More Web Proxy on the site http://driver.im/

article

Strategic Response to Institutional Influences on Information Systems Outsourcing

Organization Science, Volume 8, Issue 3

Pages 235 - 256

https://doi.org/10.1287/orsc.8.3.235

Published: 01 June 1997 Publication History

Abstract

<P>This paper underscores the importance of examining strategic response to institutional influences in light of hypercompetition. Focusing on the banking industry, which is hypercompetitive and highly institutionalized, affords a unique opportunity to understand how individual corporations in such an industry respond strategically to institutional pressures.</P> <P>We examine critical contingencies arising from hypercompetition that moderate institutional influences on information systems outsourcing in commercial banks. Using data from 226 banks and hierarchical moderated regression analyses, we show that the propensity of banks to conform to or resist institutional pressures depends on the nature of institutional pressures, perceived gain in production economies, financial capacity to resist institutional influences, and transaction cost considerations.</P>

References

[1]

Aiken, L. S. and S. G. West (1991), Multiple Regression: Testing and Interpreting Interactions, Newbury Park, CA: Sage Publications.

[2]

American Banker (1988), Managing Technology: The Impact on the Bottom Line, American Banker Technology Survey, New York: Bond Buyer, International Thomson Publishing Corporation.

[3]

American Banker (1990), Managing Technology: CEOs Take Charge, American Banker Technology Survey, New York: Bond Buyer, International Thomson Publishing Corporation.

[4]

American Banker (1991), Computer Power: How Much Is Too Much?, American Banker Technology Survey, New York: Bond Buyer, International Thomson Publishing Corporation.

[5]

American Banker (1992), Building Networks: Banks Reach Out to Customers, American Banker Technology Survey, New York: Bond Buyer, International Thomson Publishing Corporation.

[6]

American Bankers Association (1981), National Operations/Automation Survey, Washington, DC: ABA Publication.

[7]

American Bankers Association (1986), National Operations/Automation Survey, Washington, DC: ABA Publication.

[8]

American Bankers Association (1990), National Operations/Automation Survey, Washington, DC: ABA Publication.

[9]

Anderson, E. and A. T. Coughlan (1987), "International Market Entry and Expansion via Independent or Integrated Channels of Distribution" Journal of Marketing, 51, 1, January, 71-82.

[10]

Baer, H. L. and L. R. Mote (1992), "The United States Financial System," in G. G. Kaufman (Ed.), Banking Structures in Major Countries, Norwell, MA: Kluwer Academic Publishers, 469-554.

[11]

Bank Administration Institute (1980), Automation Alternatives for Communzity Banks, Park Ridge, IL: Bank Administration Institute.

[12]

Baumol, W. J. (1959), Business Behavior, Value and Growth, New York: Macmillan.

[13]

Blau, P. M. and R. A. Schoenherr (1971), The Structure of Organizations, New York: Basic Books, Inc.

[14]

Brandon, D. H. and S. Segelstein (1984), Data Processing Contracts: Structure, Contents, and Negotiation (2nd Edition), New York: Van Nostrand Reinhold.

[15]

Burns, A. F. (1988), The Ongoing Revolution in American Banking, Washington, DC: American Enterprise Institute for Public Policy Research.

[16]

Carmines, E. G. and R. A. Zeller (1979), Reliability and Validity Assessment, Sage University Paper Series on Quantitative Applications in the Social Sciences, series no. 07-017, Newbury Park, CA: Sage Publications.

[17]

Cash, J. I., F. W. McFarlan, J. L. McKenney and M. R. Vitale (1988), Corporate Infotmation Systems Management: Text and Cases (2nd ed.), Homewood, IL: Irwin Publishing.

[18]

Child, J. (1972), "Organization Structure, Environment, and Performance-- The Role of Strategic Choice," Sociology, 6, 1, 1-12.

[19]

Crampton, S. M. and J. A. Wagner, III (1994), "Percept-Percept Inflation in Microorganizational Research: An Investigation of Prevalence and Effect," Journal of Applied Psychology, 79, 1, 67-76.

