COMPLEMENTING SERVICE RELATIONSHIPS WITH SELF-SERVE
TECHNOLOGY: ANTECEDENTS OF CUSTOMERS’ E-COMMERCE ADOPTION
ANITA D. BHAPPU and ULRIKE SCHULTZE
Edwin L. Cox School of Business
Southern Methodist University
P.O. Box 750333
Dallas, TX 75275-0333
Telephone: (214) 768-2204 and (214) 768-4265
Fax: (214) 768-4099
Email: abhappu@mail.cox.smu.edu and uschultz@mail.cox.smu.edu
Keywords: service relationships, service design, SST, E-Commerce adoption

We thank our case study firm for making this research possible. We also want to acknowledge the
financial support we received from the Hart eCenter at SMU and the OxyChem Corporation.

The authors’ names are listed in alphabetical order. Both contributed equally to this paper.
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COMPLEMENTING SERVICE RELATIONSHIPS WITH SELF-SERVE
TECHNOLOGY: ANTECEDENTS OF CUSTOMERS’ E-COMMERCE ADOPTION
ABSTRACT
Service relationships are characterized by interactions between customers and
identified providers. They are essential to cultivating repeat business and referrals in
service delivery but are expensive to build and maintain. When firms introduce Internetbased, self-serve technology (SST) to complement service relationships, they are not
only introducing a more cost-effective service channel but also changing their
psychological contracts with customers. Therefore, customers will reassess their
psychological contract in evaluating whether the use of Internet-based, SST will benefit
them. We investigated the influence of this assessment on customers’ intention to
adopt Internet-based, SST. Our results show that customers perceive Internet-based,
SST both as a threat to their service provider and relationship and as an enhancement
to their productivity and work performance. While previous research has demonstrated
the complementarity of information technology and service relationships at the
organizational level, this study demonstrates the tension inherent in relationship-SST
complementarity at the dyadic interaction level.
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Social scientists have long suggested that social relations can facilitate economic
action (Baker 1990; Bourdieu 1986; Coleman 1988 & 1990). Service relationships
(Gutek 1995), which are characterized by repeat interactions between customers and
identified providers, are essential to cultivating long-term business connections that
yield financial advantages for both parties (Anderson, Hakansson, & Johanson 1994;
Gutek & Welsh 2000). Service relationships, often called socially embedded
relationships (Granovetter 1985; Uzzi 1997), have also been associated with positive
service outcomes such as increased customer satisfaction and service interaction
frequency (Gutek, Bhappu, Liao-Troth, & Cherry 1999). They are characterized by
behavioral norms and expectations such as loyalty, reciprocity, honesty, and
trustworthiness (Adler & Kwon 2002) typically associated with friendship and kinship
(Uzzi & Gillespie 2002), which make service relationships particularly desirable in
environments where personal information or tacit knowledge is exchanged (Hansen
1999).
Unfortunately, service relationships are expensive to maintain (Adler & Kwon
2002). Loyal customers expect personal attention, which can be both time-consuming
and administratively costly (Gutek & Welsh 2000). Organizations are, therefore, looking
increasingly to E-Commerce, especially Internet-based, self-service technology (SST)
such as online ordering systems, to cut costs (Bitner, Ostrom, & Meuter 2002). While
there has been considerable research on the pros and cons of SST (Bateson 1985;
Meuter, Ostrom, Rountree, & Bitner 2000) and service relationships (Gwinner, Gremler,
& Bitner 1998; Bendapudi & Berry 1997; Macintosh 2002), there has been little prior
research on a service design that combines E-Commerce and service relationships.
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A strategy of service relationship-SST complementarity has considerable
implementation challenges (Schultze 2003; Schultze & Orlikowski 2004). Chief among
them is the potential impact of SST on the service relationships it is intended to
complement. Frequent and direct interactions between customers and their dedicated
provider are essential to the development and maintenance of service relationships
(Gutek & Welsh 2000; Bendapudi & Berry 1997). However, migrating routine
transactions to a self-service platform will reduce the number of dyadic interactions
between customers and providers, thereby limiting their social attachment and the
exchange of personal and privileged information, which are the basis of service
relationships.
Furthermore, relying on transaction cost economics, which views embedded
relationships (hierarchy) as the opposite of arm’s-length relationships (market), early
information technology (IT) research predicts that network technologies like the Internet
will favor the formation of markets (Malone, Yates, & Benjamin 1987). This research
suggests that IT will replace embedded relationships with arm’s-length relationships.
However, more recent IT research (e.g., Holland & Lockett 1997; Grover, Teng, &
Fiedler 2002) has highlighted that network technologies and co-operative relationships
between firms are mutually reinforcing. For example, Kraut et al. (1999) found that
firms who relied on personal relationships to coordinate with their suppliers were most
likely to use electronic networks. They suggest that effective use of IT for inter-firm
coordination requires established personal relationships and trust (see also Hart &
Saunders 1997). Furthermore, Bensaou (1997) argues that IT enhances customer-
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supplier relations by reducing the physical, spatial, and temporal limitations to
interaction that have traditionally hindered effective cooperation.
Even though these IT studies of customer-firm relations have yielded important
insights, most have tended to focus on the organizational level of analysis (an exception
is Schultze & Orlikowski 2003). In practice, however, inter-firm relations are typically
instantiated by individual customers and providers who enter into boundary-spanning
interactions (at the dyadic interaction level) to transact services on behalf of their
respective firms. Kraut et al. (1999) have noted that it is the relationship between these
individual customers and providers that is central in determining the nature of inter-firm
relations. Similarly, sociological studies have found that the frequency of social
interaction among boundary spanners is one of the key drivers in building and
maintaining inter-firm linkages (Jones, Hesterly, & Borgatti 1997; Yli-Renko, Autio, &
Sapienza 2001).
