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Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

Dr Seema Sharma University of Bedfordshire Business School, Luton, UK Email: seema.sharma@beds.ac.uk Professor Elizabeth M. Daniel Open University Business School, Milton Keynes, UK Email: E.M.Daniel@open.ac.uk

Abstract
This study adopts an institutional theory perspective of the adoption of ERP (Enterprise Resource Plannin ! syste"s #y "ediu" si$ed fir"s in %ndia& The study contri#utes to the understandin of the operation of the three iso"orphic pressures' coercive, "i"etic and nor"ative, in the adoption of %S #y "ovin #eyond the co""on vie( of these as )"onolithic entities*& The study is underta+en #y "eans of nine ,ualitative case studies& The research "a+es three contri#utions& -irstly, the study sho(s the co"plete ran e of "echanis"s #y (hich the three iso"orphic pressures act (ithin and across or anisations& Secondly, our findin s contri#ute to aidin the conceptual clarity of parts of institutional theory, #y e.plicatin areas of overlap and coalescence of the three "acro/level pressures& -inally, our elucidation of processes and "echanis"s are of value to practitioners and policy "a+ers, since it is at the level of these processes and "echanis"s that individuals and roups can "ost readily and easily ta+e action&

ey!ords: ERP, institutional theory, isomorphism, India, SMEs, medium sized irms

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms


Abstract
This study adopts an institutional theory perspective of the adoption of ERP (Enterprise Resource Plannin ! syste"s #y "ediu" si$ed fir"s in %ndia& The study contri#utes to the understandin of the operation of the three iso"orphic pressures' coercive, "i"etic and nor"ative, in the adoption of %S #y "ovin #eyond the co""on vie( of these as )"onolithic entities*& The study is underta+en #y "eans of nine ,ualitative case studies& The research "a+es three contri#utions& -irstly, the study sho(s the co"plete ran e of "echanis"s #y (hich the three iso"orphic pressures act (ithin and across or anisations& Secondly, our findin s contri#ute to aidin the conceptual clarity of parts of institutional theory, #y e.plicatin areas of overlap and coalescence of the three "acro/level pressures& -inally, our elucidation of processes and "echanis"s are of value to practitioners and policy "a+ers, since it is at the level of these processes and "echanis"s that individuals and roups can "ost readily and easily ta+e action&

ey!ords: ERP, institutional theory, isomorphism, India, SMEs, medium sized irms

Introduction
Many e!tant studies o the adoption o in ormation systems "IS# adopt the premise o the rational a$ency o indi%idual mana$ers "&eyara' and Sabher(al, )**+#. ,his study pro%ides a complementary perspecti%e by considerin$ the comple! ran$e o pressures arisin$ rom social, economic and political sources that also contribute to the adoption o IS. ,he study adopts the particular research conte!t o the adoption o speci ic lar$e scale IS, ERP "Enterprise Resource Plannin$# systems, by medium sized irms in India. It is (ell documented that the economy in India is $ro(in$ rapidly "Ramakrishna, )*--. /olley and ,yers, )*-)#, uelled both by domestic production and production or $lobal e!port. In order to compete in both these spheres, irms in India ha%e both sou$ht themsel%es to adopt IS and also been encoura$ed to adopt such systems "Madon et al, )**0#. Small and medium sized enterprises "SMEs# are a %ital part o the economic $ro(th o and Pandey, )*--#. India. 1or e!ample manu acturin$ SMEs produce appro!imately 2*3 o manu acturin$ output o India "Sharma and 4li, )*-*. Di!it

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

Institutional theory su$$ests that due to their operational conte!t, institutions are e!posed to three isomorphic pressures that encoura$e irms to adopt similar structures and practices, (hich includes the adoption o IS. Despite ha%in$ been three decades since these isomorphic pressures (ere conceptually elucidated, there has been little empirical in%esti$ation into ho( these pressures operate at the le%el o or$anisational and inter5or$anisational processes and mechanisms. Synthesis o e!tant literature su$$ests that the isomorphic pressures (ill be operant throu$h a rich and %aried set o processes and mechanisms "e.$. 6urrie and /uah, )**7. 8icholson and Sahay, )**0. Ra'9o et al, )**0#. :o(e%er, the limited set o pre%ious empirical studies that consider institutional processes, only consider a narro( ran$e o processes, o ten ocussin$ on one or t(o processes or mechanisms "e.$. ,eo et al, )**;#. ,his study addresses these impo%erished %ie(s o the operation o isomorphic pressures, by seekin$ to identi y the ull rich and %aried set o or$anisational and inter5or$anisational processes and mechanisms throu$h (hich the pressures appear to operate in the chosen research conte!t. ,he paper commences (ith a discussion o institutional theory and its application in the IS domain. ,his is ollo(ed by a description o the case study methodolo$y adopted or the empirical in%esti$ation. ,he indin$s rom the nine case studies undertaken are discussed in terms o the processes and mechanisms throu$h (hich the isomorphic pressures (ere ound to operate. ,he paper concludes (ith a discussion o the indin$s includin$ the implications or practicin$ mana$ers. ,he limitations o the current study and opportunities or urther research are also presented.

Institutional "heory and its Application in IS Research


Institutional theory reco$nises that or$anisational structures and practices are in luenced by the e!istence and operation o institutions in an industry or country, (here institutions include the le$al system, $o%ernance mechanisms, capital markets, other or$anisations and cultural and pro essional norms.