[20]

Cronbach, L. J. and P. E. Meehl (1955), "Construct Validity in Psychological Tests," Psychological Bulletin, 52, 281-302.

[21]

D'Aveni, R. A. (1994), Hypercompetition: Managing the Dynamics of Strategic Maneuvering, New York: Free Press.

[22]

Dearden, J. (1987), "The Withering away of the IS Department," Sloan Management Review, 28, 4, Summer, 87-91.

[23]

DiMaggio, P. (1983), "State Expansion and Organizational Fields," in R. H. Hall and R. E. Quinn (Eds.), Organizational Theory and Public Policy, Beverly Kills, CA: Sage Publications, 147-161.

[24]

DiMaggio, P. (1988), "Interest and Agency in Institutional Theory," in L. G. Zucker (Ed.), Institutional Patterns and Organizations, Cambridge, MA: Ballinger, 3-22.

[25]

DiMaggio, P. and W. W. Powell (1983), "The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality," American Sociological Review, 48, 2, 147-160.

[26]

Donaldson, L. (1991), "The Ethereal Hand: Organizational Economics and Management Theory," Academy of Management Review, 15, 3, 369-401.

[27]

Eisenhardt, K. M. and S. L. Brown (1992), "Organizational Economics Within the Conversation of Strategic Management: A Commentary," in Paul Shrivastava, Anne Huff and Jane Dutton (Eds.), Advances in Strategic Management, Greenwich, CT: JAI Press, 157-162.

[28]

Federal Financial Institutions Examination Council (1992), Electronic Data Processing Examination Handbook (January), Washington, DC: Board of Governors of the Federal Reserve System, Publication Services.

[29]

Fraser, D. R. and J. W. Kolari (1985), The Future of Small Banks in a Deregulated Environment, Cambridge, MA: Ballinger.

[30]

Galaskiewicz, J. and S. Wasserman (1989), "Mimetic Processes within an Interorganizational Field: An Empirical Test," Administrative Science Quarterly, 34, 3, 454-479.

[31]

GAO (1992), Depository Institutions: Contracting Practices with Data Processing Services, Report to Congressional Committees, U.S. General Accounting Office, GOA/GGD 92-19.

[32]

Gillis, R. A. and M. Biafore (1993), "Evaluating the Outsourcing Option: Panacea or Placebo," The Bankers Magazine, 176, 3, (May-June), 10-15.

[33]

Granovetter, M. (1985), "Economic Action and Social Structure: The Problem of Embeddedness," American Journal of Sociology, 91, 3, 481-510.

[34]

Granovetter, M. (1992), "Economic Institutions as Social Constructions: A Framework for Analysis," Acta Sociologica, 35, 1, 3-11.

[35]

Hauck, W. W. and A. Donner (1977), "Wald's Test as Applied to Hypotheses in Logit Analysis," Journal of the American Statistical Association, 72, 360, Part 1, 851-853.

[36]

Heide, J. B. and G. John (1990), "Alliances in Industrial Purchasing: The Determinants of Joint Action in Buyer-Supplier Relationships," Journal of Marketing Research, 27, 1, (February), 24-36.

[37]

Hesterly, W. S., J. Liebeskind, and T. R. Zenger (1990), "Organizational Economics: An Impending Revolution in Organizational Theory?" Acadeny of Management Review, 15, 3, (July), 402-420.

[38]

Hosmer, D. W. and S. Lemeshow (1989), Applied Logistic Regression, New York: John Wiley & Sons.

[39]

Huber, R. L. (1993), "How Continental Bank Outsourced Its 'Crown Jewels'," Harvard Business Review, 71, 1, (January-February), 121-129.

[40]

Jensen, M. C. (1989), "Eclipse of the Public Corporation," Harvard Business Review, 67, 5, (September-October), 61-74.

[41]

Joskow, P. L. (1988), "Asset Specificity and the Structure of Vertical Relationships: Empirical Evidence," Journal of Law, Economics, and Organization, 6, 1, 95-117.

[42]

Kanter, R. M. (1989), When Giants Learn to Dance, New York: Simon and Schuster.

