International Journal of Business and Social Science Vol. 4 No.

14; November 2013

E-Commerce Usage in Hotel Industries Capabilities

A. H. Mutia Sobihah
Faculty of Business Management and Accountancy
Gong Badak Campus, Universiti Sultan Zainal Abidin
Kuala Terengganu, Terengganu, Malaysia.
Ahmad Munir B. Mohd Salleh @ Embat
Faculty of Management and Economics
Universiti Malaysia Terengganu
Terengganu, Malaysia
W. Abd Aziz B. W. Mohd Amin
Faculty of Business Management and Accountancy
Gong Badak Campus, Universiti Sultan ZainalAbidin
Kuala Terengganu, Terengganu, Malaysia.

Abstract
E-commerce also known as the process of buying, selling, transferring or exchanging products, services and
information via computer networks, including the internet. This study aims to determine the E-commerce usage in
Malaysia hotel industries capabilities. Hotel industries are one of those which are fully beneficial from the E-
commerce. E-commerce service may fulfill the customer needs more easily and quickly without any time
constraints. This research founds that there is a correlation between organizational capabilities with E-commerce
usage dimensions (E-commerce technology resources, E-commerce management skills, E-commerce business
network, E-commerce competency and E-commerce information network). The stepwise regression exhibited that
E-commerce management skills is the most dominant predictor of organization capabilities. Practically, this
research provides leaders organization in hotel industries with useful advice on E-commerce investment decision
making.
Keywords: E-commerce usage, hotel industries capabilities
Introduction
E-commerce is the best strategy and medium of instruction that are more efficient and flexible. Anyone who has
the power to control the ability of information technology will achieve excellence, (Gilaninia et. al, 2011). E-
commerce using the Internet and other information technologies to support trade and improve business
capabilities. Internet and E-commerce have a role to change the balance of power between the organization and
the industry (Rezvani, 2011; Kraemer and Zhu, 2004; Werthner and Ricci, 2004). E-commerce has been design
the entire industries, major changes have been made in the conduct of business, for instance the hotel industry has
undergone major changes (Laudon and Traver, 2012; Turban, 2003). E-commerce has the potential to design a
different value according to the type of organization in a variety of industries, including the hotel industry.
Generally in tourism and particularly in hotels industry, growing rapidly in many countries and is the largest
industry in the economy. The hotel industries have international dimensions and have the highest web usage.
Businesses involved in the hotels industry can be divided into two categories which Click and Mortar company
and Brick and Mortar company. Traditional hotel industry has changed. International customers will be the largest
export revenue and is an important factor in the economy in many countries (Laudon and Traver, 2012; Turban,
2003).
It is undeniable that technological change has brought many good effects on a country's hotel industry. Changes in
technology have proven that the hotel industry get the optimal benefit with increasing number of tourists coming
to Malaysia. Based on data from the Malaysia Tourism Research, 12.8 million tourists visited Malaysia during
2001, an increase of 2.5 million compared to 2000 (MASSA, 2002).
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Most of the organizations involved in tourism in Malaysia will be using E-commerce due to the pattern of the
business and shareholders which cover different geographical boundaries. This requires organizations involved to
operate through the use of computers and E-commerce systems. Although the relationship between E-commerce
usage and industries capabilities has seen an impact but the extent of these effects cannot be identified and the
dimensions of the E-commerce usage need to be identified which will give greater impact in improving
organizational capabilities. This research examines the E-commerce usage in hotel industries capabilities focusing
on the hotel which apply E-commerce system.
Literature Review
E-commerce
E-commerce is a business methodology that uses electronic medium to perform the entire business transaction.
Suppliers and customers meet in a virtual to perform transactions using internet technology. E-commerce disposes
borders and time. Customers can shop at anytime, anywhere through internet access. Buyers or customers simply
need to visit any of the E-commerce website and then select the products or services required. The selected
products will arrive within the prescribed period (Laudon and Traver, 2012; Yadim, 2007; Zhu, 2004; Turban,
2003; Chandran et. al., 2001). E-commerce concept is to support trade with computing systems with high
dynamic and open information technology. In this system, electronic data exchange, process communication
(computer to computer applications) in the information business is a branch of this system. Trading partners
(sellers, buyers or middlemen) in global electronic market system met through the internet. The electronic market
is a computer system that links each other. All trading activities of finding customers or suppliers, consulting,
contracts, agreements and settlement of payments via electronic take place safely and efficiently (Intan Salwani
et. al., 2009; Tan et. al., 2009; Norzaidi et. al., 2007; Turban, 2003).
E-commerce has been doing business online. Since the Internet became commercial, most companies have used
the website to make a profit from big names like Amazon. com. Lately companies have been doing business and
making money online. E-commerce covers a wide and numerous activities including the name and contact details
as sales leads through the integration of online buying and selling experience. Opportunities for E-commerce are
different and extensive and require greater care.
Referred to Laudon and Traver (2012); Gilaninia et. al., (2012); and Turban (2003), four E-commerce concept
that are identified are, Business to Business – B2B, Business to Consumer – B2C, Consumer to Consumer – C2C,
and Consumer to Business – C2B. New forms of E-commerce are often used for business-to-customer relations
