Beruflich Dokumente
Kultur Dokumente
Department of Management & Marketing, Faculty of Business and Economics, The University of Melbourne, Victoria 3010, Australia
Arizona State University, W. P. Carey School of Business, Department of Supply Chain Management, United States
a r t i c l e
i n f o
Article history:
Available online 14 August 2013
Keywords:
Inter-organizational systems
Case studies
Institutional theory
Supply chain
Healthcare
a b s t r a c t
The healthcare industry has been known to operate in a strong institutional environment (i.e. government
regulations), and the implementation of inter-organizational systems (IOS) has followed an institutional
process. Extending this perspective across different tiers in the healthcare supply chain, we investigate
how organizations in different tiers in the supply chain (i.e. hospitals, distributors and manufacturers)
respond to institutional pressures when implementing IOS. How institutional dynamics unfold across
multiple tiers of a supply chain is an uncharted area of research, and we take the theory-building case
study approach using data collected from ten organizations. Because organizations are embedded in their
respective tiers, our within-tier analyses are equivalent to cross-organization analyses. In this regard, the
cross-case analyses occur at two different levels: at each tier level (i.e. across multiple hospitals, multiple distributors and multiple manufacturers) and across the supply chain (i.e. across all three tiers).
The study shows how different institutional pressures such as coercive, mimetic, and normative manifest
across the tiers. It also demonstrates how a differential mix of endogenous and institutional pressures
lead to mixed organizational responses across the tiers. The propositions developed from the study
enrich institutional theory arguments within the information systems and supply chain management
disciplines. They highlight how the IOS implementation dynamics within and across different tiers in a
supply chain result in heterogeneous rather than isomorphic consequences, thereby exposing the iron
cage of institutionalization.
Published by Elsevier B.V.
1. Introduction
Information systems (IS) scholars have recognized that institutional mechanisms play a key role in inuencing the adoption and
subsequent implementation of technology (Bala and Venkatesh,
2007; Son and Benbasat, 2007; Teo et al., 2003). They have
opened the doors for investigating how organizations respond to
institutional pressures and whether these pressures continue to
perpetuate isomorphism (DiMaggio and Powell, 1983) thereby
creating iron cages. In response, some scholars have started to
question the purported ubiquity of isomorphism by pointing out
how the intensity of institutional pressures varies and individual organizations have an internal technical environment that
would respond differently (Greenwood et al., 2008; Souitaris et al.,
2012). Consequently, the conversations among institutional theorists and IS scholars have converged toward acknowledging
heterogeneityorganizations adopt heterogeneous structures and
practices in response to the presence of competing institutional
logics within their eld (Bala and Venkatesh, 2007; Bunduchi et al.,
2008; Dacin et al., 2002).
We intend to extend this line of reasoning by empirically
examining the implementation of inter-organization systems (IOS)
across three tiers of the healthcare supply chain. The goal is to
provide a better understanding of heterogeneity. IOS provides the
technology-based infrastructure that acts as a conduit for facilitating transactions, sharing information with trading partners,
co-ordinating activities and establishing governance structures
between rms. Because IOS requires commitment from trading
partners to share resources and align processes, the issues of
relational exchanges and co-ordination have gained currency in
the IS literature (Grover and Saeed, 2007; Saeed et al., 2011).
In our study, we focus on IOS that facilitate exchange of information with trading partners such as suppliers, customers, and
distributors using the internet or other digital technologies. Examples of such systems include enterprise resource planning (ERP)
systems, bar-coding, electronic data interchange and other similar technologies (Choudhury, 1997; Saeed et al., 2011). It is
through this information exchange mechanism that organizations
are no longer saddled in iron cages (DiMaggio and Powell,
1983).
We collect data from organizations that operate in the healthcare industry that face a strong institutional environment through
various regulatory agencies (Ruef and Scott, 1998). The IOS implementations in this industry have occurred largely in response to
government mandates and pressures from trading partners. These
mandates have met with varying degrees of successes and failures (Bhakoo and Chan, 2011; Blumenthal, 2011; Ford et al., 2008;
More and McGrath, 2002). Given the different types of services
provided across the supply chain and severity of consequences
associated with failures, the healthcare industry provides a unique
and challenging service operations context, particularly when
implementing IOS and investigating heterogeneous organizational
consequences (Shah, 2004; Venkatesh et al., 2011). Naturally, scholars have called for technology adoption issues to be thoroughly
investigated within the healthcare supply chain (Chopra et al.,
2004; Jarrett, 2006; Venkatesh, 2006).
We respond to this call and investigate how organizations across
a healthcare supply chain respond heterogeneously to institutional
pressures and identify organizational conditions under which IOS
implementations can be successful. Further, studying across the
three tiers in the supply chain will provide a theoretically richer
understanding of heterogeneity and the underlying reasons for it.
Scholars who subscribe to the institutional school propose that
organizations respond to demands of their external stakeholders
(i.e. government and trading partners) that promote IOS implementations in order to acquire legitimacy and goodwill within their
institutional environment (Barratt and Choi, 2007; Lai et al., 2006;
Teo et al., 2003).
To take this body of literature to the next level, we need to
address several unresolved issues that provoke a deeper understanding of institutional theory within an IOS context. First, an
institutional rationale would argue that when the catalyst for technological implementations is purely in response to the regulatory
climate and pressure from external constituents, then the organization is most likely to implement IOS largely in a ceremonial
way (Kostova and Roth, 2002; Meyer and Rowan, 1977). However, some other scholars within the institutional school argue that
institutional legitimization of practices may promote a culture of
efciency within organizations (Kennedy and Fiss, 2009; North,
1990). Therefore, we ask, if technology is implemented due to institutional pressures, then under what conditions is the organization
able to translate such changes and make a real impact on operations? Such operations are what some institutional theorists (i.e.
Meyer and Rowan, 1977) have called technical core where actual
value-adding activities occur such as actual patient care.