The paucity of research about service designs that combine E-Commerce and
relationships at the dyadic interaction level motivates our research. In this paper, we
explore customers’ adoption of an Internet-based, SST intended to complement their
existing service relationships, namely a setting in which the apparently opposing
tendencies of embedded relationships (based on interpersonal interactions) and arm’slength relationships (mediated by IT) are brought together. We begin by first
elaborating on the tension inherent in a service strategy of relationship-SST
complementarity. Next, using psychological contracts as our theoretical lens, we
hypothesize the antecedents of customer adoption of Internet-based, SST intended to
complement existing service relationships. We then briefly describe the firm we studied,
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which was developing an Internet-based, SST to complement its existing service
relationships with customers. We highlight insights that we gained through participating
in planning meetings and conducting elicitation interviews with both providers and
customers. We then describe the customer survey that we conducted to test our
hypotheses. Finally, we discuss our results, the implications of our findings, the
limitations of this study, and suggestions for future research.
UNDERSTANDING THE TENSION IN RELATIONSHIP-SST COMPLEMENTARITY
To gain a better understanding of the tension inherent in a service design of
relationship-SST complementarity, we rely on the C-O-P triangle (Gutek & Welsh 2002),
which conceptualizes all service interactions as possible loose or tight links between
three parties: the customer (C), the service organization (O) and the individual service
provider (P). Whereas different patterns of linkages among these three parties lead to
different service mechanisms, the constellation of linkages among the C-O-P
constituents represents a firm's service strategy. Two important service mechanisms
based on the C-O-P triangle are service relationships and service pseudorelationships
(Gutek et al. 1999), which are described in Table 1.
-------------------------------------------------Insert Table 1 about here
-------------------------------------------------Service relationships are characterized by a tight C-P link (see Figure 1A)
because customers engage in repeated service transactions with the same, identified
service provider (Gutek & Welsh 2002). Both customer and provider expect to interact
with each other in the future. They come to know each other as role occupants, as
acquaintances or even friends, all the while forming social attachments that enhance
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their service relationship (Gremler & Gwinner 2000; Mills & Morris 1986). Over time,
service relationships grow stronger as customer and provider develop trust, rapport, and
loyalty unless there are problems, in which case, either party can end the service
relationship. In most cases, however, the customer and provider develop a relational
psychological contract and are “more likely to be flexible when evaluating the
performance of the other party” (Eddleston, Kidder, & Litzky 2002, p. 87).
-------------------------------------------------Insert Figure 1 about here
-------------------------------------------------The customer and provider become interdependent because, in order to deliver
high quality service, the provider must gain knowledge about the customer’s needs and
preferences. This knowledge is gleaned during successive interactions between the
provider and customer, involving feedback that is both direct and informal. As their
service relationship strengthens, the provider better understands the customer’s
expectations as a consequence of the customer’s involvement in co-producing service
outcomes. This type of mutual adjustment is the primary mechanism of coordination in
service relationships and renders the customer a source of input uncertainty because
“customers are not simply a source of demand, they also are a source of production
inputs in the form of information” (Larsson & Bowen 1989, p. 214).
In service relationships, the goals of the customer and their provider are also
aligned. Both are motivated to ensure quality service and to derive economic value
from their service interactions. It is the expectation of an infinite number of future
interactions (or at least the inability to know when the last interaction will occur) that
induces customers and providers to cooperate for their mutual gain. This effect is also
8
referred to as “the shadow of the future” (Axelrod 1984). If the future casts a sufficiently
long shadow, no oversight is required to govern a service relationship because both
parties cooperate out of mutual obligation, which is the essence of their relational
psychological contract (Eddleston, Kidder, & Litzky 2002). Thus, high quality service is
maintained through the dynamics of the service relationship; no formal controls and
contracts are necessary.
In contrast, customers engaged in a service pseudorelationship have repeated
contact with a service organization rather than an identified service provider. Therefore,
service pseudorelationships are characterized by a tight C-O link (see Figure 1B).
Pseudorelationships typically consist of a single interaction between a particular
customer and a particular provider. Over time, a customer's successive contacts with a
service organization involve different, yet functionally equivalent, providers. Neither the
provider nor the customer expects to interact with each other in the future, and thus
there is no “shadow of the future” to prevent either from acting in opportunistic and selfinterested ways. Providers have little incentive to provide quality service to one-time
customers. Similarly, customers have little incentive to provide complete information or
honor undocumented agreements with providers. In essence, customers and providers
develop transactional psychological contracts, which “are based on minimal
expectations on each side, are motivated purely by self-interest, and usually involve
quid pro quo exchanges” (Eddleston, Kidder, & Litzky 2002, p. 87). As a result,
organizations typically monitor provider behavior and enter into explicit contracts with
customers to manage service quality and customer expectations.
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Internet-based, SST is a vehicle for implementing service pseudorelationships
(Gutek, Groth, & Cherry 2002) because when customers use it, they interact directly
with a firm. Therefore, when firms complement service relationships with Internetbased, SST (see Figure 1C), they are striving for both a tight C-O link (service
pseudorelationship) and a tight C-P link (service relationship). However, the frequency
of customer-provider interaction is likely to decline because transactions are being
migrated to the Internet-based, SST, which strengthens the C-O link and weakens the
C-P link. It is also important to note that Internet-based, SST, such as online ordering
systems, differ from media such as email, phone or fax, in that they do not support
directed and dyadic customer-provider communication. When customers use SST, they
can neither discern to whom their communication is directed nor direct their
communication to a specific provider. Thus, customers are left to assume that they are
interacting directly with an automated process. In most cases, this assumption is
justified because historically firms have used Internet-based, SST to automate routine
transactions and disintermediate service providers, thereby cutting costs (Bitner et al.
