Assimilating IT Innovation: The Longitudinal Effects of Institutionalization and Resource Dependence

Abstract

This study seeks to understand the longitudinal effects of external pressures on the assimilation of IT innovations in organizations, making the distinction between pressures from organizations' exchange partners and pressures from the institutional environment. Analyzing 11-year survey data on the adoption and usage of enterprise resource planning (ERP) in Fortune 1000 companies, I have found significant evidences for both sources of external pressures for ERP assimilation. Further, the effects of pressures from exchange partners depended on the extent to which ERP was legitimated as an appropriate organizational technology and practice. These findings not only resolve the long-time confounding of institutional theory and resource dependence theory, but also help delineate each theory's applicability in the operation of external factors on IT assimilation. Practically, this research helps guide practitioners to prioritize external pressures and align such pressures with their organizations' internal specifics.

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