Vol 2 No 7 October 2012 N

Australian Journal of BUSINESS & MANAGEMENT RESEARCH Vol. 2 No.
7 2012
Listing & Indexing
EDITORIAL
BOARD
DR GAVRIEL AYI AYAYI Universit du Qubec, Canada DR MADAN LAL BHASIN College of Business Fiji National University, Fiji Islands DR KEOY KAY HOOI Centre of Excellence for Research, Value Innovation and Entepreneurship (CERVIE) UCSI University, Kuala Lumpur Campus DR JIN-LI HU National Chiao Tung University, Taiwan DR SULEYMAN DEGIRMEN Mersin University Ciftlik Koy Campus, Turkey DR JUAN-ANTONIO MONDEJAR JIMENEZ Vice-Dean of the Faculty of Social Sciences of Cuenca,Spain DR HUNG HSU-FENG National ChengChi University, Taiwan DR TEH PEI LEE Multimedia University, Malaysia DR. HUSAM-ALDIN ALMALKAWI ALHOSN University, Abu Dhabi, UAE DR IMBARINE BUJANG Universiti Teknologi MARA, Kota Kinabalu,Sabah Malaysia DR HSEIH TZUNG-YUAN Department of Finance, MingDao University, Taiwan DR RUDRA PRAKASH PRADHAN Indian Institute of Technology, KharagpurKharagpur- 721 302, West Bengal, INDIA
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EDITORIAL
BOARD
DR MLADEN PECUJLIJA University of Novi Sad, 21000, Serbia DR BADAR ALAM IQBAL Aligarh Muslim University, 202002 (UP) India DR YUSLIZA MOHD.YUSOFF School of Management, Universti Sains Malaysia, 11800 USM, Pulau Pinang, Malaysia DR CHIH-YUNG TSAI National Penghu University of Science and Technology DR YUNG-HO CHIU Soochow University, Taipei, Taiwan, ROC DR ZULNAIDI YAACOB School of Distance Education, Universiti Sains Malaysia DR MUHAMMAD ALI EL-HAJJI University of Azteca, Mexico DR SENOL OKAY Pamukkale University Technical Education Faculty Kinikli/DENIZLI-TURKEY. DR HSIN-HUNG WU National Changhua University of Education, Taiwan DR ABDUS SATTAR ABBASI COMSATS University, Pakistan I-SHUO CHEN (STEVEN) Institute of Business & Management, National Chiao Tung University, Taiwan LEE CHEW GING Nottingham University Business School Malaysia Campus GARRY TAN WEI HAN Universiti Tunku Abdul Rahman, Malaysia
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Table of Contents
01
EXAMINING THE CORRELATION WEBSITE STATUS AND THE E-COMMERCE SYSTEM SUCCESS: An Australian Study
Jahjah Hallal and Jun Xu
IS CUSTOMER SATISFACTION AN INDICATOR OF CUSTOMER LOYALTY?

Rahim Ajao Ganiyu, Ignatius Ikechukwu Uche and Adeoti Olusola Elizabeth
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Design E-SCM Information Security Framework

Maryam Mahdikhani, Asadolah Khahande Karnama and Milad Beirami
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Australian Journal of Business and Management Research
Vol.2 No.07 [01-13] | October-2012 ISSN: 1839 - 0846
Examining the correlation website status and the e-commerce system success:
An Australian Study
Jahjah Hallal (Corresponding Author) Southern Cross University- Australia jad.scu2010@gmail.com Jun Xu Southern Cross University- Australia jun.xu@scu.edu.au
ABSTRACT Acknowledging that, by using e-commerce systems, firms can deliver information about their products and services, their vision, policy and many others related issues to their existence and potential customers. Typically, the applications that underlie e-commerce systems determine the nature of the product or service offering, the reaction of the customers and the revenue flux accrue to businesses. This designates that the value added by a firms website system is a critical concern to both existence and potential customers. Based on the DeLone and McLeans (1992, 2002, 2003) theory of infor mation system success model, a dichotomous dimensional model for classifying e-commerce website applications/status was developed. The proposed model was tested via surveying small businesses in Australia. The results of this study indicate that the proposed dichotomous classifications of the e-commerce website are meaningful, and unveil that e-commerce success and benefits accrue to firms are determined by the environmental context of the website system applications. Keywords: E-commerce System Success, Website Status, Small Enterprises, Static Website, Active Website, Quantitative Approach, Structural Equation Model.
1. INTRODUCTION A plethora of studies assures that lots of remuneration is expected to be obtained by firms from adopting and implementing e-commerce. The benefits range from expanding the firm reach (Evans & Wurster, 2000), improving business productivity and efficiency of gathering information (Watson, 2002), enhancing communication (Iacovou, Benbasat & Dexter, 1995; Scupola, 2001) and gaining competitive advantage (Schuete, 2000; Warrington, Abgrab & Caldwell, 2000). Even so, attainment of these benefits is depending on the efficiency of the e-commerce system applications. The benefits will be accruing to organisations because of extended applications of the e-commerce system. Review of prior studies findings show a mix of indications regards the claimed of a connection between the stages of Internet usage and the outcome. In this course, Raymond (2001), Rosenzweig, Roth, and Dean (2003), affirmed that a strong association has been identified between the stages of Internet usage and performance. In contrast, Raymond (2001) remarked that the codification of an association between the stages of Internet usage and the revenue is not supported by strong weight of real evidence. Cunliffe (2000), and Marshall, Sor, and Mckay (2000) stated that some groundwork studies revealed a wide gap between anticipated and actual achievements from the implementation of the ecommerce system. Apparently, the literature claims of an association between the stages of Internet and the performance/revenue suffers from the lack of a solid valid verification, because, such claims is not widely supported by empirical data. Besides, scrutinising of the literature reveals a lack of the existence of a model or models that address the topic of e-commerce success. Literature on e-commerce success reveals that some researchers used Delone and Maclean's model (1992) of information system success; others used the communication and ecological theories (Molla & Licker, 2001). This has pushed Molla and Licker (2001) to come into a conclusion that there is a common shortage of models and frameworks for assessing e-commerce success. Considering these facts, this study is allocated to investigate the influence of the implemented websites on e-commerce system success. It aspires to clarify the fundamental role of website status as a facilitator of the success of the e-commerce in organisations business practice. The focus will only be concerned with small enterprises (SEs) that have more than 5 and less than 20 employees, as defined by the Australian bureau of statistics (ABS 2001, cat. 1321.0). The study endeavours to address various issues in regards to the applications of the e-commerce websites implemented by SEs. Particularly, examine the potential influence of the SEs' website status (applications/functions) on e-commerce system efficiency, usage,
and subsequently the overall net benefits accrued to SEs. Produce a model that reflects the characteristics of the e-commerce system in small businesses milieu. Bridge the gap that currently exists in the literature by investigating the implications of e-commerce system in Australian SEs, and providing SEs the framework, they must follow, when they decide to embrace the online activities or enhance existent e-commerce systems. 2. LITERATURE REVIEW An e-commerce system can be defined as a computer-based information structure designed to provide customers purposeful information with a simple and easy way to navigate, search, and inquiry to get sufficient relevant answers about the enterprises goods and services in an attractive pleasant atmosphere. This kind of business practice (the internet-based business) has experienced a great expansion since the late of 1990s, because of the rapid development in innovation of information and communication technology. In this study, the website status is defined as the extent of use of the e-commerce system for several different business activities, such as advertising, sales, marketing, information sharing, and other functions (Kraemer, Gibbs, & Dedrick, 2002). Prior studies indicated that the firms engagement with e -commerce technology is sequential and progressive (Straub & Klein, 2001; Taylor & Murphy, 2004; Venkatraman, 1994, as cited in Daniel & Wilson, 2002). Moving from a simple structure website, to customer service and personalised models (Hoffman, Kalsbeek, & Novak, 1996; Karagozoglu & Lindell, 2004; Reynolds, 2000). The portal stage, transaction stage and integration stage are the main sequential stages of website level of capability that can be identified. The portal stage begins with simple Internet access for the purpose of communication and web presence. In this stage, organisations treat their website operations as a means of directing traffic to their fundamental business (Evans & Wurster, 1999). The focus of this stage is concerned with attracting new customers (OConnor & OKeefe, 1997, as cited in Rao, Metts, & Mora -Monge, 2003), cost cutting, and increasing productivity. The transaction stage begins with establishing an active web presence equipped with the ability to sell and buy, and offering customers a payment facility in a secure environment. The focus here is shifted to improve customers services, expanding the customers base and managi ng the supply chain. Integration stage starts when the organisation implements more sophisticated system that enable it to integrate activities, such as, supply chain management and managing the relationships with customers. The organisation aim is to obtain a competitive advantage, by integrating e-commerce into its overall business strategy. During this stage, the new business model will be created with full immersion into the technology, reflecting greater complexity and risk (Straub & Klein, 2001). Nonetheless, in this paper a dichotomy model has been proposed to investigate the interactions between the organisation website capability and the e-commerce success model. Figure 1 below summarises the main criteria of the dichotomous model of the website status that the analysis will be based on. Figure 1: The Website Application
Business benefits
Active web presence

