SYNOPSIS: Existing studies have found a linkage between institutional factors and systems adoption, but the literature has overlooked an important question: When is the decision to implement a system influenced by institutional factors? In this paper, the author argues that decisions to adopt systems are not influenced equally by institutional factors, and examines how system characteristics moderate the effects of institutional factors on adoption decisions, specifically decisions to adopt enterprise resource planning (hereafter, ERP) systems. The results of the study reveal that institutional factors, such as mimicry of peers, compliance with industry norms, and coercion from powerful entities influence ERP adoption decisions. The results also show that the effects of institutional factors on adoption decisions are amplified when participants have not already adopted an ERP system, the benefits of the system are difficult to quantify, and the system enhances organizational interaction throughout the supply chain. Through this paper, the author contributes to the institutional theory literature by exploring conditions that enhance the salience of institutional factors and contributes to accounting information systems literature by investigating the boundaries of the influence of institutional factors on ERP adoption.
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1 December 2009
