IT non-conformity in institutional environments: E-marketplace ...

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Author's personal copy Information & Management 46 (2009) 138–149

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IT non-conformity in institutional environments: E-marketplace adoption in the government sector Craig Standing a,*, Ian Sims b, Peter Love c a

School of Management, Edith Cowan University, Australia Southern Cross University, Australia c Curtin University, Australia b

A R T I C L E I N F O

A B S T R A C T

Article history: Received 1 March 2007 Received in revised form 1 September 2008 Accepted 1 October 2008

Institutional authority is a factor that impacts adoption of IT. Institutional theory incorporates three different but complimentary perspectives and we used these to develop a layered analysis of IT adoption in organizations. We used a case study of State Government agencies in Australia to show how layers of authority influenced the adoption or rejection of technology and that such forces varied in their influence over time. Based on this, we proposed the notion of patterns of conformity and non-conformity which recognise the changes in levels of compliance over time as organizational forces arise. In particular, the alignment of layers of authority acts to ensure conformity with or rejection of IT adoption decisions. ß 2009 Published by Elsevier B.V.

Keywords: Institutional theory Electronic marketplace IT adoption IT rejection Electronic commerce

1. Introduction The adoption of IT in organizations has primarily been considered to be due to external forces, assuming that organizational behaviour and decision making are affected by the environment. But although this is useful in understanding diffusion and use of IT, it does not explain resistance to it. The three main schools of thought within institutional theory (regulatory, norm, and cultural-cognitive) provide a way to view organizational attitude towards IT and thus enable us to predict its adoption or rejection. Using different but complimentary perspectives allowed us to discover layers of authority that supported or rejected the use of IT. Although much discussion has focused on resistance to IT [11], the influence of the institutional context has been somewhat overlooked [14]. We examined reasons for compliance or non-conformity with IT initiatives. In particular, our aim was to investigate the role of institutional forces in adoption and use or rejection of IT and to examine how these forces shaped organizational response over time. Our objectives were therefore to determine:

1. Where and how different forms of institutional perspectives influenced the adoption and use or rejection of IT. 2. How institutional forces and organizational responses changed through time with respect to the same technology. 3. The effect of multi-level complexity and how forces at each level impact on the use of technology in an organization. We chose Institutional Theory as a basis for our study, since prior research acknowledged that it explained technology decisions and outcomes. It provided us with a way to view technology adoption by focusing on the norms of and behaviours of organizations rather than by the rational, cost-benefit view of decision making. We used a case study of an Australian central government procurement agency that promoted the use of an e-marketplace in other agencies. Much of the literature on firm responses to institutional stimuli takes a static view: a firm’s interaction with its environment is still largely perceived as first response and time invariant. Our research identified the layers of authority that align, at various points in time, to support conformity or non-conformity with IT decisions. 2. Non-conformity to IT decisions

* Corresponding author. Fax: +61 8 6304 5988. E-mail addresses: [email protected] (C. Standing), [email protected] (P. Love). 0378-7206/$ – see front matter ß 2009 Published by Elsevier B.V. doi:10.1016/j.im.2008.10.001

Acts of resistance to IT adoption and use can range from minor misuse to outright rejection. There are many explanations for this.

Author's personal copy C. Standing et al. / Information & Management 46 (2009) 138–149

Theories of IT adoption have focused on its antecedents and include factors such as performance and effort expectancy, social influence, and facilitating conditions. However, it has also been recognised that the effective use of technology does not depend solely on an adoption decision but rather on a complex process of adaptation, where the users interact and develop with the technology [7]. Beaudry and Pinsonneault [2] developed a Coping Model of User Adaptation that emphasised four strategies: benefit maximising, benefit satisfying, disturbance handling, and selfpreservation. Resistance to IT involves internal struggles that result in loss of power and control at some organizational level. Although institutional policy is a driving force, the importance of the institutional context has not been extensively used to explain resistance to an IT initiative. 3. Institutional theory and strategic response to IT implementation Institutional theory considers how organizations respond to their environment through the structural interfaces that influence decision-making and action [3]. In particular, it focuses on the effect of habit, convention, and social behaviour of organizations. Legitimacy and authority result in organizational structure and define its activities. Organizations are likely to conform to institutional pressures even where there is little evidence to suggest it will improve organizational efficiency [20]. Pressures can be exerted in organizations and also be exerted on them through prevailing practices in the business environment. This form of pressure has been termed mimetic behaviour. Isomorphism (companies becoming similar) results from it and has been argued to be inefficient; however, when viewed in the context of risk aversion. it can be seen as improving organizational performance. Organizations may fail to realise significant benefits from their IT innovations because they have been adopted to satisfy policy rather than efficiency [17]. The idea of layers of authority is consistent with a broader view of institutional theory. Different schools of thought support different but complimentary perspectives of what constitutes an institution. Sociologists have viewed institutions primarily as organizational units where beliefs and norms operate to form a distinct culture [16]. They have emphasised that institutional processes operate at both macro (environmental) and micro (organizational and interpersonal) levels. More recent views emphasise the role of cultural-cognitive processes that highlight shared transorganiza-

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Table 1 Layers of institutional authority. Scope of influence

