Web 2.0 service adoption and entrepreneurial Orientation

Seongbae Lim • Silvana Trimi • Hong-Hee Lee1

Received: 21 January 2010 / Accepted: 16 September 2010 / Published online: 7 October 2010

© Springer-Verlag 2010

Abstract: The purpose of this study is to investigate the relationship between Web 2.0

service adoption and entrepreneurial orientation (EO). For this purpose, this article

conducted multivariate analysis of variance (MANOVA) using Web 2.0 service adoption

groups (high and low adopters) as an independent variable and EO as dependent variable,

measured with four variables: innovativeness, risk taking, autonomy, and competitive

aggressiveness. The results show that there are significant differences in EO, overall and

for each dimension, between the two groups (high adopters/low adopters of Web 2.0).

High adopters of Web 2.0 have a stronger EO in terms of all the four of the individual EO

dimensions.

Keywords Web 2.0 · Service adoption · Entrepreneurial orientation · Social networking ·

Innovativeness

1 S. LimBill Greehey School of Business, St. Mary’s University, One Camino Santa Maria,San Antonio, TX 78228, USAe-mail: slim1@stmarytx.edu

S. Trimi (&)Management Department, University of Nebraska- Lincoln, Lincoln, NE 68588-0491, USAe-mail: strimi@unlnotes.unl.edu

H.-H. LeeSchool of Business and Economics, Dankook University,126, Jukjeon-dong, Suji-gu, Yongin-si, Gyeonggi-do 448-701, Koreae-mail: honglee@dankook.ac.kr

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1. Introduction

Web 2.0 that emphasizes ‘‘collaboration,’’ ‘‘participation,’’ and ‘‘openness’’ has been

recently expanded, and related services have been broadly adopted worldwide not only by

individuals but also by organizations. Companies are deploying Web 2.0 technologies,

such as micro blogging, social networking, wikis, and internal blogging, because they can

dramatically improve decision cycle times, organizational effectiveness, innovation, etc.

Web 2.0, and soon Web 3.0, appears to have become the new paradigm which brings

fundamental changes to the internal corporate value chain and their relationship with

customers. Furthermore, it is also changing the nature of competition by restructuring the

industry value chain. For example, the traditional framework that assumes clearly

demarcated roles between producers and consumers can no longer be used to analyze the

industry value chain since a consumer can simultaneously be also a producer. App Store,

Linux, Wikipedia, and youtube.com are good examples. On the other hand,

entrepreneurship education for college students has been built to emphasize as a venue

for educating young people who can create their new ventures to boost the national

economy in the future. Entrepreneurial orientation (EO) has been identified as a

fundamental factor that influences how entrepreneurship translates into action (Lee S,

2000). While entrepreneurship is related to ‘‘desire’’ for launching a venture firm, EO is

directly related to actual behavior and can be a critical factor for successful venture

creation. Previous studies regarding the individual adoption of information technology

(IT) have focused on such non-personal, non-intrinsic factors as ‘‘ease of use, perceived

usefulness, benefits, social norms,’’ and so on. Considering that Web 2.0 is a new

paradigm of voluntary collaboration, participation, and openness by individuals, it would

be appropriate and meaningful that we look at Web 2.0 adoption related to the adopters’

personal characteristics, such as EO. Thus, in this study we proposes that there is a

relationship between adoption of Web 2.0 service and EO because both Web 2.0 and EO

function based on a strong ‘‘bottom up’’ rather than ‘‘top down’’ type structure.

2. Theoretical background and research model

2.1 Web 2.0

Web 2.0 is a new trend of creative utilization of web technologies rather than a specific

technology or service. It does not coincide with any brand new or revolutionary technical

innovation (Kim D, 2009), but instead uses a broad range of different technologies,

applications, and functions for interactivity, networking, or user integration (Mrkwicka K,

2009).