2002). Therefore, the C-O link may grow stronger at the expense of the C-P link, in
which case, the relationship-SST complementarity strategy will disintegrate into a
service pseudorelationship.
Alternatively, the C-O link may fail to develop if customers do not adopt Internetbased, SST. Customers and providers in service relationships have traditionally
engaged in face-to-face interaction (Gutek 1995) because it facilitates the development
of social capital between them (Uzzi 1997). Face-to-face interaction allows them to
form precise mental images of each other, which enables them to develop a strategy for
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interacting with each other (Nohria & Eccles 1992) and get to know each other as
particular role occupants (Heimer 1992). As mentioned earlier, customers can neither
discern to whom their communication is directed nor direct their communication to a
specific provider when using Internet-based, SST. This computer-mediated interface
offers "only limited impressions with which to construct the meaningful identities that
enable people to orient themselves to, and develop strategies for interacting with, one
another" (Nohria & Eccles 1992, p. 295). In other words, role differentiation is both
diminished and unstable in SST-mediated interactions (Sproull & Kiesler, 1986).
Furthermore, it is difficult in SST-mediated interactions for the customer and provider to
develop rapport and regulate opportunism (Kiesler 1986; Nohria & Eccles 1992). For
these reasons, there is an inherent tension in a service design of relationship-SST
complementarity. Service relationships are neither intuitively nor historically associated
with Internet-based, SST. Therefore, customers may not adopt SST, in which case, the
C-O link will not develop and the anticipated scalability and efficiency gains of the
relationship-SST complementarity strategy will be lost.
ANTECEDENTS OF CUSTOMER’S E-COMMERCE ADOPTION
For firms pursuing relationship-SST complementarity, it is important to
understand how this inherent tension will influence customers’ intention to adopt ECommerce, which is an antecedent of actual adoption and use (Harrison et al. 1997).
Therefore, we now turn our attention to developing hypotheses about the antecedents
of customers’ use of Internet-based, SST designed to complement existing service
relationships. We use the theoretical lens of psychological contracts (McLean Parks &
Kidder 1994; Rousseau 1995) to frame our arguments because this allows us to capture
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the inherent value of existing service relationships in the face of E-Commerce adoption.
When a customer and provider develop a psychological contract, “they are in essence
creating a mental balance sheet comparing their obligations [to each other]” (Eddleston,
Kidder, & Litzky 2002, p. 87). The introduction of an Internet-based, SST represents a
change to existing service relationships, namely the psychological contract that
customers currently have with their provider. Therefore, customers contemplating this
E-Commerce adoption will reassess their psychological contract in evaluating whether
the use of Internet-based, SST will benefit them. They will only be motivated to use
Internet-based, SST if they anticipate a net benefit from doing so (Bitner, Ostrom, &
Meuter 2002), which is why our ensuing arguments about the antecedents of
customers’ E-Commerce adoption focus on the gains and losses that customers
anticipate from using Internet-based, SST within the context of existing service
relationships.
Past research (Gwinner, Gremler, & Bitner 1998) has shown that what
customers’ value most about their service relationships is the reduced sense of anxiety
that comes from trusting their provider and knowing what to expect from them. They
also value the special treatment that they occasionally receive from their provider in
exchange for their loyalty. These relational benefits are a direct consequence of
customers’ social attachment to their provider, which is sustained by direct and dyadic
interaction with their provider. Customers may, therefore, anticipate a loss of relational
benefits and social attachment to their provider as a result of using Internet-based, SST
because it does not support interpersonal interaction (Barsness & Bhappu 2004). In
fact, given that firms have historically used Internet-based, SST to disintermediate
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service providers (Bitner et al. 2002), customers may actually perceive it as a threat to
their existing service relationship and to their provider. So whether customers’
anticipated loss stems from concerns about the relational benefits of their existing
service relationship and/or social attachment and dedication to their provider, customers
will be hesitant to use Internet-based, SST. Therefore:
H1: Customers who perceive Internet-based, SST as a threat their service
relationships will have lower intention to adopt this E-Commerce technology than
customers who do not.
Customers in strong service relationships, however, should be less concerned
about the loss of relational benefits as a result of using Internet-based, SST than
customers in weak service relationships or pseudorelationships because they have
developed sufficient rapport and trust with their provider (Czepiel, Solomon, &
Surprenant 1985; Gremler & Gwinner 2000). Therefore, customers in strong service
relationships will be less hesitant to use Internet-based, SST than customers in weak
service relationships or pseudorelationships because they have greater confidence that
their provider will continue to take good care of them even if they use Internet-based,
SST. Therefore:
H2: The effect of perceived threat of Internet-based, SST on customers’
intention to adopt this E-Commerce technology will be moderated by strength of service
relationship.
But customers in strong service relationships are more likely to be concerned
about the impact of Internet-based, SST on mutual adjustment with their provider than
customers in weak service relationships or pseudorelationships. Mutual adjustment
13
cannot be scripted a priori (Larsson & Bowen 1989) because it is enacted by continuous
feedback and information flow between the customer and provider over time.
Therefore, mutual adjustment increases as service relationships strengthen.
Furthermore, customization resulting from mutual adjustment “requires communicating
the particularities of each customer problem in the coordination of the service” (Larsson
& Bowen 1989, p. 227). Given that Internet-based, SST does not support such
customization or feedback, customers in strong service relationships, who stand to lose
considerable investments in mutual adjustment with their provider, may resist using it.
Therefore:
H3: Customers in strong service relationships will have lower intention to adopt
Internet-based, SST than customers in weak service relationships or
pseudorelationships.
