Skip to main content
SpringerLink
Log in

Institutionalizing enterprise resource planning in the Saudi steel industry: A punctuated socio-technical analysis

  • Research Article
  • Published:
Journal of Information Technology

Abstract

In this article, we analyze institutionalization as a process of transferring and stabilizing material artifacts and routines in the form of enterprise resource planning (ERP) systems. Although past studies have analyzed institutionalization as structuring around scripts or discourse moves, we emphasize the material role of artifacts and routines as carriers of institutional logics. In addition, insitutionalization is not linear and incremental, but goes through sudden, nonlinear disruptions. To this end, we apply punctuated socio-technical information system change (PSIC) model that draws upon Gersick's model of change to identify and trace moves that are critical during the institutionalization. The model accounts for ERP institutionalization by chronicling complex interactions between socio-technical elements in the implementation system, the work system, and organizational and environmental context which together account for the institutionalization outcome. We use the model to analyze a longitudinal case covering 11 years (1993–2004) of ERP implementation processes in a large Saudi steel firm. Our analysis shows that the proposed material and punctuated lens toward institutionalization offers rich insights how and why ERP systems become institutions and why their institutionalization is difficult and unfolds in unpredictable ways. We conclude that the normally held assumptions of successful linear and incremental adaptation to new institutional patterns logics out by ERP systems do not hold.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Figure 1
Figure 2
Figure 3
Figure 4
Figure 5
Figure 6
Figure 7

Similar content being viewed by others

Notes

  1. Although some scholars distinguish between factor and process approaches (Mohr, 1982), others such as Sabherwal and Robey (1995) and Brown and Eisenhardt (1997) have combined them and seen them complementary (Newman and Robey, 1992) (for institutional theory, see, e.g. Phillips et al., 2004). Langley (1999) argued that organizational research is a mixture of both and their separation can be considered to be more a difference in the theoretical emphasis rather than in the empirical demands.

  2. The socio-technical model has been used in the past to understand project risks (Lyytinen et al., 1998) and project dynamics (Lyytinen and Newman, 2008). The model has been criticized for focusing solely on static structures and to ignore the environment, and to suffer from a clear distinction between the model components. The model is attractive here due to its simplicity, encompassing classification criteria, and extensiveness.

  3. In the IS literature, this is denoted as user resistance either explicitly (e.g. physical damage to the system) or implicitly (e.g. performing an inaccurate task) to inhibit change and support equilibrium (Hirschheim et al., 1991) and (Sabherwal and Newman, 2003).

References

  • Abbott, A. (1988). Transcending General Linear Reality, Sociological Theory 6: 169–186.

    Article  Google Scholar 

  • Al-Mashari, M. (2000). Constructs of Process Change Management in ERP Context: A focus on SAP R/3, in The Proceedings of the Americas Conference on Information Systems, (August 10–13th); Long Beach, California: The Association for Information Systems, 977–980.

    Google Scholar 

  • Al-Mudimigh, A., Zairi, M. and Al-Mashari, M. (2001). ERP Software Implementation – An integrative framework, European Journal of Information Systems 10: 216–226.

    Article  Google Scholar 

  • Arthur, W.B. (1989). Competing Technologies, Increasing Returns, and Lock-In by Historical Events, Economic Journal 99 (394): 116–131.

    Article  Google Scholar 

  • Barley, S.R. and Tolbert, P.S. (1997). Institutionalization and Structuration: Studying the links between action and institution, Organization Studies 18: 93–117.

    Article  Google Scholar 

  • Beard, J. and Sumner, M. (2004). Seeking Strategic Advantage in the Post-net Era: Viewing ERP systems from the resource-based perspective, Journal of Strategic Information Systems 13: 129–150.

    Article  Google Scholar 

  • Berente, N., Lyytinen, K. and Yoo, Y. (2007). An Institutional Analysis of Pluralistic Responses to Enterprise System Implementations, ICIS 2007 Proceedings. Paper 96, http://aisel.aisnet.org/icis2007/96.

  • Berente, N., Lyytinen, K. and Yoo, Y. (2008). Alignment or Drift? Loose Coupling over Time in NASA's ERP Implementation, ICIS 2008 Proceedings. Paper 180, http://aisel.aisnet.org/icis2008/180.

  • Bingi, P., Sharma, M.K. and Godla, J.K. (1999). Critical Issues Affecting an ERP Implementation, Information Systems Management 16 (3): 7–14.

