Agency Theory THEORETICAL FRAMEWORK

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CHAPTER II THEORETICAL FRAMEWORK

A. Agency Theory

1. Technology Concepts Nowadays, technology has been being an unearthed part of human life. There are so many definitions of technology. In Random House Dictionary quotes from Kumala 2008: 12 technology is defined tightly relating to life, citizens, and environment. It means that technology will not be a free valuable. A technology usually started from individual or group imagination using nature phenomenon and practical needs. From those imaginations, individual or group developed it to be an invention. According to Galbraith in Niagara 2008 technology is defined as a systematic application and obtained from formulation science knowledge concept or knowledge collection that have certain function in practical human daily live and technology as the activity that involving organizational activity and system value. Technology is defined by Goetch in Kumala 2008: 12 as “people tools, resources, to solve problems or to extend their capabilities”. Pacey in Kumala 2008: 12 defines technology as “the application or scientific and other knowledge to the practical task by ordered systems that involve people and organization, living things and machines”. From those definitions, there are obtaining some essence: 1 technology related to eternal idea or human thought, technology existence together with human culture existence, 2 perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 10 technology is the human creation, so it does not come naturally, and it was artificial; 3 technology is set of means, so it can be bordered or it universals, depends on the analysis side sight; 4 technology is purposing to facilitate human endeavour, so technology must be able increasing human ability performance Kumala, 2008: 12. Fichman in Stylanou and Jackson 2007 introduced a related argument by distinguishing between two types of technologies in terms of the main knowledge that each type determines the user. Type 1 technologies e.g. personal computers, word processing packages, graphics software are generally independent use technologies that are intended to facilitate self- contained tasks performed by individual users. These technologies impose a relatively small main knowledge and typically require only a few hours of training before users achieve basic proficiency. In contrast, Type 2 technologies e.g. software development process technologies involve significant knowledge barriers to adoption, including a lengthier training process and a situation where the user ability, not just the willingness to use, is a determining factor. As such, experience, attitudes, training, and supervisory desires become valid predictor variables Lee et al. in Stylanou and Jackson, 2007. Facts in technology adoption based on the dynamic process, based on empirical literature in naturally affecting static network Ryan and Tucker in Niagara, 2008: 12. The benefits of technology adoption is a beginning to indicate economic development and in the next steps, technology can use as perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 11 the economic agent of the corporation in the same industry. Decision of adopting technology can also relate to how a corporation developing information technology innovation. Thus, manager in a corporation must be prepared for what strategy will be used to adopt information technology that took by the end user as technology acceptance Zhu and Weyant, 2000. Innovation in technology information done by vendor can be speed, quality and flexibility increasing for the end user operating Steinmueller. 2001; Callantone, et al. 2006; in Niagara, 2008: 13. Orlikowski and Iacono in Stylanou and Jackson 2007 point to the fact that not enough attention is paid to the technology itself as well as to the tendency to threat technologies as an independent and stable constant despite the empirical evidence that highlights the impact of system design on perceptions and use. Adopting the perspective that technology use is a function of how the technology merges with the social environment, they point to the silence of cultural, normative, and regulatory influences on the usage decision Stylanou and Jackson, 2007. 2. Conceptual of Mobile Banking Mobile phone is no longer known as it traditional functions, i.e. voice conversation and Short Message Services SMS. Nowadays, the mobile phones even facilitate for a real time teleconference through 3G Third Generations. Nonetheless, from the banking perspective, mobile phones introduce a new channel of distribution for the banking industry, and the perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 12 demand are keeping on increasing hence entrenched its feasibility as a new media of banking transaction Amin et al., 2006. In Barati and Mohammadi 2009, mobile banking is defined as the “type of execution of financial services which the customer uses mobile communication techniques in conjunction with mobile devices” Pousttchi and Schurig, 2004. It is defined as “a channel whereby the customer interacts with a bank via a mobile device, such as a mobile phone or personal digital assistant” Barness and Corbit, Scornavacca and Barnes, in Barati and Mohammadi, 2009. According to Amin et al. 2006, mobile banking defines as the newest channel in electronic banking to provide a convenience way of performing banking transaction, which is known as pocket-banking. The terms m-banking, m-payments, m-transfers, m-payments, and m-finance refer collectively