Nevertheless, the automation of routine tasks by Internet-based, SST should
improve customers’ efficiency at transacting services. In fact, Internet-based, SST
featuring updated account information, online product catalogs, and order tracking,
could improve customers’ productivity and work performance, especially in light of its
24/7 availability. Therefore, customers may actually perceive Internet-based, SST to be
useful in their jobs. Indeed, perceived usefulness, which is defined as “the degree to
which a person believes that using a particular system would enhance his or her job
performance” (Davis 1989, p. 320), has consistently been found to be an important
antecedent of IT adoption (Adams, Nelson, & Todd 1992; Hendrickson, Massey, &
Cronan 1993; Igbaria, Zinatelli, Cragg, & Cavaye 1997; Mathieson 1991; Szajna 1994;
Venkatesh & Davis 2000). Therefore:
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H4: Customers who perceive Internet-based, SST to be useful will have higher
intention to adopt this E-Commerce technology than customers who do not.
But customers with higher purchase frequency may perceive Internet-based,
SST to be less useful than customers with lower purchase frequency because in using
this E-Commerce technology, they will be assuming more co-production responsibilities.
Customers with high purchase frequency are accustomed to having their provider
anticipate and execute the necessary administrative tasks to meet their service needs
(Gutek et al. 1999). Therefore, these customers will be hesitant to use Internet-based,
SST and assume more co-production responsibilities for their high-frequency service
needs because the agency and discretion that they currently have entrusted to their
provider is one of the most valued features of their service relationship (Gwinner et al.
1998; Mills & Morris 1986). Therefore:
H5: The effect of perceived usefulness of Internet-based, SST on customers’
intention to adopt this E-Commerce technology will be moderated by purchase
frequency.
An overview of all our hypothesized relationships is depicted in Figure 2.
-------------------------------------------------Insert Figure 2 about here
-------------------------------------------------METHOD
To better understand customer adoption of SST in the context of an existing
service relationship, we conducted an in-depth analysis of a manufacturer of custom
printed office products (e.g., checks, forms, and stationery). For purposes of this
discussion, we refer to the firm by the pseudonym Custom Business Printing (CBP).
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CBP is a business-to-business (B2B) firm that has historically offered its one million,
mostly small business, customers (all located in North America) service relationships
with one of its four hundred service providers. These providers are franchisees that
distribute CBP products exclusively.
In early 2000, CBP decided to implement a relationship-SST complementarity
strategy, which involved the deployment of an Internet-based, SST that allowed
customers to go online to complete such routine transactions as placing orders,
checking the status of their order, and accessing their account information. Previously,
customers had to either call or fax their provider or contact CBP directly to accomplish
these tasks. Throughout the planning and development of the new SST, CBP’s
management assured its providers that they would not be disintermediated by the
technology because their service relationships with customers represented the firm’s
competitive advantage.
Interviews
In fall 2000, we conducted semi-structured 30-minute phone interviews with 10
CBP providers and 15-minute phone interviews with 15 of their customers. Such
elicitation interviews are typically used to generate insights and emic vocabulary that
helps researchers develop survey measures “grounded” in a particular research setting
(Harrison, Mykytyn, & Riemenschneider 1997). With an eye to understanding
customers’ evaluation of CBP’s proposed relationship-SST complementarity service
design and the influence of these perceptions on their intention to adopt Internet-based,
SST, we reviewed the interviews multiple times. Our repeated readings highlighted that
16
customers perceived Internet-based, SST both as a threat and as an enhancement to
their current service relationship with a CBP provider.
CBP customers believed that Internet-based, SST would depersonalize their
service relationships by reducing person-directed, dyadic interaction with their provider:
CUSTOMER: I would very much like to see a body or know that there is
somebody that I know just from a service standpoint. … I mean, it's in there in
cyberspace someplace, and I have no one I can talk to. I would like to have a
contact, and I'd really like it to be [my existing CBP provider]. I mean, because
he knows the firm, and he knows what our ordering pattern has been. I mean, I
wouldn't want to give that up in order to have everything on-line.
CBP providers were also concerned about the depersonalizing effects of this ECommerce technology. Some of them felt that Internet-based, SST would actually
increase the need for them to make personal contact with customers. By adding that
“personal touch” back into their customers’ online experience, they believed that they
would differentiate themselves from other online vendors and that they would foster
customer loyalty:
PROVIDER: I'd have to be much more staying in touch with them [the customers
that went online]. I'd have to be more, just calling to see how everything's going.
Just to get that personal touch in there, I still think. Or else, they could do that
[business] with any other company then.
PROVIDER: I'm a little leery, however, you know, the opportunities to give
service to a customer. …I'd almost like to know, if I opened up a log that
somebody came and accessed my site, who it was and what they wanted. So
that I might be able to at least pick up the phone, since it's automated and say,
‘[name of interviewer], I saw that you came to our web site and you checked your
invoice. Did you get the information you needed?’ and so forth, and use that to
maintain or at least have an opportunity to maintain a relationship that would
have been more personal.
At the same time, both CBP customers and providers acknowledged that
Internet-based, SST would improve their efficiency and productivity at work by
automating routine tasks:
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CUSTOMER: [SST would make transactions] faster … it expedites a whole lot.
PROVIDER: Well, it would diminish the personal contact and that would be fine
because in a lot of situations people call and leave a message for me and even
though the girls [at the provider’s office] try and screen it, they still want to talk to
me and then when I call [the customer] back I find out they want the place an
order of checks. Well, that's insane! And there's no reason that that couldn't be
placed over the Internet and that when I'm in their area we can't have a cup of
coffee and chat about the grandchild or whatever.