(Transaction stage)
Static web presence

(Portal stage)
Brochures displaying Product information Contact information & Company information FQA
Brochures displaying Product information Contact information, Company information FQA Selling, buying & ordering facilities Search capability & product feedback
Applications
Source: developed for this study based on Martin and Malay (2001); Rao, Metts, and Mora Monge (2003); Sekhar (2001); Straub and Klein (2001); Taylor and Murphy (2004) 3. THEORETICAL BACKGROUND In spite of the fact that the e-commerce system is considered as one of the information systems type. The applicability of the traditional models of information systems success required from researchers to consider the additional business functions that can be performed using e-commerce systems in contrast to traditional
information systems (Cunliffe, 2000). Particularly, with the existence of obvious differences between the information systems models and the e-commerce success models, in regard of their view for the success in terms of the system objectives and the system focus. Hence, to examine the potential influence of the website status on the e-commerce system success among small enterprises, a model that is based on the information systems success has been proposed. The model outlines the main parts of the theoretical framework that are involved in manifesting the potential influence of e-commerce system implemented on small organisations performance. It mainly adopts the basic structure of the Information System Success Model, and modified it to comply with the common perspective of e-commerce system applied by SEs. It is doing that based on the Delone and Mclean (1992, 2002, 2003) theory of information system success model and other studies in this field, which conducted by Kraemer, Gibbs, and Dedrick (2002), Hoffman, Kalsbeek, and Novak (1996), Karagozoglu and Lindell (2004), Reynolds (2000), and Taylor and Murphy (2004). The proposed model was customised by adding two constructs related to the e-commerce website status, which represented in the static website and the active website (Figure 2). The model combined the first layer of the DeLone and McLean's model, regarding the system quality, content quality, and service quality, to form one factor called system efficiency, and combined the second layer of the model (regarding the system use and user satisfaction, to form one factor called system usage. The researcher's objective was to produce a model that reflected the characteristics of the e-commerce system in small businesses context. Besides achieving the goal that this study is willing to achieve regarding assessing the influence of the website status on the small enterprise performance. Figure 2 below summarises the main constructs of the proposed model. Figure 2: The proposed theoretical framework of the influence of e-commerce website status
Website status 1. Active website 2. Static website
System efficiency
System usage
Net benefits
Source: developed for this research 4. HYPOTHESES The following hypotheses are linked to the website status, system efficiency, system usage, and net benefits. Based on literature, the website status refers to the level of utility of the e-commerce website for several different business activities (Kraemer, Gibbs, & Dedrick, 2002). This study advocates that two main sequential stages of website applications can be identified with regard of SEs, which are represented in static website presence and active website presence. Static or passive website refers to the basic Internet access for the use of communication and passive web presence. This stage entails the initial steps that organisations take to get involved in a digital environment, such as: (1) displaying product brochures and services offered (Timmers, 2000); (2) contact information; (3) and other relevant information in a static manner. It also allows organisations to present information about their businesses and other related frequent questions and answers. In fact, the portal website offers organisations the opportunity to have a window to the web' (Barry, 2000, as cited in Rao, Metts, & Mora-Monge, 2003), and provides SEs an opportunity to expand their market base (Evans & Wurster, 2000). On the other hand, active website refers to more improved website presence, that is, equipped with the capability to sell and buy, by offering customers payment facility in a secure environment. Active website is accommodating with the facilities to conduct online transactions and services. It allows firms
to offer additional function than the static website, by offering the firms opportunities for: (1) selling, buying, and ordering facilities; (2) searching capability and product feedback; (3) and linking information with inventory data. Therefore, based on the pr ior studies findings (Raymond, 2001; Rosenzweig, Roth, & Dean, 2003), it has been suggested that the active website is more likely to influence e-commerce success than the static website. This will lead us to state hypothesis H1 of e-commerce website status. H1: Active websites are more likely to positively influence the efficiency of the e-commerce system than its counterpart the static website. Hypothesis linked to e-commerce system efficiency The hypothesis related to the e-commerce system efficiency is based on the conceptual foundation provided by DeLone and McLean (2002) reformulated model. According to that model, e-commerce system efficiency is conceptualised at three different issues related to system quality, content or information quality and service quality. System quality is related to the system operational effectiveness. It is concerned with the function provided by the website, such as accessibility, ease of navigation, access to information and ability to load quickly, appearance attractiveness, secure and privacy policy, system design and accessibility (Han & Noh, 1999; Turban & Gherke, 2000). Content or information quality refers to the characteristics and manifestation of information of the system (Cunliffe, 2000; Dedhia, 2001; Savin & Silberg, 2000; Von Dran, Zhang, & Small, 1999). It is concerned with the information logical organisation, easy to comprehend, accurate, comprehensive and reliability and clarity, relevance and currency. Service quality refers to the system use in delivering the adequate performance to enhance the business operation. It is particularly concerned with responsiveness, prompt assistance when needed, follow-up services, quality of responses to frequently asked questions and tracking orders. Hence, based on the prior studies findings (Evans & Wurster, 2000; Iacovou, Benbasat, & Dexter, 1995; Raymond, 2001; Rosenzweig, Roth, & Dean, 2003; Schuete, 2000; Scupola, 2001; Warrington, Abgrab, & Caldwell, 2000; Watson, 2002) and the theoretical framework model proposed for this study. It has been suggested that a better efficiency of the e-commerce system quality is more likely to lead to a better ecommerce system usage. This will guide us to state hypothesis H2 of e-commerce system competency, which is devoted to assess the correlation between the e-commerce website efficiency and the usage of the ecommerce system applied. H2: The more efficient the e-commerce system, the more likely it will positively influence the e-commerce system usage. Hypothesis linked to usage of the e-commerce system Usage of the e-commerce system in this research includes two key variables related to the system actual use and customer's satisfaction due to the use. The use terminology in this study is related to customers' behaviour regarding the number of website visits, the length of stay at a particular site, the number of purchases completed, and retrieval and execution of a transaction. It is mainly, concerned with the use of the output of the e-commerce website by customers. Use represents one of the most critical factors employed to evaluate the success of information and e-commerce systems (Young & Benamati, 2000). Meanwhile, user/customer satisfaction refers to the valuation of the reaction or feeling of a customer. It related to his/her experience with all aspects of an e-commerce system put in place by an organisation to market its products and services (Seddon, 1997; Spreng & Mackoy, 1996). User satisfaction is completely connected to improve the wealth of the organisation (Meuter, Ostrom, Roundtree, & Bitner, 2000; McColl, Kennedy, & Schneider, 2000; Naumann, Jackson, & Rosenbaum, 2001), as use and user satisfaction are influencing the organisation's net benefits. Net benefits refer to positive or negative effects of the implemented system on the organisation efficiency and operational productivity, from the perception of the system adopter (DeLone & McLean, 1992; Jarvenpaa & Ives, 1991). This construct is measured through various variables related to the organisations context, which directed toward assessing the actual achievement or net benefits. Hence, based on the prior studies findings (e.g. Evans & Wurster, 2000; Raymond, 2001; Rosenzweig, Roth, & Dean, 2003; Schuete, 2000; Scupola, 2001; Warrington, Abgrab, & Caldwell, 2000; Watson, 2002), and the theoretical framework model proposed for this study, it has been suggested that, the more usage of the e-commerce system is more likely to affect positively the net benefits. This will guide us to state hypothesis H3 of e-commerce system usage, which is devoted to assess the correlation between the usage, and the net benefits. H3: The more the usage of the e-commerce system the more likely it will positively influence the e-commerce system success and subsequently the organisation's net benefits. Figure 3 outlines the hypotheses that are postulated to influence the SEs' net benefits due to the status of the ecommerce website applied.
Figure 3: The proposed research model of e-commerce website net benefits and its related hypotheses
Status of the e-commerce website applied Static website presence