Type of authority

Level of influence

Global Global Local Organizational Personal System

Regulatory Cultural-cognitive Cultural-cognitive Norm Norm Norm

External External External Internal Internal Internal

tional frameworks that operate at a macro-level. For example, the role and influence of professional groups are perceived as largely socially constructed but they are still influential. Institutional analysts view them as systems of rules or governance that operate on a macro scale and include legal and economic systems [12]. These three perspectives of institutions, as presented in Table 1, allow us to uncover layers of authority that impact on technology decisions. This view of institutionalism has recently considered users as social actors [10,18]. Rather than assuming that forces only arise in the external environment, we can draw upon the concept of institutionalization at various levels in the organization including: personal interaction, organizational culture, local forms of authority, and external forces. We also added technology or IS at the organizational level. Strategic response to institutional pressure can be used to classify organizational response to IT decisions. These range in levels of passive agreement to defiance (Table 2). Acquiescence is likely to occur where authority and efficiency are pressures for conformity; it can have one of three forms: habit (unconscious adherence to rules or values), imitation (contributing to organizational isomorphism) and compliance (conscious decision to comply with organizational requests). Complete acquiescence may be undesirable in some situations, as there may be conflicting demands. Thus a unit may make compromises by balancing, pacifying, or bargaining. Organizations can avoid compliance by concealing their actions, buffering or ignoring institutional rules and expectations. Defiance is a strong form of resistance that can take on the form of dismissing rules, openly challenging rules, and even aggressively attacking the rules. Manipulation is a way to control or influence institutional pressures. Institutional structures give authority to actions aligned with the goals and values of the organization, whilst domination act in a regulatory capacity so that conformity to organizational rules are

Table 2 Strategic response to institutional force [13]. Strategies

Tactics

Examples

Key antecedents

Acquiescence

Habit Imitate Comply

Following invisible, taken for granted norms Mimicking institutional models Obeying rules and accepting norms

High High High High

Compromise

Balance Pacify Bargain

Balancing the expectations of multiple constituents Placating and accommodating institutional elements Negotiating with institutional stakeholders

Low authority High uncertainty in environment High levels of dependence

Avoid

Conceal Buffer Escape

Disguising non-conformity Loosening institutional attachments Changing goals, activities, or domains

Low authority High uncertainty in environment Many constituent demands

Defy

Dismiss Challenge Attack

Ignoring explicit norms and values Contesting rules and requirements Assaulting the sources of institutional pressure

Low authority Multiplicity of demands Low efficiency

Manipulate

Co-opt Influence Control

Importing influential constituents Shaping values and criteria Dominating institutional constituents and processes

Low authority Multiplicity of demands Low efficiency Low uncertainty

authority consistency with organizational goals levels of control uncertainty in environment


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followed and recognised as influencing the adoption and assimilation of IT [4]. The antecedents for the strategic response identify:

The cause of the response. Constituent demands. Consistency with organizational goals. How control is being exerted. The environmental context of the institutional pressure.

Although these antecedents serve as broad conditions for a strategic response they provide few insights into the reasons for them, especially with respect to the level at which the institutional force is operating. In addition, the antecedents do not help in understanding the role that the IS plays as an authorizing force. A more encompassing view of institutional theory could make it possible to determine where the different forms of authority arise and how and why they might change through time to influence the use or rejection of an IS. 4. Research design The main aim of our study was to investigate the role of institutional forces in the adoption, appropriation, and adoption or rejection of IT and to examine how these forces shaped organizational response over time. We performed an in-depth case study of the history of the Western Australian Government website to discover how it introduced its e-marketplace system across different government agencies. The case study was conducted over a 3-year period (2002–2004) at separate government departments of the Western Australian State Government, where each department acted a separate unit in our analysis [6]. Government agencies at local and state levels have taken a leading role in Australia in the development of e-marketplaces to increase SME participation in e-commerce. Many government departments now either manage or sponsor e-marketplaces. Their aim is generally greater regional economic development and is motivated by efficiency [15]. Whilst government entities may assume e-marketplaces are an effective channel for implementing government policy, a number of complications may arise in attempting to address a wide range of government objectives [8]. 5. Data collection and data sources The data collection focused on the Contract and Management Services Agency (CAMS) responsible for implementing and managing the Government E-Marketplace (GEM) in six Government agencies; collection took place over a 3-year time period. In addition, a range of suppliers were interviewed to determine their

perception of the e-marketplace in the supplier community. Although the data gathering method was by semi-structured interviews, a wide range of data sources were employed. We also had access to government reports, internal documents, web sites, and newspaper articles. Using a wide range of sources allowed institutional perspectives to be examined and resulted in a broad analysis of issues. Interviews were typically of 60 min duration, however some extended to 90 min; they were conducted with participants from all seven units, including interviews with senior managers having responsibility for and knowledge of the procurement practices in each unit and interviews with operational managers involved in procurement. Interviews were also conducted in twelve supplier organizations to obtain their perception of the new methods. Interviewing several people in each unit of analysis allowed us to counteract individual bias. People were selected to take part because of their position and knowledge related to the adoption and use of the emarketplace. All interviews took place on a one-on-one basis so that interviews could be compared within the same unit to ensure consistency of responses to the adoption of the e-marketplace. At least two people, and usually three or four, were interviewed in each unit: they were the most senior staff in the decision making process and at least one was an operational employee. Additional senior interviews were not necessary, as the institutional responses were clearly defined and the separate interviews proved to be closely aligned. Discussions about adoption of the e-marketplace took place throughout the first year of our study and interviews with the senior managers took place towards the end of the first year, when sufficient time had passed for the agencies to formulate a response to the adoption of the e-marketplace. Repeat interviews were made with senior managers, since this allowed us to track their strategic responses through time. This longitudinal approach made it possible for us to investigate the changing nature of authority and how this impacted their reaction the e-marketplace. Interviews with senior managers were repeated approximately 1 year after the initial interview. This period was sufficient for changes of perception and response to the e-marketplace to occur. Recall bias was reduced by interviewing people individually and comparing their responses with those from other managers in the same unit. Interviews were also conducted with operational managers in the units in the second year of our study. The purpose of these interviews was to determine whether the decisions and actions of senior managers complied with the intended procurement activities. Similarly, supplier organizations were interviewed to determine the extent to which the government departments had procured through the e-marketplace. Table 3 provides an accounting of the people interviewed during data gathering.