Interestingly, both customers and providers suggested that increased knowledge
exchange made possible through an online product catalog would enhance service
transactions:
CUSTOMER: I think that's a good option. And also if you can go onto
somebody's web site, you can find out what other products they have.
PROVIDER: I guess the way I would see the Internet having an impact is that I
would like to get my customers to go there first of all and get a good idea of some
of the things that we have.
With Internet-based, SST mediating customer interactions, providers felt they
could only ensure high service quality and cultivate service relationships with their
customers if they remained the single point of accountability in the online ordering
process, which was the complementarity service design that CBP was pursuing:
PROVIDER: I think if a customer could reorder online and I could monitor it to
make sure that it's within the bounds of their normal reorder. Because see, a
customer sometimes doesn't know because of turnover whether they ordered
600 checks or 6000 checks, so if I see a customer that's ordered 600 checks a
year, and all of a sudden he's ordering 6000, we call them up and say ‘Check
that out!’ Or if they say the starting number [of a check order] is 12001 and I
think the starting number should be 14000 because he has another 2000 checks
there that he's not aware of. And so if I were out of the middle of that mix, there
would be more problems and hard feelings in some instances.
However, a number of CBP customers assumed their provider would either be
disintermediated by this E-Commerce technology or not get credit for online orders. In
18
other words, they were concerned about their provider’s role and viability if CBP
complemented service relationships with Internet-based, SST:
INTERVIEWER: Now in the context of sort of this Internet ordering, would you
still want him [your provider] to be kind of reviewing your orders as he does now
or is that not necessary in your mind?
CUSTOMER: Well. That's hard to say if he's going to lose his job.
INTERVIEWER: Or you don't think that [your provider’s review of your online
orders] would be necessary once you’re able [to place order via the Internet]?
CUSTOMER: I don't know. Would they get paid if I'm going straight through [the
Internet to the firm] and not through them [the provider]? … I would think they
need to be involved.
In summary, our interviews captured the inherent value of existing service
relationships. Both customers and providers, in contemplating a relationship-SST
complementarity strategy, engaged in a cognitive assessment of anticipated gains
versus losses from using Internet-based, SST. They expressed concerns that the
migration of routine transactions to an Internet-based, SST might threaten their service
provider and their service relationship, even as they recognized the efficiency benefits
of using this E-Commerce technology.
Surveys
Using the insights and emic terminology from our interviews with CBP providers
and customers, we developed a survey to test our hypotheses about the antecedents of
customers’ intention to adoption Internet-based, SST. As a pilot test, the survey was
first mailed to 25 randomly selected CBP customers, 13 of whom returned a completed
one. We made some minor changes in the wording and order of some questions based
on this pilot test. The final survey was then mailed by CBP to 2500 randomly selected
customers. The customers that we had previously interviewed and contacted for the
pilot test were not part of this final survey sample. Customers who returned their
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completed survey (pilot and final) were entered into a drawing for twenty-five (25) $50
prizes and 3 Palm Pilots, which CBP provided. The odds of winning these prizes were
stated clearly in CBP's cover letter that accompanied the surveys. A reminder card was
sent to the final survey sample ten days after the survey packet had been mailed.
Customer service agents in two CBP call centers also telephoned 500 customers
randomly selected from the 2500 customers in the final survey sample, reminding them
to complete and return their surveys. All these efforts were aimed at ensuring a
satisfactory response rate to the survey.
Response Rate
We received 383 completed surveys in postage-paid envelopes addressed
directly to us, a response rate of 15%. Interestingly, the reminder phone calls to
customers revealed that some Canadian customers, who were French-speaking, were
unable to complete our English survey. Furthermore, 7% of the phone calls made were
to incorrect or disconnected phone numbers, raising questions about the accuracy of
mailing addresses. Unfortunately, we had no way of assessing how many mailed
surveys were returned because of incorrect mailing addresses or customer business
closures. We can, therefore, only assume that the ‘real’ response rate was somewhat
higher than 15%.
When comparing the responses of early (first week) and late (second and third
week) respondents to test for non-response bias (Armstrong & Overton 1977), we found
no significant differences in their demographic profile. However, respondents with
strong service relationships were significantly more likely to have returned their surveys
early (see Table 3).
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Survey Measures
Strength of Service Relationship. To first distinguish between customers who did
and did not have a service relationship with a CBP provider, we used the following
question: "Is there a particular person you usually contact to purchase CBP products,
that is, someone you consider your CBP representative?" According to Gutek et al.
(1999), customers who respond positively to this question have service relationships
because they interact with an identified provider who they know personally. Of the 383
customers who responded to the final survey, 258 customers had service relationships,
107 customers had pseudorelationships, and 18 customers did not answer the above
screening question.
-------------------------------------------Insert Table 2 about here
-------------------------------------------To further distinguish between customers who had strong versus weak service
relationships, we asked respondents who indicated that they had a CBP representative
about the features of their service relationships using questions developed by Gutek et
al. (2000). (See Table 2 for questions.) We calculated an index score of customers'
responses to these questions and then performed a median split to categorize their
service relationships as strong or weak. This categorical transformation enabled us to
create a dummy variable for strength of service relationship with three categories: 1 =
service pseudorelationship, 2 = weak service relationship, and 3 = strong service
relationship. Of the 383 customers who responded to the final survey, 107 customers
had pseudorelationships, 133 customers had weak service relationships, and 120
customers had strong service relationships. There was missing data for 23 customers.
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Purchase Frequency. To measure how often customers purchased CBP
products, we used the following categorical question: "How many times have you
purchased CBP products in the past 12 months?" Similar questions have been used in
past research (e.g., Gutek et al. 1999) to assess service frequency.
