Model; Evaluation; Performance; Secteur du tourisme; Systèmes d'information; Information technology; Internet;

Kalika, Michel

Rival, Yann

English

Research Papers in Economics

2005 IRMA International Conference 
 
Measuring Internet performance within the organization 
 
 
Yann RIVAL                     Michel KALIKA 
PARIS DAUPHINE UNIVERSITY                 PARIS DAUPHINE UNIVERSITY 
PHD Candidate & Assistant Professor              Professor of Management 
Tel/Fax: 0033 1 53 59 96 95       Michel.kalika@dauphine.fr 
Yann.rival@dauphine.fr  
 
 
 
Abstract 
 
What is the link between the use of the Internet and the performance within the organization?  
This research is made relevant by the lack of studies dealing with the evaluation of the effects of the 
Internet on the performance within the firm. It first proposes to draw a model derived from the 
alignment perspective that would enable to understand and measure the Internet performance of the 
firm. 
Using the Information Systems (IS) literature about alignment and data collected from 11 interviews 
of general and Internet managers from the main companies of the French tourism sector, 10 variables 
were identified to build an original model. 
This model is then applied to a sector where firms frequently use the Internet: tourism. 
The first results, based on 107 returned questionnaires, show a positive relation between Internet 
strategy alignment and Internet performance. The positive relation between the organizational 
dimension of Internet strategy alignment and the financial dimension of Internet performance is 
particularly significant.  
 
 
 
 
Keywords 
Internet, strategy, Information Technologies (IT), Information Systems (IS), alignment, model, 
tourism. 
 
 
 
 
 
 
 
 
 
 
                                                            2005 IRMA International Conference 
INTRODUCTION 
 
The economic influence of the Internet was strongly criticized after the e-crack experienced in the 
spring of 2000. A few years later, the Internet is more present than ever in the activity of the firm. One 
can clearly realize that when looking at the data made available by the principal institutes collecting 
economic information. If we take a look at the B to C revenue of 2003, Europe raised 29.8
1 billion 
euros and the U.S. raised around 55
2 billion dollars. 
 
This paper first describes the main trends in Internet research. Then, from the strategic alignment 
perspective, this research proposes a model measuring Internet performance within the organization. 
 
Finally, the application of this model to the tourism sector gives us the first results explaining Internet 
performance. 
 
THREE MAIN TRENDS 
 
The Internet succeeded in becoming a strategic reality in the heart of the firms’ business and it has 
been the subject of various research. We can distinguish three main trends in Internet research. 
 
The first trend presents a methodology for the integration of the Internet within the organization: how 
to do Internet? (Venkatraman, 2000; Kulatilaka et al., 2001; Limayem et al., 1999; Van Der Heijden, 
2001). 
 
The second trend studies Internet technologies and the developmental impact on the firm: what is 
changing with Internet? (Earl et al., 2001; Bakos, 1998; Rayport et al., 1995). 
 
Finally, a third trend, relatively recent and with very few studies derived from it, focuses on the 
evaluation of the firm’s Internet activity in order to answer a question which has not been very much 
dealt with: are the positioning and the results of the firm satisfying as far as the Internet is concerned? 
(Nickerson, 2002; Wheeler, 2002; Monod, 2002). 
  
AIM OF THE RESEARCH 
 
This research focuses on the firm’s Internet strategy and, more precisely, on the adoption of Internet 
technologies within the firm for the presentation and the exchange of products and services. 
 
Moreover, the study aims at proposing and applying an original model -derived from the third research 
trend which tries to evaluate the Internet- for measuring the performance of the firm’s Internet 
strategy.  
 
METHODOLOGY 
 
We decided to apply this investigation to a sector where firms frequently use the Internet: tourism. 
 
In an exploratory approach, 11 semi-structured interviews were made between June 2002 and July 
2004 with general and Internet managers of the main companies of the French tourism sector focusing 
on different topics: impact of the Internet on the tourist industry, description of the Internet project of 
the firm, relations between Internet managers and general managers, current results of the Internet 
activity in the firm and objectives for the next years. All the interviews were recorded, transcribed and 
 
                                                 
1 Jupiter Research, December 2003 
2 ComScore Media Metrix, Decembre 2003 
                                                            2005 IRMA International Conference 
analyzed using a thematic classification. These interviews have enabled us to identify a certain number 
of key variables which will be used in our final model. 
 
Then 610 questionnaires were sent to the main companies of the French tourism sector for the 
application of the model and the study of the relation between the degree of Internet strategy 
alignment and the Internet performance level. 
 