Table 3 Interviews conducted in units of analysis. Unit of analysis

Interviews with senior managers (round 1)

Repeat interviews with senior managers

Interviews with operational managers

Interviews with supplier organizations

End of year 1

End of year 2

Throughout year 2

Year 2 and 3

Procurement agency CAMS

2

2

1

Agency Agency Agency Agency Agency Agency

2 3 2 3 2 2

2 2a 2 3b 2 2

2 2 2 2 1 2

3

7

1 2 3 4 5 6

Supplier organizations (12) a

2

One of the senior managers interviewed in the first round of interviews was not available for a second interview. Repeat interviews were not always possible with the same person. When a senior manager had resigned his or her position we interviewed the replacement person. Repeat interviews took place 1 year after the first round of interviews. b


6. Data analysis Analysis of the data was conducted in six stages, following grounded theory analysis: (1) Publicly available reports and information on the Web site were used to develop background information about the decisions leading to adoption of GEM. (2) The interviews were transcribed and coded. Initially, reasons for the responses were identified, but they were not classified until all had been identified in the transcripts. We then classified them independently; both of us interpreting the data and coding the transcripts cyclically until we reached agreement. This analysis identified the significant authority classes and these were classified according to the different levels of analysis. (3) To ensure the reliability of the analysis individual interviews were analyzed as part of the group to identify deviations from or adherence to prevailing perspectives. We assessed explanations by looking for patterns and making comparisons between responses. Responses of the interviewees were interpreted with reference to the wider environment: in particular, the initial enthusiasm during the growth in e-commerce and the cynicism that prevailed after the ‘‘dot-com’’ failure was considered. Recognition of the wider context allowed local distortions to be considered after any event. (4) Where there were discrepancies in the interpretation of responses, they were resolved by discussion between us and, in some cases, further explanation elicitation of responses were requested from interviewees to improve the mapping of their responses. This occurred in the analysis of public reports and Web site information that generally attempted to portray GEM in a positive light. In the classification and coding process both of us evaluated the responses from the interviews and classified them according to the strategic responses and the reasons for the strategic responses. Both of us were experienced researchers and so additional training was not required. The Cohen’s Kappa statistic was used to analyze the level of correspondence between us and this showed a high degree of agreement between us (0.94). This is well above the 61% level suggested as substantial agreement [9]. (5) The analysis and classification provided an event chart showing the sequence of strategic responses in each unit of analysis and a classification of the reasons for the responses. (6) The results were checked by other researchers; they were asked to trace the logical flow of the research study, research questions, case findings and analysis, and identification of constructs and identifying any gaps in the chain of evidence. The data gathering and analysis continued until it was possible to explain the responses and their reasons in a complete and meaningful manner – i.e., theoretical saturation [19]. 7. Findings The government e-marketplace (GEM) was proposed and managed by Contract and Management Services (CAMS), a government

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department in Western Australia (WA). Its proposed benefits centred on efficiency improvements for the government and community by increasing the adoption rate of e-commerce by organizations. Early in 2000 the WA government agency responsible for managing government purchasing, the Department of CAMS, embarked on the development of a major project known as the Government E-Marketplace (GEM) [8]. As GEM was a Western Australian Government initiative, it was designed to benefit the entire State economically and socially. Companies in rural Western Australia can now tender for contracts via this e-marketplace. GEM was Australia’s first comprehensive online government buying service and provided an array of services that covered the entire range of government buying and its management: Purchasing of low value commodities. Public tendering for high value goods and services. Contract planning, formation, and ongoing management. GEM aimed to streamline traditional business partnerships between the public and private sectors and significantly enhance the quality, timeliness and cost-effectiveness of services to the community. The objectives and benefits of the system listed on the Department of Industry and Transport Web site were Saving taxpayers money through the introduction of more efficient procurement practices. Increasing the accountability and transparency of government purchasing. Increasing the levels of compliance with State Supply Commission procurement and purchasing policy (including buy-local and common-usage contract policies). Demonstrating leadership in the implementation of the Australian Procurement and Construction Council guidelines and standards for e-procurement. Helping West Australian industry enter the world of e-commerce in a safe and secure environment. The results of the interviews and analysis are shown below. They were organised in terms of the main strategic responses (Table 4). The interviewees were asked to explain their unit’s strategic response when the e-marketplace decision was initially made and then how and where it changed through time. Questions were asked on actual use of the e-marketplace, the benefits and problems related to its use, the reaction of operational staff, and the reasons for their response. 8. Acquiescence as a strategic response Initially, all but one of the government agencies acquiesced to the call to adopt the e-marketplace for procurement (Table 5). This was due to several reasons, including their culture which supported conformity, the personal authority of their technology champions, external authority resulting from the popularity of emarketplaces in the business world, and the regulatory authority that resulted from State and Federal Government compliance. The responses with respect to the popularity of e-marketplaces, as