Active website presence
H1
System efficiency
H2
System usage
H3
Net benefits
Source: developed for this research 5. RESEARCH METHODOLOGY Recognising that, the appropriateness of a research approach is driven by the nature of the social phenomena to be explored (Easterby-Smith, Thorpe, & Lowe, 2002). The aim of this study to obtain a broad perspective of the SEs managers' beliefs and attitude towards e-commerce website application, will be explored by testing existing theories, such as the social cognitive theory self -efficacy beliefs (Bandura, 1991, 2001) and the information system success model (DeLone & McLean, 1992, 2002, 2003). It achieves that, with a quantitative approach, relying entirely on primary data, and utilises the questionnaire survey, as the most appropriate tool that can offer an explanation of the research methods. The questionnaire was designed to gather information of attitudes and perceptions of the participants organisations about various statements related to e-commerce system impact. All items were measured with a seven-point Likert scale. A convenience sampling method was employed in this research, participants SEs were randomly selected from the Australian Yellow P ages. The mail survey was selected as being the most suitable method for collecting original data describing a large population (Babbie, 1990). This method is considered a practical tool in gathering information related to the beliefs, values, attitudes and perceptions of the respondents (Hair, Bush, & Ortinau, 2003). It also has an efficient mechanism for data collection when the researcher knows exactly what is required and how to measure the variability of interest (Sekaran, 2000). The questionnaires were distributed to managers of the selected small enterprises. Data collected from the questionnaires was then edited, coded, entered into the statistical program Statistical Package for Social Sciences' (SPSS), and then cleared. To ensure that the data obtained is complete, accurately entered and arranged to facilitate analysis operation. Inferential analysis was conducted to find out the relationship between e-commerce website status as two separated dependent variables and the predictors independent variables. The main inferential statistical technique employed to test the hypotheses is structural equation modeling.
The overall level of e-commerce website efficiency, usage and e-commerce system success are measured against various criteria based on prior studies by Bellman (2001), Deeter-Schmelz and Kennedy (2004), Fellenstein and Wood (2000), Hassan and Li (2005), Joseph, Cook, and Javalgi (2001), Kalakota and Robinson (2001), Kambil (1995), Karagozoglu and Lindell (2004), Karayanni and Baltas (2003), Korper and Ellis (2001), Pavlou (2003), Riquelme (2002), Schneider and Perry (2000), Schuete (2000), Sekhar (2001), Straub and Klein (2001), Straub, Limayem, and Karahanna-Evaristo (1995), and Warrington, Abgrab, and Caldwell (2000). Evaluation of e-commerce system quality was based on: (1) accessibility, ease of navigation, access to information, ability to load quickly; (2) appearance attractive; (3) secure; (4) privacy policy. Evaluation of ecommerce information quality was based on: (1) appropriate information logically organised; (2) easy to understand; (3) accurate, adequate, comprehensive, reliable, concise, and clear; (4) relevant; (5) current/currency. Evaluation of e-commerce service quality was based on: (1) responsiveness, receive assistance and follow-up services promptly; (2) answer frequently asked questions; (3) track orders. Evaluation of e-commerce system use was based on: (1) number of customer purchases completed; (2) number of customer navigations. Evaluation of e-customers satisfaction was based on: (1) customers satisfaction with information provided by the companys website: (2) customers satisfaction with services offered by the companys website; (3) customers overall satisfaction with companys website. Evaluation of e-commerce system net benefits was based on criteria of: (1) increase customers base; (2) decrease transactions cycle time; (3) cost reductions (search cost, communication, time saving); (4) improve trading relationships; (5) increase sales; (6) increase businesss competitive position; (7) increase businesss profits; (8) increase businesss staff productivity, change in working hours, change in number of workers; (9) decrease inventory investment; (10) and improve customers service. Evaluation of the passive or portal website was based on: (1) display company information; (2) display brochure and product information; (3) display contact information and feedback. Evaluation of the active or transaction integration website was based in addition to having all portal stage characteristics on the ability to: (1) sell and buy online, utilise ordering, and payment facilities; (2) receive product feedback; (3) utilise search capabilities; (4) and provide after-sales customer service and support. 6. TESTING OF HYPOTHESES A structural equation model (SEM) method is used to analyse the potential interrelationship of proposed model constructs. This method is considered a good tool to examine models containing complex relationships when a set of structural linear equations exist, irrespective of whether the variables in the equations are observed or latent (Garson, 1998, 2008, 2009). SEM is a theory-based approach that is governed by hypothesis rather than experiment (Hair, Black, Babin, Anderson, & Tatham, 2006). The tested model contained four independent factors (static website, active website, system efficiency, and system usage), and one dependent factor (net benefits). Each of these factors was represented in a cluster of predictors. Collected data have passed various tests to make sure that they are suitable and ready for inferential analysis. The assumption of multivariate normality and linearity were evaluated through SPSS using the techniques described by Tabachnick and Fidell (2007). This was completed by calculating z-scores or standard scores for each item on those variables, and calculating mahalanobis distance for each factor using data from variables of each set of the four factors. The issue of missing data was addressed and a replacement of the missing data was applied using series mean method. Ultimately, using data from 201 respondents, a confirmatory factor analysis, was performed using AMOS (Analysis of Moment Structures) on the twenty one sub-tests of the website function. The hypothesised model (model 1) is shown in Figure 4, where circles represent latent variables and rectangles represent measured variables. The measurement errors are enclosed by smaller circles and indicate that some portion of each observed variable is measuring something other than the hypothesised factor. The following abbreviation sub-tests serves as indicators of: (1) the static website factor (statc1_f, statc2_f and statc3_f); (2) the active website factor (statc1_f, statc2_f, statc3_f, activ1_f, activ2_f, activ3_f, and activ4_f); (3) the system efficiency factor (syst1, info1 and srv1); (4) the system usage factor (sat1_sqf, sat2_sqf, sat3_f, q13_a_1, q13_b_1, q13_c_1 and q13_d_1); (5) the net benefits factor (be1_lnf, be2_srqf, be3f, be4f). The four factors hypothesised to be connected with single head arrows imply a hypothesised direct effect. Model estimation (model 1) Maximum likelihood estimation was employed to estimate all models. The independence model that tests the hypothesis that all variables are uncorrelated was easily rejectable, X2(210, N = 201) = 3104.56, p < .001. The hypothesised model was tested next and support was found for the hypothesised model. Goodness of fit related to this five factors model, X2(182, N = 201) = 374.63, p < .001, comparative fix index (CFI) = .85; and the root mean square error of approximation (RMSEA) = .07. A chi-square difference test indicated a significant improvement in fit between the independence and the hypothesised model. The model p value is less than .05, so the test agrees in rejecting the null hypothesis at the .05. Nonetheless, since the RMSEA for this model is
.07 > .06, the tucker-Lewis index is .92 < .95 and the comparative fix index = .85 < 90, the model does not fit well according to the accepted measures of fit recommended by Hu and Bentler (1995, 1999). The next task was to identify any area of misfit in the model as recommended by Joreskog (1993). In this regard, two types of the model output information, the standardised residuals covariance and the modification indices were examined, to detect any possible misspecification. Consequently, post hoc model modifications (model 1a) were preformed in an attempt to develop a better fitting and possibly more parsimonious model (Figure 5). The model 1a, X2 (172, N = 201) = 228.40, p = .001, with a ratio of 1.31 < 2 represent an adequate fit (Byrne, 1989). The root mean square residual (RMR) = .03 < .05, indicates a good fitting model, which means that the model explained the correlations within an average error of .03 (Hu & Bentler, 1995). The goodness of fit index (GFI) = .91, which is close to 1 indicate a good fit (Hu & Bentler, 1995). The comparative fit appendix CFI = .98 .95, is considered representative of a well-fitting model (Hu & Bentler, 1999). Figure 4: Hypothesised CFA model (model 1)
Chi-square = 374.63 Degrees of freedom = 182 Probability level = .00 GFI = .85 Model 1 r1
1
e1 statc1_f
e8
e9
e10
1
e2 statc2_f
1
Static website syst1
1
info1
1
srv1
1
e3 statc3_f
1
e4 activ1_f
1
r2 Active website System efficiency
1
e5 activ2_f
1
e6 activ3_f
1
e7 activ4_f
1 1 1 1
r3 Net benefits r4
1
e11 sat1_sqf
1
e12 sat2_sqf
1
e13 sat3_f
1
e14 q13_a_1
System usage be1_lnf
1
e15 q13_b_1
be2_srqf
be3f e20
be4f
1
e16 q13_c_1 e18 e19 e21
1
e17 q13_d_1
Source: created for this research Root mean square error of approximation RMSEA of .04 .06, indicate a good fit (Hu & Bentler, 1999), the Tucker-Lewis Index TLI = .98 .95, indicates of good fit (Hu & Bentler, 1999). The noncentrality parameter NCP = 54.40 with a confidence interval of 19.29 and 97.62 indicates that we can be 90% confident that the population value of the noncentrality parameter lies between 19.29 and 97.62. The default model (1a) expected cross-validation index (ECVI) of 1.71, the saturated model (ECVI) of 2.31 and the independence model of (ECVI) of 15.73. Given the lower ECVI value for the default model (1a) compared with the saturated model and the independence model, we conclude that it represents the best fit to the data. The expected crossvalidation index (ECVI) is considered as a means of assessing in a single sample the likelihood that the models cross-validates across similar-sized samples from the same population (Brwone & Cudeck, 1989, 1993 as cited in Schumacker & Lomax, 2004, p. 240- 254; Byrne, 2001, p. 86). A Chi square difference test indicated that the model1a was significantly improved by addition of those paths, X2diff (8, N =201) = 146.23, p =.001. Because post hoc model modifications were performed, the squared multiple correlation among the model (1a) factors and the hypothesised model factors were inspected, where parameter estimates were hardly changed despite modification of the model. The size of the correlated error associated with items is considered substantially large. In addition, testing the standardised and unstandardised values of the factor loading
estimates revealed that both are mainly substantively reasonable and statistically significant. The only exception for this rule was static website and system usage. Variance and covariance estimates were statistically significant as well as substantively reasonable. 7. FINDINGS The values associated with each path in Figure 5 are unstandardised regression coefficient. These values represent the amount of change in the dependent variable per single unit change in the predictor. As shown in Figure 5, the unstandardised regression coefficient of the static website variable was 0.23. This result suggests that for every single unit of increase in the static website level, the system efficiency increases by 0.23 units in the small business population. The unstandardised regression coefficient of the active website variable was 4.29. This result suggests that for every single unit of increase in the active website level, the system efficiency increases by 4.29 units in the small business population. The unstandardised regression coefficient of the system efficiency variable was 0.22. This result suggests that for every single unit of increase in the system efficiency, the usage increases by 0.22 units in the small business population. Meanwhile, the unstandardised regression coefficient of the system usage was 0.23. This result suggests that for every single unit of increase in the system usage, the net benefit increases by 0.23 units in the small business population. Consequently, both the static website and active website were seen to have had an unequal impact on system efficiency. The SEM results indicate that: (1) the static website has a considerably lesser significance impact on system efficiency, than the active website; (2) system efficiency has a considerably significant impact on system usage; (3) and the system usage in it turn, has a considerably significant impact on system net benefits. This means, the more functions the e-commerce system (website status) can offer, the more impact on the system efficiency, system usage and subsequently net benefits the organisation will gain. Figure 5: Modified CFA model with significant coefficient presented in unstandardised forms (model 1a)
Chi-square = 228.40 Degrees of freedom = 174 Probability level = .00 GFI = .91 .25 Model 1 1.00 r1 1
.18
e8 e9
.25 1
info1
.23
e10
1.28
e1 e2 e3
1
statc1_f
1
syst1
1
srv1
1.37 .55 1 .05
1
statc2_f statc3_f
.90 1.57 3.50 3.14 3.34