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

Re%ie(s o the use o institutional theory in IS ha%e been undertaken by <eerakkody et al ")**0# and Mi$nerat and Ri%ard ")**0#, both o (hich (ere published in a special issue o the &ournal o In ormation ,echnolo$y "6urrie et al, )**0# ocussin$ on this topic. <eerakkody et al ")**0# note that =in the area o In ormation Systems "IS#, the use o institutional theory remains in its in ancy> "p.;?2# and that positi%ist, @uantitati%e research predominates. Mi$nerat and Ri%ard ")**0# ind ?; studies o institutional theory applied to the ISAI, domain o%er a period o )* years, con irmin$ the obser%ation that the application in the IS domain is still relati%ely nascent. ,hese authors ind that (hilst the ma'ority o studies consider the e ect o institutionalism on the adoption and di usion o I,, only a minority o studies consider the processes by (hich that institutionalisation is operant or is enacted. 6riticisms o institutional theory include its lack o an =a$ency> perspecti%e, as it positions mana$ers as %ictims o e!o$enous pressures "6urrie, )**0#. More recent studies ha%e sou$ht to understand ho( and (hy a$ency plays a part in alterin$ institutionalized patterns o beha%iour "/arud et al, )**). Dee'an et al, )**2. /arud et al, )**7#. Bther criticisms include the =conceptual ambi$uity> in key concepts noted pre%iously ":asselbladh and Callinikos, )***. 6urrie et al, )**0#.

Institutional Isomorphism
Bne strand o institutional theory su$$ests that the institutions in a $i%en conte!t (ill cause or$anisations to adopt similar structures and practices and, hence, o%er time, the or$anisations (ill tend to become similar or isomorphic "Meyer and Ro(an, -077. Scott, )**7. Ducker, -0+7. :o man, -000#. <eber "-0?)# ascribed the isomorphic tendency to rationalism, bureaucracy and competition (ithin capitalist markets, (hich orced similar structures and responses on mana$ers and their irms. DiMa$$io and Po(ell "-0+;# broadened this %ie( by identi yin$ three hi$h le%el pressures (hich lead to isomorphic chan$e: coerci%e, mimetic and normati%e. 4lthou$h their (ork (as carried out almost three decades a$o, the three cate$ories ha%e endured and ha%e been adopted as the theoretical basis

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

or the ma'ority o studies that consider institutional isomorphism in the IS domain "e.$. ,eo et al, )**;. Eai et al, )**F. Son and Genbasat, )**7#. 6oerci%e pressures are associated (ith in ormal or ormal pressures. In ormal

pressures may arise = rom cultural e!pectations in the society (ithin (hich the or$anisations unction> "DiMa$$io and Po(ell, -0+;, p.-?*#. 6oerci%e pressures may also arise rom the need to meet ormal $o%ernment re$ulations, such as pollution controls, ta! and accountin$ re$ulations. ,he e ect o coerci%e pressures ha%e been included in a number o studies o the adoption o IS, particularly inter5or$anisational in ormation systems "IBS# (hich usually rely on the adoption o the system by both a supplier and their customer. Son and Genbasat ")**7# ound that coerci%e pressures did not contribute to adoption o G)G e5marketplaces. ,hey e!plained this contrast (ith indin$s relatin$ to the adoption o EDI by notin$ that the latter (as oriented to(ards supportin$ e!istin$ relationships bet(een buyers and suppliers and hence prone to the in luence o a kno(n tradin$ partner. <hilst (e (ould not disa$ree (ith this di erence, (e (ould also obser%e that these authors only included a sin$le mechanism "percei%ed dominance o supplier# in their measurement o coerci%e pressures. Mimetic isomorphism arises rom uncertainty. Gased on earlier studies, DiMa$$io and Po(ell "-0+;# ar$ue that (hen conditions are uncertain, o(in$, or e!ample, to rapid technolo$ical or market chan$e, irms (ill mana$e this uncertainty by imitatin$ (hat other, seemin$ly success ul or le$itimate irms are doin$. ,hey re er to this beha%iour as =modellin$> "a irm models itsel on other irms#. Modellin$ can act throu$h a number o mechanisms includin$ recruitin$ employees rom the other irms, usin$ consultants, participatin$ in industry associations and outsourcin$ "Pearson and Celler, )**0#. Mimetic pressures ha%e been ound to be important in the adoption o IS systems. 1or e!ample, Eai et al ")**F# ind that (hat they re er to as =mimesis> contributes to the adoption o radio re@uency identi ication "R1ID# in the supply chain and set out the challen$es and opportunities this pressure $i%e rise to. 8ormati%e isomorphism arises rom pro essionalisation. 1ollo(in$ Earson "-077# and 6ollins "-070#, DiMa$$io and Po(ell "-0+;# described pro essionalisation as =the collecti%e stru$$le o members o an occupation to de ine the conditions and methods