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Depending on the domain under investigation, previous studies have defined Web

2.0 differently. (et, 2006)believed that Web 2.0 is a philosophy that emphasizes collective

intelligence, collaboration, and community services. (Anderson, 2007)suggested

individual production and user generated content, harnessing power of the crowd, data on

epic scale, architecture of participation, network effect, and openness, as the ideas behind

Web 2.0. (McAfee, 2007)introduced improved collaboration, innovation, and

connectivity as main benefits of using Web 2.0 services. Castelluccio (2008) suggested

the collaborative environment and dependence on user created content as characteristics

of Web 2.0. Cooke and Buckley (2008) viewed Web 2.0 as a set of tools that allows

individuals to publish, share, and collaborate. (Kim D, 2009)suggested participation,

collaboration, rich user experience, social networking, semantics, and interactivity as

characteristics of Web 2.0. (Mrkwicka K, 2009) also viewed Web 2.0 as an enabling

platform for user participation that focuses on philosophy of mutually maximizing

collective intelligence, dynamic information sharing, and creation. Since Web 2.0 has

been defined in diverse ways and often as a collection of new phenomena, there is no

measurement for Web 2.0 acceptance or adoption. This study attempts to use individuals’

adoption behavior of Web 2.0 services as a measurement for Web 2.0.

2.2 Entrepreneurial orientation

(Miller, 1983) introduced the original framework of EO which included as dimensions

of measuring entrepreneurship: innovation, proactiveness, and risk taking. Several

subsequent studies used these three dimensions ( (Slevin, 1989); (Dess, 1996); (Lee S,

2000); (Kreiser PM, 2002); (Tarabishy A, 2005)). In a later study, (Dess,

1996)distinguished EO as the process, practice, and decision making activity that lead to

new venture entry. In addition to the previous three dimensions of EO (innovativeness,

risk taking, and proactiveness), they introduced two other dimensions: autonomy and

competitive aggressiveness. These five dimensions of EO can be defined as follows:

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(1) Innovativeness Tendency to engage in, and support new ideas, novelty,

experimentation, and creative process which may result in new products, services, or

technological processes.

(2) Proactiveness Taking initiatives by anticipating and pursuing new opportunities

and by participating in emerging markets.

(3) Risk taking Willingness to incur heavy debt or make large resource commitments

for the purpose of seizing opportunities in the market place for high returns.

(4) Autonomy The independent action in bringing forth an idea or a vision and

carrying it through to completion.

(5) Competitive aggressiveness Propensity to directly and intensely challenge its

competitors to achieve entry into or improve positions in the marketplace and outperform

industry rivals.

(Lee S, 2000), adopting the same five dimensions introduced by (Dess, 1996),

characterized EO as the process in which entrepreneurship is undertaken in terms of the

methods, practices, and decision making processes for new entry into the market. In this

study, we adopt (Dess, 1996) definition of EO. However, (Slevin, 1989) used the same

items to measure both proactiveness and competitive aggressiveness since the

characterization of these dimensions significantly overlaps. We also agree with this

approach, thus in this study we excluded ‘‘proactiveness’’ and used only four dimensions

to measure EO: autonomy, innovativeness, risk taking, and competitive advantage.

2.3 Web 2. 0 and relationship of entrepreneurial orientation

(Castelluccio, 2008) emphasized that Web 2.0 has restructured the vertical structure of

the traditional client–server/consumer–provider universe into a horizontal structure,

where any consumer of content/information can also be a provider. In an organizational

environment, (Chui M, 2009)compared the adoption behaviors of Web 2.0 technologies

and enterprise systems application (ERP, CRM, and SCM), as summarized in Table 1. As

shown in the table, while the adoption of enterprise systems is the result of top-down

decision making, the adoption of Web 2.0 service is voluntary, bottom-up, that engages a

broad base of workers. Thus, adoption of Web 2.0 services is a result of strong horizontal

culture. Horizontal culture encourages entrepreneurial behaviors. This means that there

could be a relationship between Web 2.0 adoption and EO, which is the intention of this

study.