Table 4 Strategic responses to institutional forces. Unit of analysis Government Government Government Government Government Government

agency agency agency agency agency agency

1 2 3 4 5 6

First response

Second response

Third response

Acquiesce (Comply) Acquiesce (Comply) Acquiesce (Comply) Defy (Dismiss) Acquiesce (Comply) Acquiesce (Comply)

Compromise (Bargain) Compromise (Bargain) Manipulate (Influence)

Avoid (escape) Manipulate (Control) Compromise (Pacify)

Compromise (Pacify) Compromise (Bargain)

Avoid (Escape)


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Fig. 1. Timeline of strategic responses set against the Gartner Hype Cycle for e-marketplaces.

explained by the Gartner hype cycle over 5 years, is shown in Fig. 1: e-marketplaces reached a peak of popularity around 2001 and 2003 but rapidly declined in popularity in the next 2 years. The popularity of e-marketplaces in the business environment created a legitimating pressure for acquiescence and avoidance. 8.1. Personal authority The e-marketplace was promoted by CAMS, which employed a charismatic CEO to act as technology champion. He was enthusiastic in actively marketing the concept and positively impressed other agencies. The CAMS’ CEO was clearly very persuasive in his arguments as many interviewees remarked on it. He has the capacity to coerce people to his point of view, and he has the capacity to seduce people into believing. And I certainly did. I’m not saying that he was often obtuse or deceitful. I think that in his own mind he honestly and earnestly believed that he was doing the right thing. But whatever he did, he did to further his own objectives, and if I had my time over again I’d probably make some decisions differently. (Head of Procurement – Government Agency 1). Another government agency official stated that the CEO of CAMS was not only effective in convincing potential users of its benefits but also in garnering political support for the idea at the State level. He was clearly someone who could liase with senior state political figures and this political backing added to the credibility of the system and arguments for its adoption. He set the vision, and that was part of what makes him persuasive. He can set a vision and really flesh it out, and that presumably helped in getting the political support at the State level. (Procurement Officer – Government Agency 3). 8.2. Internal institutional authority Some procurement staff believed that the e-marketplace was being used as a tool to create a role for CAMS: its purpose was being questioned prior to development of the e-marketplace but GEM soon became its reason for being. The pressure on other government agencies to adopt the system for end-to-end procurement was sometimes seen as a tactic to make CAMS indispensable.

They were going to try and mandate GEM across all government departments to control everything and obtain full compliance. (Procurement Officer – Government Agency 2). Most of the government agencies thought compliance was a natural response to the introduction of GEM. Although CAMS was part of government and was not therefore considered an external pressure, it used institutional pressure to conform. The norms and values within government created a culture of conformity. I suppose we had to support the idea, we had little choice, as we are a government department and this was a top down initiative (Senior manager – Government Agency 1). 8.3. Local authority Pressures were exerted on suppliers to adopt the system. They were concerned that if they did not use GEM they would be excluded from contracts. Many suppliers spent significantly in becoming GEM enabled and persevered despite problems with its usability. I mean this guy just stood up and said, ‘‘This is going to be how it is’’, you know, without consultation with anyone, I believe. He had his little idea of how it was going to work, and that’s what he put in practice, and of course from day one it never worked. I spent a lot of money on my system, because I was told I would not be able to deal with any government department if I wasn’t GEM-enabled. (Supplier) 8.4. External authority The proposal to adopt the e-marketplace was legitimated by the global growth in e-commerce and e-procurement. CAMS predicted the Government E-Marketplace would revolutionise government procurement and that it would present the State Government in a positive light as an innovator. Well, it was during the time when e-procurement was getting a lot of hype in the press. You could virtually pick up any business magazine and it was talking about e-procurement and how, if you weren’t in e-procurement, you were going to be out of business within 12 months, and how it was going to revolutionise the way people bought. There were plenty of


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Table 5 Reasons for acquiescence. External – regulatory and cultural-cognitive authority

Agency 1 Acquiesce

E-marketplaces were everywhere and seemed to be the way of the future and part of the global trend. E-markets were part of the ecommerce wave – it would have been silly to question their relevance. We didn’t want to be laggards. GEM was going to improve compliance to State procurement regulations.

Agency 2 Acquiesce

External local – culturalcognitive

Organizational ties and culture

Personal authority

System authority

We had to support the idea, we had little choice, as we are a government department and it was a top down initiative. You might not agree with the decision but you have to accept it in government.

He (technology champion) has the capacity to coerce people to his point of view, and he can seduce people into believing. I remember the announcement – he was very convincing and it sounded as though we would be leaders.

Although the system was one of a kind you could see that it could be a workable system.

Now, to be fair to the people who were pushing it at the time, I guess they were in a position where they knew that if they wanted to get support and government money then they had to push the boundaries a bit about, you know, how fantastic this thing was going to be. After listening to the rationale we thought it had a lot of potential, it and he were very convincing at the time.