THE STRATEGIC ALIGNMENT MODEL AS A FRAMEWORK 
 
The Strategic alignment model for IS/IT (Henderson and Venkatraman, 1993) suggesting that strategy 
and IT developments must be coherent, can be applied to Internet technologies. If we consider Internet 
strategy as emerging from Internet technologies, the Henderson and Venkatraman model would enable 
us to assess the congruence of the Internet strategy with the rest of the firm. It is then possible to study 
the relation between the coherence of Internet strategy and the results obtained as far as the Internet is 
concerned. 
 
Today, however, there are very few, if any, studies that apply the strategic alignment model to assess 
Internet strategies. 
 
AN INTERNET STRATEGIES ASSESSMENT MODEL 
 
We define Net-Alignment  as the fit between the Internet Strategy of the firm (elaboration and 
application processes of the Internet strategy) on the one hand, and the Business Strategy (elaboration 
and application processes of the business strategy), the organization  of the firm (structures and 
organizational processes), and the Internet structure  (technological infrastructure and processes linked 
to the Internet) on the other hand. Strategic Net-Alignment,  Organizational Net-Alignment and 
Technological Net-Alignment constitute the Net-Alignment of the firm. 
 
Besides, the firm’s Internet performance is directly influenced by the implementation of the Internet 
strategy.  
 
From the IS/IT literature describing factors that inhibit/facilitate Alignment or characterize the IS/IT 
performance and the data collected in the 11 interviews, 10 variables were identified and adapted to 
the Internet strategies assessment model (Figure 1):  
 
- Regarding the construct Strategic Net-Alignment:  
 
•  Collaborative planning methods:  planning process including the Internet activity 
(Broadbent and Weill, 1993; Reich and Benbasat, 2000), 
 
• Valorization: consideration of the Internet activity by other functions of the firms (Ciborra, 
1997; Papp, 1995; Interviews), 
 
• Implication in the strategy: implication of the Internet activity in the strategy (Broadbent 
and Weill 1993; Papp, Luftman and Brier, 1995; Interviews), 
 
- Regarding the construct Organizational Net-Alignment: 
 
• Organizational change choice: choice of adapting the organizational structure of the firm to 
the Internet activity (Amami and Rowe, 2000; Henderson and Venkatraman, 1993; 
Interviews), 
 
 
                                                            2005 IRMA International Conference 
• New processes: creation of new processes for the Internet activity in the firm (Broadbent et 
Weill, 1993; Interviews), 
 
•  Functional integration: level of integration of Internet-based technologies within the 
different departments of the firm  (Amabile and Gadille, 2002; Henderson and Venkatraman, 
1993; Interviews), 
 
- Regarding the construct Technological Net-Alignment: 
 
•  Internet technologies complementarity: complementarity in Internet technological 
investments (Amabile and Gadille, 2002; Henderson and Venkatraman, 1993), 
 
• Internet technological evolution: development of a new Internet technologies (Rockart et 
al., 1996; Weill et Vitale, 2002; Interviews), 
 
- Finally, regarding the explained construct of the model, Internet performance: 
 
• Commercial Internet performance: growth rate of sales directly or indirectly related to the 
Internet, growth rate of market shares related to online direct/indirect sales, conquest of new 
markets thanks to the Internet (Venkatraman, 1989; Interviews). 
 
• Financial Internet performance: yield of the capital invested on the Internet, net result 
obtained by the Internet activity compared with that of the main rivals, an increased control of 
costs thanks to the Internet (Venkatraman, 1989; Interviews). 
 
MEASUREMENT PERSPECTIVE 
 
As far as the measuring of alignment is concerned, we have chosen an original approach. 
 
Instead of observing alignment through variables only valid for one given moment (like most 
empirical studies on alignment which are based on bi-varied approaches), we used a scale for 
measuring the alignment that integrates the formative variables of the “Fit”. More precisely it consists 
in measuring the level of alignment, beginning with the study of the constitutive mechanisms of 
alignment.  
 
Offering a measure whose validity is long-lasting, this approach is particularly suited to the Internet. 
 
The environment related to the Internet evolves very quickly indeed and it is practically impossible to 
aim at a pre-determined objective. When involved in the dot-com activity management, you have to be 
permanently able to combine better decisions in the present and the creation of new decisions 
(Venkatraman, 2000). 
 
From this perspective, we adapted alignment scales described in the IS literature to the Internet in 
order to establish a Net-Alignment scale. In the same way, we applied performance scales commonly 
used in the IS/IT literature to the Internet, in order to establish an Internet performance scale. 
 