    Article  Google Scholar 

  • Boudreau, M.-C. and Robey, D. (1999). Organizational Transition to Enterprise Resource Planning Systems: Theoretical choices for process research, in The Proceedings of the 20th International Conference on Information Systems, Charlotte, NC: Association for Information Systems, 291–299.

    Google Scholar 

  • Brown, S.L. and Eisenhardt, K. (1997). The Art of Continuous Change: Linking complexity theory and time-paced evolution in relentlessly shifting organizations, Administrative Science Quarterly 42: 1–34.

    Article  Google Scholar 

  • Brown, C. and Vessey, I. (1999). ERP Implementation Approaches: Towards a contingency approach, Proceedings of 26th ICIS, Charlotte, NC: ICIS.

    Google Scholar 

  • Callaway, E. (1999). Enterprise Resource Planning: Integrating applications and business processes across the enterprise, Charleston, SC: Computer Technology Research Corp.

    Google Scholar 

  • Chae, B. and Poole, M. (2005). Mandates and Technology Acceptance: A tale of two enterprise technologies, Journal of Strategic Information Systems 14: 147–166.

    Article  Google Scholar 

  • Czarniawska, B. and Sevon, G. (1996). Translating Organizational Change, Berlin: de Gruyter.

    Book  Google Scholar 

  • Ciborra, C., Braa, K. and Hanseth, O. (2000). From Control to Drift: The dynamics of corporate information infrastructures, New York: Oxford University Press.

    Google Scholar 

  • Creed, W., Scully, M. and Austin, J. (2002). Clothes Make the Person? The tailoring of legitimating accounts and the social construction of identity, Organization Science 13 (5): 475–496.

    Article  Google Scholar 

  • Currie, W. (2009). Contextualizing the IT Artefact: Towards a wider research agenda for IS using institutional theory, Information Technology & People 22 (1): 63–77.

    Article  Google Scholar 

  • Dacin, M., Goodstein, J. and Scott, R. (2002). Institutional Theory and Institutional Change: Introduction to the special research forum, The Academy of Management Journal 45 (1): 43–56.

    Article  Google Scholar 

  • Davenport, T. (1998). Putting the Enterprise into the Enterprise System, Harvard Business Review 76 (4): 121–131.

    Google Scholar 

  • DiMaggio, P.J. and Powell, W.W. (1983). The Iron Cage Revisited: Institutional isomorphism and collective rationality in organizational fields, American Sociological Review 48: 147–160.

    Article  Google Scholar 

  • Fahy, M. (eds.) (2001). Topical Issues Enterprise Resource Planning Systems Leveraging the Benefits for Business, London: The Chartered Institute of Management Accounting.

    Google Scholar 

  • Fleck, J. (1994). Learning by Trying: The implementation of configurational technology, Research Policy 23: 637–652.

    Article  Google Scholar 

  • Gersick, C.J.G. (1991). Revolutionary Change Theories: A multilevel exploration of the punctuated equilibrium paradigm, The Academy of Management Review 16 (1): 10–36.

    Article  Google Scholar 

  • Glick, W.H., Huber, G.P., Miller, C.C., Doty, D.H. and Sutcliffe, K.M. (1990). Studying Changes in Organizational Design and Effectiveness: Retrospective event histories and periodic assessments, Organization Science 1 (3): 293–312.

    Article  Google Scholar 

  • 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 (4): 151–182.

    Google Scholar 

  • Greenwood, R. and Hinings, C.R. (1996). Understanding Radical Organizational Change: Bringing together the old and the new institutionalism, Academy of Management Review 21: 1022–1054.

    Google Scholar 

  • Griffith, T., Zammuto, R. and Aiman-Smith, L. (1999). Why New Technologies Fail? Industrial Management 29–34.

  • Hirschheim, R., Klein, H. and Newman, M. (1991). Information Systems Development as Social Action: Theoretical perspective and practice, Omega 19 (6): 587–608.

    Article  Google Scholar 

  • Hargadon, A. and Douglas, Y. (2001). When Innovations Meet Institutions: Edison and the design of the electric light, Administrative Science Quarterly 46 (3): 476–501.

    Article  Google Scholar 

  • Hong, K.-K. and Kim, Y.-G. (2002). The Critical Success Factors for ERP Implementation: An organizational fit perspective, Information and Management 40: 25–40.