Second, we must note that organizations in different industries would respond differently to the institutional pressures to
implement IOS. This is largely because they have their own, unique
set of norms, business practices and administrative complexities (DiMaggio, 1991; Hoffman, 1999; Scott, 2008). Therefore, by
extension, organizations at different tiers in a supply chain may perceive institutional pressures differently. The crucial question then
becomes how an organizations internal responses to implement
IOS may vary across the supply chain. This would have implications
for the managers in organizations across the supply chain and policy makers at the government or professional organizations that set
operational standards (Ruef and Scott, 1998; Scott, 2008).
Third, IS scholars are cognizant of the fact that the decision
to implement IOS occurs in response to both, the broader institutional environment where an organization confronts external
pressures (Gosain, 2004; Teo et al., 2003) and the internal organizational environment (Bharadwaj, 2000). For instance, Teo et al.
(2003) employed institutional theory to study the inuence of
DiMaggio and Powells (1983) three institutional pressures (coercive, mimetic, and normative) on IOS adoption. Their study focused
on intentions to adopt and left open (for future research) the
433
434
435
2008; Ludwick and Doucette, 2009; Vogus et al., 2010; Yasnoff et al.,
2004).
2.3. Decoupling as organizational response to institutional
pressures
In one of the early contributions to neo-institutional theory,
Meyer and Rowan (1977) argue that when organizations adopt formal programs, policies and procedures to conform to institutional
demands, they may decouple these formal prescriptive structures
from actual practices. This decoupling occurs because, on one hand,
an organization is attempting to acquire legitimacy to meet the
demands of its institutional stakeholders but, on the other, it is
constrained by the local circumstances, access to resources and the
requisite expertise at the technical core (Boxenbaum and Jonsson,
2008). Therefore, there is a disconnection between what happens
inside the technical core of the organization and the changes that
are made, often cosmetically, at the administrative level in response
to these institutional pressures.
Scholars from different disciplines such as organization studies
(OS), operations management (OM) and IS have all addressed these
issues. The OS scholars have provided illustrations where organizations may introduce stock buyback plans or long-term incentive
plans due to institutional pressures but implement them in a
limited fashion or not at all (Westphal and Zajac, 2001). Meyer and
Rowan (1978) illustrate how schools adopt standards in response to
government regulation but decouple them from class room instruction. Similarly, Delucchi (2000) discusses the disconnect between
the claims of the mission statement and the actual baccalaureate
degrees in liberal arts colleges.
Within the OM context, examples of decoupling have been
documented across topics such as implementation of quality initiatives (Boiral, 2003; Choi and Eboch, 1998), supplier development
programs (Choi and Wasti, 1995; Rogers et al., 2007) and implementation of RFID technology (Barratt and Choi, 2007). When a
supplier implements TQM practices in response to a buyer mandate it may develop extensive documentation manuals which are
often overlooked (Boiral, 2003). Similarly, an organization adopts
436
3. Methodology
By investigating how organizations in each tier in the supply chain respond to institutional and endogenous pressures, we
intend to develop an in-depth understanding of how heterogeneity unfolds across the different tiers of the supply chain. Since
the nature of the research question is exploratory and involves
investigating a contextually-rich phenomenon, we use an inductive
case study approach (Eisenhardt and Graebner, 2007; Meredith,
1998; Yin, 2003). Conducting case studies for theory building
purposes through an inductive analysis of the data has been
endorsed by scholars within the OM and IS disciplines (Barratt
et al., 2011; Benbasat et al., 1987; Meredith, 1998). Typically, an
inductive case study involves several within-case analyses and
then cross-case analysis (Miles and Huberman, 1994; Yin, 2003).
We use the same approach but with a minor variation. As organizations are nested within each tier and three tiers together
constitute a supply chain, our within-tier analyses would be what
is commonly called a cross-case analysis with organization as
the unit of analysis. We call our approach a nested case study
design and will discuss it in more detail below (see data analysis
section).
3.1. Sampling
As we investigate the effects across the supply chain and not
the effects across different supply chains, we focus on one industry
in order to minimize the extraneous effects. We chose healthcare because it is known to have a strong institutional eld (Scott,
2008). The healthcare sector is subject to strong regulation and it
is likely to have different pressures for technology implementation from inside and outside the organization (Greenhalgh et al.,
2004). We picked a three-tier supply chain. We wanted more than
a two-tier supply chain that would simply constitute a buyer and
a supplier, but did not want a very long and complex supply chain.
A well-known three-tier supply chain in healthcare would be a
manufacturerdistributorhospital supply chain. We also wanted
to control for product variance and therefore chose to focus on
pharmaceutical products as these products face a strong regulatory
environment and are sensitive to the adoption of IOS. For instance,
these products are mandated to have bar-coding for sale, both over
the counter and in retail outlets so they can be used to track products throughout the supply chain.
A variety of IOS were implemented in the case study sites but we
focused on Type 3c according to Swansons (1994) Tri Core Model of
IS innovations. These innovations are inter-organizational systems
that enable the provision of products and services by facilitating
the interface between the host organizations and trading partners
such as suppliers, distributors or customers (Grover et al., 1997;
Swanson, 1994). The data collected pertained to the IOS that have
the ability to interface with trading partners in the supply chain
such as EDI, bar-coding and ERP systems.
3.2. Data collection
The data were collected from organizations in Australia, where
the manufacturerdistributorhospital supply chain has a strong
presence. For instance, in the US this supply chain is being
challenged by many hospitals starting their own distribution centers (Scheller and Smeltzer, 2006). Data collection occurred from
February 2007 to July 2008. An initial focus group was held with
experts within the healthcare domain to provide input into the
interview protocol and identify potential organizations that could
be included for this study. The focus group helped identify organizations where a decision to adopt an IOS had been taken and the
users were in the process of developing new procedures, processes
437
Table 1
Overview of organization proles.