Static website
.23
1.03
1.08
1.00
r2
1
activ1_f
e4
1.05
.05 .05 .03 .01

e5
1
activ2_f
.08 .91
Active website
4.29
System efficiency
1 .11
.90 1
e6 e7
.03
activ3_f
1
activ4_f
.89 1.00 .22
.02 1 .02
e11
.01
sat1_sqf
1
sat2_sqf sat3_f
1.00 1.04 3.49

System usage
.03
.09 1 e13 .68

e14
e12
r3
.75 1 .23
Net benefits r4
1 1 1 1
.20
q13_a_1
e15
.27 .22
.05
.08
-.07 .03 .08 q13_b_1 -.17
1.00 .21
be1_lnf
.29
be2_srqf
.42 1
be3f
e16
q13_c_1 q13_d_1
.13 e17
.08
.02
.65
be4f
.83
e18
e19
e20
e21
.07
Source: created for this research The result of the analysis of the website status revealed support for hypotheses H1, H2, and H3 as detailed in Figures 5. It reveals that hypotheses: (1) H1 was found that the active website has a higher significant impact
on the system efficiency than its counterpart the static website (refer to Figures 5); (2) H2 was found that the system efficiency has a significant impact on the system usage (refer to Figures 5); (3) and H3 was found that the system usage has a significant impact on the net benefits (refer to Figures 5). 8. DISCUSSIONS The findings of this study revealed that system efficiency was significantly influenced by the status of the implemented website (whether it is static or active) and its various applications. System efficiency in terms of system quality, information quality and services quality was found to be a significant predictor in influencing the system usage. System usage was found to be a significant predictor in influencing the organisational net benefits (Figure 5). These finding is correspondent with prior studies, which suggested that: (a) a strong association had been identified between the stages of Internet use and the organisation performance and subsequently the input the Internet adds to organisation bottom line (e.g. Raymond, 2001; Rosenzweig, Roth, & Dean, 2003); (b) system efficiency contributes to achieve higher visibility, better advertising and promotion activities, and enhances customers services (Fellenstein & Wood, 2000); (c) a strong association had been identified between the stages of the Internet usage and its performance (e.g. Raymond 2001; Rosenzweig, Roth, & Dean, 2003). This result verified the literature claims that sale growth and profitability can be adversely affected by websites that do not function properly, that is, businesses can lose as much as 40 percent of repeat end-user traffic' (Fellenstein & Wood, 2000). As long as, potential customers will judge the organisation's e-commerce website they visit, by the ability of the website to offer the most convenient functions that satisfy their needs (Savin & Silberg, 2000). As the table (5) shows the results of the unstandardised regression coefficient analysis of the active website is 4.29, the static website is 0.23. These results clearly showed that the active website has a considerably higher positive significance influence on system efficiency than its counterpart the static website. The system efficiency has a significant influence on the system usage, and in turn, the system usage has a significant influence on the net benefits that the organisation can achieve. The findings of this study affirm that the e-commerce website status is playing the key role as a determinant for the success of the e-commerce system in small enterprises. The research's findings have offered an empirical support on a national level among Australia for the influence of the website status on the system efficiency, the system efficiency on the system usage, and the system usage on the net benefits. The findings of this study unearth that the better the level of improvement of the website status of the e-commerce system, the better results regarding usage and net benefits, and subsequently a better opportunity of success for the e-commerce system. This study as well, offered a practical support for the creation of model that clarifies the impact of the website status on the system success. The model tested in this study can serve up as a reference source for practitioners and academics alike in better understanding of impact of the e-commerce system applications, and grant them the appropriate recommendations based on the empirical findings. It clarifies the overall picture of how the status of website can affect the expected outcomes of the implemented e-commerce system, and presents small enterprises useful information for enhancing their understanding of e-commerce and its anticipated results. It also provides insightful information about the pathway that small enterprises must be followed to yield the desirable benefits, with respect of the sales and net revenue. The findings of this study has outlined the path that policy makers, and business practitioners must be observed when developing future strategy/ies to promote e-commerce within SEs. The findings show clearly that implementing the appropriate website system by means of: (1) a clear developed online strategy; (2) a relevant website that reflects the business's strategy; (3) the website should be frequently updated and present current information about the SE's products and services. Would offer SEs the opportunity to achieve their desires, which is to survive in increasing tough competitive marketplace. The findings of this study can be used as a basic background that offers ongoing advice and support to developing future strategy/ies to establish, promote, and enhance e-commerce adoption and implementation. 9. CONCLUSION AND SUGGESTIONS This study might experience diverse limitations that could affect the overall validity and reliability of its findings. Those limitations could arise from the theoretical, procedural, and methodological approaches applied in the research. The principal limitation of this study being a cross-sectional is related to the nature of the mail survey used to collect the data. This limitation is attributed to the likelihood that respondents answers may not reflect precisely the outcome figure of actual benefits they attained. The probability of response bias, which could exist because of the participants' tendency to respond to questions in a certain way, might misrepresent or misconstrue facts (Zikmund, 2003). This problem would attribute to the characters of the SEs' decision makers being busy people, and so they have limited time to answer the survey questions accurately. Likewise, because
we are unable to determine the person who completed the survey is? This also adds problems to the accuracy of the researchs findings. Besides, SEs mainly owned and operated by family members who might possess high professional skills with little or no formal education might make them unable to interpret the actual outcome of e-commerce system. Also, the sample method utilised to identify the SEs who participated in this research was not based on a strictly random sample, due to the absence of complete list accounting for all Australian SEs. The selected sample of participants SEs was based on a convenience sample method, where the selection here is purely subjective and arbitrary. This non-probability sampling method suffers from problems of extreme bias, which raised the question concerning its appropriateness, and how equitable the results would be in representing the entire SE population. Nonetheless, various procedures have been applied to ease and/or diminish the effect of these limitations. Those procedures are reflected in selection of the most appropriate paradigm for this study, selection of the quantitative research approach, sampling process, questionnaire design, determination the data needed and construct operationalisation, determination of measurement scale applied, and the judgment of the quality of the survey research method by constructing validity and reliability. Consequently, we believes that the research has projected and examined a number of significant factors that affect e-commerce system success. The findings of this study shows how the functions that the website can provide will determine the success of the implemented e-commerce system in bringing small enterprises the benefits they desire. SEs must be aware that: (1) the website system quality must be accessible, ease of navigation, attractive and secure; (2) the website information quality must be accurate, comprehensive, reliable and clear, relevance and current; (3) the website service quality must be responsiveness, prompt, offering follow-up services and excellence of responses to frequently asked questions. Accordingly, SEs who have adopted e-commerce or on the brink to adopt ecommerce should be fully understood that the website status of the e-commerce system adopted will contribute significantly to the net benefits they expected from adopting e-commerce. Thereby, SEs should have the precise answers on the following questions: What system quality might make their websites effective and attractive? What information quality is ideal to be presented for their websites? What services quality the website should provide to satisfy customers needs? Still, this study demonstrated that the website of e-commerce system is an inevitable phenomenon that the businesses of all types should be aware about its impact. For that reason, to be able to gain the most benefits of e-commerce, businesses in general and SEs in specific should think through the following suggestions: Implement the e-commerce system that suits your business activities. Constantly update your website capability. Monitor the development in e-commerce innovation and how it can be leveraged, if possible to improve the current business practice. Nonetheless, further research efforts are required to shed more light on the influence of website status on the ecommerce system efficiency, usage and subsequently the overall success of the e-commerce system. Likewise, this study has illuminated the effect of the website status of the e-commerce system on a limited extent, by investigating two categories of the website status (active and static). Extending the examination of any future research on website status to include other categories, such as the integration stage would help to clarify the influence of the website status on the e-commerce success. This research has assessed the influence of the website of e-commerce system in Australian SEs based on the perception of SEs manages/owners. Future studies that look into the influence of the website of e-commerce system in Australian SEs based on customers perception, would be of great benefits in supporting the result of this research. Besides, various opportunities are exist for future studies to address the above mentioned limitations, by trying to avoid them or as many as possible are emerging. Additional empirical investigates that illuminate further the impact of the website status on the e-commerce system success are required for validating the findings of this study. 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Is Customer Satisfaction an Indicator of Customer Loyalty?