Perceived Threat of SST. To measure whether customers perceived Internetbased, SST as threatening their existing service relationships, we developed questions
based on insights from our interviews with CBP providers and customers. These
questions are listed in Table 2. We calculated an index score for perceived threat of
SST by taking the mean of customers' responses to these questions.
Perceived Usefulness of SST. To measure whether customers perceived
Internet-based, SST to be useful, we adapted questions developed by Davis (1989).
These questions are listed in Table 2. We calculated an index score for perceived
usefulness of SST by taking the mean of customers' responses to these questions.
Intention to Adopt SST. To measure customers' intention to use Internet-based,
SST, we developed questions based on the service features that CBP planned to make
available to customers online, which are listed in Table 2. We calculated an index score
for intention to adopt SST by taking the mean of customers' responses to these
questions.
RESULTS
Descriptive Statistics
Descriptive statistics and correlations for all study variables are listed in Table 3.
Of the 383 survey respondents, 11 did not indicate their gender, 269 were women, and
103 were men. Ninety percent (90%) of customers described their ethnicity as “white,
22
European” and 66% of them described their office as having an urban location. The
respondents, on average, worked 39.5 hours per week, had worked in their current
position for 11.6 years, had 17.7 years of related work experience, and worked in a
business that employed an average of 9.70 full-time equivalents.
-------------------------------------------Insert Table 3 about here
-------------------------------------------Factor Analysis
Exploratory factor analysis of the survey questions extracted three factors (see
Table 4). The factors converged after 5 iterations using Varimax rotation. None of the
survey questions had significant cross-loadings and all satisfied the postulate of factorial
causation (Kim & Mueller 1978), which suggests that the imposition of a factor analytical
structure on observed data should be driven by theoretical arguments. Cronbach
alphas indicated that the questions, as specified by our hypothesized factor analytical
structure, formed reliable measurement scales.
-------------------------------------------Insert Tables 4 & 5 about here
-------------------------------------------Regression Analyses
Hypothesis 1 predicted that customers who perceived Internet-based, SST as a
threat to their service relationships would have lower intention to adopt this ECommerce technology than customers who did not. We tested this hypothesis by
regressing perceived threat of SST on intention to adopt SST. As indicated in Table 5,
perceived threat of SST did have a significant negative effect on intention to adopt SST.
Therefore, hypothesis 1 was supported.
23
Hypothesis 2 predicted that the effect of perceived threat of Internet-based, SST
on customers’ intention to adopt this E-Commerce technology would be moderated by
strength of service relationship. We tested this hypothesis by regressing the interaction
between strength of service relationship and perceived threat of SST on intention to
adopt SST. As indicated in Table 5, this interaction had a significant positive effect on
intention to adopt SST. Therefore, hypothesis 2 was supported.
Hypothesis 3 predicted that customers in strong service relationships would have
lower intention to adopt Internet-based, SST than customers in weak service
relationships or pseudorelationships. We tested this hypothesis by regressing strength
of service relationship on intention to adopt SST. As indicated in Table 5, strength of
service relationship did have a significant negative effect on intention to adopt SST.
Therefore, hypothesis 3 was supported.
Hypothesis 4 predicted that customers who perceived Internet-based, SST to be
useful would have higher intention to adopt this E-Commerce technology than
customers who did not. We tested this hypothesis by regressing perceived usefulness
of SST on intention to adopt SST. As indicated in Table 5, perceived usefulness of SST
did have a significant positive effect on intention to adopt SST. Therefore, hypothesis 4
was supported.
Hypothesis 5 predicted that the effect of perceived usefulness of Internet-based,
SST on customers’ intention to adopt this E-Commerce technology would be moderated
by purchase frequency. We tested this hypothesis by regressing the interaction
between purchase frequency and perceived usefulness of SST on intention to adopt
24
SST. As indicated in Table 5, this interaction had a significant negative effect on
intention to adopt SST. Therefore, hypothesis 5 was supported.
DISCUSSION
Our study captures the tension inherent in a relationship-SST complementarity
strategy, which is evident in customers’ ambivalence about using Internet-based, SST.
This tension is theoretically supported by the C-O-P triangle (Gutek & Welsh 2002) and
psychological contracts (Eddleston, Kidder, & Litzky 2002; McLean Parks & Kidder
1994; Rousseau 1995). It is also empirically supported by our results, which highlight
that customers’ motivation to use Internet-based, SST is directly related to their
cognitive assessment of anticipated gains versus losses in light of their existing
psychological contract and service relationship with their provider.
Customers who perceived Internet-based, SST as threatening the relational
benefits of their service relationships and social attachment to their provider had lower
intention to adopt this E-Commerce technology than customers who did not. However,
the negative impact of perceived threat of SST on intention to adopt SST was
attenuated by strength of service relationship because customers in strong service
relationships had probably developed sufficient rapport and trust with their provider and
were, therefore, confident that their provider would take care of them even if they used
Internet-based, SST. But customers in strong service relationships had lower intention
to adopt Internet-based, SST than customers in weak service relationships or
pseudorelationships because they were likely to lose considerable investments in
mutual adjustment if they used this E-Commerce technology.
25
Consistent with prior research on IT adoption, customers who perceived Internetbased, SST to be useful, because it would likely improve their productivity and work
performance, had higher intention to adopt this E-Commerce technology than
customers who did not. However, the positive impact of perceived usefulness of SST on
intention to adopt SST was attenuated by purchase frequency probably because
customers with high purchase frequency did not want to assume more co-production
responsibilities when using Internet-based, SST. In other words, customers with high
purchase frequency appeared to be weighing productivity benefits against co-production
costs.
From an organizational standpoint, these findings suggest that although a
strategy of relationship-SST complementarity is possible, there are numerous
implementation challenges associated with the tension inherent in such a strategy.