[43]

Klein, B., R. Crawford, and A. Alchian (1978), "Vertical Integration, Appropriable Rents and the Competitive Contracting Process," Journal of Law and Economics, 21, 2, (October), 297-326.

[44]

Lacity, M. and R. Hirschheim (1993), Infotmation Systems Outsourcing: Myths, Metaphors, and Reality, New York: John Wiley & Sons.

[45]

Loh, L. and N. Venkatraman (1992), "Diffusion of Information Technology Outsourcing: Influence Sources and the Kodak Effect," Information Systems Research, 3, 4, December, 334-378.

Digital Library

[46]

Mahoney, J. T. (1992), "Organizational Economics Within the Conversation of Strategic Management," Advances in Strategic Management, 8, 103-155.

[47]

Markus, L. M. and C. Soh (1993), "Banking on Information Technology: Converting IT Spending into Firm Performance," in Rajiv D. Banker, Robert J. Kauffman, and Mo A. Mahmood (Eds.), Strategica nd Economic Inmpacts of Information Technology Investment: Perspectives on Organizational Growth and Competitive Advantage, Middletown, PA: Idea Group Publishing, 364-392.

[48]

Masten, S. E. (1984), "The Organization of Production: Evidence from the Aerospace Industry," Journal of Law and Economics, 27, 2, 403-417.

[49]

Meindl, J. R., S. B. Ehrlich, and J. M. Dukerich (1985), "The Romance of Leadership," Administrative Science Qutarterly, 30, 1, 78-102.

[50]

Meyer, J. W. and B. Rowan (1977), "Institutionalized Organizations: Formal Structure as Myth and Ceremony," American Journal of Sociology, 83, 2, 340-363.

[51]

Nohria, N. and R. G. Eccles (1992), Networks and Organizations, Boston, MA: Harvard Business Press.

[52]

Nunnally, J. (1967), Psychometric Methods, New York: McGraw-Hill.

[53]

OECD (1992), Banks Under Stress, Washington, DC: Organizational for Economic Cooperation and Development.

[54]

Office of Technology Assessment (1984), Effects of Information Technology on Financial Services Systems, OTA-CIT-202, September, Washington, DC: U.S. Government Printing Office.

[55]

Office of Technology Assessment (1987), International Competition in Services, OTA-ITE-328, July, Washington, DC: U.S. Government Printing Office.

[56]

Oliver, C. (1991), "Strategic Responses to Institutional Processes," Academy of Management Review, 16, 1, 145-179.

[57]

Perrow, C. (1985), "Review Essay: Overboard with Myth and Symbols," American Journal of Sociology, 91, 1, 51-155.

[58]

Peter, J. P. (1979), "Reliability: A Review of Psychometric Basics and Recent Marketing Practices," Journal of Marketing Research, 16, 1, (February), 6-17.

[59]

Pfeffer, J. and G. R. Salancik (1978), The External Control of Organizations: A Resource Dependence Perspective, New York: Harper and Row.

[60]

Pisano, G. P. (1990), "The R & D Boundaries of the Firm: An Empirical Analysis," Administrative Science Quarterly, 35, 1, 153-176.

[61]

Powell, W. W. and P. J. DiMaggio (1991), The New Institutionalism in Organizationial Analysis, Chicago: The University of Chicago Press.

[62]

Price, J. L. and C. W. Mueller (1986), Handbook of Organizational Measurement, Marshfield, MA: Pitman Publishing.

[63]

Quinn, J. B. (1992), Intelligent Enteiprise, New York: Free Press.

[64]

Ross, P. H., J. D. Wright, and A. B. Anderson (1983), Handbook of Survey Research, San Diego, CA: Academic Press, Inc.

[65]

Rubin, L. S. (1977), "Universities in Stress: Decision Making under Conditions of Reduced Resources," Social Science Quarterly, 58, 2, 242-254.

[66]

Salzman, H. and S. Rosenthal (1994), Software by Design, New York: Oxford University Press.

[67]

Scott, W. R. (1995), Institutions and Organizations, Thousand Oaks, CA: Sage Publications.