Rahim Ajao Ganiyu (Corresponding author) Department of Business Administration University of Lagos, Nigeria. abdulrahimajao@yahoo.com Ignatius Ikechukwu Uche Department of Business Administration University of Lagos, Nigeria. godnear2000@yahoo.com Adeoti Olusola Elizabeth Department of Business Administration University of Lagos, Nigeria. shladeoti@yahoo.com
ABSTRACT Customer satisfaction and loyalty is a well known and established concept in several areas like marketing, consumer research, economic psychology, welfare-economics, and economics. And has long been a topic of high interest in both academia and practice. The aim of the study was to investigate whether customer satisfaction is an indicator of customer loyalty. The findings of the study supported the contention that strong relationship exist between customer satisfaction and loyalty. However, customer satisfaction alone cannot achieve the objective of creating a loyal customer base. Some researchers also argued, that customer satisfaction and loyalty are not directly correlated, particularly in competitive business environments because there is a big difference between satisfaction, which is a passive customer condition, and loyalty, which is an active or proactive relationship with the organization. Keywords: Customer satisfaction, customer loyalty, switching cost, loyalty programme, consumption experience, word-of-mouth, customer value
1. INTRODUCTION Customer loyalty has long been a topic of high interest in both academia and practice, and a loyal customer base has been found to be beneficial to the firm. Most companies strive for customer loyalty as the competition in most sectors grows tighter, both the importance of, and the challenge in, keeping customer loyalty increases. Indeed, customer satisfaction has for many years been considered as key factor in determining why customers leave or stay with an organization. Therefore, organizations need to know how to keep their customers, even if they appear satisfied. Every organization has come to realize that in order for it to survive, let alone grow, it has to acquire and then retain profitable customers. And it is loyal customers that generate increasing profits for each additional year they are retained. Customer satisfaction is not a guarantee of repeat patronage. Satisfied customers jump ship every day, and the reasons are not always due to customer dissatisfaction, some customers are lost due to indifference which arises from pure neglect (Michael et al., 2008). Customer satisfaction is the heart of marketing. The ability of an organization to satisfy customers is vital for a number of reasons. For example, it has been shown that dissatisfied customers tend to complain to the company and in some cases seek redress from them more often to relieve cognitive dissonance and bad consumption experiences (Oliver, 1987; Nyer, 1999). If service providers fail to properly address such behavior, it can have serious adverse effect. In extreme cases of dissatisfaction, customers may resort to negative word-of-mouth as a means of getting back to the company. Reichheld (1996) posits that unsatisfied customers may choose not to defect, because they do not expect to receive better service elsewhere or if the switching cost is high. Additionally, satisfied customers may seek for competitors because they believe they might receive better service elsewhere.
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Customer retention is a function of other factors other than customer satisfaction. These include a wider variety of product choices, greater convenience, better prices, and enhanced income (Storbacka et al., 1994). Therefore, many researchers consider customer satisfaction to be the best indicator of a companys fu ture profit and competitiveness. The outcomes of customer satisfaction include customer loyalty (Bei and Chiao, 2001). In the consumer marketing community, customer loyalty has long been regarded as an important goal of any corporate entity (Reichheld and Schefter, 2000). And as such both marketing academics and professionals have attempted to uncover the most prominent antecedents of customer loyalty. Researchers have found a strong relationship between customer satisfaction and loyalty. For instance, Szymanski and Henard (2001), in their meta-analysis study, indicate 15 positive and significant correlations between the two constructs. Bearden and Teel (1983) have also shown a relationship between satisfaction and loyalty. In fact Jones et al., (1995) argued that this relationship is not a simple linear one; the resulting behaviors may depend on consumer attributions, (i.e. their belief in the causes of the customer satisfaction and dissatisfaction assessment). Quite understandably, marketing practitioners have often lay claim with customer satisfaction, using slogans such as Our focus is customer satisfaction, or The customer is a king Customer is our reason for being in business. etc. The importance of customer satisfaction inform the study carri ed out by the University of Michigan which tracks customers across 200 firms representing all major economic sectors to produce the American Customer Satisfaction Index (ACSI). Each company receives an ACSI score computed from its customers perceptions of quality, value, satisfaction, expectations, complaints, and future loyalty (Fornell et al., 1996). According to Boselie, et al., (2002) satisfaction is a positive, affective state that results from the appraisal of a working relationship between parties. Customer satisfaction is defined by Olivers (1997) as the consumers fulfillment response. It is a judgment/assessment that a product or service feature, or the product or service itself, provides a pleasurable level of consumption related fulfillment. In other words, it is the overall level of contentment with a service/product experience. Bitner and Zeithaml (2003) opined that satisfaction is the customers evaluation of a product or service in terms of whether that product or service has met their need s and expectations. Customer loyalty can seem elusive and magical to those trying to obtain it. However, there are a lot of good reasons for businesses to pursue customer loyalty as a strategic objective. Customers are expensive to acquire; keeping them loyal allows you to amortize acquisition costs. Loyal customers are often willing to pay premium prices. For example, some of the important attitudes and behaviors expected of a loyal customer include: Likelihood to recommend company products and services to others. Likelihood to continue purchasing the company products and services, at minimum, at the same level. Likelihood of purchasing other products and services the company offer. Believing company products and services are superior to competitors. Not actively seeking alternative service providers. Providing the company with opportunities to correct problems and not using these as a basis for compromising the relationship.
Numerous studies have pointed out that two of the most effective means of generating customer loyalty are to delight customers (Oliver, 1999; Lee, et al., 2001) and to deliver superior customer value derived from excellent services and quality products (Parasuraman and Grewal, 2000). In addition, some scholars argue that switching costs, is a key moderating variable, and can significantly influence customer loyalty through such determinants as customer satisfaction (Fornell, 1992; Oliver, 1999; Lee et al., 2001) and perceived value (Woodruff, 1997; Neal, 1999). Customer loyalty can be defined as the adherence of customers to a company. Even if businesses make mistakes, loyal customers will not leave. Kincaid (2003, p.10) defines customer loyalty as a consumer behavior, built on positive experience and value, which leads to buying products, even when that may not appear to be the most rational decision . Furthermore, the concept was later divided in to behaviouristic and non-behaviouristic dimensions where the latter is more focused on the underlying causes of customer loyalty
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and attitudes of consumers (Peppers and Rogers, 2004). So, in the investigation of customer loyalty, it is valid to explore two fields: the behavior of consumers and their intentions (Schweizer, 2008). Stone et al., (2000) posits that customer loyalty is also dependent on a number of customer related factors, i.e. how customers perceive the business rather than what the business really does. Given all these benefits, its only natural that businesses should turn to a diverse range of tools to develop customer loyalty. And every company seems to have a different formula for making that loyalty happen. Such initiatives include creation of valuable customer experiences, creation of resonant brand, proactive marketing initiatives, quality control processes, and customer relationship management. The common thread here is that the experience the customer ultimately has with the business, if it is positive creates the emotional bond that leads to customer loyalty. But something is missing from this assertion. What about the product itself? What role does it play in creating customer loyalty? Of all the touch points customers have with the company, companys product is the one touch point with which they are likely to spend the most time. The product is also the touch point likely to create the strongest emotional reaction, because it is the customer experience with product that customers use to portray the company brand and image. Although, it is widely acknowledged that customer satisfaction is a driver of customer loyalty. However, a number of contributions to the services marketing literatures over the past decade have called this into question and empirical studies have begun to demonstrate service contexts in which customer satisfaction and loyalty do not always correlate positively (Silvestro and Cross, 2000, Kamakura, 2002, Pritchard and Silvestro, 2005). However, most of these empirical studies have been based on business to consumer (B2C) contexts, and on latitudinal rather than longitudinal data. The term customer loyalty was widely researched in 1990s but considerably fewer investigations were conducted in later periods (see for example, Heskett et al., 1994, Rucci and Kirn, 1998, Reichheld and Markey, 2000; Vandermerwe, 2000; Fredericks, 2001, Reichheld, 2004). Also, moderate amount of empirical research has been conducted to examine the relationships among customer loyalty, satisfaction, switching costs, and customer value. And to date very few empirical studies has investigated these constructs in a single framework. And the complicated interrelationships among these constructs have not been fully uncovered and understood (Reichheld and Sasser, 1990; Jones and Sasser, 1995). Therefore, the current study seeks to address some of these gaps and offers further theoretical insight and contribution into the contention that customer satisfaction is an indicator of customer loyalty. 