An evaluation of the interaction between companies’ privacy practices and user information privacy concerns in the success of electronic commerce

Submission note: A thesis submitted in total fulfilment of the requirements for the degree of Doctor of Philosophy to the School of Management, Faculty of Business, Economics and Law, La Trobe University, Bundoora.

This research provides a deeper understanding of the issues of privacy between organisations and customers in their information privacy interaction in the success of electronic commerce – that is, the adoption of electronic commerce by both individuals and companies. I investigate the concept of Privacy by Design between organisations‘ privacy practices and customer‘s information privacy concerns in the success of electronic commerce by exploring the following questions: (1) Of what significance is the influence of the concept of ‘Privacy by Design’ on consumer trust of a website, and the perceived privacy and security concerns of the customers in the Internet?; (2) Do customers' perceived privacy and security concerns influence trust in a website and their intention to conduct online transactions?; and, (3) Is customer trust in an organisation‘s website important in determining their intention to use online transactions? To better understand the drivers behind this interaction phenomenon. The research comprised three distinct research phases. The first phase investigated, the corporate perspective through in-depth interviews with carefully selected executives within organisations representative of specific industry segments. The second phase investigated customer perceptions of trust, privacy and security through focus group interviews. This is first comprehensive study to link the two paradigms and test the new model. The resultant model, which combined both the organisational and consumer privacy concepts, was then tested in the final phase via a large-scale survey using a questionnaire comprised of validated scales. This research fills an existing gap in the information systems literature in which there has been little discussion on the significant relationships between information technology, infrastructure and privacy and security concerns. This study also serves as an important investigation on the determinants of customers' intention to use online transactions as measured by behavioural and attitudinal factors in the success of electronic commerce. In this context, it has been found that when online customers are unconcerned and trusting based on the previous experience they have had with the organisation‘s website, they are more likely to revisit the website and not switch to other competitors.