A model of the adoption of radio frequency identification technology: The case of logistics service firms

Globalization and advances in information technology represent both realities and opportunities for enterprises in the 21st century. This paper aims to broaden understanding of service innovation as a critical organizational capability through which the adoption of information technology influences firm performance. This study examines how the adoption of radio frequency identification (RFID) technology influences the operational performance of logistics service firms. We develop the RFID adoption model based on the interorganizational information systems (IOS) view of the firm that integrates the various strands of research into the framework. The study draws from the related information technology and interorganizational information systems literatures to explore organizational factors associated with the adoption of RFID. A model of the associations between information technology and interorganizational information systems use, social support, power structure, organizational readiness, procedural flexibility, and top management support is developed, and hypotheses are advanced about the relationships among these constructs. An empirical survey was conducted among 500 logistics service firms in Taiwan. A total of 131 valid observations were analyzed using the partial least squares technique. Results showed that RFID adoption has positive effects on business practices, which in turn improves operational performance. We address the value of certain interactive firm behaviors in RFID adoption and identify related constructs of RFID adoption in terms of their efficiency and value for logistics service firms. These results have implications for both education and practice.