2. CONCEPTUAL BACKGROUND Customer loyalty has been studied since the 1950s (see Jacoby and Chestnut 1978 for a review). Customer satisfaction remains a worthy pursuit among the consumer marketing community (Oliver, 1999). Certainly, customer satisfaction is a critical focus for effective marketing programs. According to Yi (1991) customer satisfaction is a collective outcome of perception, evaluation and psychological reactions to the consumption experience with a product or service. Customer satisfaction is regarded as how customers can get more benefits than their cost (Liu and Yen, 2010). Customer satisfaction plays the most important role in total quality management. And in comparison with other traditional performance measures, customer satisfaction is probably less sensitive to seasonal fluctuations, changes in costs, or changes in accounting principles and practices (Kotler, 2006). Some researchers (Parasuraman, et al., 1988; Cronin and Taylor, 1992) consider overall satisfaction to be the primary function of perceived service quality. Among the more popular measures of customer satisfaction, two widely employed approaches are transaction-specific and cumulative or overall satisfaction. The transactionspecific approach defines customer satisfaction as an emotional response by the consumer to the most recent transactional experience with an organization (Oliver, 1993). The associated response occurs within the time frame of consumption, after the choice process has been completed. The affective response on the other hand varies in intensity depending upon the situational variables that are present. Compared to transactional-specific satisfaction, overall satisfaction reflects customers cumulative impression of a firms service performance On the other hand, the overall satisfaction perspective views customer satisfaction in a cumulative evaluation fashion that requires summing the satisfaction associated with specific products and various facets of the firm. Satisfied customers tend to have a higher usage level of a service than those who are not satisfied (Ram and Jung, 1991; Bolton and Lemon, 1999). They are more likely to possess a stronger repurchase intention and to
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recommend the product/service to their acquaintances (Zeithaml et al., 1996). Numerous studies have also revealed that customer satisfaction positively affects loyalty (Zeithaml et al., 1996; Bloemer, et al., 1999; Oliver, 1999). As identified by the researchers that customer loyalty as a construct is comprised of both customers attitudes and behaviors. Customers attitudinal component represents notions like: repurchase intention or purchasing additional products or services from the same company, willingness of recommending the company to others, demonstration of such commitment to the company by exhibiting a resistance to switching to another competitor (Cronin and Taylor, 1992; Prus and Brandt, 1995; Narayandas, 1996), and willingness to pay a price premium (Zeithaml, et al., 1996). On the other hand, the behavioral aspect of customer loyalty represents- actual repeat purchase of products or services that includes purchasing more and different products or services from the same company, recommending the company to others, and reflecting a long-term choice probability for the brand (Feick, et al., 2001). The behavioral typology to customer loyalty is primarily concerned with measures of repeat purchase, proportion of purchases etc. Although, this is considered to be a relevant measure, the main criticism of this typology is that it does not include the customers motives for their behavior. Therefore attitudinal approaches to loyalty have been developed. While a behavioral approach to loyalty is still valid as a component of loyalty, it is argued that attitudinal approaches to loyalty should supplement the behavioral approach (Samuelson and Sandvik, 1997). The attitudinal typology includes, for example, measures of commitment and trust. 3. METHODOLOGY AND METHOD 3.1 Corelational Research Method To achieve the study objective, the researchers adopted co relational research method, using qualitative research approach. The study explored and established the existence of relationship/interdependence between customer satisfaction and customer loyalty. Previous published studies, articles, books etc on the subject matter was thoroughly reviewed to gain a deeper understanding and insight in what earlier researchers have said, done and come up with. The major advantage of using secondary information is that much of the background work needed has already been carried out and have been already used and established by other researchers for a similar or different researcher purposes (Harris, 2001). 4. DISCUSSIONS AND CONCLUSION Customer satisfaction is a popular concept in several areas like marketing, consumer research, economic psychology, welfare-economics, and economics. The most common interpretations obtained from various authors reflect the notion that satisfaction is a feeling which results from evaluation process of what has been received against what was expected, including the purchase decision itself and the needs and wants associated with the purchase (Armstrong and Kotler, 1996). Many empirical studies have shown that customer satisfaction secures future revenues (Fornell, 1992; Bolton, 1998), reduces future transactions costs (Reichheld and Sasser, 1990), decreases price elasticity (Anderson, 1996), and minimizes the likelihood of customers defecting if quality falters (Anderson and Sullivan, 1993). Customer loyalty is winning the confidence of the customer in favor of an organization such that the relationship becomes a win-win situation for both the organization as well as the customer. Customer loyalty is not a process that finishes with the customer joining the loyalty program but actually a process that starts with the customer joining the same. Customer loyalty is something more of what an enterprise must get from the customer. As opposed to what the name suggests, it is not just something that the customer has to build towards the enterprise. Customer loyalty will be hard to get in times of a recession. At least harder than it was when the consumer had enough to spend. Small reasons will be enough for customers to turn away from putting money into a business. Customers will not put loyalty first but the price will be a major driving force. For now - the consumer confidence is so low and will be influenced by immediate benefits. As such customer loyalty programs will need to adapt to quicker and possibly immediate awards to the customer. Lower prices as part of the loyalty program will definitely boost membership to the loyalty programs but this must be carefully communicated to the customer, to avoid perceiving companys product as inferior compare to competitors offering. Therefore, discounts to customers must be treated separate from the benefits of lower price to loyal customers. Loyal
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customers must be given a feeling that they are being treated specially, particularly with the ongoing economic recession. That is the key to keeping the customers with the business in these hard times. Customers need to be better informed now of the benefits that they are getting by belonging to loyalty program. The power of customer loyalty is clear and compelling: It leads to more profitable growth. Loyal customers stay longer with companies that treat them well. They buy more of their products, and they cost less to serve. They recommend the companies to their friends and colleagues, becoming, in effect, a highly credible volunteer sales force. Investing in loyalty can generate more attractive returns than rolling out an ambitious new marketing plan or expanding line of companys business. Loyalty can be of substantial value to both customers and the firm. Customers are willing to invest their loyalty in business that can deliver superior value relative to competitors (Reichheld, 1996). When they are loyal to a firm, consumers may minimize time expended in searching and in locating and evaluating purchase alternatives. Also, customers can avoid the learning process that may consume the time and effort needed to become accustomed to a new vendor. Customer loyalty is one major driver of success in e-commerce (Reichheld and Schefter, 2000). It is a fallacy to assume that a customer is loyal just because he/she continue to buy from the companys. There are many reasons why a customer repeats purchasing which have little to do with being really loyal. Moreover, loyalty means hanging in there even when there may be a problem because the organization has been good to customers in the past and addresses issues when they arise. It means that they do not seek out competitors and, when approached by competitors, are not interested. It also means being willing to spend the time and effort to communicate with the organization so as to build on past successes and overcome any weaknesses. Customer satisfaction alone cannot achieve the objective of creating a loyal customer base. In theory and practice trust has come out to be an important antecedent of customer loyalty. While determining the imperatives of how to win customers trust the service provider(s) must focus on both present and future time frame. The construct of trust contains belief in the brand or company, which provides the customers an assurance of positive outcomes not only for the present but also for the future. It had been thought and research has found that by increasing loyalty as it is apparent that satisfied customer are likely to remain loyal to the service provider (Eriksson and Vaghult, 2000). However, research by Jones and Sasser (1995) has found that satisfaction and loyalty are not directly correlated, particularly in competitive environments. The findings shows that to achieve loyalty in competitive environments organizations need to completely satisfy their customers (Jones and Sasser, 1995). Fredericks (20 01) also points out that there is a big difference between satisfaction, which is a passive customer condition, and loyalty, which is an active or proactive relationship with the organization. Furthermore, Coyles and Gokey (2002) found from their research that satisfaction alone does not make a customer loyal and that merely measuring satisfaction does not tell a company how susceptible its customers are to changing their spending patterns or jump ship to competitors with a better offering. They identify three basic customer attitudes, emotive, inertia and deliberative that underlies loyalty profiles. They have found that the emotive customers are the most loyal. 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Design E-SCM Information Security Framework

