediators are PE, EE, SI and FC respectively.
Step one in table 4 runs regression of “Personality traits” on “Intention”. The result shows that
“Extraversion” (p<.01) and “Openness” (p<.05) significantly affect the “Intention of online
stocking”. Step 2 processes the regression of independent variables on mediators. In table 4,
“Extraversion” shows significant effect on PE, EE, SI and FC; “Openness” shows significant
effect on EE, SI and FC.
We therefore chose “Extraversion” and “Openness” to proceed to the third step: testing the
intervention effects. The effects of “Extraversion” on “Intention” declined after adding PE, EE,
SI and FC as indicated in step 3 of table 4. The analyses support hypotheses H1a, H2a, H3a and
H4a. The effects of “Openness” on “Intention” declined after adding EE and FC. The results
support hypotheses H2e and H4e.
To test the moderating effects, this research first calculated Z value for each variable. Zx *
Zy would then represent the interaction effect of independent variable x and moderator y. Table 5
shows the results. Neither personality traits nor Internet experience moderates the effects of EE
on the intention of adopting online stocking, H6 is rejected. The main effects of PE and FC will
not be interpreted due to the presence of the interaction terms. PE*O will also be interpreted by
PE*W*O. The summary of findings and the explanation of each hypothesis will be given in the
discussion section.
Table 5 Results of moderating effects

Dependent variable: the intention of adopting online
stocking
Adjusted R2: 0.593
Variables in regression model β coefficient
PE .323(*)
PE*O .211(*)
PE*W*O -.608(**)
SI*W*A .372 (**)
SI*W*C -.336(*)
FC .412(**)
FC*W*N .305(*)
Note: Only significant effects are listed here.
DISCUSSION
This research investigates the influence of personality traits on UTAUT model in the online
stocking domain. Table 6 and 7 provide the summary of findings. Table 4 revealed two
intervening effects. The results suggested that among five different personality traits, the
“Extraversion” trait affected “the intention of an investor” thru “Performance Expectancy”,
“Efforts Expectancy”, “Social Influence” as well as “Facilitating Condition”. “Openness”,
however, affected “the intention of an investor” thru “Efforts Expectancy” as well as

“Facilitating Condition”. From the aforementioned definition, “Extraversion” is considered to be
positive, optimistic and sociability. Individuals higher in “Extraversion” may expect more
opportunities to leverage their performances; assistances or opinions from outside are essential to
them and would be accepted easily. In contrast, individuals lower in Extraversion may expect
fewer opportunities and may refuse assistances from others. “Openness” refers to be easy to
accept various experiences and cultures. Individuals, who are more open, are more likely to
perceive online stocking as an easy way to conduct investment. They also expect the required
resources and facilities always available.
“Openness with Internet Experience” was found moderating the “Performance Expectancy -
Intention” relationship and the effect is negative (-0.608). “Openness” individual tends to be easy
to accept various experiences and cultures, they are always happy and always appreciate for
newish. According to the definition, it was expected that “Openness with Internet Experience”
might motivate the intention from Performance Expectancy. However, the result showed the
opposite. Probably as long as an Open person is capable of using the Internet and understands the
advantages of online stocking, he is more likely to utilize all resources to explore the new fantasy
regardless of the benefits. Future research may explore deeply on this specific trait.
Table 6 Summary of significant findings on research model 1

Intervening Independent Explanation
variable variable
Extraversion H1a: Effect of Extraversion on intention of adopting
Performance
online stocking is strong only thru the intervention of
Expectancy
performance expectancy.
Efforts efforts expectancy.
Expectancy Openness H2e: Effect of Openness on intention of adopting online
stocking is strong only thru the intervention of efforts
expectancy.
Social
Influence
social influence.
Facilitation facilitation conditions.
Conditions Openness H4e: Effect of Openness on intention of adopting online
stocking is strong only thru the intervention of facilitation
conditions.
Note: The dependent variable of each hypothesis is “Intention of adopting online stocking”.
Table 7 Summary of significant findings on research model 2

Independent Moderators Explanation
variable
Performance Extraversion, Conscientiousness, H5: Effect stronger for Openness with
Expectancy Agreeableness, Neuroticism, internet experience.
Internet experience
Social Extraversion, Conscientiousness, H7: Effect stronger for Agreeableness with
Influence Agreeableness, Neuroticism, internet experience, and Conscientiousness
Internet experience with internet experience.
Facilitation Extraversion, Conscientiousness, H8: Effect stronger for Neuroticism with

Conditions Agreeableness, Neuroticism, Internet Experience.
Internet experience
Note: The dependent variable of each hypothesis is “Intention of adopting online stocking”.
“Agreeableness with Internet Experience” moderates the “Social Influence - Intention”

relationship with positive effect (0.372). “Agreeableness” refers to an individual who is cordial
and enthusiastic. “Agreeable” individuals also tend to sacrifices their own pleasures to please the
others (Narayanan and Levine, 1995). The measurements of “Agreeableness” are measuring the
degree of trust, straightforwardness, and tender-mindedness. Social influence is the degree an
individual perceives the influence on him from other persons of importance. Therefore, the more
Agreeableness will motivate more on the “Social Influence – intention” relationship.
“Conscientiousness with Internet Experience” was also found moderating the effect of
“Social Influence” on “Intention” and the effect was negative (-0.336). Conscientious persons are
more authoritative, responsible, tough and determinant, once they make a decision, they would
more likely follow their intention. Therefore, they might not be influenced by others. The “Social
Influence – Intention” relationship would be weakened by “Conscientiousness” trait.
Venkatesh et al. (2003) hypothesized that “Facilitating Condition” had direct effects on
“Intention”. The result of this research however suggested that, “Neuroticism with Internet
Experience” significantly moderate the “Facilitating Condition - Intention” relationship with
positive effect (0.372). “Neuroticism” generally tends to be more vulnerable, easy to get angry
and worry. High neurotic individual appears to be more anxious for facilities, so he will feel
secure in the attempt to a new technology.
CONCLUSIONS
This research explored the role of personality traits in the unified theory of acceptance and
use of technology. From table 3, the variances explained in the intervention effect were quite
low; however, the moderating model could explain 60% variances (see table 4). Data analyses
suggested that personality traits play more important roles as moderators than as external
variables. Based on the findings, security businesses could develop valuable marketing strategies
to encourage investors to adopt new means of investment. For example, since performance
expectancy may not motivate the intentions of “Openness”, security businesses could offer more
facility assistance, improve their knowledge of managing money, or expand services to provide
newly financial merchandises, etc. The existence of virtual communities might bring
“Conscientiousness”, “Neuroticism” and “Agreeableness” investors more fun and more

