The performance implications of media richness in a business-to-business service environment: direct versus indirect effects

The performance implications of media richness in a business-to-business service environment: direct versus indirect effects

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Article ID: iaor20073685
Country: United States
Volume: 50
Issue: 8
Start Page Number: 1106
End Page Number: 1119
Publication Date: Aug 2004
Journal: Management Science
Authors: , , , ,
Keywords: supply & supply chains
Abstract:

This research examines media richness by modeling face-to-face, telephone, and electronic media as one construct and testing its performance implications. The context is the third-party logistics industry, in which a customer firm allows a service provider to assume responsibility for all or part of a critical business process. This business-to-business service environment is characterized by high levels of complexity (uncertainty, variability, equivocality) and network interdependence, key contextual attributes that enhance media richness' impact. We found a direct effect of media richness on relational performance and through it, indirect effects on satisfaction and loyalty. Furthermore, we found a direct effect of media richness on loyalty, which suggests that service firms in networked relationships provide loyalty-inducing benefits the genesis of which is not in the satisfaction created by the service itself. While past studies have examined the relationship of richness-related constructs and performance, no significant link was found. Our study is the first to demonstrate that media richness can affect firm performance when businesses interact in a complex environment.

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