It was going to save us money and be better than our existing systems.

We were told it was going to reduce costs and ease doing business with suppliers. That seemed to be good although we had to go on trust.

Everyone was going to be using emarketplaces eventually and we would be leaders.

We had to use it because they wanted full compliance.

Western Australia was seen as being at the forefront of technological development in the government sector.

They were going to try and mandate GEM across all government departments to control everything and obtain full compliance.

You could virtually pick up any business magazine and it was talking about e-procurement and how, if you weren’t in e-procurement, you were going to be out of business within 12 months. This made us think GEM could work. Agency 3 Acquiesce

He set the vision, and that was part of what makes him persuasive. He can set a vision and really flesh it out, and that presumably helped in getting the political support at the State level. He came across as a champion for the e-marketplace – you have to hand it to him for that.

Compliance to State and Federal policy was part of the reason. GEM would make it easier for us to comply with regulations.

The biggest positive really is probably to capture a lot more information about the purchasing that’s done than was ever possible in the past, and therefore allow us to analyse it and make some management decisions about things. Agency 5 Acquiesce

Agency 6 Acquiesce

It was as much a community thing, improving the business sector with us leading the way, as the financial benefits. The financial benefits would stem from doing everything electronically and this would reduce errors and transaction costs.

We felt we had as a government department to adopt the systems then there would be one system for the whole of government. One part of us thought that if we didn’t get involved we would be left behind.

We didn’t want to be the ones saying no we aren’t going to use the system. It would put us in a difficult situation as the reasons for implementing GEM were pretty strong at the time. The Internet was going to change how managed government. It was a centralised system that would bring everyone in line.

I guess we didn’t think we could say no to GEM. After all, who is going to stand up and say that?

All of government was supposed to be using it so we knew we would be expected to use it too.

The main motivation was to save money and a lot of other things but he had obviously done his homework and a lot would be spent on the launch.

He was good at selling the system but those were heady days!


144 Table 6 Reasons for defiance. External – regulatory and cultural-cognitive authority Agency 4 Defy

External local – cultural-cognitive


Our suppliers weren’t impressed by the idea.

We got the impression that it was very much high risk. If you were going to take this on you were going to be one of the pioneers, and as we all know with technology the pioneers get the arrows in the back and that’s the end of them! We decided it (GEM) wasn’t for us and so we made the decision not to use it. The implications didn’t worry us at the time.

articles about purchasing consortiums and dealing electronically and all the rest of it. (Head of Procurement – Government Agency 2). CAMS wanted the Western Australian Government to be seen as a technology leader and used this as a justification for the implementation. The GEM system was put forward as being a leader in its field: – as being, you know, a bit of a pioneer system – fairly innovative and it was a system that was being marketed throughout Australia and other state governments were interested in it. Western Australia was seen as being at the forefront of technological developments in the government sector. (CEO – Government Agency 2). GEM was also being introduced to improve compliance with State and Federal legislation that required more detailed reporting. This created a form of regulatory institutional authority. 8.5. System authority The other agencies believed that there would be benefits in adopting the e-marketplace. For example, access to information produced by the system would be valuable although there was little knowledge on how to make the best use of it.

Personal authority

System authority

We couldn’t see the point of GEM as our systems were working fine for us.

The biggest positive really is probably to capture a lot more information about the purchasing that’s done than was ever possible in the past, and therefore allow us to analyse it and make some management decisions about things. As management information is the most bankable, if you like, thing that’s come out of it, even though we haven’t made a real lot of progress on implementing the sort of management decisions that come out of that new information. (Procurement Officer – Government Agency 3). 9. Defiance as strategic response One government agency that was loosely connected to central government decided not to adopt the e-marketplace (Table 6). This agency already had a procurement system and was unwilling to take the risk of being one of the first to adopt the new technology. It was likely that the agency heads did not feel the same level of institutional pressure to use GEM. The sales pitch was done quite well. I remember a team of people coming out from GEM and selling the system, but one thing that they couldn’t meet was demonstration sites. It was very much you basically take it on trust and it was still developing the system and, you know, ‘‘We can make it work for you,’’ but no guarantees, or no examples where it’s working in other organisations. (Head of Procurement – Government agency 4).

Table 7 Reasons for manipulation. External – regulatory and culturalcognitive authority

Agency 2 Manipulate

Agency 3 Manipulate

External local – culturalcognitive


Personal authority

System authority

It’s strange how they were flavour of the month and then considered to be suspect. You can’t block that sort of widespread perception out The dot.com crash was a factor I am sure.

If GEM could be changed to work for us we decided we could gain a lot from it.

There was a collapse in confidence in relation to GEM which was brought about by the consolidation of emarketplaces world-wide. This change in sentiment acted as a catalyst for criticisms that we all got caught up in. Looking back most of the problems were not critical and we maybe overreacted at that time.

We knew that some of the other government departments were struggling with aspects of GEM or didn’t want to get into it. Although it didn’t suite our requirements fully we thought we could play a role in shaping it to our needs – as far as we could.

There was a lot of uncertainty and confuse as things were moving pretty rapidly. We thought this could be turned to our advantage.

You might call it game playing but you have to be street wise in an organizational sense.