confidence. They could get the technological supports from the community or be more motivated
by social pressure. For “Agreeableness” investors, the binding of good relationships among
agents and investors are more essential. “Neuroticism” individuals however, may need special or
gentle attentions to ease their temper and to cultivate their intentions.
Moderators include age, sex and voluntariness of use in UTAUT model were excluded to
simplify the research models of this research. Further study might reconsider these variables to
supplement the model. Furthermore, previous work has identified that personality traits might be
extremely distinctive among races and cultures (McCrae & John, 1992, Narayanan et. al., 1995),
our empirical study results conducted in Taiwan might not be applied to general. Future similar
researches may be conducted in other countries. In addition, the intention was asked, but the
actual behavior was not yet observed in this study. It is worth further studying as well.
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Authors desiring to submit a paper should submit it to the editor-in-chief via email.
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E-mail: fang@mail.ntpu.edu.tw
No. 69, Sec 2, Chien Kuo N. Rd, Taipei 10433 Taiwan
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Each paper submitted to Electronic Commerce Studies would be reviewed by the
editor for general suitability. If it is judged suitable, two reviewers are selected and a
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revised or rejected.
WEBSITE
More details about Electronic Commerce Studies could be available at the
website http://ecstudies.thesis.com.tw

Contemporary Management Research: Vol. 1, No.1, September 2005 ISSN:1813-5498

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Contemporary Management Research: Vol. 1, No.1, September 2005 ISSN:1813-5498

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Contemporary Management Research

Vol. 1, No.1, September 2005 ISSN:1813-5498

Consumer Complaining Behavior: The Case of a South American 3

Internet-Enabled Mobile Handheld Devices for Mobile Commerce 13

Technological Innovativeness and Organizational Culture in Hong 35

How do Organizations Implement Downsizing? – An Australian 57

The Role of Personality Traits in UTAUT Model Under Online 69

Publisher: Academy of Taiwan Information Systems Research

Editor: Wenchang Fang National Taipei University

“Contemporary Management Research” Editorial Board

Editorial office: P. O. Box 179-45, Taipei City 116, Taiwan

Consumer Complaining Behavior: The Case of a South American

Key Words: Complaining, Consumer Behaviour, South America, Chile

Figure 1 Sample Data Distribution

Complaints per Industry

Table 2 Complaints per Industry Type

Consumer Complaining Behaviour Construct

Table 3 Consumer Complaining Behaviour Construct: Factor Analysis

Table 4 Confirmatory Factor Analysis Goodness of Fit Indexes

Overall Results for each Consumers Complaining Behaviour Dimension

Table 5 Chilean Consumer Complaining Behaviour Means

Influence of a Series of Variables on Consumers Complaining Behaviour

Table 6 Difference between Men and Women

Table 7 ANOVA for difference among Social Class

Complainers versus non Complainers

Table 8 Difference between Complainers and Non-Complainers

Internet-Enabled Mobile Handheld Devices

Figure 1 Forecast of demand for mobile handheld computing devices

A mobile commerce system involves a variety of components, among which mobile

Requirements of a Mobile Handheld Device

MOBILE COMMERCE SYSTEMS

Table 1 Comparisons of the two major types of mobile middleware

MC applications User interface

Mobile devices Internet-enabled PDAs

Mobile middlew are WAP

Wireless netw orks Wireless LAN

Wired netw orks Wired LAN/WAN

Host computers Host computers

An MC System Structure A Typical Implemention

Figure 2 A mobile commerce system structure

An Example of Mobile Commerce Transaction Processing

Figure 3 A flowchart of a user request processed in a mobile commerce system

1. Mobile commerce applications: A content provider implements an application by providing

MOBILE HANDHELD DEVICES

Mobile OS Microbrowser Batteries

Figure 4 System structure of mobile handheld devices

• Smart cellular phones: They are voice-based devices

• PDAs (Personal Digital Assistants): In contrast to Figure 6 Palm® Tungsten C

Table 2 Specifications of some major mobile handheld devices

MOBILE OPERATING SYSTEMS

Figure 7 A generalized mobile operating system structure

1. Mobile applications: This level refers to customer-level applications such as microbrowsers

MOBILE CENTRAL PROCESSING UNITS

Requirements of a Mobile CPU

Figure 8 ARM11 microarchitecture, © 2003 ARM, Ltd. Reprinted with permission

Figure 9 Openwave® Mobile Browser version 7

Microbrowser Microbrowser Microbrowser Microbrowser

Wireless HTM L HTM L A language

Figure 10 Four approaches for microbrowsers to display mobile contents

INPUT/OUTPUT DEVICES, MEMORY, BATTERIES, AND SYNCHRONIZATION

MOBILE COMMERCE APPLICATIONS

Categories of Mobile Commerce Applications

Table 3 Major mobile commerce applications