Organization type
Head quarters
Annual turnover
(world wide)
Employees
(world wide)
Types of products
Number of
informants
Manufacturer A
Australia
A$687 million
1600
Oncology
Manufacturer B
USA
US$20.9 billion
44,000
Intravenous
Solutions IV Fluids
Manufacturer C
USA
US$9.8 billion
47,000
Cardiovascular
Oncology
Neuroscience
Distributor A
Australia
A$3.4 billion
6000
Distributor B
Australia
A$1.3 billion
300
Hospital A
Australia
A$1.1 billion
13,000
Pharmaceutical
Products
Hospital B
Australia
A$700 million
8000
Pharmaceutical
Products
Hospital C
Australia
A$700 million
7000
Pharmaceutical
Products
Hospital D
Australia
A$55 million
900
Pharmaceutical
Products
Hospital E
Australia
A$110 million
600
Pharmaceutical
Products
3
4
438
Table 2
Description of coding categories.
Description
Coding category
Instances where interviewees discussed regulatory, compliance or mandating issues as drivers for technology implementation
Instances where interviewees discussed the drivers for implementing technology in response to compliance pressures from
the parent corporation
Instances where interviewees discussed the drive for technology implementation being generated through pressure from
suppliers, customers, government etc.
Instances where interviewees discussed the role of professional bodies, trade and industry forums as drivers for technology
implementation. This was perpetuated by adoption of these standards becoming an industry norm
Instances where interviewees mentioned copying/imitating their peers or competitors in the industry as drivers for
technology implementation
Instances where interviewees mentioned issues such as reducing manual errors, improve inventory management and other
operational efciencies as drivers for implementing technology
Instances where interviewees mentioned improving nances, cash ow and improving the quality of time spent by the
physicians on their clinical tasks as drivers for implementing technology
Instances where interviewees mentioned implementing technology for quality of care and patient safety purposes
Instances where interviewees mentioned how purely ceremonial changes made due to institutional pressures had taken root
and led to real changes in the technical core of the organization
Instances where interviewees reported real changes taking place in their organization such as improvement in processes,
performance measures and strategic approaches for improving relationship with trading partners
Instances where interviewees reported making cosmetic changes in response to the institutional pressures such as creating a
new role in the organization, forming a committee, documenting procedures but not following them
Coercivepressures
Normative pressures
Mimetic pressures
Efciency
Resources
Safety
Internalization
Technical core
Administrative level
Table 3a
Institutional, endogenous pressures and organizational responses by hospitals.
Hospital A
Hospital B
Hospital C
Hospital D
Hospital E
Institutional
pressure
Endogenous
pressure
Organization
response
n, M
C, n, m
n, m
n, M
n, m
S, E, I
s, e, r, i
s, e, r
S, E, r, I
s, E, i
T
A
a, t
a, T
a, T
a, weak administrative response; A, strong administrative response; c, weak coercive pressure; C, strong coercive pressure; i, weak internalization pressure; e, weak
efciency pressure; E, strong efciency pressure; n, weak normative pressure; N,
strong normative pressure; m, weak mimetic pressure; M, strong mimetic pressure;
I, strong internalization pressure; r, weak resource pressure; R, strong resource pressure; s, weak safety pressure; S, strong safety pressure; t, weak response at technical
core; and T, strong response at technical core.
439
Table 3b
Illustration of coded data for hospitals.
Hospital A
Institutional
n
M
Endogenous
E
I
Organization Response
We are now becoming more conscious that the industry around us have embraced e-commerce systems particularly
the wholesalers and we have to keep up
. . .it was actually following a visit to the Coles Myer (a large Australian grocery chain) warehouse where they have an
extensive e-commerce system, that it red up our imagination to look at developing similar systems within the health
sector and we employed a consultant to have a look at our procurement and distribution systems
Our main concern with implementing technology is patient safety as we have to make sure that we have adequate
supply of the drugs and then distribute them to the wards accordingly as not having the right drug can prove fatal in
our line of business
. . .thats why e-commerce has been excellent from the point of view of monitoring our usage patterns, how much we
are purchasing and reducing manual errors. This issue is of prime importance for us
We monitor the stock that is three months from expiry, one month from expiry, and actually Ill show you some
documents. So thats our KPI internally within the pharmacy department. We have also implemented these KPIs
amongst our other satellite hospitals. And similarly we maintain that within the wards. This is signicantly more than
what is expected of us by the director of nance (actual documents as evidence were provided to the researcher)
. . .and I suppose the main thing that came out of the Phase 1 of the Monash Project was actually to do the electronic
ordering but we would also get information such as the shipping notication and by scanning the bar code on the
carton and sending the acknowledgment receipt reduced manual checking and improved our service levels in some
cases even up to 50%
Hospital B
Institutional
n
m
Endogenous
s
e
r
i
Organization Response
We were the rst hospital chosen by the state government to implement the Oracle based ERP system and given an
inexible deadline of the 2nd of May so we had to go live in order to comply and since we are publicly funded we had
no choice. . .
The key drivers, as I think you would have mentioned it, the industries around us, the supermarkets and the like and
hiring people from these industries particularly in the IT domain is also catching up
If someone came to one of our meetings tomorrow and said, this new system is up and running and we implemented
it, and by doing so has saved us a million bucks, so the very next day we would all be ringing up trying to get it
implemented, but no one has actually done that yet. . .
More or less every single product that we have is bar-coded, predominantly for patient safety, although it works very
well for procurement
And also if I have a good way of procuring drugs and if I can have the assurance that when I order a drug, its going to
come in a timely fashion, it means that I dont have to carry as much inventory
I am interested in the productivity of my staff and also ensuring that clinical staff are not wasting their time in
entering data
Of course we have KPIs (Key Performance Indicators) that we require for the auditors but I like them to be
automatically derived, and then you can use them effectively. If your measurement system is based entirely on
reporting requirements then its not a good measurement system. Weve spent quite a lot of time over the past year in
trying to build up a suite of indicators that allows us to only measure stuff that we nd useful. We are rening our
system so that we are able to collect that automatically. Were not there yet, but weve made signicant steps forward
Last year, we brought on a clinical products advisor and he evaluated all the products and then the whole process
went through a product evaluation committee and they made recommendations. However, that was a waste of time
as we are not using the (ERP) system; although we have met the government deadline. . .It has actually made us go
backwards. We are still running the department but everything is being done manually as there are lives at stake
here. . .