and transactions, not just (EDI) for business-to-business relations. This offers much bigger numbers, therefore
great penetration; therefore more people want to use it (Rezvani et. al., 2011, Fisher, 2000). E-commerce is
necessary in the interest of both parties together in such a trade, the buyer and seller, because it offers a
combination of low cost, high reliability, accuracy, and speed. Thus, it can have an impact on both top and bottom
line productivity ratio (Fisher, 2000).
In explaining the E-commerce, several approaches and important role has been highlighted by the researchers. In
such case, most of the researchers have identified seven key role in E-commerce that are everywhere, global,
consistent, accessibility, interactivity, information density, and personalization and customization, (Laudon and
Traver, 2012; Zhu and Kraemer, 2005; Turban, 2003).
Methodology
This study uses cross-sectional study design. In the early stages of data collection, a pilot study was conducted
involving 30 hotels that use e-commerce to get their opinion about the content and format of the questionnaire
developed by Tow (2004). Based on this pilot study, the researchers used all the items in the questionnaire study
because they are important, relevant and appropriate for this study. After that, the translation technique of back-
to-back was used to translate the questionnaire survey in English and Malay to improve the validity and the
reliability of the research findings (Hussey and Hussey, 1997).
This questionnaire consists of two variables: a) the use of E-commerce consists of 31 items and b) the ability of
the Organization consists of 28 items taken from Tow (2004). The items selected in this study have croncbach
alpha greater than 0.60, which indicates that they meet acceptable standards of reliability analysis (Sekaran,
2003). All items used in the questionnaire were measured using a 5-item Likert scale which ranges from "strongly
disagree" (1) to "strongly agree" (5).
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The population of this study is the hotel industry using E-commerce in Malaysia. Researchers have official
approval to conduct a study of organizational management. The researchers distributed 146 questionnaires to
study under the 3 star hotels and 111 survey questionnaires to 4 star hotels on using cluster sampling. From
surveys distributed, 226 questionnaires were returned to the researchers and produce 87 per cent response rate.
But, only 217 samples can be used which is 84 per cent. Number of samples exceeded the minimum sample of 30
participants as required by probability sampling technique shows that it can be analyzed using inferential statistics
(Sekaran and Bougie, 2011).
Statistical Package for Social Sciences (SPSS) version 11.5 was used to analyze the data. First, the validity and
reliability analyzes were conducted to assess the validity and reliability of the measurement scale (Nunally and
Bernstein, 1994). Second, Pearson correlation analysis and descriptive statistics were conducted to determine the
collinearity problem, and further confirm the validity and reliability of the construct (Hair et. al., 2006). Finally,
multiple regression analysis has been recommended to assess the magnitude and direction of each independent
variable and the dependent variable. Standardized coefficients (standardized beta) were used for all analyzes.
Research Findings
Reliability Analysis
Reliability analysis is the extent to which any reliable or consistent measure (Trochim, 2001). Alpha reliability is
typically used to determine consistency. As illustrated in Table 1 below, E-commerce business network has the
highest rate with cronbach alpha reliability of 0.99, while E-commerce technology resources, E-commerce
management skills, E-commerce competency and E-commerce information network indicates between 0.93 and
0.98. Given these results, all variables have been studied have an adequate level of internal consistency as they
meet the recommended standard 0.60 (Sekaran, 2003).
Table 1: Reliability Analysis (N=217)
______________________________________________________________________________
Variables Number of Item Alpha Cronbach
______________________________________________________________________________
E-commerce Technology Resources 8 0.93
E-commerce Management Skills 7 0.97
E-commerce Business Network 4 0.99
E-commerce Competency 3 0.97
E-commerce Information Network 2 0.98
Industries capabilities 17 0.73
______________________________________________________________________________
Descriptive Statistics
Mean scores for variables
Mean score is calculated to determine the level of E-commerce technology resources, E-commerce management
skills, E-commerce business network, E-commerce competency and E-commerce information network. As can be
seen in Table 2 below, E-commerce technology resources appeared to have (mean=3.21, SD=0.51). Additionally,
E-commerce management skills (mean=3.33, SD=0.93), E-commerce business network (mean=3.48, SD=0.66),
E-commerce competency (mean=3.00, SD=0.24), and E-commerce information network (mean=3.15, SD=0.46).
Table 2: Summary of Mean Score Analysis
______________________________________________________________________________
Variable Mean Standard Deviation
______________________________________________________________________________
E-commerce Technology Resources 3.21 0.51
E-commerce Management Skills 3.33 0.93
E-commerce Business Network 3.48 0.66
E-commerce Competency 3.00 0.24
E-commerce Information Network 3.15 0.46
Industries capabilities 3.21 0.31

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Bivariate correlation analysis
Pearson Correlation were conducted to measure the relationship between organization capabilities with E-
commerce technology resources, E-commerce management skills, E-commerce business network, E-commerce
competency and E-commerce information network to test all hypotheses related to that. As shown in Table 3, the
findings of correlation analysis showed a significant positive relationship between the organizations capabilities
with E-commerce management skills, E-commerce technology resources, E-commerce business network, E-
commerce competency and E-commerce information network variables (p < 0.01). These results clearly support
the hypothesis H1, H2, H3, and H4.