to a set of applications that enable people to use their mobile telephones to manipulate their bank store value in an account linked to their handsets, transfer funds, or even access credit or insurance products Donner and Tellez, 2008. In Amin et al. 2006, Kohli 2004 claimed that the mobile banking service gives customers the convenience of account access information and real-time transaction capabilities. Hamzah 2005 in Amin et al. 2006 said that mobile banking brings the convenience and enhanced value. Riivari 2005 in Amin et al. 2006 claimed that the opportunity for mobile services is three times as many mobile phone users as those who use online PCs, and they are now ready for anywhere, anytime applications that match their lifestyles. perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 13 According to Donner 2006 mobile banking services enable consumers, for example, to request their account balance and the latest transactions in their accounts, to transfer funds between accounts, to make, buy and sell orders, for the stock exchange and to receive portfolio and price information. There are a variety of mobile media channels, including, SMS Short Message Service, mobile web, mobile client application, phone banking, etc. Each mobile media channel has its strengths and weaknesses, and it is important to identify the delivery mode that is most appropriate for each banking service. According to Rahardjo in Widyastuti 2008: 32, there are some conditions for mobile banking services: 1 easy use application, 2 the services can be reached from everywhere and every time, 3 cheap, 4 secure, and 5 reliable. Mobile banking services generally classified into three type characteristics Kumala, 2008: 15, mention as follow. 1 Informational This type is the simplest of mobile banking. It consists of products and services information from bank provider. The risk is quite low, because this system does not connect to banks’ main server and network, but connects to web hosting server. 2 Communicative This type is enabling communication between customers and banks systems. It can be account balance information, transaction report, customer data changed, and also member services form. The risk is higher than the first above, because there is an interaction between the customers and some banking network server, which is susceptible with programs that can harm the system such as viruses. 3 Transactional This last type is the most complete than the others, and generally it also consist two types above. In this type, customers enable to do transaction directly. Because it has direct flow through bank main server and network, so it has the highest risk than two others. Thus, a good maintenance and direct control is necessary. Customers can directly access their bank account, paying bill, transferring fund, etc. perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 14 According to Alsindi et al. 2004 in Kumala 2008: 16, mobile banking services have some strengths and weaknesses. The strengths are mentioned as follow. 1 WAP provides more alternatives to connect with bank customers and to increase the number of customers. 2 Bank customer can reach their banking services anytime and anywhere. 3 It can consider as one of the markets competitive advantage. 4 The used of this technology will decrease the number of customers to visit bank or ATM and also opening new branch. The weaknesses are mentioned as follow. 1 The number of mobile banking users is very minim. 2 Mobile banking, perhaps, considered by some customers is a complex used of technology. 3 Developing mobile banking services needs a lot of cost because it needs more effort and infrastructure assure the security to do. 4 Limitation of cell phone screen width considered as one of the weaknesses because the information than shown is limited. Mobile banking is still in development phase which needs more concerned due to enhance the mobile banking system content to fulfill the customer needs. When it probably completing the customer needs, the acceptance of consumer will increase and bank can rise up their profitability. With driving customer loyalty, engaging new segment, and empowering it own capability, it also probably gives some opportunities to bank provider. 3. Technology Acceptance Model TAM One of the most utilized models in studying information system acceptance is the Technology Acceptance Model TAM Davis et al., 1989; Mathieson, 1991; Davis and Venkatesh, 1996; Gefen and Straub, 2000; Al- Gahtani, 2001 in which system use actual behaviour is determined by Perceived Usefulness PU and Perceived Ease of Use PEOU relating to the attitude toward the use that relates to the intention and finally to behaviour perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 15 Pikkarainen et al., 2004. TAM has become so popular that it has been cited in most of the research that deals with user acceptance of technology Lee et al., 2003. TAM is based on the Theory of Reasoned Action TRA, which is concerned with the determinants of consciously intended behaviours Fishbein and Ajzen in Pikkarainen et al., 2004. Behavioural intention will determine individual behavioural. Expression from behavioural intention should be relating with high accurate prediction of related volitional action Jogiyanto, 2007: 26. From the information systems perspective one relevant element of TRA is its assertion that any other factor that influences behaviour, for example, systems design variables user, characteristics, task characteristics, political influences and organizational structure do