One of the suppliers to the government felt GEM was going to be used to further individual and government reputations and did not want to join it. Well, I went to the original presentation, and I walked away thinking, ‘‘This guy’s got a dream and he’s using the government, the media, as his negotiator’’, and from day one I looked at it and said, ‘‘There’s no way that it will work, and it’s just pie-in-the-sky type stuff’’. (Supplier) 10. Manipulation and compromise as a strategic response After the initial phase of acquiescence, several alternative responses and strategies arose, including manipulation and compromise (Tables 7 and 8). Two government agencies and one supplier

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thought that they could manipulate the system to be more tailored to their own needs. As they were amongst the first to adopt the e-marketplace they thought that CAMS would be more responsive to their demands. An example of a compromise in the use of the system is shown by the following government department: We were keen to be one of the first and, in fact, we were the first government buyer. So, we were leading the charge with it. But we didn’t want to use the system as an end-to-end solution. We continually tried to get our point across and have our approach accepted but the GEM team seemed to lose interest in supporting us. The perception of e-marketplaces generally also changed because of their collapse and it took the pressure off us in implementing end-to-end procurement with GEM. (CEO – Government agency 1).

Table 8 Reasons for compromise. External – regulatory and cultural-cognitive authority


Agency 1 Compromise

Agency 2 Compromise

Agency 3 Compromise

Agency 5 Compromise

Some of our group of suppliers were having difficulties as well as us.


Personal authority

System authority

We worked with the GEM support team for months to try and get things right.

We didn’t want to use the system as an end-to-end solution. We continually tried to get our point across and have our approach accepted but the GEM team seemed to lose interest in supporting us. The system problems were frustrating and they made it difficult to use some functionality.

We were still supporters of GEM at this point.

There were problems of system compatibility, with aspects of the system that were less efficient than our existing systems, where our policies were different to those implemented within the system and so compromises were made in relation to what we could use. We had many problems with GEM and this meant we didn’t want to make the full transition to it.

There were quite a few problems with GEM, especially in the first year or so.

We tried to comply as far as possible. We weren’t really resisting or anything like that. We didn’t want to make too many waves.

Look, basically it was a pig to run, although that has improved a lot with the last upgrade.

I don’t think government should be in the business of developing systems like this and then selling them across the world.

We couldn’t see what was up with the current approach. It was just going to increase competition between suppliers.

Despite a quite a few glitches we persisted with GEM to keep them happy.

I think we got drawn in by him into a whole different agenda that is not our main concern. Agency 6 Compromise

We still thought GEM had potential to be a good procurement platform and we wanted to work towards using it more fully.

We had problems with GEM and they weren’t being resolved in a hurry.

It (GEM) had us tearing our hair out at times.


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Compromises were made in the use of the system by some government agencies. Rather than using the e-marketplace for end-to-end procurement, some decided to use only some parts of the system. Although this was not what the central procurement agency wanted, one agency discussed these issues openly with CAMS.

Perhaps we were too quick in turning our back on GEM. It was unbelievable how e-marketplaces were riding the crest of a wave and then crashed. It made us think we were better sticking with our existing systems and certainly gave us a reason for doing so. We might seriously consider it again now though. (Head of Procurement – Government Agency 1).

When the decline in e-marketplaces happened we began to take stock of our situation. There were problems of system compatibility, with aspects of the system that were less efficient than our existing systems, where our policies were different to those implemented within the system and so compromises were made in relation to what we could use. (Head of Procurement – Government Agency 2).

Expectations of the system were high because of the effort that had been expended on its promotion. When the reality of the system did not meet expectations, significant cynicism arose. The gap between the expectations created and the reality of using it meant that GEM developed a reputation as a failure, adding to the resistance.

Government Agency 3 was used to pilot the system and resources were put into supporting their adoption. They saw the emarketplace as a means to improve procurement compliance in their own purchasing and it had a positive impact but it was still far from making all purchases through the e-marketplace. As the first to use the e-marketplace, Agency 3 tried to exert their influence to change the design and technical features of later modules. However, despite the canvassing. they did not think they were successful in influencing development of the system. 11. Avoidance as a strategic response A number of factors contributed to the eventual avoidance of the e-marketplace by some government agencies (Table 9). The rapid consolidation of e-marketplaces in the business environment and the change in sentiment against them appeared to exacerbate the problems and internal criticisms, which included technical problems, the expectation-reality gap, lack of identification with the broader ideals of the system and the lack of benefits from using the system. The rapid consolidation of e-marketplaces which took place around the world became a reason to use GEM less or avoid it altogether. It also gave the government agencies confidence in criticising the system. However, most realised the long term potential of using an e-marketplace.

By promising all of these things and not being able to deliver there’s so much cynicism around the system. My suggestion has been, even if they retain GEM, they probably need to really think seriously about re-badging it, re-promoting it and get rid of all the hoo-hah and just deal with it as a tool. (Head of Procurement – Government Agency 2). CAMS’ enthusiastic marketing to other government agencies had a detrimental impact after implementation since government agencies thought that it had been oversold, especially when many e-marketplaces collapsed. The problems faced by e-marketplaces across the world seemed to question the model and so we wondered why we had gone this route, although we realised they has some potential. GEM suffered a huge over-sell in terms of the hype cycle, which has not helped and will take a bit of time to undo. This was a very early experiment and we were judged as such by the other regions as pretty courageous. (CEO – Government Agency 6). The e-marketplace system struggled technically to live up to expectations. It was slow to use and involved accessing many screens, each of which took considerable time to download. The technical problems led to increased frustration, especially from

Table 9 Reasons for avoidance.