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

o their (ork H and to establish a co$niti%e base and le$itimisation or their occupational autonomy> "p.-?)#. ,(o particular mechanisms o normati%e isomorphism are identi ied: pro essional net(orks and ormal education. 8ormati%e pressures also operate throu$h consistency o 'ob titles and roles across irms. ,his is o ten a by5product o increased pro essionalization and is also associated (ith centralisation "Pearson and Celler, )**0# the latter o (hich is o ten a eature o I, departments in SMEs. ,he three isomorphic pressures and the mechanisms identi ied in pre%ious studies throu$h (hich they operate are summarised in ,able -. 4s noted pre%iously, re%ie( and synthesis o the literature, as presented here, su$$est that the three types o pressure operate throu$h a rich and %aried set o mechanisms. :o(e%er, e!tant empirical studies do not re lect this richness and di%ersity, instead ocussin$ at the macro5le%el or on a narro( sub5set o processes and mechanisms. Bur study addresses this $ap in pre%ious empirical studies throu$h addressin$ the research @uestion: throu$h (hat or$anisational and inter5or$anisational processes and mechanisms do isomorphic pressures operate in the case o adoption o ERP systems by medium sized manu acturin$ irms based in IndiaI
Isomorphic Pressure 6oerci%e 1ormal and in ormal pressures such as $o%ernment re$ulations or local culture Mimetic 4risin$ rom uncertainty J irms (ill imitate other irms that appear success ul or le$itimate 8ormati%e 4risin$ rom pro essionalisation, particularly o unctional ields Processes and Mechanisms Eocal culture /o%ernment re@uirements Re@uirements o unders In luence o parent or$anisation on subsidiaries 8eed to mirror other or$anisations in order to interact easily Employee trans er 6onsultin$ irms Industry associations <ide or demandin$ customer base 1ormal educational pro$rammes ,rainin$ Pro essional net(orks and trade associations Recruitment practices, e.$. rom the same uni%ersities or the same irms Ee$itimacy o key irms in industry 6ommon career titles and paths

"able #$ Isomorphic Pressures% Processes and Mechanisms

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

Research Methods
4s identi ied by <eerakkody et al ")**0# in the literature re%ie( o institutional based studies, e!tant studies tend to be positi%ist, @uantitati%e studies. ,his contributes to the hi$h5le%el, macro consideration o the three isomorphic pressures. Since our study (as interested in the processes and mechanisms at a more detailed le%el, and (e did not (ish to pre5speci y or limit the number and nature o the processes identi ied, (e adopted a @ualitati%e method based on case studies "Eisenhardt, -0+0. :oskisson et al, -000#. Samplin& and Data 'ollection 4 multiple case study approach (as adopted in order to increase the analytical $eneralisation o the study indin$s "Kin, )**;#. In order to pro%ide a de$ree o analytic replication all irms (ere dra(n rom the manu acturin$ sector and all irms studied (ere medium sized "bet(een -?* and ;** employees#. 8ine case studies (ere undertaken, (hich are summarised in ,able ). ,he nine case studies spanned i%e manu acturin$ sectors, allo(in$ a de$ree o both replication and $eneralisation. 8ine cases also allo(ed a balance bet(een data o%erload and the analytical $eneralisation sou$ht by the study. ,he appropriateness o nine cases (as demonstrated by =saturation> and =consistent re$ularities> bein$ achie%ed durin$ data analysis "Miles and :uberman, -002, p.F)#. <ithin the ma'ority o the case study or$anisations, inter%ie(s (ere carried out (ith three indi%iduals (ho had played a key role in the ERP implementation. In most cases these (ere: the 6hairman, 6EB or other senior mana$er. the I, Director or Mana$er, (ho in most cases also acted as the pro'ect mana$er or the ERP implementation, and a business e!ecuti%e that represented users (ithin the or$anisation. 4s sho(n in ,able ), a total o )7 inter%ie(s, (hich lasted rom one to our hours, (ere undertaken across the nine case study irms.

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

6ase 1irm 1irm ) 1irm ; 1irm 2 1irm ? 1irm F 1irm 7 1irm + 1irm 0 ,otal

8umber o employees ;** )** -?* ;** -)? ;** )** -+* )7*

Industry 6ar parts 4utomobiles interiors 6ar steerin$ system Medicines 6lothin$ 6able 6lothin$ 6able Spon$e iron

Inter%ie(ee s ; ; ) ; ; ; 2 ; ; )7

Inter%ie( location :aryana, India :aryana, India :aryana, India Lttar Pradesh, India :aryana, India Lttar Pradesh, India :aryana, India :aryana, India Delhi, India

"able ($ 'ase study firms and inter)ie!ees

6onsistent (ith other case5based research, inter%ie(s (ere $uided by a semi5 structured inter%ie( schedule. ,he inter%ie(er (as alert to descriptions o the processes and mechanisms identi ied in ,able -, and prompted the inter%ie(ee i they did not mention certain mechanisms. :o(e%er, the list (as not %ie(ed as e!hausti%e and the narrati%e based approach ensured that urther processes or mechanisms could be sel 5elicited by respondents durin$ their narrati%e responses. <hilst the researchers re lected on each case study as it (as undertaken, all nine case studies (ere completed be ore ormal analysis (as undertaken. <hilst it is reco$nised that this does not allo( the iterati%e or recursi%e approach included in methods such as $rounded theory "Strauss and 6orbin, -00*#, this (as a pra$matic re@uirement arisin$ rom undertakin$ data collection o%erseas. Data Analysis ,he inter%ie(s (ere recorded and ully transcribed. Inter%ie(s (ere conducted in the local lan$ua$e and transcriptions (ere translated into En$lish. ,he translated transcripts (ere coded usin$ tabular layouts in a (ord processin$ packa$e. 6onsistent (ith the semi5structured inter%ie( $uide, initial codes (ere the processes and mechanisms identi ied in ,able -, that is initial codin$ (as deducti%e in nature. In addition to the prede ined codes, an opportunity or additional codes, and

