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Research Internet Shopping

BUSINESS RESEARCH METHODS

ABSTRACT

This research paper deals with the study of adoption rate of internet shopping for consumers across a wide range of countries. It basically analyzes the effects of Hofstede's national culture dimensions on the attitude of consumers towards internet shopping. The two main dimensions of national culture that have been used for analysis are individualism-collectivism and uncertainty avoidance. A review of the existing work on national cultures and internet shopping is carried out to form a theoretical background for the above mentioned hypothesis. A linear regression model which is controlled for the effects of a few related factors such as income, unemployment rate, economic growth rate etc. is also used for the analysis. The two above mentioned cultural dimensions and their interaction account for 14% of the variance in internet shopping rate on top of the combined 63% explained by income level, unemployment rate and crime rate. The results of the study show that internet shopping adoption rates are negatively correlated with uncertainty avoidance but positively correlated with individualism-collectivism. An argument on the practical implications in terms of social policy and website design guidelines has also been given at the end of the paper.

PROBLEM STATEMENT

Internet shopping involves a higher level of risk and menace as compared to shopping from a physical store. Shoppers often lack the necessary information on the online stores and the process involved in such transactions. Individualism-collectivism affects the way people tend to form trust and hence may affect their willingness to trust and carry out transactions with online vendors and merchants. Thus uncertainty avoidance and individualism-collectivism may affect internet shopping adoption rates to a large extent.

RESEARCH OBJECTIVES

The objectives of this research include establishing a workable relationship between the cultural dimensions of individualism-collectivism and uncertainty avoidance and the internet shopping adoption rates. The effects of a set of contextual and situational factors on shopping via the internet are also to be analyzed for the purpose of forming a linear regression model to better understand the effects of these cultural dimensions on internet penetration rates.

The objective of the research is also to substantiate the formulated hypotheses with factual data, in order to increase the credibility of the research. The researchers have prepared the hypotheses that internet shopping adoption rates for countries with relatively lower uncertainty avoidance levels and the rate is higher for individualist than for collectivist countries.

The research should also be able to prove the last but not the least important hypotheses that for countries with a high uncertainty avoidance level, individualism-collectivism has a very little impact on internet shopping rates. On the other hand individualists show a higher internet shopping adoption rate than collectivists in a country with relatively low uncertainty avoidance levels.

IMPORTANCE AND BENEFITS OF THE STUDY

This research will help the researcher in ascertaining the effects of uncertainty and individualism-collectivism on internet shopping penetration rates among customers and how to lessen their pessimistic effects. After conducting a comprehensive study on the above mentioned research topic we will be better able to analyze the different effects of cultural dimensions on internet shopping. The results of the study can then be used by online merchandisers and vendors to help them in improving their services and the process of carrying out online transactions. They will be able to establish trust between themselves and their customers by eliminating uncertainty and avoiding any mishaps that may occur during a transaction.

RESEARCH DESIGN

The design of the study is such that:

• The research paper commences with an abstract and introduction of the research topic and the scope of the research.

• A theoretical background or framework is given in order to analyze the internet shopping environment and the cultural effects on this environment.

• Formulation of hypotheses for the study follows the theoretical background.

• The methods employed in conducting the research are discussed.

• The main findings and results of the study are discussed and elaborated upon.

• Theoretical and practical implications of the results are then argued upon.

• The research paper concludes with a discussion of any possible future research areas.

DATA ANALYSIS

The data analysis technique used for the research is a four step linear regression model. This model helped us in establishing negative or positive correlation between a set of situational factors and the two main cultural dimensions namely uncertainty avoidance and individualism-collectivism. The control factors employed for the study include income, educational level, unemployment rate, economic growth rate and crime rate.

As the model is a four step hierarchical model, additional independent variables were included at each step. The dependent variable in this model is the internet shopping adoption rate by country. The independent variables are individualism index (IDV) and uncertainty avoidance index (UAI).

The results of the research are based on the study of 33 countries. The data has been collected from various sources including The World Factbook (2001) and the Report of Taylor Nelson Sofres (2001).

The limitations of the study are that we have used crime rate as a surrogate measure for internet crime because most of the countries do not collect statistics on internet crime. This restricts the scope of research on this factor to quite a large extent. The data for general crime has been collected from Interpol's website (Interpol, 2oo3).

NATURE AND FORM OF RESULTS

The results of the study have been represented statistically and in the form of organized tables. Hierarchical regression results for internet penetration rate show that after taking income into account, education level, unemployment rate, crime rate and economic growth rate do not significantly affect the internet penetration rate.

The means, standard deviations and correlations of all the variables have been represented in the form of a table. Also the results of the hierarchical regression model have been represented statistically to test the joint effects of the contextual factors and the two cultural dimensions of uncertainty avoidance and individualism-collectivism on internet shopping adoption rate.

BUDGET

The total budget and its breakdown for conducting the research study is given as follows:

SCHEDULE

The schedule for conducting the research study is given as follows:

FACILITIES AND RESOURCES

The following resources have been used for the research study:

• International Monetary Fund (2001)

• United Nations Organization for Education Science and Culture (UNESCO,2002)

• Interpol (Interpol,2002)

BIBLIOGRAPHY

• Hofstede, G.H. (1980) Culture's Consequences, Sage: Beverly Hills, CA

• Kale, S.H. and Barnes, J.W. (1992) ‘Understanding the domain of cross-national buyer- seller interactions', Journal of international Business Studies 23(1): 101-132.

• Taylor Nelson Sofres (2001) ‘TNS interactive global eCommerce report 2001. http://www.tnsinfo.com

• The International Monetary Fund (2001) ‘World Economic outlook database'.

• International Police Organization (Interpol) (2003) Online data, http://interpol.com

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