Agency 1 Avoid

Agency 6 Avoid

External – regulatory and cultural-cognitive authority


Perhaps we were too quick in stopping using GEM. Some marketplaces were very successful and then crashed. It made us think we should not change our existing systems and gave us a reason for doing so. We thought it was a big mistake; we were getting pulled into when others were getting out of these types of procurement systems.

Our suppliers had some problems with GEM. What were we supposed to say to them?

We were influenced by the large scale collapse of many of these marketplaces reported in the media and the lack of savings made matters worse. The problems faced by emarketplaces world-wide seemed to question the model, so we wondered why we had gone this route, although we realised they has some potential.


Personal authority

System authority

We began to think that GEM had been oversold to us and we all felt a bit stupid.

There were quite a few system problems that were slow to be addressed. Our existing systems were familiar and we knew how to work around any issues.

They annoyed people by trying to push it too much, you know, a real sales job.

GEM suffered a huge over-sell in terms of the hype cycle, which has not helped and will take a bit of time to undo.


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suppliers, and was a factor in the increased unwillingness to use the system.

deliver predicted savings. Staffing levels remained the same and this made it difficult to see where any improvements were made.

Look, basically it was a pig to run, although that has improved a lot with the last upgrade. Where you’re going out to a prison or where your supplier is out somewhere in the bush there are problems. With hindsight maybe it wasn’t the best platform. (Procurement Officer – Government Agency 3).

The main motivation was to save money. The claim that CAMS originally made for GEM was that they would reduce the cost of a purchase order from $75 to $5. Now, that’s all very well to talk about, but unless you capture the $70, then it’s nonsense. And I don’t think anybody ever considered capturing the savings. They still had the same number of people. (Head of Procurement – Government Agency 6).

The wide-ranging motives for developing GEM created confusion in government departments who identified more easily with efficiency goals than a desire to improve the use of e-commerce in the business community. These social aims were not a strong driver for government departments in adopting the new system. Many of the SME suppliers had only low levels of IT support and this acted as a barrier to adoption. GEM was seen as a way of moving small business into the electronic era but they often didn’t have the computing equipment or motivation to adopt e-commerce. It was not something they could identify with – it was just hard work to them. (Procurement officer – Government Agency 3). As sentiment changed against e-markets around the world, GEM encountered increased scepticism in terms of its ability to

The savings estimated in reports seldom occurred. In addition, the Web site became the public face of GEM and generally presented a positive evaluation of success but the number of reported transactions was quite low and this triangulated with the findings from government agencies. 12. Discussion Our main contribution was in identifying layers of authority that align to induce change in strategic response to an IT system. We took a fine grained institutional view of authority (regulatory, cultural-cognitive and norm) and argued that strategic responses to IT systems often involves alignment of structures at more than

Fig. 2. Patterns of response.

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C. Standing et al. / Information & Management 46 (2009) 138–149

one level. From our findings we propose that strategic responses can be understood within an authority framework. Resistance to ISs cannot only be explained by power struggles or rational efficiency decisions. The need to make it easier to report to changes in State Government regulations can be seen as a regulatory pressure but the decline in popularity of e-marketplaces globally was a cognitive-cultural pressure while supplier dissatisfaction was a local cultural-cognitive pressure; the strength of internal organizational ties served as an organizational norm pressure while the role of the CEO of CAMS who acted as a technology champion was a personal norm pressure.

Manipulation comes into play when there is uncertainty caused by system problems and this can lead to compromises being made (patterns 2 and 3). System and support problem are a major reason for compromise (pattern 4). Weak institutional ties provide a context for organizational units to openly defy the use of a system because they do not fear the consequences (pattern 5). Technical problems and poor usability of systems legitimate resistance to its use. Design problems associated with e-marketplaces can result in poor response times, cryptic instructions, errors in the system, lack of integration with back-end systems, and difficult navigation. These problems are felt not only by the adopting organization but also by the suppliers.

12.1. Patterns of responses

12.2. Layers of authority

Strategic responses to institutional forces have been over simplified by ignoring how responses may change over time. Five of the six government departments we surveyed acquiesced at first to the technology changes. However, our longitudinal approach showed that the responses changed, demonstrating increasing levels of resistance. We have therefore proposed the idea of patterns of responses of conformity or non-conformity to IT adoption within a context of pressures that take these changes into account. Although there may be many patterns, we suggest that there are certain ones that are more likely to occur. Likewise, the role that IT plays in patterns of non-conformity is likely to be a relatively small set. Some of the patterns are shown in Fig. 2. A pattern of increasing non-conformity (pattern 1) involves initial acquiescence due to regulatory and cultural-cognitive authority, and internal organizational authority, followed by compromise due to system and support problems and then avoidance caused by the continued system problems and external pressures to non-conform. The system issues result in compromises being made and cause eventual avoidance of the system [1].