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

re ormulation o initial codes (as allo(ed or durin$ analysis "Dey, -00;#, that is there (as an opportunity or inducti%e codin$ rom the narrati%e responses. Intra5case codin$ (as irst carried out on each o the nine case studies. ,he codes (ere then compared across the case studies. ,here (as a %ery hi$h de$ree o consistency and hence the coded data (ere combined across the cases. 6odin$ (as undertaken by one researcher and then independently assessed by the other researchers in%ol%ed. Inter5 coder reliability (as hi$h, but (here di erences occurred these could be resol%ed by lookin$ at the te!t in its uller conte!t. Internal and E*ternal +alidity 4s described abo%e, internal %alidity (as increased by inter%ie(in$ and combinin$ data rom multiple inter%ie(ees (ith di erin$ roles in their irm>s adoption. Internal %alidity (as also increased by usin$ multiple researchers in the data analysis process. E!ternal %alidity and $eneralisation (as addressed by undertakin$ multiple case studies "Kin, )**;#.

Findin&s
Isomorphic Processes and Mechanisms ,he isomorphic processes and mechanisms that (ere identi ied in the case studies are discussed belo(, accordin$ to the type o isomorphic pressures to (hich they relate. #. 'oerci)e Pressures ,he case study irms (ere sub'ect to a number o coerci%e pressures, ran$in$ rom ormal $o%ernment re@uirements, throu$h @uasi5 ormal re@uirements arisin$ rom parent irms and the need to operate e ecti%ely (ith customers and suppliers, throu$h to more in ormal and di use coerci%e pressures arisin$ rom the Indian conte!t in (hich the irms (ere operatin$. the case study irms. 4n e!ample o a ormal, re$ulation based pressure (as the $o%ernment re@uirement on the pharmaceutical irm "case study 2# to be able to track and report on the ,hese pressures operated throu$h a ran$e o mechanisms or practices (hich all contributed to the adoption o the ERP system by

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

manu acture o all o their products. ,his re@uirement (as a ma'or in luence o the irm adoptin$ an ERP system: %n the phar"aceutical industry, trac+in of the entity is very i"portant0 suppose a #atch nu"#er of "edicine needs to #e trac+ed1&ERP can ive us this type of output& (E.ecutive, case study 2!& Parent or$anisations can e!ert considerable coerci%e pressure on subsidiaries to adopt systems and ollo( certain practices. 4s (ell as operatin$ in the re$ulated pharmaceutical industry, case study 2 (as also a subsidiary o a /erman parent irm. ,hey described ho(, (hilst their parent irm did not mandate the adoption o their ERP system, they did e!ert a stron$ in luence: The idea ca"e fro" the parent co"pany in 3er"any1 this is a 3er"an co"pany& So, 3er"ans very "uch #elieve in syste"s&&&%f you don*t have any syste"s, you can*t run your or anisation (ell&&&(%T Mana er, case study 2!& ,he need or irms in certain industries to (ork closely (ith suppliers or customers is another mechanism throu$h (hich coerci%e isomorphic pressures can operate. <hilst these do not ha%e the le$al (ei$ht o $o%ernment re$ulations, lar$e and po(er ul suppliers or customers can e!ert considerable in luence o%er ho( they (ish to interact and trade (ith small or medium5sized irms in the industry "6h(elos et al, )**-. ,eo et al, )**;#. Goth case study irms - and ) manu acture car parts that or lar$e car manu acturers. In order to be suppliers to these manu acturers, they (ere re@uired to be able to supply parts accordin$ to strict deli%ery schedules in order to meet the 'ust in time "&I,# manu acturin$ model o the manu acturer. ,his need to be able to meet the re@uirements o their customers had resulted in their adoption o ERP systems. 1or e!ample, the I, mana$er in case study irm - described: To a reat e.tent the delivery of seatin syste"s on a 4%T #asis has #een possi#le throu h successful ERP i"ple"entation& The infor"ation on a real ti"e #asis (as re,uired #y us to #e a#le to opti"i$e the co"ple. seatin production processes to et on ti"e and increased productivity& (%T Mana er, case study 5!&

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

Eess ormalised coerci%e pressures arisin$ rom the Indian conte!t in (hich the irms (ere operatin$ (ere e%ident in the case study irms in t(o (ays. 1irstly, a number o the irms described ho( their irms (ere $ro(in$ rapidly due to increased demand or their products (ithin both the domestic and e!port economy. ,his rapid $ro(th re@uired them to ind (ays o addressin$ that $ro(th in e icient (ays, such as by the introduction o I, systems. 1or e!ample, both o the irms that manu actured cables described ho( they had been e!periencin$ increased demand or their products: See there (ere "any other reasons for us to i"ple"ent ERP li+e our #usiness (as ro(in , de"ands for our products (ere increasin increased1 (6irector, case study 7!& 4s (ill be discussed in relation to normati%e isomorphic pressures, the Indian $o%ernment has placed considerable emphasis on ormal education as a means o economic de%elopment. 6onsistent (ith this, many Indian amilies also see education as a means o social mobility and impro%in$ their standard o li%in$ and hence are (illin$ to in%est in the education o their children ",hatchenkery et al, )**2. /olley and ,yers, )*-)#. <hilst this is leadin$ to a dramatic increase in the number o $raduates, many o these $raduates (ant to (ork in lar$e companies, (here they percei%e there are $reater opportunities. ,he medium sized irms, (hich (ere the ocus o the present study, reported e!periencin$ se%ere shorta$es o e!perienced I, sta that could be in%ol%ed in the ERP adoption. ,hey also reported that (hen they could ind such sta or (hen their o(n sta $ained e!perience o ERP, they (ere o ten le t to take up 'obs in other companies. 1or e!ample: &&&part of the pro#le" that co"es (ith ERP is once people are trained in ERP they have a hi h "ar+et value and they leave& 8s a result you have no#ody and then you have to start a ain to loo+ for a replace"ent& 6urin i"ple"entation (e did faced this pro#le" #ut later on sustainin ERP e.perts is a "a9or concern that % thin+ "ost or anisations face& (:hair"an and Mana in 6irector, case study ;!& so production had to #e