Table 3: Summary of the Relationship between Dependent and Independent Variables

________________________________________________________________________________________
Variable Pearson Correlation Analysis
___________________________________________________

1 2 3 4 5 6
_________________________________________________________________________________________
E-commerce Technology Resources 1
E-commerce Management Skills 0.296** 1
E-commerce Business Network 0.142** 0.226** 1
E-commerce Competency 0.421** 0.255** 0.343** 1
E-commerce Information Network 0.096 0.329** 0.009 0.135* 1
Industries Capabilities -0.485** -0.701** 0.640** 0.506** 0.308** 1
_________________________________________________________________________________________
Note : Significant at ** P<0.01
Multiple regression analysis with stepwise procedure
Multiple regression analysis with stepwise procedure was performed to determine the most dominant variable
affecting the organization capabilities.
Organization Capabilities with E-commerce technology resources, E-commerce management skills, E-commerce
business network, E-commerce competency and E-commerce information network.
As illustrated in Table 4 below, E-commerce technology resources, E-commerce management skills, E-commerce
business network, E-commerce competency and E-commerce information network has expressed great influence
on organization capabilities. E-commerce management skills have been found to be the most dominant predictor
of organization capabilities (β=0.464,p<0.01), E-commerce business network (β=0.461, p<0.01), E-commerce
technology resources (β=0.220, p<0.01), E-commerce competency (β=-0.122, p<0.01) and E-commerce
information network (β=0.114, p<0.01). Together, these four variables stated R 2 value of 0.823, indicating that
82.3% of the variance in capabilities can be explained by them.

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Table 4: Stepwise Regression of Organization Capabilities (N=217)

_______________________________________________________________________________________

Model R2 Adjusted R2
Unstand. Stand. T Sig. Value
Beta Beta
_______________________________________________________________________________________

Model 1 0.492 0.489

Constant 4.425 87.731 0.000**
EC Management skills 0.210 0.701 14.416 0.000**

Model 2 0.736 0.733

Constant 3.789 65.268 0.000**
EC Management skills 0.176 0.587 16.259 0.000**
EC Business Network 0.215 0.507 14.058 0.000**

Model 3 0.799 0.796

Constant 3.428 50.847 0.000**
EC Management skills 0.154 0.513 15.646 0.000**
EC Business Network 0.206 0.486 15.356 0.000**
EC Technology Resources 0.145 0.264 8.165 0.000**

Model 4 0.812 0.809

Constant 3.220 38.325 0.000**
EC Management skills 0.141 0.471 14.035 0.000**
EC Business Network 0.210 0.495 16.103 0.000**
EC Technology Resources 0.145 0.263 8.416 0.000**
EC Information Network 0.076 0.124 3.916 0.000**
Model 5 0.823 0.819
Constant 2.946 26.337 0.000**
EC Management skills 0.139 0.464 14.166 0.000**
EC Business Network 0.196 0.461 14.707 0.000**
EC Technology Resources 0.121 0.220 6.715 0.000**
EC Information Network 0.070 0.114 3.699 0.000**
EC Competency 0.142 0.122 3.586 0.000**
________________________________________________________________________________________
Note. ** p< 0.01 level (2-tailed).

Conclusion and Future Recommendation

The findings showed a significant relationship between E-commerce technology resources, E-commerce
management skills, E-commerce business network, E-commerce competency and E-commerce information
network with organization capabilities. Multiple regression analysis outcomes verify that E-commerce technology
resources, E-commerce management skills, E-commerce business network, E-commerce competency and E-
commerce information network has expressed great influence on organization capabilities. Of all the predictor’s
variables, E-commerce management skills appeared to be the most dominant variable in influencing organization
capabilities. This result has also supported with previous studies by Tow (2004) and Bharadwaj (2000). These
findings provide useful guidance to the hotel management, the Ministry of Tourism Malaysia and the Malaysian
government in its efforts to enhance the usage of E-commerce to improve organization capabilities to achieve
capability in line with the capability of the hotel industry in west countries. The management has been and will be
using the application of E-commerce websites should give attention to the management of E-commerce skills.
This is due to one of the factors of E-commerce management skills is having a group of people who are skilled in
managing information technology systems and E-commerce.
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This study has limitations in terms of the scope of the study or its methodology. Therefore further research should
be conducted based on the following requirements: studies involving larger population size of homogeneous
countries with Malaysia as the Southeast Asian country and carry out triangulation involve quantitative research,
and qualitative to obtain a more comprehensive study involves two types of data.

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