Hospital C
Institutional
n
m
Endogenous
Organization Response
r
a
Setting up of state tendering bodies require us to use electronic trading platforms and that is becoming more of an
accepted norm
We are waiting and watching what is going on in Hospital A and if they are able to demonstrate a saving then we will
jump on the band wagon
So I think theres a lot of reluctance in people to perhaps launch into these products until they can be shown
denitively that these products are workable, reliable, and robust and dont leave us at risk, and by us, I mean our
patients at risk
Our system continues to evolve, such that the tracking is better, the data capture is better, the analysis is better. The
range of products that we can barcode and capture now is wider. The ability for hospitals and distributors to use the
commerce as part of this arrangement is much better
I actually think a lot of it is nancial (driver for technology) as we have limited budgets
We have established two teams as a part of our response to the reporting requirements. The rst team was the
purchasing and IT team and the second team was managing the change management process. This group was
communicating to hospital managers, to divisional and clinical staff, doctors and ward staff and ward clerks about
what was going on
I guess the main thing that has come out of the EDI system has been training our inventory management staff and
technical people on how to use the system properly and how to manage the inventory system properly. They can
conrm orders, make sure that the bar coding is done accurately, and picking slips and so forth are done correctly.
This has led to small savings
Hospital D
Institutional
n
M
Society for Hospital Pharmacists of Australia (SHPA) is a professional society and they have special interest groups of
other specialties putting up guidelines for performance in specialist hospitals such as ours
We have moved over to Merlin (software system) that Hospital A was using as we believe it is an efcient way to
transact with the distributors
440
Table 3b (continued )
Hospital D
Endogenous
S
E
Organization response
a
T
. . .but of course theres always the risk that youre not going to have the right product when youve got the patient on
the operating table and thats, you know, thats a major risk
To reduce the errors involved in the former manual and paper based ordering process, and these orders that in turn tie
back into our inventory controls, because through the barcode scanning of the product or the dispensing labels ties
back into the movement of stock out of our inventory
The original push for the computerization of the inventory system was a nance one, and that was driven by the
auditors. I did read the auditors report, but they felt it was a nancial control point of view and was driven by
reducing the pilferage in medicines
We have introduced a series of changes beyond what the auditors want us to doso have linked the med station to
Merlin, which is effectively linking dispensing activities to procurement and we have also entered into a vendor
managed inventory for some product lines with a distributor which has helped reducing inventory further
The nance people are always demanding paper and therefore we have employed extra people who can generate
manual documents particularly for this purpose
We have actually reduced the physical stock in the hospital by $70,000, and were working on reducing that down. So
we used to be $350,000$380,000, and were working on this year reducing it by another $30,000$40,000. Now, that
has occurred because of implementation of technology
Hospital E
Institutional
Endogenous
m
S
E
r
i
Organization response
We have to use electronic systems as the government wants us to purchase from specic suppliers who have won the
contracts
We are also looking at the option of getting in consultants who have worked in the retail sector
You have to remember that you are working with patient and you dont want to put expired stock into people,
especially prosthetics or wrong drugs or you run the risk of getting sued!
Waste elimination, error elimination. I could go on forever. Back orders and reverse logistics coming out of the system
are critical benets of using IS systems with distributors. The other thing is that it enables us to get the units of the
measure right so that you do not end up with container full of goods and you actually only want the boxes full and
vice versa
We have also been able to increase the productivity of the clinical staff that makes the senior management very happy
Of course we have to meet the requirements, but the primary reason we are doing it (using e-business systems)
particularly with functional items, to speed up the delivery time, because we need that rapid response which is really
critical in a regional community
There is a lot of duplication happening when we maintain records for the government agencies and also to conform to
reporting requirements in the hospital and this is increasing with new guidelines being set by National e-health
transition authority (NEHTA)
Since we have utilized the system, they (staff in the pharmacy department) now get a printed sheet which tells them
the numbers and the location as well as where to get it and what to pick and the correct units of measure. Therefore
by doing it electronically you eliminate people keying in data and we have decreased the inventory holding by 20%
which is signicant for us
that implementing IOS had enabled using clinical staff time (a very
expensive resource) more effectively in the hospital. These issues
were raised by the interviewees in response to senior management
seeking more transparency in budget spends across the different
departments. Finally, since this study was conducted within the
healthcare domain each organization had to comply with its internal regulatory regime along with the pressures at the eld level. We
identied a very interesting internal driver called internalization,
which essentially implied the extent to which organizations were
able to channel the regulatory pressures both externally and internally to implement technology beyond ceremonial conformity.
Hospitals A and D demonstrated strong internalization, as each of
these hospitals were monitoring their key performance measures
on a rolling basis and beyond what the internal benchmarks were
set by the senior management in the hospital. The Director of Pharmacy at Hospital A made a comment that highlighted this intrinsic
driver even though we have preferred suppliers that are endorsed
by the state contracting body we like to compare prices through on
line catalogs and develop relationships with specic manufacturers
to supply directly in order to save the hospital money. Hospital B
and E reported weak internalization as they made a fairly restrained
effort to go beyond the regulatory regime of the hospital. Hospital
B admitted that they were modifying their KPIs (Key Performance
Indicators) but there was considerable room for improvement. Similarly Hospital E also illustrated that even though they had staff
manually keying in orders, they had changed some roles to train
other staff and increase their productivity.
Organization responses occur at the administrative level and
technical core. As discussed in the literature review, institutional
pressures lead to a response at the administrative level, whereas the
441
442
Table 4a
Institutional, endogenous pressures and organizational responses by distributors.