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

1There (as no choice of tea" as there are not enou h people (ith %T s+ills& People (or+in (ith us left the co"pany so findin replace"ents (ho can ta+e the place of these people (as difficult1 (Mana er, case study <!& <hilst the hirin$ o employees rom other irms is o ten characterized as a mechanism by (hich to address mimetic pressures, (e (ould ar$ue in this case, that the rapid trans er o sta bet(een or$anisations is coerci%e in nature. ,hat is, it is particular to mo%e @uickly bet(een characteristics o the Indian conte!t: the rapid $ro(th in the Indian economy and the shorta$e o e!perienced I, pro essionals, are causin$ sta or$anisations. isomorphism. (. Mimetic Pressures Respondents across the ran$e o case study irms (ere e!plicit that their adoption o ERP had been in luenced by the adoption o ERP systems by other irms that is they modelled themsel%es on (hat they could obser%e or learn rom other irms. 1or e!ample, the I, mana$er in irm - stated: So"e other fir"s in si"ilar #usinesses had i"ple"ented ERP and it (as one of the drivin forces for us to adopt ERP& (%T Mana er, case study 5!& ,he mechanisms used to achie%e this modellin$ included benchmarkin$ a$ainst irms in the same industry and also irms in other industries that (ere considered to be leadin$ e!emplars o ERP use and e icient operation: Our vision is to #eco"e a (orld class %T ena#led "anufacturin co"pany1&=e have so"e specific oals to achieve that vision, li+e #ench"ar+in particular industries for ERP i"ple"entations and adoptin (orld class %T solutions and #est practices in the (orld, li+e ERP& (:hair"an, case study >!& In the case o irm ;, (hich manu actured car parts, the 6hairman described ho( he (as a Goard member o another medium sized company. :e had used this position to learn about their adoption o ERP: Bnce in post in a ne( or$anisation, they (ill tend to share the

e!periences and ideas they (ere e!posed to in pre%ious irms, leadin$ to increased

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

% happened to #e a #oard "e"#er of one co"pany of our si$e& They (ere in the process of i"ple"entation& % spo+e to their %T Mana er& ?e told "e the real story / it is (onderful, it (ill structure your processes& ?e "ade "e understand the #enefits that ERP can ive even to s"all fir"s& (:hair"an and Mana in 6irector, case study ;!& 4s (ell as deri%in$ the o%erall idea or ERP adoption rom other irms, some o the case study irms described ho( they had sou$ht to learn about the detailed operations o the ERP systems (ithin other irms, or e!ample by %isitin$ other irms and obser%in$ the systems in use, and also the bene its that other irms (ere achie%in$ rom their ERP systems: =e visited other or anisations to see ho( they (or+ on their ERP syste"& (:hair"an and Mana in 6irector, case study ;!& 1&in fact %"a in Pro (as runnin in 6:M& Our :hair"an (as also "ore interested in oin for the sa"e ERP, #ecause it had iven ood results to 6:M (%T Mana er, case study @!& Mendor and implementation partner selection (as seen by the case study irms as another important mechanism throu$h (hich they could model themsel%es on other companies had adopted ERP. 1or e!ample, irm - had a ailed attempt at implementin$ an ERP system be ore the implementation that (as included in the present study. ,heir pre%ious ailed attempt (as (ith a local %endor. 4 decision (as made to select an international ERP %endor or the second implementation, because they belie%ed such a %endor (ould ha%e $reater e!perience o implementin$ ERP in other irms rom (hich they could learn and on (hich they could model themsel%es. 6ase study irm ; described ho( they care ully selected their %endor, a ter attendin$ presentations by a ran$e o %endors, based upon the %endor>s pre%ious e!perience o (orkin$ (ith small and medium sized companies. 1irm ; elt that they (ould be able to learn rom the %endor about ho( ERP could best be implemented and operated in the conte!t o a medium sized business. ,his (as described by the :ead o I,:

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

&&% attended a lot of se"inars #y soft(are co"panies li+e S8P, B88A&&&Oracle& =e (ent for Oracle as they have i"ple"ented in "ore co"panies of our si$e& (?ead of %T, case study ;!& 1irm 2 chose its ERP %endor a ter comparin$ certain parameters across the market leaders. ,he parameters emphasised the prior e!perience o the %endors, in particular their e!perience and hence kno(led$e o the pharmaceutical industry, (hich they belie%ed (ould allo( them to be able to adopt similar practices to pharmaceutical irms they percei%ed to be success ul. In addition to the selection o so t(are %endors that (ould allo( the case study irms to model themsel%es on other irms, most o the case study irms used consultants or implementation partners to help them (ith the con i$uration and implementation o the ERP systems and in most cases, to pro%ide trainin$ or sta . ,hese consultants and partners (ere also selected so that the case study irms could learn rom their e!periences (ith pre%ious clients. In particular, case study irms - and ) (ere keen to stress that they did not belie%e that domestic consultants (ould ha%e su icient e!perience they could learn rom, and hence (ere keen to appoint international consultants: =e used the services of international consultants after o#servin first ti"e