so only indirectly by influencing an attitude toward behaviour, subjective norm or their relative weights Davis et al. in Pikkarainen et al., 2004. Since 1967 TRA has been developed, tested and used extensively and its extension, the Theory of Planned Behaviour TPB utilized widely since 1988 by Ajzen. Ajzen included a construct which was not use yet in TRA. This construct namely perceived behavioural control which is used to control individual behaviour that is limited by their weaknesses and their boundaries from lack of sources used to realize their behaviour Jogiyanto, 2007: 61. Although the TAM and the TRA share many issues they have some considerable differences. The first difference is that according to TRA beliefs are bound to context, and hence they cannot be generalized. Contrary to that, perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 16 TAM states that PEOU and PU are issues that affect acceptance of all information systems. The other significant difference is that in TRA all beliefs are summed together, but in the TAM both beliefs are seen as distinct constructs. Modelling each belief separately allows researchers to better trace influences of all the affecting factors on information system acceptance Davis et al. in Pikkarainen et al., 2004. TAM has been tested in many studies e.g. Davis, 1989; Davis et al., 1989; Mathieson, 1991; Adams et al., 1992; Davis, 1993; Segars and Grover, 1993; Taylor and Todd, 1995, and it has been found that TAM’s ability to explain the attitude toward using an information system is better than other model’s TRA and TPB Mathieson in Taylor and Todd, 1995. In other words, the use of an information system acts as an indicator for information system’s acceptance. There are five main constructs used in TAM: 1 perceived usefulness, 2 perceived ease of use, 3 attitude towards behaviour or attitude towards using technology, 4 behavioural intention or behavioural intention to use, 5 behavioural or actual technology use. perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 17 Figure II.1 Technology Accepted Model by Davis et al. 1989 3.1 Perceived Usefulness Several studies on TAM perceived usefulness as an important antecedent of computer utilization Davis et al. and Igbaria et al. in Selamat et al., 2009. Davis 1989 defined PU as the degree to which an individual believes that using the system will enhance his job performance Alrafi, _____. From that definition, it is known that perceived usefulness as a belief about decision making process Jogiyanto, 2007: 114. Many research found strong relationships between perceived usefulness and technology usage. In the study of mobile banking acceptance Luarn and Lin 2005 in Selamat et al. 2009 found that perceived usefulness has a positive impact on the willingness to use mobile banking. Therefore, it is highly predictable that people use information technology because they find it useful. Its construct is made by six items, i.e. work more quickly, job performance, increase productivity, effectiveness, make job easier, and useful. External Variables Attitude Toward Using Perceived Ease of Use Perceived usefulness Behavioural Intention to use Actual system use Source: Harmadi and Hermana 2005 perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 18 3.2 Perceived Ease of Use PEOU Quote from Selamat et al. 2009, PEOU is a major factor that affects acceptance of an information system Davis et al., 1989. PEOU is defined as the degree to which an individual believes that using computer or computerized system will be free from physical and mental efforts Davis in Alrafi, ______. From the definition, it is known that PEOU also a belief about decision making process Jogiyanto, 2007: 115. According to Teo 2001 if a system is easy to use, it requires less effort on the part of users, thereby increasing the likelihood of adoption and usage. Conversely, if systems that are complex or difficult to use are less likely to be adopted, since it requires significant effort and interest on the user. Franco and Roldan 2005 in Selamat et al. 2009 found the relationship between PEOU, and PU was significant and positively related. This means a difficult system is less useful. The construct of PEOU is formed by many items Jogiyanto, 2007: 115, i.e. easy of learn, controllable, clear and understandable, flexible, easy to become skilful, and easy to use. 3.3 Attitude Towards Using Attitude toward using the system is defined as the degree of evaluative affect that an individual associates with using the target system in his or her job Davis et al. in Jogiyanto, 2007: 116. It refers to the person’s general feeling, favorable or otherwise, for the use of the perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 19 new technology. TAM conceptualizes individual perceptions of usefulness based on instrumentality as being strongly related to attitude toward technology use. It is also defined by Mathieson 1991 as the user’s evaluation of the desirability of his or her using the system Jogiyanto, 2007: 116. Prior research showed that attitude has positive influence to the behavioural intention, and some showed negative results. Thus, some researches do not include this construct Jogiyanto, 2007: 116. 