    Article  Google Scholar 

  • Jepperson, R.L. (1991). Institutions, Institutional Effects, and Institutionalism, in W.W. Powell and P.J. DiMaggio (eds.) The New Institutionalism in Organizational Analysis, Chicago, IL: University of Chicago Press, pp. 143–163.

    Google Scholar 

  • Keil, M. (1995). Pulling the Plug: Software project management and the problem of project escalation, MIS Quarterly 19 (4): 421–447.

    Article  Google Scholar 

  • Keil, M. and Flatto, J. (1999). Information Systems Project Escalation: A reinterpretation based on option theory, Accounting, Management & Information Technology 9: 115–139.

    Article  Google Scholar 

  • Kimberly, J. and Bouchikhi, H. (1995). The Dynamic of Organizational Development and Change: How the past shapes the present and constrain the future, Organization Science 6 (1): 918–919.

    Article  Google Scholar 

  • Klein, H. and Myers, M. (1999). A Set of Principles for Conducting and Evaluating Interpretive Field Studies in Information Systems, MIS Quarterly 23 (1): 667–693.

    Article  Google Scholar 

  • Kumar, K. and Van Hillegersberg, J. (2000). ERP Experiences and Evolution, Communications of the ACM 43 (4): 23–26.

    Article  Google Scholar 

  • Langenwalter, G.A. (2000). Enterprise Resource Planning and Beyond Integrating Your Entire Organization, Boca Raton, FLO: St. Lucie Press.

    Google Scholar 

  • Langley, A. (1999). Strategies for Theorizing from Process Data, Academy of Management Review 24 (4): 691–710.

    Google Scholar 

  • Larsen, M.A. and Myers, M.D. (1999). When Success Turns into Failure: A package-driven business process re-engineering project in the financial services industry, Journal of Strategic Information Systems 8: 395–417.

    Article  Google Scholar 

  • Leavitt, H.J. (1964). Applied Organization Change in Industry: Structural, technical and human approaches, in W.W. Cooper, H.J. Leavitt, and M.W. Shelly (eds.) New Perspectives in Organizational Research, New York, NY: John Wiley.

    Google Scholar 

  • Lozinsky, S. (1998). Enterprise-Wide Software Solutions: Integration strategies and practice, Reading, MA: Addision-Wesley.

    Google Scholar 

  • Lyytinen, K. and Newman, M. (2008). Explaining Information Systems Change: A punctuated socio-technical change model, European Journal of Information Systems 17 (6): 589–613.

    Article  Google Scholar 

  • Lyytinen, K., Mathiasen, L. and Ropponen, J. (1998). Attention Shaping and Software Risk – A categorical analysis of four classical risk management approaches, Information Systems Research 9 (3): 233–255.

    Article  Google Scholar 

  • Markus, M.L. and Tanis, D. (2000). The Enterprise Systems Experience – From adoption to success, in R.W. Zmud (ed.) Framing the Domains of IT Research: Glimpsing the Future Through the Past, Cincinnati, OH: Pinnaflex Educational Resources.

    Google Scholar 

  • Markus, M.L., Axline, S., Petrie, D. and Tanis, C. (2000). Learning from Adopters’ Experiences with ERP – Problems encountered and success achieved, Journal of Information Technology 15: 245–265.

    Article  Google Scholar 

  • Meyer, J.W. and Rowan, B. (1977). Institutionalized Organizations: Formal structure as myth and ceremony, American Journal of Sociology 83 (2): 340–363.

    Article  Google Scholar 

  • Mohr, L.B. (1982). Explaining Organizational Behaviour, San Francisco, CA: Jossey-Bass.

    Google Scholar 

  • Monge, P.R. (1990). Theoretical and Analytical Issues in Studying Organizational Processes, Organization Science 1 (4): 406–430.

    Article  Google Scholar 

  • Myers, M.D. and Michael, N. (2007). The Quantitative Interview in IS Research: Examining the craft, Information and Organization 17 (1): 2–26.

    Article  Google Scholar 

  • Nandhakumar, J., Rossi, M. and Talvinen, J. (2005). The Dynamics of Contextual Forces of ERP Implementation, Journal of Strategic Information Systems 14: 221–242.

    Article  Google Scholar 

  • Newman, M. and Robey, D. (1992). A Social Process Model of User–Analyst Relationships, MIS Quarterly 16: 249–266.

    Article  Google Scholar 

  • Newman, M. and Sabherwal, R. (1996). Determinates of Commitment to Information Systems Development: A longitudinal investigation, MIS Quarterly 20 (1): 23–24.