Maryam Mahdikhani (Corresponding author) m.mehdikhani290@yahoo.com E-MBA and member of young researchers society, Shahid Bahonar University, Kerman, Iran Asadolah Khahande Karnama Assistant Professor, Shahid Bahonar University, Kerman, Iran Milad Beirami M.A.student of Public Adminastration, Islamic Azad University, Rafsanjan, Iran
ABSTRACT
Electronic Business (e-Business) is revolutionizing the way of communication between Internal and external stakeholders in an organization. E-business can lead to competitive advantage and at the same time, increase profitability. There are several factors resulting on the success of e-business. One of the most important factors is Security. It is thus clear that information technology (IT) and the emerging e-business application and related to security are gaining a pivotal role in managing supply chain. This paper examines the impact of E-business on supply chain on information security aspect among other types of supply chains. The current paper reviews security and supply chain literatures and then investigates framework of information technology in supply chain management. Areas of supply chain which need security attention are then proposed in e-supply chain information security framework and this will be considered as a guideline for managers to find out if their e-supply chain network is secure enough. Through the paper, one realizes that Information Security in every information based-system will be vital. Keywords: E-business; E-Supply chain Management; business Security
1. INTRODUCTION Over the last years enterprises and individuals have started to conduct business over computer networks, especially the Internet. This development is commonly summarized as electronic business (e-business). Electronic Business which is commonly referred to as e-business, which is the utilization of information and communication technology (ICT) in conduct business on the internet, not only buying and selling but also servicing customers and collaborating with business partner. Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers (Velmurugan, 2009). Information security is one key component of national security. Many experts believe that under normal circumstances, the so-called information security refers to the state of the social informatization in one country and the countrys information technology system being free from external threats and invasion (Luo yixin, 2011). Therefore, Security is the key to the success of e-business and lack of security is the significant problem on the way to e-business success. During every business transaction, the parties involved should feel security with the people and the companies. It must be established and managed continuously in business transaction activities (Velmurugan, 2009). It is not difficult to see that information security mainly includes three aspects, i.e. human security, physical security and safe operation. Human security mainly refers to the safety awareness, legal awareness, safety skills and so on of computer users; physical security refers to the measures and processes in the protection of computer equipment, facilities (including network) and other media from natural and man-made destruction. It involves security of environment, equipment and media; safe operation mainly includes risk management of systems, audit tracking, backup and recovery, emergency and so on (Luo yixin, 2011). 2. LITERATURE REVIEW 2.1. Supply Chain Management and Electronic Supply Chain Supply chain is the integration of key business process from end user through original suppliers that provides products, services, and information that add value for customers and other stakeholders. Supply
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chain management means coordinating, scheduling and controlling procurement, production, inventories and deliveries of products and services to customers (Yeung et al, 2009). In the context of increasingly globalized and competitive economy where organizations are part of an environment characterized by networks of inter- and intra-organizational relationships, an important prerequisite of information sharing emerges as supply chain integration (SCI) (Ipek Kooglua et al,2011). Correct supply chain relationships based on strategic collaboration with supply chain partners (Simchi et al,2003) as a result of SCI, leverage the flow of timely, accurate and quality information (Li S et al,2006). However, although the definitions in the literature regarding SCI encompass the complementarities between integration and information sharing, in the means that SCI supports effective and efficient flow of information (Gaile et al,2006), therefore IT and respective e-business tools and methods are more importantly viewed as having a role in supporting the collaboration and coordination of supply chains through information sharing. Objectives of e-business in supply chain management are to provide information availability and visibility, enable single point-of contact of data, allow decisions based on total supply chain information, and enable collaboration with supply chain partners. Efficiency of information transfer, information availability and transparency of relevant business information are only a few of the benefits provided by e-business solutions to support supply chain integration. A supply chain is called an esupply chain when it is electronically managed, typically with web-based software. Improvements in supply chains regularly bring an attempt to make information flow automatically (Poirier et al, 2000). The need of flexibility and adoptability in a dynamic e-business environment which focuses on network integration has introduced electronic supply chain management (E-SCM). E-SCM refers to the supply chain that is built via electronic linkages and structurally based on technology-enabled relationships (Williams, L.R et al, 2002). E-SCM includes order treatment, organizing production, stock management, match delivery and transportation management, inventory management, customer service and payment management. 1) Order treatment. Order treatment is to identify and manage the attainable orders. When orders come, enterprises must identify which can be done and then analyze the cost and benefit according to the production capability. In this way, e-SCM reduces the error and cycle-time, and improves the efficiency. 2) Organizing production. Organizing production improves the communication among suppliers, enterprises and customers, and removes the difficulties of production management. To some extent, E-SCM makes the forecast of sales more accurate and organizes the production efficiently. 3) Stock management. Stock management is to smooth the flow of information between enterprises and their suppliers. By using e-commerce, enterprises gather information about the sales and future demand, and offer it to their suppliers. At the same time, enterprises get the price list and the catalog of the products from their suppliers. On the other hand, managing their stock through the internet, enterprises make the products range of stock wider and reduce the number of stock personnel. 4) Match delivery and transportation management. In match delivery, enterprises can integrate the total supply chain by monitoring the consignments in the match delivery center, and tracing the transportation of the goods. In transportation, enterprises can exert their effects on optimizing resources, reducing transportation cost, tracing the cargo and delivering them to the right place timely. 5) Inventory management. Through e-commerce system, enterprises can communicate with each other about the inventory, such as the information of orders delayed and stock status. This can reduce the inventory cost and enhance the efficient utilization of their warehouses. 6) Customer service. Through internet, to receive and adjust the complaints from customers will be more convenient. It reduces the cost of informing customers of the necessary replacement or repairing. 7) Payment management. With the development of the technology and the security management of the internet, enterprises can settle accounts with their trade partners and customers on line (Closs, D.J et al, 2004). 2.2. Definition of Electronic Business In order to be able to define an approach to e-business security, a working definition of e-business is needed. The definition of the term used here is based on a review of a number of basic concepts essential to an understanding of the business environment in general, and in particular the changes it has gone through in recent year. E-Business is a platform for communications and information sharing between business to business or business to consumers, which enables the streamlining of business processes involved in Supply Chain, and may facilitate efficient, effective performance improvement in Supply Chain Management (Asanka Hiroshana ,2007).The e-business involves the automation of all the business processes in value
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chain-form procurement or purchasing of raw materials, to stock holding, distribution and logistics, to sales and marketing, after sales, invoicing, debt, collection and more. E-business includes models and methods of doing business, as well as all processes of business. E-business could be described in the following way: EB f (EC, CRM, SCM, RP, BI, etc.) Where: EB E-business; EC E-commerce; CRM Customer Relationship management; SCM Supply Chain Management; RPM Resource Planning; BI Business inelegance. 2.3. Concept of business security E-business is a powerful tool for business transformation that allows companies to enhance their supplychain operation, reach new markets, and improve services for customers as well as for suppliers and employees. However, implementing the e-business applications that provide these benefits may be impossible without a coherent, consistent approach to e-business security. Traditional network security has focused solely on keeping intruders out using tools such as firewalls. This is no longer adequate. E-business means letting business partners and customers into the network, essentially through the firewall, but in a selective and controlled way, so that they access only the applications they need. To date, organizations have controlled and managed access to resources by building authorization and authentication into each ebusiness application. E-business security is an overarching business issue that, based on analyzed risks, establishes the threat acceptance and reduction parameters for the safe use of technology. As an overarching issue, e-business security can be thought of as being absolutely fundamental to the effective and efficient use of information technology (IT) in support of e-business. E-business depends on providing customers, partners, and employees with access to information, in a way that is controlled and secure. Managing e-business security is a multifaceted challenge and requires the coordination of business policy and practice with appropriate technology. In addition to deploying standards bases, flexible and interoperable systems, the technology must provide assurance of the security provided in the products. As technology matures and secure e-business systems are deployed, companies will be better positioned to manage the risks associated with disintermediation of data access. Through this process businesses will enhance their competitive edge while also working to protect critical business infrastructures from malefactors like hackers, disgruntled employees, criminals and corporate spies.Figure 1 presents a particularly approach to e-business in terms of security: how these main components presented interact and the main frame in which they change information (Flynn BB et al,2010). The architecture contains components that cannot be omitted components that interact for assuring the process called as SCM, supply chain management.
Figure1; EBSA, e-business security architecture
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The components on which the presented architecture is based on are, (Flynn BB et al,2010): Applications for Customer Relationship Management, CRM, used for interacting between various departments such as sales, marketing and client services; the main aspects of these applications is client orientation, trying to provide the best services to customers and collecting feed-back for interested departments; ERP applications, Enterprise Resource Planning, are focused on planning based on forecasting, procurement management, materials, inventory, accounting information, such as receivables and payments; ERP applications make the leap from the stock based production to requests based production; Supplier relationship management (SRM) is the discipline of strategically planning for, and managing, all interactions with third party organizations that supply good and/or services to organization, in order to maximize the value of those interactions. In practice, SRM entails creating closer, more collaborative relationships with key suppliers in order to uncover and realize new value, and reduce risk. SCM, Supply Chain Management helps t optimize production process, managing stocks and decreasing the expectation time of customers by fasting up the delivery time; at their full efficiency SCM applications can break the disadvantages generated by logistics; Business Intelligence, BI is the picture frame in which are managed the applications described above; it refers to knowledge, skills, technologies, services, risks, security issues, applications and more others that are used for stepping the traditional business into a new era of making business. Those concepts are relying on the efficiency of the security systems which are incorporated into the functional ones. Security can be very well achieved by implementing a PKI, public key infrastructure, like the one presented in figure 1. 3. SECURITY IN SUPPLY CHAIN One of the main inhibitors to the uptake of e-business in general, and the adoption of electronic supply chains in particular, has been concern about the security of online transactions. Once organizations can demonstrate to both customers and trading partners the security of their online operations, commercial prospects immediately improve. It is important to remember that the fundamental goal of electronic supply chain network security is not to prevent the loss of sensitive data, but to maximize the economic return on such data, whilst always maintaining its integrity. Although supply chain security (SCS) is considered an important subject, there has been little formal definition in literature. The application of policies, procedures, and technology to protect supply chain assets (product, facilities, equipment, information, and personnel) from theft, damage, or terrorism and to prevent the introduction or unauthorized contraband, people or weapons of mass destruction into the supply chain( Doinea, Mihai,2009) the above definition of SCS considers security of supply chains from two aspects, soft and hard. Hard aspect indicates tangible vulnerabilities, such as physical thefts (facilities, equipment, and personnel) or physical damages and terrorism. Soft aspect refers to intangible vulnerabilities which in the above definition are considered as information theft. The scope of this paper is to clarify information theft and tries to demonstrate details of this phrase connected to information security in e-SC. From an information technology face of security (information security), information theft contains different items such as viruses, worms, Trojan horses, hackers, Trap doors, Logic bombs, port scanning, spoofs, DNS attacks, social engineering, etc. 3.1. Role of Information technology in Supply chain Information Technology (IT) in SCM enables great opportunities, ranging from direct operational benefits to the creation of strategic advantage. It changes industry structures and even the rules of competition. IT is a key in supporting companies creating strategic advantage by enabling centralized strategic planning with day-to-day centralized operations. In fact supply chain become more market-oriented because of IT usage. The objectives of IT in SCM are (Simchi et al, 2003): Providing information availability and visibility; Enabling a single point of contact for data; Allowing decisions based on total supply chain information; and Enabling collaboration with partners The functional roles of IT in SCM have been outlined as Follows (Auramo et al,2005). (See figure 2).