3.4 Behavioural Intention The behavioural intent constructs as a proxy to predict the actual usage had been successful thus far Ramayah and Ignatius, 2003. Warshaw and Davis 1985 define behavioural intention as “the degree to which a person has formulated conscious plans to perform or not perform some specified future behaviour” Ramayah and Ignatius, 2003. This is in line with the Theory of Reasoned Action Fishbein Ajzen, 1975 and its successor Theory of Planned behaviour Ajzen, 1985, which contend that behavioural intention is a strong predictor of actual behaviour. In the application of information systems, the TAM has been successfull used by many researchers to predict behavioural intent towards the use of information technology Ramayah and Jantan, 2003; Ramayah, Sarkawi and Lam, 2003; Legris, Ingham, and Collerette, 2002; in Ramayah and Ignatius, 2003. perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 20 3.5 Behaviour Actual Usage The behavior construct represents a user’s subjective estimate of the amount of time or frequency that heshe actually spends using the technology Stylianou and Jackson, 2007. Igbaria et al. 1995 defined perceived usage as the amount of time interacting with a technology and the frequency of use Gardner and Amoroso, 2004. They found strong relationships with behavioural intent to use the technology. Igbaria et al. in Gardner and Amoroso 2004 found that individuals are likely to use a system if they believe it is easy to use and will increase their performance productivity. Actual usage, as originally conceptualized in the Davis 1989 study, was measured by the frequency of use and the length of time of use Szajna, 1996. Objective measures of actual use are difficult to obtain for Internet-based technologies and therefore, many of the TAM studies either left out usage as a dependent variable, focusing solely on behavioural intention or else moved to perceived usage. The construct captures both work and entertainment related use. The mobile banking conceptualization examines use as a function of the time spent transaction on the mobile banking. Szajna 1996 recommended the examination of self-reported usage. Sun 2003 in Gardner and Amoroso 2004, reports that most TAM studies used a perceptual self-report usage. Felasufazein 2010 and Kusumo 2010 has proven that actual perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 21 usage did not fit to the model to their research for mobile banking acceptance. 3.6 External Variables Although TAM is a model applicable to a variety of technologies Adams et al., 1992; Chin and Todd, 1995; Doll et al., 1998, it has been criticized for not providing adequate information on individuals’ opinions of novel systems Mathieson, 1991; Moon and Kim, 2001; Perea y Monsuwe et al., 2004; in Huang et al., 2006. Davis 1989 observed that external variables enhance the ability of TAM to predict acceptance of future technology. In other words, the constructs of TAM need to be extended by incorporating additional factors. Choosing additional factors depends on the target technology, main users and context Moon and Kim in Huang et al., 2006. Wang et al. 2003 in Huang et al. 2006 noted that variables relating to individual differences play a vital role in the implementation of technology. Additionally, empirical research based on TAM has discovered strong relationships between individual differences and information technology acceptance Agarwal and Prasad in Venkatesh, 2000. To understand user perception of mobile banking, this study use two individual difference variables, namely “perceived mobility value” and “perceived enjoyment”, into the proposed TAM model. These two constructs are described as follow. Perceived Mobility Value PMV denotes user awareness of the mobility value of mobile banking. Mobility perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 22 has three different elements, including convenience, expediency and immediacy Seppala and Alamaki in Huang et al. 2006. Mobility permits users to gain access to service or information anywhere at anytime via mobile devices. Previous studies found that mobile users valued efficiency and availability as the main advantages of mobile banking, and these advantages are a result of the “mobility” of a mobile device Chen et al., 2003; Hill and Roldan, 2005; Ting, 2005; in Huang et al., 2006. From paper build by exploring customer perceived value in the mobile service field, the majority of respondents show positive critical incidents when users perceived mobile services to be especially valuable them, description of reasons why and under which condition they had used the service, and description of consequences of service use in their own language Pihlstrom, 2008: 65. Therefore, mobile banking is valuable because of its mobility. Consequently, the perceived mobility value is a critical factor of individual differences affecting users’ behaviors Huang et al., 2006. Individuals engage in activities because these activities lead to enjoyment and pleasure Teo and Lim, 1997. According to Davis et al. 1992, Perceived Enjoyment PE is defined as “the extent to which the activity of using the technology is perceived to be enjoyable in its own right, apart from any performance consequences that may be anticipated” Jogiyanto, 2007: 131. In this study, perceived enjoyment denotes the extent to which an individual finds the interaction of mobile banking perpustakaan.uns.ac.id digilib.uns.ac.id commit to user 23 intrinsically enjoyable or interesting. Perceived enjoyment is seen as an example of intrinsic motivation, and it has been found to influence user acceptance significantly. Furthermore, research on the role of enjoyment suggested the importance of enjoyment on users’ attitudes and behaviors Igbaria et al., 1995; Teo and Lim, 1997; Wexler, 2001; Yi and Hwang, 2003; in Huang et al. 2006.

B. Conceptualization And Hypotheses Development