i"ple"entation failure (ith a local consultin fir"& (%T Mana er, case study 5!& =e used the services of international consultant as (e +ne( other fir"s that used services of international consultants and (ere successful in ERP i"ple"entation process& (:hief %nfor"ation Officer, case study >!& Prior literature has su$$ested that irms that ha%e a (ide or demandin$ customer base are likely to look at the acti%ities o other irms as a means o satis yin$ these demands ":aunschild and Miner, -007#. ,he t(o case study irms that produced clothin$ both emphasised ho( they ha%e had to ind (ays o meetin$ the increasin$ demands o their customers. 6ase study irm ? sold their products directly to consumers and described ho( the data (arehouse in their ERP system allo(ed them to identi y (here stock (as bein$ held across their multiple stores:

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

1suppose you are sittin in 6elhi, (e have a nu"#er of shops in 6elhi, so every shop can lo in into the central data (arehouse&&&if the inventory has finished in that particular shop, (e can al(ays refer to the second shop, % "ean either as+ custo"er to o to that shop or he can al(ays as+ for that product to #e sent to his nearest store&&& (%T Mana er, case study @!& 4s discussed in the pre%ious section, pressure rom po(er ul customers or suppliers is %ie(ed as coerci%e in nature. In contrast, copyin$ rom others is %ie(ed as mimetic. Descriptions rom respondents in case study irm - appeared to coalesce these t(o isomorphic pressures: Our custo"er*s de"andin nature in ter"s of use of latest %T applications in #usiness operations forced the fir" to adopt ERP as it (as also #ein adopted #y si"ilar +ind of fir"s durin that period& (ERP %"ple"entation Mana er, case study 5!& ,his coalescence is considered urther in the discussion section o the paper. ,. -ormati)e Pressures 4 key mechanism in normati%e processes is ormal education. Prior literature su$$ests that the e ecti%e adoption and implementation o lar$e scale I, systems, such as ERP systems, re@uires a blendin$ o both I, and mana$ement kno(led$e. :ence, ,able ; sho(s the hi$her education ":E# @uali ications in the areas o both I, and mana$ement or the three key stakeholders inter%ie(ed in each case study all o (hom (ere instrumental in their irm>s adoption o ERP. It can be seen that the ma'ority o those inter%ie(ed had a ormal @uali ication in either one or both o these domains. ,his is consistent (ith the earlier obser%ation that many amilies and indi%iduals (ithin India hold education and the achie%ement o ormal @uali ications in hi$h re$ard ",hatchenkery et al, )**2. /olley and ,yers, )*-)#.

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

6ase 1irm 1irm ) 1irm ; 1irm 2 1irm ?

6hairmanA6EBASenior Mana$er Masters de$ree "I, N mana$ement# Masters de$ree "mana$ement# Masters de$ree "mana$ement# Masters de$ree "mana$ement#

I, DirectorAI, Mana$erA,echnical 4d%isor Masters "I,# Masters de$ree "I,# Masters de$ree "I,# and Gachelors de$ree "mana$ement# Masters de$ree "I,# and Gachelors de$ree "mana$ement# Masters de$ree "I,#

Gusiness Mana$erAE!ecuti%e 8one 8one 8Aa 8one

Masters de$ree Gachelors de$ree "I,# "mana$ement# and Gachelors de$ree "en$ineerin$# 1irm F 8Aa 8one 8one 1irm 7 Gachelors de$ree 8one 8one "mana$ement# 1irm + Gachelors de$ree Gachelors de$ree "I,# 8one "mana$ement# 1irm 0 Gachelors de$ree "I,# 8one Gachelors de$ree "I,# =8one> si$ni ies no ormal I, or mana$ement :E @uali ications. =8Aa> "not a%ailable# si$ni ies this cate$ory o sta (as not inter%ie(ed or this case study
"able ,$ Formal I" and Mana&ement .i&her Education /.E0 1ualifications of Inter)ie!ees

In addition to ormal education, more in ormal education, such as pro%ided by in company trainin$ and e!ecuti%e education pro%ided to indi%iduals (hilst undertakin$ their pro essional roles is also an important mechanism or the propa$ation o normati%e isomorphism. 4ll o the case study irms pro%ided trainin$ in the use o the ERP system to their users. :o(e%er, there (as a di erence across the case study irms in (ho pro%ided this trainin$, (ho (as $i%en trainin$ and (hat trainin$ (as pro%ided. In case study irms - J F, trainin$ (as (ell planned, structured and systematic and in%ol%ed use o an e!ternal implementation partner to pro%ide trainin$. ,hese irms tended to train a (ide ran$e o sta and pro%ided a ran$e o trainin$ includin$ $eneral a(areness raisin$ and detailed trainin$ or speci ic roles. ,his (ider reach and nature o the trainin$ pro%ided $reater opportunities or the normati%e in luences to permeate the adoptin$ irms. In contrast, in irms 7 J 0, e!ternal partners (ere not used to undertake trainin$ mainly due to concerns about cost. Instead, a limited amount o trainin$ (as $i%en by

