MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ------------------------------ NGUYEN THI KIM HA DETERMINANTS OF THE ADOPTION OF TECHNOLOGICAL INNOVATION BY LOGISTICS SERVICES PROVIDERS IN VIETNAM MASTER OF BUSINESS ADMINISTRATION THESIS HO CHI MINH CITY - 2011 1 TIEU LUAN MOI download : skknchat@gmail.com MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ------------------------------ NGUYEN THI KIM HA DETERMINANTS OF THE ADOPTION OF TECHNOLOGICAL INNOVATION BY LOGISTICS SERVICES PROVIDERS IN VIETNAM Major: Business Administration Major Code: 60.05 MASTER OF BUSINESS ADMINISTRATION THESIS INSTRUCTOR: PROFESSOR NGUYEN DONG PHONG HO CHI MINH CITY - 2011 2 TIEU LUAN MOI download : skknchat@gmail.com ACKNOWLEDGEMENT First of all, I would like to express my heartfelt gratitude to my research supervisor, Professor Nguyen Dong Phong, for his precious guidance, experience sharing, ceaseless encouragement and highly valuable suggestions throughout the course of my research. I would like to convey my sincere thanks to Dr. Tran Ha Minh Quan, for providing valuable guidance, comment and enthusiastic support. My special gratitude is extended to all instructors and staffs at Faculty of Business Administration and Postgraduate Faculty, University of Econimics HoChiMinh City (UEH) for their support and the valuable knowledge during my study in UEH.
I wish to take this opportunity to express my appreciation to Professor Nguyen Dong Phong and UEH Board of Directors for establishing MBA program in English. I also extend my sincere thanks to Lecturer Dang Vinh Phuc for his valuable support and data analysis experience during my research. Last but not least, the deepest and most sincere gratitude go to my beloved parents, my sisters and my closest friends for their boundless support, abundant love and encouragement throughout my period of study. This is the special encouragement to help me complete this study.
3 TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT The growth of Vietnam’s economy is the effort contributed partially by considerate development of logistics service industry. In this industry, technological innovation adoption is one of the most promising and potential premise to increase supply chain visibility and improve process efficiency. Vietnam’s logistics service providers should pay attention to adopt more efficient logistics technologies to provide better services for their customers. However, first of all, the requirement to identify determinants affecting technological innovation adoption is considered as important goals in any logistics firms.
This article studies the factors influencing the adoption of technological innovations by logistics service providers in Vietnam. Based on the technology–organization–environment (TOE) framework (Tornatzky, M. Fleischer, 1990) and outstanding characteristics selected from logistics industry (Chieh-Yu, 2006), six variables (explicitness of technology, accumulation of technology, organizational encouragement, quality of human resource, governmental support and environmental uncertainty) are proposed to help predict innovation adoption. Data collected from 150 logistics service providers in Ho Chi Minh city is tested against the proposed research model using linear regression.
The findings suggest that five of six variables have positive effect on innovation adoption. We find that the adoption of technological innovations is significantly influenced by explicitness of technology, accumulation of technology, organizational encouragement, quality of human resource, and environmental uncertainty. However, governmental support does not show the significant impact on adoption. The results and implications included in our study contribute to an expanded understanding of the determinants that affect innovation adoption in logistics service providers.
Key words: technological innovation adoption, logistics service providers, technology-organization-environment framework. 4 TIEU LUAN MOI download : skknchat@gmail.com CONTENTS Acknowledgement. 5 List of Tables. 7 List of Charts.
8 List of Figures. Research scope and research design. 13 CHAPTER 2: Literature review and research model. Definition of innovation.
Innovation adoption in logistics technologies. Logistics and supply chain management. Logistic services providers and role of innovation for their services ………………………………………………………… 18 2. Four categories of logistics technologies…………………………19 2.
Determinants of innovation. The measurement scales. Adoption of innovation. Explicitness of technology.
Accumulation of technology. Quality of human resource. 33 5 TIEU LUAN MOI download : skknchat@gmail. The pilot research.
The main research. Data collection and analysis. 37 CHAPTER 4: Research result and finding discussion. Descriptive statistics of sanple.
Characteristics of sample. The construct measurement scale. Exploratory factor analysis. The hypotheses assessment.
Overall model fit.3 Multi linear regression analysis. 61 CHAPTER 5: Conclusion and implications. Implications of the research. Recommendation from the research result.
Limitations and further research. 70 Appendix 1 Appendix 2 6 TIEU LUAN MOI download : skknchat@gmail.com LIST OF FIGURES Figure 2.1 : Process of literature review.1 : Process of research. : Process of hypothesis assessment. 53 7 TIEU LUAN MOI download : skknchat@gmail.com LIST OF CHARTS Chart 4.1 : Standardized distributions of variables…………………………59 Chart 4.2: Regression standardized predicted value……………………… 60 Chart 4.3: Nornal P-P plot of regression stand…………………………… 60 8 TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES Table 2.1: Previous studies using the TOE framework in investigation of the adoption of technological innovations………………23 Table 4.
: Case Processing Summary. : Number of employee. : Technological innovation implementation for LSPs. : Cronbach’s alpha of adoption of innovation.
: Cronbach’s alpha of explicitness of technology. : Cronbach’s alpha of accumulation of technology. : Cronbach’s alpha of organizational encouragement. : Cronbach’s alpha of quality of human resource.
: Cronbach’s alpha of governmental support. : Cronbach’s alpha of environmental uncertainty. : The EFA result of Dependent Variable. : The EFA result of Independent Variables.
: The final construct measurement items. : The result of correlation analysis. : The result of overall model fit. : The result of ANOVA.