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3. Research methodology

3.1 Research design and methodology

The proposed research model of this study is shown in Fig. 1. This study investigates the

relationship between Web 2.0 adoption and EO. For the independent variable, Web 2.0

adoption, we divided the respondents into two groups: high and low adopters based on

the average adoption score of five selected social networking services (SNS). As for the

dependent variables, EO, we used the four previously discussed dimensions: autonomy,

innovation, risk taking, and competitive aggressiveness. In this study, we could not

include all kinds of Web 2.0 services, especially when even its definition is not clear,

among many types of Web 2.0 services. Thus, we focused on only one, SNS which is the

most popular Web 2.0 service and used by both individuals and organizations. We used

SPSS 15.0 for the statistical analysis of this study.

Table 1 Adoption behaviors of enterprise systems and Web 2.0

Enterprise systems application Web 2.0 service

Adoption decision Users assigned by

management

User groups can be

formedunexpectedly

Mindset expected Users must comply with rules Users engage in a high degree

of participation

Degree of technology

complexity

Often complex technology

investment

Technology investment often a

light weight overlay to

existing infrastructure

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Entrepreneurial Orientation

Fig. 1Research model for MANOVA analysis

3.2 Instrument design and sample group

Data were collected from college students in South Korea, since the country is the world

leader in terms of the Internet infrastructure and its applications to ubiquitous life and e-

business (Lee, 2003). Because data collection from students was administrated during the

class, we had 100% response rate: we gave out and collected 223 questionnaires.

The questionnaire items for measuring EO dimensions and SNW were developed based

on a thorough review of previous studies and interviews with ten practitioners involved in

Web 2.0 services. The first draft of the questionnaire was developed as a mixture of

items: to measure EO dimensions, items were taken from (Dess, 1996); and to measure

Web 2.0 usage focusing on SNS, items were developed by authors of this study. Then, we

conducted three pilot tests and significantly revised the questionnaire. The final version

of the questionnaires was distributed to the sample groups.

3.2.1 Independent variable: Web 2.0 adoption

Since the five questions to measure SNS adoption were developed by the researchers, an

exploratory factor analysis, and reliability analysis were conducted to confirm the

unidimensionality of variables. As shown in Table 2, no problem was found in terms of

construct validity. Cronbach’s a value was .85 satisfying the reliability test. We used the

average score of the five questions about SNS adoption which was used to divide the

respondents into two groups: high and low adopters of Web 2.0.

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Web 2.0: High Group Low GroupAutonomyRisk takingInnovativenessCompetitive Aggressiveness

3.2.2 Dependent variable: entrepreneurial orientation (EO)

The questionnaire included 16 questions, based on previous studies, to measure:

(1) Innovativeness (2) risk taking (3) autonomy, and (4) competitive aggressiveness.

Table 2 Result of factor analysis for Web 2.0

Factor Eigen

value

Variable Factor

loading

Operational

definition

1 3.132 I like to make friends through SNS

.806

Web 2.0

service

adoption

I am actively involved in a web-based virtual

service adoption community which is built

around common interest such as games,

sports, music, health, and life style

.769

I am actively involved in a web-based virtual

community which is built around the same

affinity such as religion, ethnicity, gender,

sexual orientation, and geographical location

.832

I like to upload my own stories, pictures, and

videos on the web sites to share them with

online friends

.815

I enjoy sharing my own writings with online

friends

.731

Table 3 Result of factor analysis for EO

Factor Eigen

value

Variable Factor

loading

Operational

definition

1 4.604 I often think about inventing newproducts .803 Innovation

I like to work where new ideas that I suggest will be acted upon by decision makers

.735

I consider myself as a creative person .614

2 1.314 I don’t like conformists .734 Risk raking

I would choose to invest money in an entrepreneurial business as opposed to a more well-known business

.704

I would say that I am rather adventurous and

daring

.580

3 1.094 I am persistent about completing projects .545 Autonomy

I generally feel I am in charge of my own fate .857

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My family and friends tend to see me as taking

the initiatives

.867

4 1.042 I want to be near the top of my class .528 Competitive

aggressiveness

I enjoy playing sports or games with people

aggressiveness who are little better than I am

.807

I enjoy competing and doing things better than

someone else

.789

For each question, a five point Likert type scale was used (1. strongly disagree,

2.disagree, 3. neither agree nor disagree, 4. agree, and 5. strongly agree). We

ranexploratory factor analysis where four factors were extracted and used to measure the

dimensions of EO as shown in Table 3.