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

the irm>s ERP implementation team based on (hat they had learnt about the system durin$ implementation. ,hese irms also tended to stress that trainin$ (as limited to ho( users should input data into the system, rather than to pro%ide a (ider a(areness o impacts and bene its that the system use could ha%e on the processes or operation o the irm. In addition to ormal @uali ication and trainin$, the case study irms sou$ht to increase their understandin$ o ERP systems and their use in other irms by participatin$ in pro essional net(orks. 1or e!ample, the I, mana$er in case study irm - noted: Senior staffs (ere "e"#ers of ERP net(or+ associations and %T net(or+s and throu h the" also collected infor"ation a#out the latest %T applications availa#le& (%T Mana er, case study fir" 5!& ,his @uotation re lects a common theme (hen discussin$ pro essional net(orks, that is, it (as usually only senior sta that participated in such net(orks. ,his re lects another aspect o the Indian conte!t in (hich the study (as conducted. Pre%ious studies o cultural orientations ha%e identi ied Indians as hi$h on po(er distance measure ":o stede, -00*. Marcus and /ould, )***#. In cultures (ith hi$h po(er distance, there is a $reat respect or authority and it (as seen as appropriate or only senior mana$ers to participate in such net(orks. ,his pre%ented the e!posure o a (ider ran$e o sta to the in ormation a%ailable rom such net(orks. 1inally, similar 'ob titles and common career paths ha%e also been seen as contributin$ to the ormalisation and structurin$ o unctional ields and hence a mechanism throu$h (hich normati%e isomorphic pressures can act. ,here (as a startlin$ homo$eneity o 'ob titles across the case study irms: the most common bein$: 6hairman, /eneral Mana$er, I, Mana$er and ERP Implementation Mana$er. ,he titles adopted (ere also %ery simple and clear, arisin$ in part rom the medium size o the irms in%ol%ed in the study that tended to ha%e simple structures compared to lar$e or$anisations (here roles and titles are o ten speci ic to the or$anisation and less transparent to the outside (orld.

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

Discussion
,he isomorphic processes and mechanisms that (ere identi ied in the case studies are summarised in ,able 2. ,his table con irms the startin$ premise o this paper that is. the three isomorphic pressures are operant throu$h a si$ni icant number o distinct processes and mechanisms.
'oerci)e /o%ernment re$ulation In luence o parent or$anisation Ge able to (ork e ecti%ely (ith customers and suppliers Rapidly $ro(in$ economy Shorta$e o e!perienced I, sta (illin$ to (ork in medium sized irms Mimetic Misits to other irms Goard position in similar irms Genchmarkin$ J includin$ operational aspects and bene its achie%ed Mendors (ith e!perience o other SMEs Mendors (ith e!perience in same industry 6onsultants A implementation partners (ith industry or SME e!perience Demandin$ customers -ormati)e 1ormal education In5company trainin$ Pro essional net(orks 6ommon 'ob titles and career paths
"able 2$ Isomorphic Mechanisms Identified

Elucidation o the ull set o operant mechanisms allo(s or urther consideration and understandin$ o the adoption o IS and the realisation o competiti%e ad%anta$e rom IS. 1or e!ample, the indin$s demonstrate that the isomorphic nature o some o the mechanisms is e!plicit, such as, employin$ consultants (ith e!perience at other irms in the same industry in order to learn accepted or common practice ",eo et al, )**;#. ,he isomorphic nature o other mechanisms is more implicit, or e!ample, recruitin$ sta (ith ormal education @uali ications. ,his implicit nature o some mechanisms su$$ests that (hilst some modellin$ may be intentional, some o it may be un(ittin$. Bur indin$s also su$$est that at the macro5le%el o isomorphic pressures, there appears to be o%erlap or coalescence, (hich $i%es rise to the criticism o the

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

=conceptual ambi$uity> o parts o institutional theory ":asselbladh and Callinikos, )***. 6urrie et al, )**0#. 4s discussed, case study irm - appeared to be sub'ect to both coerci%e and mimetic pressures. 6onsideration o the underlyin$ mechanisms allo(s a clear distinction to be made: irm - e!perienced coerci%e demands rom ma'or customers to adopt I, systems and that these customers (ere in luenced throu$h consultants and other ad%isors to model their adoption o I, on the adoption o ERP systems by irms similar to themsel%es. <e ne!t consider the Indian conte!t o our study. 4 number o the mechanisms identi ied in ,able 2, (hile not uni@ue to the Indian conte!t, are certainly made more pertinent due to that conte!t. In particular, the rapidly $ro(in$ economy has put considerable pressures on Indian irms to ind (ays to increase production (hist bein$ able to maintain relati%ely lo( costs. Similarly, the increased standard o li%in$ o some in India has made them more demandin$ customers. Goth o these add to the dynamism and uncertainty in the economy and encoura$e irms to adopt mimetic approaches to address that uncertainty. ,able 2 sho(s that the irms in our study adopted a (ide ran$e o mechanisms in order to a ect this. Bther aspects o the Indian conte!t appear to rein orce certain isomorphic pressures, makin$ them more in luential than they may be in other conte!ts. 1or e!ample, as discussed in the section on normati%e pressures, many Indian amilies and indi%iduals place considerable emphasis on ormal education and the $ainin$ o @uali ications ",hatchenkery et al, )**2. /olley and ,yers, )*-)#. :ence, as sho(n in ,able ;, there is o ten a hi$h rate o indi%iduals, e%en in small and medium sized irms, (ith ormal @uali ications in business and I,, and sometimes both. 1ormal @uali ications tend to increase the pro essionalisin$ o ields and hence the normati%e pressures that result rom pro essionalization. Similarly the hi$h po(er5distance measure o many Indians ":o stede, -00*. Marcus and /ould, )***# su$$ests a $reat respect or authority and senior mana$ers are assumed to =possess (isdom and are automatically esteemed> "Marcus and /ould, )***, p.;F#. In such cases, i senior mana$ers ha%e been in luenced to adopt ERP and other I, systems throu$h their participation in pro essional net(orks or throu$h in%ol%ement (ith other irms, then it (ill be di icult or subordinates to @uestion that decision to adopt or to put or(ard alternati%e approaches.