                                                            2005 IRMA International Conference 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
Strategic Net 
Alignment 
Organizational 
Net-Alignment 
Technological 
Net-Alignment 
Net-Alignment 
Collaborative 
planning methods 
 
Valorization 
Implication in the strategy
Organizational change 
choice 
 
New processes 
 
Functional integration 
Internet technologies 
complementarity 
Internet technological 
evolution 
Internet 
performance  Commercial Internet 
performance 
Financial Internet 
performance 
 
Figure 1. The Internet Strategies Assessment Model   
 
 
APPLICATION AND RESULTS 
 
610 questionnaires were sent to the main companies of the French tourism sector for the application of 
the Internet strategies assessment model and the study of the relation between the degree of Net-
Alignment and Internet performance measure. Then, statistical analyses have been carried out with 
SPSS, the software used to process the 107 returned questionnaires (18% of the firms answered). 
 
The validity and reliability of our five concepts (Net-Alignment, Strategic Net-Alignment, 
Organizational Net-Alignment, Technological Net-Alignment and Internet performance) were 
successfully tested. The average score of Cronbach’s alpha for each construct is 0.8, which proves the 
reliability of this exploratory research.  Besides, the use of Confirmatory Factor Analysis (CFA) 
enabled us to verify the unidimensionality of every concept. 
 
 
                                                            2005 IRMA International Conference 
The study of the link between the alignment of Internet strategy and Internet performance is made 
thanks to the observation of correlations at the 5 % level and at the 10% level (Table 1) 
 
The first results show a positive relation between Internet strategy alignment and Internet 
performance. Among the two dimensions of Internet performance, the financial dimension is the one 
which is the most influenced by the alignment of Internet strategy. Among the three dimensions 
constitutive of the Internet strategy alignment, the organizational dimension is the one that has the 
highest influence on Internet performance. Therefore, the correlation between Organizational Net-
Alignment and Financial Internet performance equals 0,680. 
 
To be more precise, the creation of new processes for the Internet activity in the firm (a new way of 
processing e-mails from the website, a new way of processing incoming calls, a call-centre devoted to 
the web site) and the level of integration of Internet-based technologies within the different 
departments of the firm (on-line customer services, on-line supervision of stock and availability, order 
of products and services through the Internet...) seem to play an essential part in the success of Internet 
strategy. 
 
To conclude, we should underline the weakness of the link between the technological alignment of 
Internet strategy and the Internet commercial performance (0,93). 
 
This was a brief presentation of the first collected results which will have to be followed-up by an in-
depth analysis of the numerous results obtained by the application of this model for the evaluation of 
Internet strategies to the tourism sector.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table1- First results 
 
Internet 
performance 
Commercial       
Internet 
performance 
Financial         
Internet 
performance 
Net-Alignment  0, 508** 0,455** 0,565**
Strategic Net-Alignment  0,454** 0,407** 0,487
Collaborative planning methods  0,350** 0,273 0,350
Valorization 0,442** 0,497** 0,489**
Implication in the strategy:  0,429** 0,342** 0,472**
Organizational Net-Alignment  0,616** 0,508** 0,680**
Organizational change choice  0,442** 0,363** 0,486**
New processes  0,527** 0,412** 0,557**
Functional integration  0,516** 0,468** 0,609**
Technological Net-Alignment  0,311* 0,293* 0,369**
Internet technologies complementarity  0,304* 0,265* 0,373**
Internet technological evolution  0,280* 0,276* 0,316**
* sig<0,10, **sig<0,05. 
 
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                                                            2005 IRMA International Conference 
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An E-commerce System Model”,

De profundis? Deconstructing the Concept of Strategic Alignment”,

Determinants of Strategically Aligned Organization: A Multi-industry, Multiperspective Analysis & Validation, Unpublished doctoral dissertation,

E-commerce is Changing the Face of IT”,

Exploiting the Virtual Value Chain”,

Factors that Influence the Social Dimension Of Alignment between

Five Steps to a Dot-Com Strategy: How To Find Your Footing on the Web”,

Internet et performance de l’entreprise : Etude de l’organisation industrielle de

La valorisation des usages d’Internet et de sites Web par l’alignement stratégique : une caractéristique de l’entreprise étendue?

Les Facteurs influençant l’utilisation d’Internet dans les organisations”,

Les Opportunités de recherche en commerce électronique sur Internet »,

Measuring IT core capabilities for electronic commerce”,

NEBIC: A Dynamic Capabilities Theory for Assessing Net-Enablement”,

Strategic Alignment: Leveraging Information Technology for Transforming Organizations”,

Strategic Options in the Digital Era”,

The Concept of Fit in Strategy Research: Toward Verbal and Statistical Correspondence »,

The emerging Role of Electronic Marketplaces on the Internet

What IT Infrastructure Capabilities are needed to Implement E-business Models?

Measuring Internet performance within the organization.

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Measuring Internet performance within the organization.

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