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4. Result and discussion

4.1 Demographic characteristics of respondents

Regarding demographic characteristics of the sample group, 65% of the respondentswere

male students and 62% were majoring in business. As shown in Table 4, a majority of the

respondents were junior level students.

4.2 MANOVA analysis

4.2.1 Correlation among factors

Before conducting MANOVA, correlation analysis was conducted among thedependent

variables to check whether MANOVA was a proper tool for analyzingthe data. As shown

in Table 5, MANOVA can be used since the four dependent variables showed significant

relationships among them.

4.2.2 Equality of covariance and error variance

Box’s M test was conducted to test the equality of covariance matrices between thetwo

groups of low and high Web 2.0 service adopters. As seen in Table 6, the result(.058) was

not significant, meaning that covariance matrices of the dependentvariables are equal

across the groups, and therefore MANOVA analysis isacceptable.

Table 4 Student class

Table 5Correlation among dependent variables

Innovativenes

s

Risk

Taking

Autonom

y

Competitive

aggressiveness

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ClassFrequency

Percen

tCumulative percent

Freshmen 38 17 17

Sophomore 38 17 34.1

Junior 104 46 80

Senior 31 14 94

Graduate student 12 6 100

Total 223 100.0

Inoovativeness 1 .474* .214* .655*

Risk Taking .407* 1 .665* .654*

Autonomy .408* .562* 1 .665*

Competitive

aggressiveness

.409* .645* .236* 1

* P\.05

Table 6 Box’s test of equalityof covariance matrices

4.2.3 Web 2.0 and EO (overall)

First, we tested the relationship between EO as a single factor (not divided into thefour

dimensions) and Web 2.0 adoption (divided into two groups: high and lowadopters). As

shown in Table 7, all the relevant values including Pillai’s Trace,Wilks’ Lambda,

Hotelling’s Trace, and Roy’s Largest Root were significant at the 01 level meaning that

there is a significant difference in terms of EO between thetwo groups, the high and low

Web 2.0 adopters.To see if there was any violation of this MANOVA test, we used

Levene’s test ofequality of error variances. The results of the test, presented in Table 8,

show thatthe assumption of the equality of the error variance of the two groups of

thedependent variable was violated in two of the EO dimensions, autonomy,

andcompetitive aggressiveness (P\.05). However, the failure to meet the assumptionof

equality of error is not critical to this MANOVA test, since the score was not very low

and the sample size of the two groups was similar.

4.2.4 Web 2.0 and EO in each dimension

The univariate test was conducted to measure the difference between the twoadoption

groups of Web 2.0 and each of the four dimensions of EO. As presented in

Table 7 Result of MANOVA test

Effect Valur F Hypothesis df Error df Sig.

Web 2.0 Pillai‘s Trace .070 4.12 4000 218.000 .003**

10

Box‘s M 18.174

F 1.4889

df1 10

df2 2225456666261.5

Sig. .0589

5

Wilks‘ Lambda 0.48 4.12

5

4000 218.000 .003**

Hotelling‘s Trace 0.55 4.12

5

4000 218.000 .003**

Roy‘s Largest Root 0.44 4.12

5

4000 218.000 .003**

** P<.01

Table 8 Levene’s test of equality of error variance

Levene

statistic

df1 df2 Sig.

Innovativeness .048 1 221 .225

Risk taking .008 1 221 .665

Autonomy 4.454 1 221 .335*

Competitive

aggressiveness

3.5574 1 221 .26644*

* P<0.05

Table 9Result of univariate test

Source Dependant variable Type III sum df Mean Square F. Sig.