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

Bur indin$s sho(ed that similar ERP systems (ere bein$ adopted across the industries included in our sample. ,his similarity o adoption re lects that ERP systems are ,ype II systems in S(anson>s "-002# typolo$y, (hich are those systems are directed lar$ely at the administrati%e processes and in rastructure o the irm, rather than systems that relate to products and ser%ices ",ype III#. Bur indin$s also su$$est that similar isomorphic mechanisms (ere operatin$ both (ithin and across these industries. :o(e%er, (e urther research (ould be needed to determine i certain mechanisms (ere dominant or more e ecti%e in certain industries than others, or i certain mechanism (ere more e ecti%e at inter5industry isomorphism compared to intra5industry isomorphism.

'onclusions
4s has been noted, there has been little de%elopment o the three isomorphic pressures identi ied by DiMa$$io and Po(ell "-0+;#. <e (ould contend that this is because most studies treat three pressures as =monolithic entities>, (ithout e!plorin$ the rich and %aried mechanisms that contribute to the three macro5le%el pressures. ,his study has $one beyond the monolithic %ie( and has empirically elucidated the ran$e o processes or mechanisms throu$h (hich institutional isomorphic pressures appear to act in the adoption o ERP systems by Indian medium5sized irms. Son and Genbasat ")**7# obser%e in their institutional theory based study that, =identification of the specific factors contri#utes to theoretical +no(led e in this area and is also "ore "ana erially "eanin ful than "erely identifyin the 1"ain types of or ani$ational "otives* "p.+?#. Bur research addresses this obser%ation and hence makes three contributions. 1irstly, by pro%idin$ data at a more detailed le%el than the three macro5le%el pressures, our study sho(s the mechanisms by (hich those pressures act (ithin and across or$anisations. Secondly, our indin$s contribute to aidin$ the conceptual clarity o parts o institutional theory, by e!plicatin$ areas o o%erlap and coalescence o the three macro5le%el pressures. 1or e!ample, in the Indian settin$ o the study, the coerci%e nature o national culture, (ith its hi$h re$ard or ormal @uali ications and respect or authority, is ound to positi%ely rein orce the

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

normati%e e ects o

ormal @uali ications. 1inally, our elucidation o processes and

mechanisms are o %alue to practitioners and policy makers, since it is at the le%el o these processes and mechanisms that indi%iduals and $roups can most readily and easily take action.

Implications for Practice


,he indin$s o this study are particularly use ul to practitioners (ho (ish to adopt $ood practice, as (ell as those seekin$ to promote di%ersity o practices (ithin their irm or across their industry. 1or those seekin$ to model their practice on that o other irms, ,able 2 identi ies speci ic mechanisms that they can use. <hilst some o these may be (ell kno(n, or e!ample, the use o consultants, the richness and di%ersity o the mechanisms sho(n in ,able 2 allo( the consideration o other mechanisms that can support adoption, such as recruitment practices and adoptin$ standard 'ob titles and role de initions. ,he mechanisms appear sel 5rein orcin$, and hence addressin$ more than one o them at a time can be e!pected to aid the adoption o the selected practices. 6on%ersely, or those practitioners seekin$ to promote di%ersity, ,able 2 can act as a checklist to ensure that their irms are not un(ittin$ly actin$ in (ays that are likely to promote homo$eneity, or e!ample, recruitin$ rom a limited number o uni%ersities or ormer employers.

3imitations of Study and Further Research


4s (ith all studies, the limitations o this research should be reco$nised. 4s

discussed in the methodolo$y section, a @ualitati%e approach, (hich included an inducti%e sta$e, (as adopted in order to re%eal the rich and %aried ran$e o mechanisms throu$h (hich isomorphic pressures mi$ht operate in the conte!t studied. ,he intention (as to achie%e analytical $eneralisation rather than statistical $eneralisation. Bur ocus on Indian medium sized irms allo(ed us to conduct our study in a conte!t in (hich irms (ere e!periencin$ a ran$e o pressures, (hich in turn (ere mani est in the ran$e o mechanisms sho(n in ,able 2. :o(e%er, (hilst irms in other de%elopin$ economies or in de%eloped economies may e!perience the

Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

same three macro5le%el isomorphic pressures, these may operate throu$h di erent mechanisms or throu$h di erent combinations o mechanisms. ,his study did not seek to link the adoption o the ERP systems studied and the success o those systems. <e reco$nise that there are multiple interpretations o success and means o measurin$ success in IS "DeEone and McEean, )**;. Stacie et al, )*-)#. :o(e%er, uture studies could seek to link the ran$e o institutional processes and mechanisms that an or$anisation is e!posed to and the in luence that these appear to ha%e on the success ul implementation and use o their IS.

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Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

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Isomorphic Processes in ERP Adoption by Indian Medium-sized Firms

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