[68]

Spector, P. E. (1992), Summated Rating Scale Construlction: An Introduction, Sage University Paper Series on Quantitative Applications in the Social Sciences, series no. 07-082, Newbury Park, CA: Sage Publications.

[69]

Steiner, T. D. and D. B. Teixeira (1990), Technology in Banking: Creating Value and Destroying Profits, Homewood, IL: Business One Irwin.

[70]

Sutton, R. I. and T. D'Aunno (1989), "Decreasing Organizational Size: Untangling the Effects of Money and People," Academy of Management Review, 14, 2, 194-212.

[71]

Thompson, J. D. (1967), Organizations in Action, New York: McGraw-Hill.

[72]

Tolbert, P. S. and L. G. Zucker (1983), "Institutional Sources of Change in the Formal Structure of Organizations: The Diffusion of Civil Service Reforms, 1880-1935," Administrative Science Quarterly, 23, 1, 22-39.

[73]

Tomasko, R. M. (1987), Downsizing: Reshaping the Coiporation of the Future, New York: American Management Association.

[74]

Ulrich, D. and J. B. Barney (1984), "Perspectives in Organizations: Resource Dependence, Efficiency, and Population," Academy of Management Review, 9, 3, 471-481.

[75]

Van de Ven, A. H. and D. L. Ferry (1980), Measuring and Assessing Organzizations, New York: John Wiley & Sons.

[76]

Walker, G. and D. Weber (1984), "A Transaction Cost Approach to Make or Buy Decision," Administrative Science Quarterly, 29, 3, 373-379.

[77]

Warren, D. L. (1984), "Managing in Crisis: Nine Principles for Successful Transition," in J. R. Kimberly and R. E. Quinn (Eds.), Managing Organizational Transitions, Homewood, IL: Irwin, 85-106.

[78]

Whetten, D. (1980), "Organizational Decline: A Neglected Topic in Organizational Science," Academy of Management Review, 5, 4, 577-588.

[79]

White, L. H. (Ed.) (1993), The Crisis in American Banking, New York: New York University Press.

[80]

Williamson, O. E. (1985), The Economic Institutions of Capitalism, New York: Free Press.

[81]

Zucker, Lynne G. (1977), "The Role of Institutionalization in Cultural Persistence," American Sociological Review, 42, 5, 726-743.

Cited By

Im GAhuja M(2023)The Interdependence of Coordination and Cooperation in Information Technology OutsourcingInformation Systems Research10.1287/isre.2023.121634:4(1791-1806)Online publication date: 1-Dec-2023
https://dl.acm.org/doi/10.1287/isre.2023.1216
Abayomi OZhang XPeng XZhao S(2020)How Do Institutional Pressures and Behavioral Intentions Affect Mobile Services Adoption?ACM SIGMIS Database: the DATABASE for Advances in Information Systems10.1145/3400043.340004951:2(82-100)Online publication date: 18-May-2020
https://dl.acm.org/doi/10.1145/3400043.3400049
Alzadjali KElbanna A(2020)Smart Institutional Intervention in the Adoption of Digital Infrastructure: The Case of Government Cloud Computing in OmanInformation Systems Frontiers10.1007/s10796-019-09918-w22:2(365-380)Online publication date: 1-Apr-2020
https://dl.acm.org/doi/10.1007/s10796-019-09918-w
Show More Cited By

Strategic Response to Institutional Influences on Information Systems Outsourcing
1. Applied computing
  1. Enterprise computing

Recommendations

Institutional Isomorphism due to the Influence of Information Systems and Its Strategic Position
SIGMIS-CPR '17: Proceedings of the 2017 ACM SIGMIS Conference on Computers and People Research

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 ...
Institutional Influences on Information Systems Security Innovations

This research investigates information security management as an administrative innovation. Although a number of institutional theories deal with information systems (IS) innovation in organizations, most of these institutional-centered frameworks ...
Assimilation of Interorganizational Business Process Standards

Organizations have not fully realized the benefits of interorganizational relationships (IORs) due to the lack of cross-enterprise process integration capabilities. Recently, interorganizational business process standards (IBPS) enabled by information ...

