The relationship between Internet use and perceived performance in retail and professional service firms

Information technology (IT) and, in particular, the Internet is dramatically impacting on the services sector. This paper specifically investigates the relative impact of several forms of Internet use on perceived performance for two groups of service organisations – retail service firms and professional health service firms. Using a mailed‐out self‐administered questionnaire, 625 completed questionnaires were obtained, and 43 per cent of respondents reported that they used the Internet. Thus the final usable sample in the study comprised 262 respondents. Results showed that the Internet does significantly influence perceived performance in both types of service firms. However, there are differences in the forms of Internet use between the two service groups and their relative effect on performance. For retail firms, use of transactional function, such as ordering, selling and payment, was found to be positively related to increases in perceived performance. In contrast, for professional health service firms, the ability to search for information on products and/or services was found to be positively associated with perceived performance. Finally, theoretical and managerial implications of the findings of this study are discussed.