Distributor A
Distributor B
Institutional pressure
Endogenous pressure
Organizational response
c, N
c, n
E, r, i
e, R
a, T
A, t
a, weak administrative response; A, strong administrative response; c, weak coercive pressure; i, weak Internalization pressure; e, weak efciency pressure; E, strong efciency
pressure; n, weak normative pressure; N, strong normative pressure; r, weak resource pressure; R, strong resource pressure; t, weak response at technical core; and T, strong
response at technical core.
Table 4b
Illustration of coded data for distributors.
Distributor A
Institutional
c
N
Endogenous
r
i
Organization response
a
T
The setting up of this new regulatory agency is having an impact as the government is saying go and populate the
national product catalogue and this voice is getting stronger
All off a sudden, we are not pushing, we are the ones being pushed by our trading partners and organizations such as
the Australian Defense Force and now were being pushed into what they want rather than what we have, so there is
this sudden turnaround. . .
One of the biggest drivers for us was that we dont want people sitting there taking orders over the phone, we want
them (our customers) to navigate our system electronically, when it comes down to it, that is the single and biggest
driver. Add on to that the fact that there is an inherent error rate that comes with a team of customer service people
taking orders over the phone. You embrace electronic EDI and the problem is sorted
Smoothing our payment ows have been a big advantage
You are getting more of the business involved in IT folk rather than just IT involved with IT the personnel. So I think
that it is signicant in what is changing throughout the business
We have established a committee to monitor the progress on the NEHTA health care projects
We were actually doing that vendor supply management with two hospitals, one in Victoria and other in Tasmania
with the objective of expanding and generating signicant revenue from this exercise. . .
Distributor B
Institutional
c
n
Endogenous
e
R
Organization response
The NEHTA initiative by the central government is certainly putting pressure on us and this will intensity as they set a
date for compliance
Having electronic procurement systems are becoming standard practices in our industry and if we do not have them
in place we stand to lose customers. . .
We are looking at options to increase our order accuracy
Everyone is trying to reduce cost and make things more accurate. . . We are attempting to reduce the man hours spent
chasing products so whatever we can do to improve the supply chain and this improves our cash ow which is really
important to us
My role (CIO) is a new one that the organization has created so that we can comply with the government pressures
and also to reduce staff. . . Besides there are a number of committees that have been instituted throughout the
organization looking at IT issues
We have trailed a ward box delivery system to the hospitals with the new scanning technology that we have
implemented
Manufacturer A
Manufacturer B
Manufacturer C
Institutional
pressure
Endogenous
pressure
Organizational
response
c, n
c
c, N
e, R, s, i
E, r, i
e, R
t
a, T
A, t
a, weak administrative response; A, strong administrative response; c, weak coercive pressure; e, weak efciency pressure; E, strong efciency pressure; n, weak
normative pressure; N, strong normative pressure; r, weak resource pressure; R,
strong resource pressure; s, weak safety pressure; t, weak response at technical
core; T, strong response at technical core; and i, weak internalization pressure.
443
Table 5b
Illustration of coded data for manufacturers.
Manufacturer A
Institutional
Endogenous
n
e
R
s
i
Organization response
This is a turning point for the industry as the government is mandating that we populate the national product
catalogue
We are being pressurized by our customers i.e. hospitals to adopt e-commerce systems
For us, it is manufacturing efciency, customer service and inventory is the basic step in that principle and we are
looking at getting that down. . .
The biggest benet that an organization gets out of it is the benet of faster cash ow and working capital and that is
the biggest opportunities for the pharmaceutical sector overall
Incorrect bar coding in the grocery industry would make a customer angry whereas in our industry there is no other
recourse and it could prove fatal so you cannot let it go out into the market place
Our KPIs are rolling as far as we put something in place till it is working and then drop it and go on to the next one.
This is reviewed every quarter and if not valid as technology changes then we get rid of them
When we talk about our suppliers relationships we have halved our lead times for some global products and got the
inventories down
Manfucturer B
Institutional
Endogenous
c
E
r
i
Organization response
We have to gain compliance in the marketplace with the ongoing regulatory changes in the technology domain
Error reduction is a signicant driver if we can get the correct order with the correct prices for the correct item with
the correct unit measure and get that aligned with the system then right throughout the supply chain we are going to
get benets from that. This means we are not going to be picking the wrong stock and therefore not get a pile of
customer returns
Access to nances is an issue within our organization as our customers are reluctant to contribute to the building or
investing in a system so we have to completely rely on our deep pockets for funding any project
We are required to have a bar code on a product as we are selling our product over the counter; however we are
scanning the EAN 128 (bar code standard) on the carton even though the customers are not asking us to do that at the
moment
With all the scrutiny with anything that touches the nances we have to be extra careful so in some processes we
have added extra steps so some things that used to take two minutes now take two hours! This is particularly with
our ERP system
We are one of the only manufacturers that has implemented RFID technology internally for warehouse management
purposes and discussing how it can be applied across the broader supply chain particularly with the hospitals since
we distribute directly to them. I can also show you how we improved our KPIs (actual documents were handed to the
researcher)
Manfucturer C
Institutional
c
N
Endogenous
e
R
Organization response
Our organization (here in Australia) is under pressure from its head quarters to implement a supply chain planning
system and also the drive with the current NEHTA initiative
As more and more government puts pressure from top and customers from underneath we are having to re-think our
IT strategy but without our customers asking us for this we would have taken an even longer time. . .
In the event of a stock recall, if all of our distributors have scanned what comes in, theyve got an electronic record of
whats in and where it is, and so they can go straight to it without opening any boxes
. . .but there is also signicant costs incurred in changing over to that electronic inventory management, and at the
moment for us, from what I understand, our senior management is not really concerned about switching over and
spending the money to change the inventory management system
There is a lot of re-structuring going on and my role was created just 18 months ago because of all these regulatory
changes . . .none of our current ow of products imported or manufactured here is followed electronically. Although
we have created the documentation for some systems but we dont really follow it
We have implemented one system that interfaces between our key supplier and us and that has happened due to the
project initiated by Hospital A
444
chain. Some are ubiquitous and some appear more isolated. The
ubiquity of normative pressures could be attributed to two reasons.