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Figure 2; Functional roles of IT in SCM For the short term, the system must be able to handle day to day transactions and electronic commerce across the supply chain and thus help align supply and demand by sharing information on orders and daily scheduling. From a mid-term perspective, the system must facilitate planning and decision making, supporting the demand and shipment planning and master production scheduling needed to allocate resources efficiently. To add long-term value, the system must enable strategic analysis by providing tools, such as an integrated network model, that synthesize data for use in high-level "what-if" scenario planning to help managers evaluate plants, distribution centers, suppliers, and third-party service alternatives. 3.2. Security in each element of the electoronic supply chain Every element of the electronic supply chain is affected by issues of trust and security. Product development Open communication is vital during product development, and sharing information and resources within the development team is in everyone's interest. Commercially sensitive information will need to be communicated in a secure online environment, through, for instance, secure e-mail services or virtual private networks. Purchasing This time the goal is transactional confidence. Both parties must be confident in the ability of the other to deliver payment or goods, and to maintain the security of payment details provided - by credit or debit card, for instance. The use of digital signatures supported by certification authorities and encrypted transmissions (such as Secure Socket Layer or other end-to-end security products) can reassure customers that their details will be kept confidential. Stock control/inventory By regulating who has access to your stock control system and who can update records you can make sure that you have an accurate picture of your stock holdings. This is particularly important when online customer/supplier interfaces are in use. Order accuracy Greatly improved by e-mail, fraudulent ordering can be guarded against by the use of digital signatures and Certificate Authorities (CAs). CAs issue and manage security credentials to guarantee people are who they say they are. Delivery Secure delivery information where the information cannot be intercepted online means that details of what you have purchased and where it will be delivered are secure. This protects against the possibility of high value items being targeted in transit by thieves. Customer service Increased levels of trust and security in the electronic supply chain lead to better business relationships and greater levels of trading activity. 3.3. Information system Security Information systems and technologies are a major enabling tool for firms to respond to customers and suppliers in real time resulting in higher sales and higher profits. Information systems have become essential tools for helping enterprises operate in a global economy. The main objectives are reducing inventory levels, improving delivery services, improving the customer service, reducing the cost through the supply chain, and increasing sales. All these will improve the firm's profitability. (Radwan et al,2011 and Ming et al,2009). The objective of an information system security programmed is to protect an organizations information by reducing the risk of loss of confidentiality, integrity and availability of that information to an acceptable
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level. A good information security programmed involves two major elements, risk analysis and risk management. In the risk analysis phase, an inventory of all information systems is taken. For each system, its value to the organization is established and the degree to which the organization is exposed to risk is determined. Risk management, on the other hand, involves selecting the controls and security measures that reduce the organizations exposure to risk to an acceptable level. To be effective, efficient and reflect common sense, risk management must be done within a security framework where information security measures are complemented by computer, administrative, personnel and physical security measures. Here we present Information System (IS) security in terms of the conceptual framework shown diagrammatically in figure 3.(Nachtigal, Sharon, 2009).
Figure 3; Information System Security framework The framework above suggests that the approach to security should be derived from the security goals, which are themselves derived from perception of security that is based on identified threats. In this frameworke, security design and development and security management are derived from security approach and in the next section we offer our our information security framework in E-SCM that is based on both security design and development and security management and develop. 4. INFORMATION SECURITY FRAMEWORK IN E-SCM Information security framework is a comprehensive security framework model that ensures the overall security of information there by eliminating business risks. The comprehensive information security framework should incorporate the following key elements: Recommended sound security governance practices (e.g., organization, policies, etc.) Recommended sound security controls practices (e.g., people, process, technology) A guide to help reconcile the framework to common and different aspects of generally adopted standards An analysis of risk or implications for each component of the framework A guide of acceptable options or alternatives and criteria, to aid in tailoring to an organizations operating environment A guide for implementation and monitoring Toolset for organizations to test compliance against the framework A comprehensive information security framework is the answer for the components to work together, instead of having stand alone components and system. The connected information security framework delivers practical guidance for everyday IT practices and activities, helping users establish and implement reliable, cost-effective IT services. It is obvious that the information security framework for an organization establishes policies and best practices. The framework used for assessing the organizations curren t information security framework provides a roadmap for the evaluation and improvement of information security policies and practices. The security infrastructure in electronic supply chain (e- scm) needs to have the following basic capabilities;
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Identification/authentication: This is the first step of any security and privacy process: being able to tell who users are. Authorization: Once the system determines who users are and that they are who they say they are it must provide the correct levels of access to different applications and stores of information. Asset Protection: The system must keep information confidential and private. This has become more difficult in the modern ebusiness environment, where information is traveling across multiple, often entrusted, networks. Accountability: This is the ability to keep track of who has done what with what data. E-business solutions also need to ensure that participants in transactions are accountable. Administration: This involves defining security policies and implementing them consistently across the enterprise infrastructures different platforms and networks. Assurance: This demands mechanisms that show the security solutions are working, through methods such as proactive detection of viruses or intrusions, periodic reports, incident recording, and so forth. Availability: Modern e-businesses must prevent interruptions of service, even during major attacks. This means that the solution must have built-in fault tolerance and applications and procedures to quickly bring systems back online.
Figure 4; E-Supply Chain Information Security (E-SCIS) framework Figure 4 describes a framework for identification and application of information security in electronic supply chain. The framework clarifies seven areas that are mentioned and each of them needs several factors to impelement correctly. We just mentioned some of tools and methods which let us make our networks secure facing what mentioned in this frame work under infrastructure for Information Technology area. So it is clear that manager would employ this framework to make sure if security agents in organization have applied security issues in supply chain network.
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5. CONCLUSION E-Business systems have become indispensable for most of the large organizations because of the huge development of todays technology and the huge number of competitors that used them. E-Business systems development cause security to be more effective, therefore, as e-business systems will gain new features and the IT&C will be used by more and more users, the security will need to keep the line straight, assuring those information characteristics that always will be necessary. They are dependent on all the application from which they are formed of. In this era of increased cyber attacks and information security breaches, it is essential that all organizations give information security the focus it requires, specially in supply chain it has vital role which can not be overlooked by the organization that are involved. To ensure information security, the organization should understand that information security is not solely a technological issue. The organization should also consider the non-technical aspect of information security while developing the information security framework. This paper examined information security and e-SC concepts. The focus of this paper was information security in electronic suplly chain management while use e-business in its transaction. Through the paper, one realizes that IS in every information based-system will be vital and need to be developed in electronic supply chains because in some cases the importance of Information System is low and in others high. Our propused framework highlights major fileds in supply chain information security which managers can reap the benefits of studying these factors. REFERENCES 1. Manivannan Senthil Velmurugan,(2009), security and trust in e-business: problems and Prospects,International Journal of Electronic Business Management, 7(3) 151-158. 2. Luo yixin, (2011). Study on the Current Situation of Information Security and Countermeasures in China Energy Procedia 5 392396 3. Yeung JHY, Selen W, Zhang M, Huo B,( 2009). The effects of trust and coercive power on supplier integration, International Journal of Production Economics; 120:66. 4. Ipek Kooglua, Salih Zeki Imamo glua, Hseyin Incea, Halit Keskin, (2011). The effect of supply chain integration on information sharing: Enhancing the supply chain performance, Procedia Social and Behavioral Sciences 24, 16301649. 5. Simchi-levi, David , Philip Kaminsky and Edith Simchi-levi (2003), Managing The Supply Chain: The Definitive Guide For The Business Professional, (Hardcover - 12-2003) 6. Li S, Lin B.( 2006). Accessing information sharing and information quality in supply chain management.Journal of Decision Support Systems; 42:1641 -1656. 7. Gaile-Sarkane, E. (2005) Basics of E-Marketing. Publishing House of RTU. 232 pp. 8. Poirier, C., Bauer, M. (2000), E-supply Chain: Using the Internet to revolutionize your business , Berrett-Keohler Publishers, San Francisco, CA. 9. Williams, L.R., Esper, T.L., & Ozment, J. (2002), The electronic supply chain: Its impact on the current and future structure of strategic alliances, partnerships and logistics leadership , International Journal of Physical Distribution & Logistics Management, 32(8), 703-719. 10. Closs, D.J. and McGarrell, E.F. (2004) Enhancing security throughout the supply chain, Special Report Series, IBM Center for the Business of Government. 11. Asanka Hiroshana Horadugoda Gamage,(2007), E-Business Impact on SCM in the apparel industry operating between a developing and a developed economy, A Thesis submitted for the degree of Doctor of Philosophy, Brunel University. 12. Flynn BB, Huo B, Zhao X. (2010), The impact of supply chain integration on performance: A contingency and configuration approach. Journal of Operations Management; 28: 58-71. 13. Doinea, Mihai,(2009), E-Business Security Architectures Informatica Economic, 13(9). 14. Auramo, Jaana,; Jouni Kauremaa and Kari Tanskanen,(2005 ),Benefits of IT in Supply Chain Management: An explorative study of progressive companies Interna tional Journal of Physical Distribution and Logistics Management; 35,2; Academic Research Library pg. 82. 15. Radwan, A., and Majid Aarabi,( 2011), Modeling Supply Chain Management Information System Using ARIS Framework Proceedings of the 2011 International Conference on Industrial Engineering and Operations Management Kuala Lumpur, Malaysia, January 22 24. 16. Ming-Chang Lee, Mei-Wen Han,(2009), E-Business Model Design and Implementation in Supply Chain Integration,, International Symposium on Web Informa tion Systems and Applications (WISA09) Nanchang, P. R. China, May 22 -24, 001-004. 17. Nachtigal, Sharon, (2009) E-business Information Systems Security Design Paradigm and Model Thesis submitted to The University of London for the degree of Doctor of Philosophy.
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IS CUSTOMER SATISFACTION AN INDICATOR OF CUSTOMER LOYALTY?

Design E-SCM Information Security Framework

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Australian Journal of Business and Management Research

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Australian Journal of Business and Management Research

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Australian Journal of Business and Management Research

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Australian Journal of Business and Management Research

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Australian Journal of Business and Management Research

Vol.2 No.07 [01-13] | October-2012 ISSN: 1839 - 0846

Australian Journal of Business and Management Research

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Australian Journal of Business and Management Research

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Australian Journal of Business and Management Research

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Australian Journal of Business and Management Research

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Is Customer Satisfaction an Indicator of Customer Loyalty?

Australian Journal of Business and Management Research

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Australian Journal of Business and Management Research

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Australian Journal of Business and Management Research

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Australian Journal of Business and Management Research

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Australian Journal of Business and Management Research

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Australian Journal of Business and Management Research