Customers perceive service relationships and E-Commerce as distinct and opposing
service delivery environments, giving rise to their ambivalence about using Internetbased, SST. Therefore, organizations implementing a relationship-SST
complementarity strategy need to address the losses that customers’ anticipate from
adopting this E-Commerce technology, in addition to emphasizing anticipated gains.
Organizations will have to reassure customers that Internet-based, SST will not
undermine their service relationships and psychological contracts with providers.
But it may be difficult to justify an expensive E-Commerce strategy based on
relational arguments because the financial savings typically associated with automation
may be difficult to realize. Indeed, our interviews highlighted the challenge associated
with keeping providers involved and maintaining a tight C-P link in a relationship-SST
26
complementarity service design. The CBP providers that we interviewed believed that
they could maintain existing service relationship if they were notified whenever a
customer completed a transaction via the Internet-based, SST. This would allow them
to follow up with their customer and remain the single point of accountability for
customer service. However, Schultze and Orlikowski (2004) found that many
customers fail to see the value of such provider follow-ups and, therefore, resist
providers’ attempts to contact them about their online transactions. Furthermore, an ECommerce service design that grants providers personal control over the information
flow to and from customers presents both technical and strategic challenges.
Organizational websites typically have global formats that force all service providers to
follow standard operating procedures, which may ultimately be at odds with the local
and individualized procedures that service relationships call for. Therefore, it is unclear
how to design service relationships that are truly enhanced by Internet-based, SST.
Limitations
Our findings need to be considered in light of the limitations of this research. We
need to recognize the case-specific details of this study when interpreting our results
and identifying implications for research and practice. For instance, it is important to
note that CBP providers sell commodity products through B2B service relationships with
owners of small business or their staff members responsible for ordering office supplies.
Furthermore, CBP providers are franchisees, namely small business owners
themselves. Therefore, they are likely to be active in their local small business
community through participation in business associations and networking groups,
27
building service relationships in ways that may be distinct from providers who are
employees and who serve individual consumers rather than small businesses.
Given the case-specific details of this study, one might conclude that our findings
are not applicable to business-to-consumer (B2C) service relationships. However, it is
important to note that the C-O-P triangle (Gutek & Welsh 2000) and psychological
contracts (Eddleston, Kidder, & Litzky 2002; McLean Parks & Kidder 1994; Rousseau
1995), which are the theoretical underpinnings of this research, are not specific to B2B
service relationships. In fact, the C-O-P triangle has only been tested in B2C
environments. Therefore, our findings should generalize to both B2B and B2C
environments. Furthermore, the processes that CBP sought to automate through
implementing an Internet-based, SST can be found in most organizations, irrespective
of whether they sell commodity or custom products and whether they serve businesses
or consumers. Ultimately, however, the generalizability of our research findings can
only be assessed through replications in other settings.
With regard to our measures, we need to acknowledge two limitations. First, we
developed a new scale for perceived threat of SST. Even though this scale clustered
together in our factor analysis and demonstrated adequate reliability, this construct is
much richer in meaning than we are able to capture with our three questions. We,
therefore, recommend further development of this scale. Second, in order to
incorporate customers with pseudorelationships into our data analysis, we had to create
a categorical dummy variable for strength of service relationship. To do this, we
sacrificed the richness captured by the seven questions measuring features of service
relationships when we transformed these items into a categorical dummy variable using
28
a median split. Again, future research should attempt to develop a richer measure for
strength of service relationship.
CONCLUSIONS
While previous research has demonstrated the complementarity of IT and
relationships at the organizational level, this study demonstrates the tension inherent in
relationship-SST complementarity at the dyadic interaction level. Our results show that
customers contemplating the use of E-Commerce will reassess the psychological
contract of their service relationship and that any anticipated gains and losses will
influence their intention to adopt Internet-based, SST. We found that customers
perceived Internet-based, SST both as a threat to their service provider and their
service relationship and as an enhancement to their productivity and work performance.
Therefore, firms implementing a relationship-SST complementarity strategy must
reassure customers that using Internet-based, SST will not undermine their service
relationships or their psychological contracts with providers.
Our research highlights a number of avenues for future research, in addition to
the scale development challenges that we highlighted in the limitations section. Given
that our study was limited to customers with existing service relationships and
pseudorelationships, future research should explore the adoption of E-Commerce in
environments where service encounters (Gutek 1995; Gutek et al. 1999; Gutek & Welsh
2000) are prevalent. The structural embeddedness of service encounters differs from
that of service relationships and pseudorelationships. Service encounters are not
characterized by any tight links between customers and service providers or between
customers and service organizations. There is no expectation of future interaction at all.
29
Therefore, it would be interesting to learn to what extent, if any, relational considerations
impact customers' intention to adopt Internet-based, SST in a context of service
encounters.
Finally, future research should explore customer adoption of Internet-based, SST
in service environments where the goals of providers and customers are at odds and
their motivations to build service relationships are not aligned. For instance, in car
sales, providers are typically interested in building service relationships with their
customers in order to generate repeat sales and referrals. However, given the negative
stereotypes about car sales associates, many customers would rather use Internetmediated, car-buying services (e.g., Autobytel) to avoid direct contact with car sales
associates. In this context, we would expect a relational construct that measures the
opposite of perceived threat of SST to play a role in predicting customers’ intention to
adopt Internet-based, SST.