First, professional and government bodies are being proactive in
instilling norms across the supply chain in the context of IOS implementation (Bala and Venkatesh, 2007). Further, the strong network
ties that exist within this industry are accelerating the diffusion
of these norms among the players operating within the industry.
Second, the quest for acquiring legitimacy is a rather compelling
concern within the healthcare domain specically among the distributors and manufacturers that are being driven by the hospitals.
As hospitals were the bulk buyers for pharmaceutical products they
were able to exercise stronger normative pressures for the implementation of IOS projects.
This is consistent with Bala and Venkatesh (2007) who have
also identied normative pressures exerted by dominant trading
partners as playing a key role in accelerating implementation of
IOS. Resource investments by the hospitals trading partners in
such projects would indirectly enhance their process alignment
and develop capabilities regarding information sharing thereby
improving their efciency and lead to tighter relationship with the
buying rm (Rai et al., 2006; Klein and Rai, 2009; Rai and Tang,
2010).
The coercive pressures more prevalent in the upstream of the
supply chain could be due to the governments perception of the
upstream players as a bottleneck for supply chain integration. Since
the full benets of IOS can be realized through investments in such
systems beginning with the manufacturers in the upstream of the
supply chain, it is likely that governments are building regulatory
pressures for favorable implementations of IOS applications there
(Patyakuni et al., 2006; Rai and Tang, 2010).
In terms of mimetic pressures, our study found that mimicking
was more visible downstream, with public hospitals mimicking each other. This nding may appear puzzling to institutional
theorists, as institutional theory has become synonymous with
mimetic isomorphism, specically, among competing organizations (Mizruchi and Fein, 1999; Tingling and Parent, 2002). What
we found is that these hospitals tend to be non-competitive and are
open to sharing information regarding the efciencies achieved by
implementing IOS. The practice of benchmarking was quite prevalent, and this observation provides a plausible reason for mimetic
behavior among public hospitals. They benchmark or mimic the
leading players in the eld so that they could reach out to other
progressive hospitals that operate within the same environment
(Venkatesh and Bala, 2012). Because hospitals have limited experience in implementing IOS, they wanted to reach out to their peers
so that they could receive adequate training and advice to implement these systems (Fichman et al., 2011). A plausible reason why
upstream pharmaceutical manufacturers did not exhibit mimetic
behavior might be due to the secrecy and patents surrounding the
pharmaceutical industry (Shah, 2004).
Among the endogenous organizational drivers, three key factors warrant discussion so that we are able to develop cogent
understanding of heterogeneity. First, issues of resource rigidity seemed to be playing a key role in the implementation of
IOS with the upstream section of the supply chain (Bala and
Venkatesh, 2007; Gilbert, 2005). The dominance of the resource
concerns can be explained largely due to shortening of patent lives
for the pharmaceutical manufacturers (Shah, 2004) and by the
intense competition among the distributors for very slim margins.
Resource concerns, however, did not dominate the public hospitals
at the downstream end of the supply chain. The second issue that
was rather alarming was the absence of patient safety concerns
upstream in the supply chain. On the one hand, it is not surprising that our study has echoed what other IS researchers have been
suggesting as reducing medical errors is a key priority in healthcare as they are expensive, increase the length of stay of patients
445
446
447
448
Boiral, O., 2003. ISO 9000: outside the iron cage. Organization Science 14, 720737.
Boudreau, M.-C., Robey, D., 2005. Enacting integrated information technology: a
human agency perspective. Organization Science 16, 318.
Boxenbaum, E., Jonsson, S., 2008. Isomorphism, diffusion and decoupling. In: Greenwood, R.C., Oliver, K., Sahlin, Suddaby, R. (Eds.), Handbook of Organizational
Institutionalism. Sage, New York, pp. 7898.
Bunduchi, R., Graham, I., Smart, A., Williams, R., 2008. Homogeneity and hetrogeneity in information technology private standard setting the institutional
account. Technology Analysis & Strategic Management 20, 389407.
Chamaz, K., 2006. Constructing Grounded Theory: A Practical Guide Through Qualitative Analysis. Sage, Thousand Oaks, CA.
Chaudhry, B., Jerome, W., Shinyi, W., Maglione, M., Mojica, W., Roth, E., Morton, S.C.,
Shekelle, P.G., 2006. Systematic review: impact of health information technology
on quality, efciency, and costs of medical care. Annals of Internal Medicine 144,
E12W18.
Choi, T., Wasti, S., 1995. Institutional pressures and organizational learning: The
case of American-owned automotive-parts suppliers and Japanese shop-oor
production methods. In: Liker, J., Ettlie, J., Campbell, J. (Eds.), Engineered in Japan:
Japanese Technology Management Practices. Oxford University Press, New York.
Choi, T.Y., Eboch, K., 1998. The TQM paradox: relations among TQM practices, plant
performance and customer satisfaction. Journal of Operations Management 17,
5975.
Chopra, S., Lovejoy, W., Yano, C., 2004. Five decades of operations management and
the prospects ahead. Management Science 50, 814.
Choudhury, V., 1997. Strategic choices in the development of interorganizational
systems. Information Systems Research 8, 124.
Cooper, R.B., Zmud, R.W., 1990. Information technology implementation research:
a technological diffusion approach. Management Science 36, 123139.
Dacin, M.T., Goodstein, J., Scott, W.R., 2002. Institutional theory and institutional
change: introduction to the special research forum. Academy of Management
Journal 45, 4356.
Deephouse, D.L., 1996. Does Isomorphism legitimate? Academy of Management
Journal 39, 10241039.
Delucchi, M., 2000. Staking a claim: the decoupling of liberal arts mission statement
from Baccalaureate degrees awarded in higher education. Sociological Inquiry
70, 157171.
