Institutional isomorphism due to the influence of information systems and ITs strategic position

Abstract

Institutional isomorphism is a concept at the core of institutional theory to explain the homogeneity of organizations in a field. DiMaggio and Powell (1983) developed a framework that presented the different mechanisms, including coercive, mimetic and normative, through which isomorphism occurs. Information systems (IS) have become a critical asset in the industry today, with firms heavily dependent on IS for either their day-to-day operational processes or to gain a strategic edge. This paper proposes that IS drives isomorphism in organizations. The IS impact affecting isomorphism is greater when the dependence of the firm on information technology is greater. McFarlan and McKenney's (1983) IS strategic grid identifies four kinds of IS dependence' strategic, turnaround, operational, and support. We propose a framework to understand the degree of isomorphism (through different mechanisms) that a firm is likely to experience under the influence of IS, based on the firm's position in the strategic grid. There has been studies linking institutional theory and strategic IT, and evidences of importance of such research, but none of the studies develops a framework observing the mechanisms of isomorphism due to IT impact. The paper analyses relevant cases from the industry using a framework that we developed. The framework has practical implications for firms to be prepared for the isomorphic changes they are expected to experience when their IS dependence places them in a particular strategic quadrant.