30
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35
TABLE 1: Differences between Service Relationships and Service Pseudorelationships
Service Relationships
1
Structure of Service Interaction1
Repeated C-P interactions
Repeated C-O interactions
Nature of Relationship2
Socially-embedded relationships
Arm’s length transactions
Nature of Service Contract3
Implicit and relational
Explicit and transactional
Expected Behavior of Participants4
Relational, social behavior
Opportunistic, self-interested behavior
Applicability5
Tasks characterized by trust and
interdependence
Tasks characterized by efficiency and
market competition
Knowledge Exchanged6
Private information and tacit knowledge
Public information and explicit knowledge
Gutek & Welsh 2000
Granovetter 1985; Uzzi 1997
3 Eddleston, Kidder, & Litzky 2002; Poppo & Zenger 2002
4 Granovetter op.cit; Uzzi op.cit.
5 Hansen 1999; Uzzi op.cit.
6 Uzzi & Gillespie 2002
2
Service Pseudorelationships
36
TABLE 2: Survey Questions
Features of Service Relationship [1-strongly disagree, 5-strongly agree]
FEA1: I am a loyal customer of my CBP representative.
FEA2: I know my CBP representative well.
FEA3: My CBP representative knows me well.
FEA4: I value the advice that my CBP representative provides me.
FEA5: I trust my CBP representative.
FEA6: The service I receive from my CBP representative is personalized just for me.
FEA7: If I were dissatisfied with the service I received, I would speak directly to my CBP representative
about the problem.
Perceived Threat of SST [1-strongly disagree, 5-strongly agree]
Using my CBP representative’s web site would …
THR1: Hurt my CBP representative's business.
THR2: Eliminate the personal service that I currently receive from my CBP representative.
THR3: Destroy the relationship that I currently have with my CBP representative.
Perceived Usefulness of SST [1-strongly disagree, 5-strongly agree]
Using my CBP representative’s would …
USE1: Improve my performance at work.
USE2: Increase my productivity at work.
USE3: Enhance my effectiveness at work.
USE4: Be useful to me at work.
Intention to Adopt SST [1-strongly disagree, 5-strongly agree]
I would use the CBP web site …
ADPT1: To learn about the products that CBP sells.
ADPT2: To learn about volume discounts on products that CBP sells.
ADPT3: To learn about the prices of CBP products.
ADPT4: To purchase products, including re-orders.
ADPT5: To check my order status.
ADPT6: To check my account status.
37
TABLE 3: Descriptive Statistics and Correlation Matrix (n=383)
Variables:
Mean
SD
1.
1. Intention to Adopt SST
3.80
0.862
1.00
2. Strength of Service Relationship
2.04
0.794
0.101+
1.00
3. Perceived Threat of SST
2.84
0.935
-0.067
0.185**
1.00
4. Perceived Usefulness of SST
2.93
0.928
0.600***
0.014
-0.096+
1.00
5. Purchase Frequency9
2.40
0.923
0.136*
0.314***
0.026
0.066
1.00
6. Purchase Satisfaction8
4.46
0.894
0.120*
0.094+
0.020
-0.016
0.111*
1.00
7. Gender (F=1, M=2)
1.28
0.448
-0.029
0.107+
-0.022
-0.076
-0.055
-0.038
1.00
8. Year Born (19__)
54.6
11.9
0.209***
0.046
-0.027
0.218***
0.204***
-0.015
-0.163**
1.00
9. Survey Response10
1.26
0.440
0.020
-0.163**
0.068
-0.082
-0.072
-0.028
0.031
0.012
+p<0.10,
8 Satisfaction
2.
3.
4.
5.
6.
7.
8.
9.
1.00
*p<0.05, **p<0.01, ***p<0.001
with CBP provider in the past 12 months ranged from 1: very dissatisfied to 5: very satisfied.
of purchase from CBP provider in past 12 months was measured in terms of the following categorical scale: 0 = 0 times, 1 = 1-3
times, 2 = 4-6 times, 3 = 7-9 times, 4 = 10-12 times, 5 = 13 or more times.
10 Survey Response time was coded as early=1, late=2.
9 Frequency
38
TABLE 4: Factor Analyses
Survey Item:
Factor 1:
Perceived Threat of
SST
(=0.954)
Factor 2:
Perceived Usefulness
of SST
(=0.932)
Factor 3:
Intention to Adopt
SST
(=0.938)
THR1
0.803
0.081
-0.049
THR2
0.874
-0.158
0.039
THR3
0.920
-0.082
-0.117
USE1
-0.045
0.915
0.291
USE2
-0.048
0.920
0.312
USE3
-0.028
0.915
0.325
USE4
-0.109
0.727
0.447
ADPT1
-0.037
0.167
0.846
ADPT2
-0.032
0.212
0.860
ADPT3
-0.042
0.265
0.877
ADPT4
-0.107
0.352
0.762
ADPT5
-0.010
0.337
0.819
ADPT6
-0.021
0.353
0.774
39
TABLE 5: Regression Analyses
Intention to
Adopt SST
Intention to
Adopt SST
Strength of Service Relationship (B):
0.063
-0.082+
Perceived Threat of SST (B):
-0.021
-0.161***
Perceived Usefulness of SST (B):
0.539***
0.654***
Purchase Frequency (B):
0.061
0.197**
Strength of Service Relationship x Perceived Threat of SST (B):
0.023***
Purchase Frequency x Perceived Usefulness of SST (B):
-0.060*
2
Adjusted Model R :
Model F (df):
+p<0.10,
0.341
0.421
50.3***(4,378)
47.4***(6, 376)
*p<0.05, **p<0.01, ***p<0.001
40
FIGURE 1: The C-O-P Triangles
A. Service Relationship
B. Service Pseudorelationship
C
O
C. Relationship-SST Complementarity
C
C
P
P
O
______ tight link
---------- loose link
C = customer
O = organization
P = provider
O
P
41
FIGURE 2: Customer Adoption of Relationship-SST Complementarity
Strength of
Service
Relationship
-
Perceived
Threat of SST
Intention to
Adopt SST
Perceived
Usefulness of SST
+
Purchase
Frequency
-