Devaraj, S., Kohli, R., 2003. Performance impacts of information technology: is actual
usage the missing link? Management Science, 273289.
DiMaggio, P.J., 1991. Constructing an organizational eld as a professional project:
US art museums, 1920-1940. In: DiMaggio, P., Powell, W.W. (Eds.), The New
Institutionalism in Organizational Analysis. University of Chicago Press, Chicago,
pp. 267292.
DiMaggio, P.J., Powell, W.W., 1983. The iron cage revisited: institutional isomorphism and collective rationality in organizational elds. American Sociological
Review 48, 147160.
Dutton, J., Dukerich, J., 1991. Keeping an eye on the mirror: image and identity in
organizational adaptation. Academy of Management Journal 34, 517554.
Eisenhardt, K.M., 1989. Building theories from case study research. Academy of
Management Review 14, 532550.
Eisenhardt, K.M., Graebner, M.E., 2007. Theory building from cases: opportunities
and challenges. Academy of Management Journal 50, 2532.
Ferneley, E.H., Sobreperez, P., 2006. Resist, comply or workaround? An examination of different facets of user engagement with information systems. European
Journal of Information Systems 15, 345356.
Fichman, R.G., Kohli, R., Krishnan, R., 2011. The role of information systems in healthcare: current research and future trends. Information Systems Research 22,
419428.
Ford, E., McAlearney, A.S., Phillips, M.T., Menachemi, N., 2008. Predicting computerized physician order entry system adoption in US hospitals: can federal mandate
be met? International Journal of Medical Informatics 77, 539545.
Frohlich, M.T., Westbrook, R., 2002. Demand chain management in manufacturing and services: web-based integration, drivers and performance. Journal of
Operations Management 20, 729745.
Gilbert, C., 2005. Unbundling the structure of inertia: resource versus routine rigidity. Academy of Management Journal 48, 741763.
Glaser, B.G., Strauss, A.L., 1967. The Discovery of Grounded Theory: Strategies for
Qualitative Research. Adline Publishing Company, New York.
Goh, J.M., Gao, G., Agarwal, R., 2011. Evolving work routines: adaptive routinization of information technology in healthcare. Information Systems Research 22,
565585.
Gosain, S., 2004. Enterprise information systems as objects and carriers of institutional forces: the new iron cage? Journal of the Association for Information
Systems 5, 151182.
Greenhalgh, T., Robert, G., Macfarlane, F., Bate, P., Kyriakidou, O., 2004. Diffusion of
innovations in service organizations: systematic review and recommendations.
Milbank Quarterly 82, 581629.
Greenwood, R., Oliver, C., Sahlin, K., Suddaby, R., 2008. Introduction, The Sage Handbook of Organizational Institutionalism. Sage, London, pp. 146.
Grover, V., Fiedler, K., Teng, J., 1997. Emprical evidence on Swansons Tri-Core model
of information systems innovation. Information Systems Research 18, 273287.
Grover, V., Saeed, K.A., 2007. The impact of product, market, and relationship characteristics on interorganizational system integration in manufacturersupplier
dyads. Journal of Management Information Systems 23, 185216.
Halbesleben, J.R.B., Wakeeld, D.S., Wakeeld, B.J., 2008. Work-arounds in health
care settings: literature review and research agenda. Health Care Management
Review 33, 212.
Hardy, C., Maguire, S., 2010. Discourse, eld-conguring events, and change in
organizations and institutional elds: Narratives of DDT and the Stockholm
convention. Academy of Management Journal 53, 13651392.
Haunschild, P.R., Miner, A.S., 1997. Modes of interorganizational imitation: the
effects of outcome salience and uncertainty. Administrative Science Quarterly
42, 472500.
Heugens, P.P.M.A.R., Lander, M.W., 2009. Structure! Agency! (And other quarrels): a
meta-analysis of institutional theories of organization. Academy of Management
Journal 52, 6185.
Hoffman, A.J., 1999. Institutional evolution and change: environmentalism and the
U.S. chemical industry. Academy of Management Journal 42, 351371.
Iacovou, C.L., Benbasat, I., Dexter, A.S., 1995. Electronic data interchange and small
organizations: adoption and impact of technology. MIS Quarterly, 465485.
Jarrett, P.G., 2006. An analysis of international health care logistics: the benets and
implications of implementing just-in-time systems in the health care industry.
Leadership in Health Services 19, 110.
John, C.H., Cannon, A.R., Pouder, R.W., 2001. Change drivers in the new millennium: implications for manufacturing strategy research. Journal of Operations
Management 19, 143160.
Kennedy, M.T., Fiss, P.C., 2009. Institutionalization, Framing, and Diffusion: the logic
of TQM adoption and implementation decisions among US hospitals. Academy
of Management Journal 52, 897918.
Khalifa, M., Davison, M., 2006. SME adoption of IT: the case of electronic trading
systems. IEEE Transactions on Engineering Management 53, 275284.
Khoumbati, K., Themistocleous, M., Irani, Z., Mantzana, V., 2008. Information systems
and healthcare XXIV: factors affecting the EAI adoption in the healthcare sector.
Communications of AIS 2008, 87102.
Klein, R., Rai, A., 2009. Interrm strategic information ows in logistics supply chain
relationships. MIS Quarterly 33, 735762.
Kobayashi, M., Fussell, S.R., Xiao, Y., Seagull, J., 2005. Work Coordination, Workow,
and Workarounds in a medical context. CHI 2005, Portland, OR, USA.
Kostova, T., Roth, K., 2002. Adoption of organizational practice by subsidiaries
of multinational corporations: Institutional and relational effects. Academy of
Management Journal 45, 215233.
Kuan, K.K.Y., Chau, P.Y.K., 2001. A perception-based model for EDI adoption in small
businesses using a technology-organization-environment framework. Information & Management 38, 507521.
