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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$ed fir"s in %ndia& The study contri#utes to the understandin of the operation of the three iso"orphic pressures' coercive, "i"etic and nor"ative, in the adoption of %S #y "ovin #eyond the co""on vie( of these as )"onolithic entities*& The study is underta+en #y "eans of nine ,ualitative case studies& The research "a+es three contri#utions& -irstly, the study sho(s the co"plete ran e of "echanis"s #y (hich the three iso"orphic pressures act (ithin and across or anisations& Secondly, our findin s contri#ute to aidin the conceptual clarity of parts of institutional theory, #y e.plicatin areas of overlap and coalescence of the three "acro/level pressures& -inally, our elucidation of processes and "echanis"s are of value to practitioners and policy "a+ers, since it is at the level of these processes and "echanis"s that individuals and roups can "ost readily and easily ta+e action&
ey!ords: ERP, institutional theory, isomorphism, India, SMEs, medium sized irms
ey!ords: ERP, institutional theory, isomorphism, India, SMEs, medium sized irms
Introduction
Many e!tant studies o the adoption o in ormation systems "IS# adopt the premise o the rational a$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
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$ers. ,he limitations o the current study and opportunities or urther research are also presented.
Re%ie(s o the use o institutional theory in IS ha%e been undertaken by <eerakkody et al ")**0# and Mi$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$ories ha%e endured and ha%e been adopted as the theoretical basis
or the ma'ority o studies that consider institutional isomorphism in the IS domain "e.$. ,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
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
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.
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
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
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
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!&
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
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
% 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,:
&&% 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:
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, )*-)#.
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,#
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
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.
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
=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$h in%ol%ement (ith other irms, then it (ill be di icult or subordinates to @uestion that decision to adopt or to put or(ard alternati%e approaches.
Bur indin$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
normati%e e ects o
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 $roups can most readily and easily take action.
discussed in the methodolo$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
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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