How does organisational absorptive capacity matter in the assimilation of enterprise information systems?

Abstract

Extant literature offers two mostly distinct perspectives on enterprise systems assimilation -driven either by internal expertise and learning capability or by external institutional pressures. This study combines the two perspectives and subscribes to the view that organisations' learning capability moderates their acquiescence to institutional pressures. The study then anchors organisational learning capability to the concept of absorptive capacity and proposes that its two dimensions -potential absorptive capacity (PACAP) and realised absorptive capacity (RACAP) -affect enterprise systems assimilation through different pathways. Our survey-based empirical study of Enterprise Resource Planning (ERP) systems in the post-implementation stage reveals that while both PACAP and RACAP have a positive direct impact on assimilation, PACAP positively moderates the impact of mimetic (institutional) pressures, but not normative (institutional) pressures, on assimilation; whereas RACAP positively moderates the impact of normative pressures, but not mimetic pressures, on assimilation. Thus, our theoretical contribution lies in understanding the distinct ways in which PACAP and RACAP moderate the influence of external institutional pressures on enterprise systems assimilation.

E-learning Readiness and Absorptive Capacity in the Manufacturing Industry

“…Absorptive capacity has been re-conceptualized and extended by various researchers, mainly through empirical studies [10]- [13]. Different definitions and outcomes of the original concept have emerged to a heterogeneous variety, both empirically and theoretically [23].…”

“…To clarify the relationship between knowledge acquisition and firm innovation, the concept of absorptive capacity, can be used to define the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends as critical to its innovative capacity [9]. Over the years researchers have reconceptualized and extended their description of absorptive capacity, and also applied it to different organizational contexts or studies of phenomena [10]- [13].…”

ERP Institutionalisation- A Quantitative Data Analysis Using The Integrative Framework of IS Theories

“…These three steps embody the pre-implementation, implementation, and post-implementation stages of ERP assimilation, and thus, provide a more comprehensive foundation for this process. Looking at the temporal relationship of these stages, implementation (physical installation) takes between one to three years (21 months on average), with benefits starting to accrue in an average of 31 months (post-implementation stage) (Chatterjee et al 2002;Liang et al 2007;Saraf et al 2013). Later in the literature review section, ERP institutionalisation is introduced as a result of fully assimilated ERP system (it takes about five to six years for an ERP module to become completely ingrained, routinised, and institutionalised).…”

“…Institutionalised technology becomes ingrained and absorbed into the work life of the organisation which influences the realisation of the higher productivity benefit, business values, and success (Purvis et al 2001;Chatterjee et al 2002;Liang et al 2007;Peppard et al 2007). To conclude, in the normal progression of events, ERP technology is first implemented, then assimilated, and once its usage becomes routinised and embedded within the organisations' work processes and value chain activities, its use will be taken for granted by various system stakeholders and users (Tolbert and Zucker 1999;Rogers 2003;Teo et al 2003;Baptista 2009;Maheshwari et al 2010;Saraf et al 2013). This taken-for-grantedness represents the institutionalisation of ERP.…”

“…At this stage also acting in compliance with the institutional effects is viewed as logical by those who share ERP technology (Baptista 2009; Seddon et al 2010;Maheshwari et al 2010). In fact, coercive, normative and mimetic mechanisms make ERP systems to be legally sanctioned, morally governed, and culturally supported (Scott 2001;Teo et al 2003;Saraf et al 2013). In response to these institutional effects, however, the need for ERP and its upgrading modules will be created (or recreated), which affects the successful assimilation and institutionalisation of this technology within the organisation.…”