The Performance Implications of Media Richness in a Business-to-Business Service Environment: Direct Versus Indirect Effects

  • Authors:

  • Shawnee K. Vickery;Cornelia Droge;Theodore P. Stank;Thomas J. Goldsby;Robert E. Markland

  • Affiliations:

  • -;-;-;-;-

  • Venue:
  • Management Science
  • Year:
  • 2004

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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 onrelational performance and through it, indirect effects onsatisfaction andloyalty. 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.