Lai, K., Wong, C.W.Y.h., Cheng, T.C.E., 2006. Institutional isomorphism and the adoption of information technology for supply chain management. Computers in
Industry 57, 9398.
Lapointe, L., Rivard, S., 2005. A multilevel model of resistance to information technology implementation. MIS Quarterly 29, 461491.
Leape, L.L., Berwick, D., 2005. Five years after to err is human what have we learned.
Journal of the American Medical Association 293, 23842390.
Liang, H., Saraf, N., Hu, Q., Xue, Y., 2007. Assimilation of enterprise systems: the
effect of institutional pressures and the mediating role of top management. MIS
Quarterly 31, 5987.
Liu, H., Ke, W., Wei, K.K., Gu, J., Chen, H., 2010. The role of institutional pressures and
organizational culture in the rms intention to adopt internet-enabled supply
chain management systems. Journal of Operations Management 28, 372384.
Ludwick, D., Doucette, J., 2009. Adopting electronic medical records in primary care:
lessons learned from health information systems implementation experience in
seven countries. International Journal of Medical Informatics 78, 2231.
Mahapatra, S.K., Narasimhan, R., Barbieri, P., 2010. Strategic interdependence, governance effectiveness and supplier performance: A dyadic case study investigation
and theory development. Journal of Operations Management 28, 537552.
Menachemi, N., Saunders, C., Chukmaitov, A., Matthews, M.C., Brooks, R.G., 2007.
Hospital adoption of information technologies and improved patient safety: a
study of 98 hospitals in Florida. Journal of Healthcare Management 52, 398410.
Meredith, J., 1998. Building operations management theory through case and eld
research. Journal of Operations Management 16, 441454.
Meyer, J.W., Rowan, B., 1977. Institutionalized organizations: formal structure as
myth and ceremony. American Journal of Sociology 83, 340363.
Meyer, J.W., Rowan, B., 1978. The structure of educational organizations. In: Ballantine, J.H., Spade, J.Z. (Eds.), Schools and Society: A Sociological Approach to
Education. Sage Publications, London, UK.
Miles, M.B., Huberman, M., 1994. Qualitative Data Analysis, 2nd ed. Sage Publications, London, UK.
Mizruchi, M.S., Fein, L.C., 1999. The social construction of organizational knowledge: a study of the uses of coercive, mimetic and normative isomorphism.
Administrative Science Quarterly 44, 653683.
More, E., McGrath, M., 2002. An Australian case in e-health communication and
change. Journal of Management Development 21, 621632.
Mukhopadhyay, T., Kekre, S., 2002. Strategic and operational benets of electronic integration in B2B procurement processes. Management Science 48,
13011313.
Mukhopadhyay, T., Kekre, S., Kalathur, S., 1995. Business value of information technology: a study of electronic data interchange. MIS Quarterly,
137156.
Munkvold, B., 1999. Challenges of IT implementation for supporting collaboration in
distributed organizations. European Journal of Information Systems 8, 260272.
North, D.C., 1990. Institutions, Institutional Change and Economic Performance.
Cambridge University Press, New York.
Orlikowski, W.J., Barley, S.R., 2001. Technology and Institutions: what can research
on information technology and research on organizations learn from each other?
MIS Quarterly 25, 145165.
449
Tilcsik, A., 2010. From ritual to reality: demography, ideology, and decoupling in
a post-communist government agency. Academy of Management Journal 53,
14741498.
Tingling, P., Parent, M., 2002. Mimetic isomorphism and technology adoption: does
imitation transcend judgement? Journal of the Association of Information Systems 3, 113143.
Venkatesh, V., 2006. Where to go from here? Thoughts on future directions for
research on individual-level technology adoption with a focus on decision making. Decision Sciences 37, 497518.
Venkatesh, V., Bala, H., 2012. Adoption and impacts of interorganizational business
process standards: role of partnering synergy. Information Systems Research,
127.
Venkatesh, V., Zhang, X., Sykes, T.A., 2011. Doctors do little technology: a longitudinal eld study of an electronic healthcare system implementation. Information
Systems Research 22, 523546.
Vogus, T.J., Sutcliffe, K.M., Weick, K.E., 2010. Doing no harm: enabling, enacting, and
elaborting a culture of safety in health care. Academy of Management Perspectives 24, 6077.
Weick, K.E., 1995. Sensemaking in Organizations. Thousand Oaks, CA.
Westphal, J.D., Zajac, E.J., 2001. Decoupling policy from practice: the case of stock
repurchase programs. Administrative Science Quarterly 46, 202228.
Williams, Z., Lueg, J.E., Taylor, R.D., Cook, R.L., 2009. Why all the changes? An institutional theory approach to exploring the drivers of supply chain securitry (SCS).
International Journal of Physical Distribution and Logistics Management 39,
595618.
Wu, Z., Choi, T.Y., 2005. Suppliersupplier relationships in buyersupplier triad:
building theories from eight case studies. Journal of Operations Management
24, 2752.
Yasnoff, W., Humphreys, B., Overhage, J., Detmer, D., Brennan, P., Morris, R., Middleton, B., Bates, D., Fanning, J., 2004. A consensus action agenda for achieving
the national health information infrastructure. Journal of the American Medical
Informatics Association 11, 332.
Yin, R.K., 2003. Case Study Research Design and Methods, 3rd ed. Sage Publications,
Thousand Oaks, CA.
Zhang, C., Dhaliwal, J., 2009. An investigation of resource-based and institutional
theoretic factors in technology adoption for operations and supply chain management. International Journal of Production Economics 120, 252269.
Zhu, Q., Sarkis, J., 2007. The moderating effects of institutional pressures on emergent green supply chain practices and performance. International Journal of
Production Research 45, 43334355.
Zsidisin, G.A., Melnyk, S.A., Ragatz, G.L., 2005. An institutional theory perspective of
business continuity planning for purchasing and supply management. International Journal of Production Research 43, 34013420.
Zucker, L.G., 1987. Institutional theories of organization. Annual Review of Sociology
13, 443464.