The strategic response to an IT adoption decision is the result of the alignment of layers of institutional authority through time (see Table 10). Viewing institutional authority solely as external pressure to conform fails to recognise the layered influence of authority and over simplifies the multi-levelled nature of institutions. Are certain levels of authority more important than others in determining a strategic response? From the cases we argue that external cultural cognitive authority is a major factor dictating strategic response. Non-conformity with the use of IT innovation is heavily influenced by the perception of the technology in the environment [5]. The level of popularity of a technology serves as an external factor that supports internal decisions, highlighting the multi-level nature of institutional forces. However, a strategic response to an IT decision is unlikely to stem from one form of authority. For example, avoidance required external (negative) authority, system problems, local supplier feelings, or even a negative personal decisions resulting from the realization that GEM was ‘‘hypedup’’ and oversold.

Table 10 Layers of authority.

Gray shades: significant factors in strategic response.


Notwithstanding the importance of external cultural authority, other forms are usually necessary to result in any one of the strategic responses. 13. Managerial implications Our study had a number of implications for practitioners. It showed that technology appropriation does not take place in a static context and is influenced by shifting forms of authority over time. Groups of users may acquiesce to a technology decision initially, but change in popularity in the environment can change internal perceptions of it. There is little that IT managers can do but try to manage the internal perception. Managers need to be aware of the multiple levels of authority that affect an organization and assess how they might influence the use of technology. References [1] C.C. Albrecht, D. Dean, J.V. Hansen, Marketplace and technology standards for B2B e-commerce: progress, challenges, and the state of the art, Information and Management 42 (6), 2005, pp. 865–875. [2] A. Beaudry, A. Pinsonneault, Understanding user responses to information technology: a coping model of user adaptation, MIS Quarterly 29 (3), 2005, pp. 492, 493–524. [3] M.A. Bowring, De/constructing theory: a look at the institutional theory that positivism built, Journal of Management Enquiry 9 (3), 2000, pp. 258–270. [4] D. Chatterjee, R. Grewal, V. Sambamurthy, Shaping up for e-commerce: institutional enablers of the organizational assimilation of web technologies, MIS Quarterly 26 (2), 2002, pp. 65–89. [5] K.C. Cousins, D. Robey, The social shaping of electronic metals exchanges: an institutional perspective, Information Technology & People 18 (3), 2005, pp. 212– 229. [6] DoIT, GEM, 2002, http://www.gem.wa.gov.au (accessed 24.09.02). [7] M.R. Jones, H. Karsten, Giddens’s Structuration Theory and information systems research, MIS Quarterly 32 (1), 2008, pp. 127–157. [8] F. Kaefera, E. Bendoly, Measuring the impact of organizational constraints on the success of business-to-business e-commerce efforts: a transactional focus, Information and Management 41 (5), 2004, pp. 529–541. [9] K. Krippendorff, Content Analysis: An Introduction to Its Methodology, 2nd ed., Sage, Thousand Oaks, CA, 2004. [10] R. Lamb, R. Kling, Reconceptualizing users as social actors in information systems research, MIS Quarterly 27 (2), 2003, pp. 197–236. [11] L. Lapointe, S. Rivard, A multilevel model of resistance to information technology implementation, MIS Quarterly 29 (3), 2005, pp. 461–492. [12] S.M. Miranda, Y. Kim, Professional versus political contexts: institutional mitigation and the transaction cost heuristic in information systems outsourcing, MIS Quarterly 30 (3), 2006, pp. 725–754. [13] C. Oliver, Strategic responses to institutional processes, Academy of Management Review 16 (1), 1991, pp. 145–179.

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[14] W.J. Orlikowski, S.R. Barley, Technology and institutions: what can research on information technology and research on organizations learn from each other? MIS Quarterly 25 (2), 2001, pp. 145–166. [15] D.D. Phan, E-business development for competitive advantages: a case study, Information and Management 40 (6), 2003, pp. 581–590. [16] W.R. Scott, Organizations: rational, natural, and open systems, Pearson Hall, New Jersey, 2003. [17] E.B. Swanson, N.C. Ramiller, Innovating mindfully with information technology, MIS Quarterly 28 (4), 2004, pp. 553–584. [18] H.H. Teo, K.K. Wei, I. Benbasat, Predicting intention to adopt interorganizational linkages: an institutional perspective, MIS Quarterly 27 (1), 2003, pp. 19–49. [19] R.K. Yin, Case Study Research Design and Methods, 3rd ed., Sage Publications, Newbury Park, 2002. [20] D. Yiu, S. Makino, The choice between venture and wholly owned subsidiary: an institutional perspective, Organization Science 13 (6), 2002, pp. 667–683. Craig Standing is Professor of Strategic Information Management and Head of School in the School of Management Information Systems at Edith Cowan University, Australia. His current research interests are in the areas of electronic markets and mobile commerce. He has published in the European Journal of Information Systems, IEEE Transaction on Engineering Management, Information & Management and European Journal of Operational Research.

Ian Sims holds professional qualifications as a CA, a CPA with a specialist designation in Information Systems and MCIPS. He has managed complex information systems in both the public and private sectors. He is the course Coordinator for the master of Supply Chain Management at Southern Cross University.

Peter Love is the inaugural Chair of Innovation in the Department of Construction Management at Curtin University of Technology. Professor Love has a multidisciplinary background and has varied research interests, which include project management, engineering forensics, operations and production management, information systems evaluation, and IT applications to construction and engineering. He serves as an editorial advisory board member for several leading international journals, as well as acted as coand-mini-track chair at numerous international conferences. He has co-authored/edited six books and has authored/co-authored over 350 internationally refereed research papers, which have appeared in leading international journals.