Comments

Please enable JavaScript to view thecomments powered by Disqus.

Information & Contributors

Information

Published In

cover image Organization Science

Organization Science Volume 8, Issue 3

June 1997

141 pages

ISSN:1526-5455

Issue’s Table of Contents

Publisher

INFORMS

Linthicum, MD, United States

Publication History

Published: 01 June 1997

Author Tags

Qualifiers

Article

Contributors

Other Metrics

View Article Metrics

Bibliometrics & Citations

Bibliometrics

Article Metrics

56
Total Citations
View Citations
0
Total Downloads

Downloads (Last 12 months)0
Downloads (Last 6 weeks)0

Reflects downloads up to 20 Dec 2024

Other Metrics

View Author Metrics

Citations

Cited By

Im GAhuja M(2023)The Interdependence of Coordination and Cooperation in Information Technology OutsourcingInformation Systems Research10.1287/isre.2023.121634:4(1791-1806)Online publication date: 1-Dec-2023
https://dl.acm.org/doi/10.1287/isre.2023.1216
Abayomi OZhang XPeng XZhao S(2020)How Do Institutional Pressures and Behavioral Intentions Affect Mobile Services Adoption?ACM SIGMIS Database: the DATABASE for Advances in Information Systems10.1145/3400043.340004951:2(82-100)Online publication date: 18-May-2020
https://dl.acm.org/doi/10.1145/3400043.3400049
Alzadjali KElbanna A(2020)Smart Institutional Intervention in the Adoption of Digital Infrastructure: The Case of Government Cloud Computing in OmanInformation Systems Frontiers10.1007/s10796-019-09918-w22:2(365-380)Online publication date: 1-Apr-2020
https://dl.acm.org/doi/10.1007/s10796-019-09918-w
Levy MBui Q(2019)How field-level institutions become a part of organizationsInformation and Organization10.1016/j.infoandorg.2019.10027229:4Online publication date: 1-Dec-2019
https://dl.acm.org/doi/10.1016/j.infoandorg.2019.100272
Oliveira TMartins RSarker SThomas MPopovič A(2019)Understanding SaaS adoptionInternational Journal of Information Management: The Journal for Information Professionals10.1016/j.ijinfomgt.2019.02.00949:C(1-12)Online publication date: 1-Dec-2019
https://dl.acm.org/doi/10.1016/j.ijinfomgt.2019.02.009
Barua AMani D(2018)Reexamining the Market Value of Information Technology EventsInformation Systems Research10.1287/isre.2017.071829:1(225-240)Online publication date: 1-Mar-2018
https://dl.acm.org/doi/10.1287/isre.2017.0718
Smuts HKotzé PVan der Merwe ALoock M(2017)Framework for Managing Shared Knowledge in an Information Systems Outsourcing ContextInternational Journal of Knowledge Management10.4018/IJKM.201710010113:4(1-30)Online publication date: 1-Oct-2017
https://dl.acm.org/doi/10.4018/IJKM.2017100101
Angst CWowak KHandley SKelley K(2017)Antecedents of information systems sourcing strategies in U.S. hospitalsMIS Quarterly10.25300/MISQ/2017/41.4.0641:4(1129-1152)Online publication date: 1-Dec-2017
https://dl.acm.org/doi/10.25300/MISQ/2017/41.4.06
Gardner JBoyer KWard P(2017)Achieving Time-Sensitive Organizational Performance Through Mindful Use of Technologies and RoutinesOrganization Science10.1287/orsc.2017.115928:6(1061-1079)Online publication date: 1-Dec-2017
https://dl.acm.org/doi/10.1287/orsc.2017.1159
Pal AOjha ABandi RKishore RBeimborn DSharma RSrivastava S(2017)Institutional Isomorphism due to the Influence of Information Systems and Its Strategic PositionProceedings of the 2017 ACM SIGMIS Conference on Computers and People Research10.1145/3084381.3084395(147-154)Online publication date: 21-Jun-2017
https://dl.acm.org/doi/10.1145/3084381.3084395
Show More Cited By

View Options

View options

Media

Figures

Other

Tables

View Issue’s Table of Contents