: The result of multi regression analysis. : The conclusion about hypothesis. 59 9 TIEU LUAN MOI download : skknchat@gmail.com CHAPTER 1 : INTRODUCTION 1. RESEARCH BACKGROUND The country economy in the beginning months of 2011 is happing in the background of the world’s economy which has not yet fully escaped from the crisis but been gradually stabilized.
According to the Asian Development Bank, the Vietnamese economy grew at 6.7 per cent last year and is likely to achieve 7 per cent growth this year. Contribution to above figures is shipping and logistics industry. Experts have called for the development of the country’s logistics and maritime services to make the economy more competitive and boost global integration. For developing countries, revenue from logistics services account for about 15 to 20 percent of GDP.
For less developed countries, this rate could be over 30 percent. It is currently 25 percent for Vietnam. (Vietnam Business News) Logistics and supply chain management are seen as the fields in which logistics services providers, by virtue of their particular expertise, are able to offer the most added values to transactions in the freight trade. Not only do logistics services providers have to arrange for the transport of cargo and facilitate its clearance through customs, they also need to manage their client’s order processing (Ruth Banomyong).
Thus, logistics services providers play a significant role in supply chain management. According to Vietnam Freight Forwarders Association Viffas , Vietnam has more than 1000 enterprises which provide logistics services, most of which, about 600-700 enterprises, are located in HCM City, and the majority of enterprises have a modest capital of 1-1. Currently, Vietnam ranks the 53rd among 155 countries which have logistics services and ranks the fifth among ASEAN countries. 10 TIEU LUAN MOI download : skknchat@gmail.com Although Vietnam occupies a vital geographical position in Asia, providing a dynamic and diverse cargo transport system, the logistics industry in Vietnam has not developed as rapidly as in regional countries like Thailand and China and not well to fit the existing potentials.
For this reason, Vietnam is very concerned about boosting the industry to aid its subsequent integration with the region in the near future. In fact, over the recent years, many logistics services providers (LSPs) have acknowledged that their operations are not responsive enough. Moreover, firm level competitiveness is extremely sensitive and affects directly their operations. In order to fully meet customers’ demand, Vietnam’s logistics services providers have begun to improve their service efficiently by continuous adoptions of technologies.
Many studies have found that innovation is the most important tool for enterprises to keep their competitive advantage (Kimberly and Evanisko, 1981; Damanpour and Evan, 1984). Nixon (2001) suggests that logistics service providers should employ new information technologies to raise their service capability in the e-commerce age. Speakman (2002) proposes that logistics companies could increase their performance by employing new technologies. Chapman, Soosay and Kandampully (2003) suggest that the logistics industry should pay more attention to innovation in logistics service, and the innovation in logistics can be implemented through technology, knowledge and relationship networks.
Adopting new technologies might enable logistics service providers to enhance their service abilities There are several previous studies done on determinants of the adoption of technological innovations. One of the frameworks many researchers referred relates to technology – organization - environment (TOE) framework. Tornatzky and Fleischer firstly proposed the TOE framework to study the adoption of technological innovations. They argue that the decision to adopt a technological innovation is based on factors in the organizational context and environmental contexts, as well as characteristics of the technology itself.
Base on this illustration, it can be concluded that technological innovation is 11 TIEU LUAN MOI download : skknchat@gmail.com important for Vietnam’s logistics service providers. Before logistic services providers can draw up strategies for technological innovations, they should know what factors will influence technological innovations adoption. However, there is still a lack of empirical research on the adoption of technological innovations for Vietnam’s logistics industry. Therefore, the main purpose of this paper is to explore determinants of the adoption of technological innovations by logistics services providers in Vietnam 1.
RESEARCH OBJECTIVES The research objective is to explore the impact of determinants belonging to technology – organization – environment framework on the adoption of technological innovations by logistics service providers in Vietnam. In particularly, this research will answer the question “What are the key determinants of the adoption of technological innovation by logistics service providers in Vietnam?” The research will provide some conclusions about the role of these determinants in logistics service providers in Vietnam. It helps logistics service providers identify which important factors influencing the adoption, thereby making a contribution to the significant decisions about technological innovations. RESEARCH SCOPE AND RESEARCH DESIGN This research is conducted at Ho Chi Minh City.
The research object is the company whose function is logistics service provider. The research process includes two main steps: the pilot research and the main research. The pilot research bases on qualitative method. We interview seven different logistics service providers, in order to check the content and the meaning of words by using the measurement scales.
The main research is conducted with 150 logistics service providers through 12 TIEU LUAN MOI download : skknchat@gmail.com quantitative technique. The reason is to test the measurement model, research model and the hypotheses. After collecting data, the measurement scales will be verified the reliability and validity by Cronback alpha coefficient, Exploratory Factor Analysis (EFA) respectively. Finally, the hypotheses will be tested by using the linear regression analysis.
RESEARCH STRUCTURE The structure of this research consists of 5 chapters. Chapter 1: Introduction presents overview about research background, research objectives and research meaning, research scope and research design, as well research structure. Chapter 2: Literature reviews provide the theoretical foundations of logistics technologies, innovation adoption and determinants of innovation adoption. This chapter also includes the development of research hypotheses and the proposed research model.
Chapter 3 : Methodology introduces research methodology used in the research that includes research methodology design, research procedures, measurement scales. Chapter 4: Research results and finding discussion describe sampling, data processing , and discussion of the findings. Chapter 5 : Conclusion and implication present conclusions and implications from the research project. 13 TIEU LUAN MOI download : skknchat@gmail.com CHAPTER 2 LITERATURE REVIEW AND RESEARCH MODEL 2.