    Article  Google Scholar 

  • O’Leary, D.E. (2000). Enterprise Resource Planning Systems: Systems, life cycle, electronic commerce and risk, Cambridge, UK: The Press of Syndicate of the University of Cambridge.

    Book  Google Scholar 

  • Pentland, B.T. (1999). Building Process Theory with Narrative: From description to explanation, Academy of Management Review 24 (4): 711–724.

    Google Scholar 

  • Pettigrew, A. (1987). Context and Action in the Transformation of the Firm, Journal of Management Studies 24 (6): 649–670.

    Article  Google Scholar 

  • Pettigrew, A. (1990). Longitudinal Field Research on Change: Theory and practice, Organization Science 1 (3): 267–292.

    Article  Google Scholar 

  • Pettigrew, A. (1992). The Character and Significance of Strategy Process Research, Strategic Management Journal 13: 5–16.

    Article  Google Scholar 

  • Phillips, N., Lawrence, T. and Hardy, C. (2004). Discourse and Institutions, Academy of Management Review 29 (4): 635–652.

    Google Scholar 

  • Pollock, N. and Williams, R. (2008). Software and Organisations, The Biography of the Enterprise-Wide System Or How SAP Conquered the World, London: Routledge.

    Google Scholar 

  • Poston, R. and Grabski, S. (2001). Financial Impacts of Enterprise Resource Planning Implementations, International Journal of Accounting Information Systems 2: 271–297.

    Article  Google Scholar 

  • Pozzebon, M. and Pinsonneault, A. (2005). Global-Local Negotiations for Implementing Configruable Packages – The power of initial organizational decisions, Journal of Strategic Information Systems 14: 121–145.

    Article  Google Scholar 

  • Quattrone, P. and Hopper, T. (2006). What is IT?: SAP, accounting and visibility in a multinational organisation, Information and Organization 16 (3): 212–250.

    Article  Google Scholar 

  • Rajagopal, P. (2002). An Innovation – Diffusion view of implementation of enterprise resource planning (ERP) systems and development of a research model, Information and Management 40 (2): 87–114.

    Article  Google Scholar 

  • Robey, D. and Newman, M. (1996). Sequential Pattern in Information Systems Development: An application of a social process model, ACM Transactions on Information Systems 14 (1): 30–63.

    Article  Google Scholar 

  • Robey, D., Ross, J.W. and Boudreau, M.-C. (2002). Learning to Implement Enterprise Systems: An exploratory study of the dialectics of change, Journal of Management Information Systems 19 (1): 17–46.

    Google Scholar 

  • Robson, C. (2002). Real World Research, 2nd edn, Oxford, UK: Blackwell Publishers Ltd.

    Google Scholar 

  • Sabherwal, R. and Newman, M. (2003). Persistence and Change in System Development: A dialectical view, Journal of Information Technology 18 (June): 69–92.

    Article  Google Scholar 

  • Sabherwal, R. and Robey, D. (1995). Reconciling Variance and Process Strategies for Studying Information System Development, Information Systems Research 6 (4): 303–327.

    Article  Google Scholar 

  • Scott, W.R. (1987). The Adolescence of Institutional Theory, Administrative Science Quarterly 32 (4): 493–511.

    Article  Google Scholar 

  • Scott, W. (2001). Institutions and Organizations, 2nd edn, Thousand Oaks, CA: SAGE Publications.

    Google Scholar 

  • Seo, M. and Creed, S. (2002). Institutional Contradictions, Praxis, and Institutional Change: A dialectical perspective, The Academy of Management Review 27 (2): 222–247.

    Google Scholar 

  • Shang, S. and Seddon, P.B. (2002). Assessing and Managing the Benefits of Enterprise Systems: The business manager's perspective, Information Systems Journal 12 (4): 271–299.

    Article  Google Scholar 

  • Shona, L.B. and Kathleen, M.E. (1997). The Art of Continuous Change: Linking complexity theory and time-paced evolution in relentlessly shifting organizations, Administrative Science Quarterly 42 (1): 1–34.

    Article  Google Scholar 

  • Strauss, A. and Corbin, J. (1998). Basics of Qualitative Research Techniques and Procedures for Developing Grounded Theory, Thousand Oaks, CA: SAGE Publications.

    Google Scholar 

  • Taylor, J.C. (1998). Participative Design: Linking BPR and SAP with an STS approach, Journal of Organizational Change Management 11 (3): 233–245.