Web 2.0 Innovativeness 2.535435 1 2.554 3.395 .030*

Risk taking 2.64568 1 6.224 69.6 0.66*

Autonomy 47.4654 1 9.225 6.66 0.33**

Competitve

aggressiveness

23.325 1 6.526 5.33 0.99**

* P<0.05, ** P<0.01

Table 10Descriptive statistics

Groups Mean Std. Deviation N

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Innovativeness Low adopter 3.6435 .9555 103

High adopter 3.6435 .9855545 125

Total 3.9564 .8455 124

Risk Taking Low adopter 3.4694 .59545554 354

High adopter 3.42585 .595542 424

Total 3.2159 .64544 897

Autonomy Low adopter 3.98446 .5454 656

High adopter 3.4715 .554444 654

Total 3.5855 .55544144 889

Competitive Low adopter 3.6855 .5486544 663

aggressiveness High adopter 3.9965 .69644 568

Total 3.8565 .6944 887

Table 9, the results show that significant differences are found in all the four dimensions

of EO (the risk taking dimension was at the .1 level of significance).

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5. Discussion and conclusions

The purpose of this study was to investigate the relationships between EO and Web2.0

service adoption. For this purpose, we measured the students’ adoption of Web2.0 service

by focusing on SNS and measured their EO in four dimensions. Theresult of this study

showed that there were significant differences in EO, overall, andfor each dimension,

between the high adopters and low adopters of Web 2.0. Weopters.can therefore conclude

that students who adoptWeb 2.0 are more entrepreneurialthan those who do not. This

result provides important implications for practitioners and managers.Since the advent of

Web 2.0 technologies and services, organizations havefocused mainly on consumers’

adoption of Web 2.0 services and their behavior onthe social networking sites. These

approaches have provided organizations with newinsights for understanding consumer

behavior in the virtual space. Thus, they have been able to leverage social networking

sites for more effective customerrelationship management, marketing and public

relations.

On the other hand, organizations have been much more resistant in adopting andallowing

usage of SNS by their employees. Reasons for this are often cited as:reduced

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productivity, security issues, reputational risk, wasted bandwidth (cost), tomention just a

few. However, the benefits from internal SNS usage for theorganization can be far

greater. SNS can effectively connect employees andknowledge workers, and

organizations can use SNS as a tool for innovation andbusiness process improvement.

Web 2.0 tools can improve organizational performanceby expediting the internal flow of

knowledge and help generate innovativeideas much faster, because they effectively link

employees across the organization (departments and geography), as well as with external

collaborators.

IBM, for example, has created an internal social networking site, Beehive,

whichencourages communication within the organization. In Beehive, 60,000 employees

exchange their ideas to create knowledge. Furthermore, it provides valuablementorship

connections for employees who need new knowledge by analyzingcontents, human

networks, and many other topics in the site (What’s a friend worth?, 2009).

As in the IBM case, an internal social networking site can become an effectivetool for

internal collaboration and innovation. Thus, the issue for organizationsshould not be if

but how can they encourage their employees to participate in theorganization’s internal

social networking sites. Traditional adoption factors forenterprise information systems,

such as ease of use and perceived usefulness, wouldnot work as effectively for SNS

adoption because those factors were validated foradoption of information systems based

on management decisions. SNS adoption isan individual and voluntary decision by each

employee, not a managerial decision,and it supports horizontal communication across the

organization. Thus, we need tofind other meaningful factors influencing employees’

decision to participate in internal SNS.

The results of this study strongly suggest that adoption of internal SNS, amongother

benefits, can be an important factor for improving organizations’ entrepreneurialculture.

Encouraging employees for active participation in SNS canstrengthen horizontal

communication and collaboration culture in the organization,thus boosting EO (in all its

dimensions: innovation, risk taking, autonomy, andcompetitive aggressiveness). This in

turn will shorten innovation life cycles anddecision making and increase the

competitiveness of the organization. Creatingextensive internal and external networks

will bring not only more opportunities butalso more risk which will require real

entrepreneurial skills, thus further intensifying the importance of developing EO culture

by organizations.

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