    Article  Google Scholar 

  • Tolbert, P. and Zucker, L. 1983. Institutional Sources of Change in the Formal Structure of Organizations: Diffusion of civil service reform, 1880–1935, Administrative Science Quarterly 28: 22–29.

    Article  Google Scholar 

  • Tushman, M.L. and Romanelli, R. (1985). Organizational Evolution: A metamorphosis model of convergence and reorientation, in B. Staw (eds.) Research in Organizational Behaviour 7, Greenwich, CT: JAI Press. pp. 171–222.

    Google Scholar 

  • Van de Ven, A.H. and Huber, G.P. (1990). Longitudinal Field Research Methods for Studying Processes of Organizational Change, Organization Science 1 (1): 213–219.

    Article  Google Scholar 

  • Van de Ven, A.H. and Poole, M.S. (1995). Explaining Development and Change in Organizations, Academy of Management Review 20 (3): 510–540.

    Article  Google Scholar 

  • Walsham, G. (1993). Interpreting Information Systems in Organizations, Chichester: Wiley.

    Google Scholar 

  • Walsham, G. and Waema, T. (1994). Information Systems Strategy and Implementation: A case study of a building society, ACM Transactions on Information Systems 12 (2): 150–173.

    Article  Google Scholar 

  • Ward, J., Hemingway, C. and Daniel, E. (2005). A Framework for Addressing the Organizational Issues of Enterprise System Implementation, Journal of Strategic Information Systems 14: 97–118.

    Article  Google Scholar 

  • Weick, K.E. (1998). Improvisation as a Mindset for Organizational Analysis, Organization Science 9 (5): 543–555.

    Article  Google Scholar 

  • Yin, R.K. (2003). Case Study Research: Design and Methods, 2nd edn, Thousand Oaks, CA: SAGE Publications.

    Google Scholar 

  • Zucker, L.G. 1991. The Role of Institutionalization in Cultural Persistence, in W.W. Powell and P.J. DiMaggio (eds.) The New Institutionalism in Organizational Analysis, Chicago, IL: University of Chicago Press. pp. 83–107.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. The Weatherhead School of Management, Case Western Reserve University, Cleveland, 44106-7235, Ohio, USA

    Kalle Lyytinen

  2. Norwegian School of Economics, and Business Administration, Bergen

    Mike Newman

  3. University of Manchester, Manchester Business School, Manchester, M15 6PB, UK

    Mike Newman

  4. King Faisal University, Al-Ahssa, Saudi Arabia

    Abdul-Rahman A Al-Muharfi

Authors
  1. Kalle Lyytinen
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Mike Newman
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Abdul-Rahman A Al-Muharfi
    View author publications

    You can also search for this author in PubMed Google Scholar

Appendices

Appendix A

Interview timetable and participants

See Table A1.

Table a1 A summary of the interviews conducted at HADEED
Full size table

Appendix B

A sample of detailed analysis for the events in the process diagram

The ultimate goal for HADEED employees was to accomplish their daily activities and get the work done using a variety of disjointed technologies, countless paper, and manual work processes. Every employee's outcome had to be printed out in hard copies and sent to another employee who uses such output as input and feeds the system again. Therefore, there were growing gaps in between the four socio-technical components that leave HADEED in an unbalanced state.

HADEED was in a stable (Eq1) state of performing normal activities until the IT manager proposed the change (DisEq1). The need was generated by external forces, such as the Y2K problem, and outside competition that HADEED was facing in both the Saudi and international markets. However, the need for change was mainly encouraged by a general lack of support for the PRIME system. The system representative in Saudi Arabia provided poor services and some of the system hardware providers have gone out of business. In addition, internally, HADEED was planning to build another new factory called HADDED-2 Flat Product, which needed an appropriate technology. All previous external and internal (hybrid) forces were interpreted as positive because they were forcing HADEED from a crisis situation toward a better one (Figure B1).

Figure B1
figure 8

Antecedent conditions.

Full size image

The IT manager submitted by the end of 1989 a proposal to HADEED top management level describing HADEED's current and future situation. HADEED top management realized the problem and supported the process further by establishing a project team to look for a new system.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Lyytinen, K., Newman, M. & Al-Muharfi, AR. Institutionalizing enterprise resource planning in the Saudi steel industry: A punctuated socio-technical analysis. J Inf Technol 24, 286–304 (2009). https://doi.org/10.1057/jit.2009.14

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/jit.2009.14

Keywords

Search

Navigation