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Information Technology Diffusion: A Strategic Perspective

Information Technology Diffusion: A Strategic Perspective Raid Al-adaileh (Email: [email protected])

Jawed Siddiqi (Email: [email protected]) Computing Research Center School Of Computing and Management Sciences Sheffield Hallam university-Sheffield Tel: +44 114 225 3169 Fax: +44 114 225 3161 Keywords: Information technology diffusion, Culture, Developing countries, Two-dimension model

Abstract Information technology diffusion (ITD) is a concept that is associated with how a new idea or a new way individual and organizational behaviour is communicated between people. This concept has been subject to extensive research especially in the developed countries. In spite of this research, the failure of some ITD projects continues to be a major problem that constrains the benefits of Information and Communication Technologies (ICTs). Therefore, we argue that there is much to be done to arrive at a strategic vision that prevents such expensive failure of IT implementation. This paper explores the issue of ITD from a strategic point of view and identifies the major themes that dominated the available literature. A two-dimension Model of analysis is proposed and applied. That includes technological and cultural dimensions. Based on this, a framework for future research has been proposed. Cultural dimension with factors that include people values, their interactions and relationships are found to be the major issues that need further examination especially within the context of developing countries.

1. Introduction: ITD has been subject to extensive research in the developed countries (e.g. Juustila, 1995; Dasgupta, 1997; Baskerville & Heje, 1998; Lynn et al, 1999; Henfridsson, 2000; Jassawalla & Sashittal, 1998; Hanna et al, 1995). Few studies have been explored this area within the context of developing countries (Nulens, 1997; Heeks, 2001; Straub et al, 1997; Harris et al, 1998; Henfridsson, 1995; Rose & Stroub, 1998; Kirlidog, 1996; Abdul-Gader & Alangari, 1996; Straub et al, 2001).

This massive literature especially in developed

countries has not prevented some IT projects from facing a substantial failure. It seems that the focus of most

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Information Technology Diffusion: A Strategic Perspective of this literature has missed the important elements of successful diffusion. Therefore, the need to establish new vision for ITD studies seems extremely important to avoid making the same mistakes as well as avoiding the expensive failure of some IT projects. This is especially important for developing countries that suffer from lack of financial resources and thus need to get the full range of IT benefits without too much risk of failure. This paper is an attempt to highlight the important aspects that need to be considered to achieve successful diffusion. It starts with a clarification of the proposed model of analysis, which will be applied to analyse the available literature. The main focus will be directed toward understanding ITD within the context of developing countries. Based on this, a guide for future research in the area of ITD within this context will be proposed.

2. Two-dimension Model Successful implementation and diffusion of IT is based on the consideration of two major dimensions: cultural and technological dimensions. Both are seen as two main success factors for ITD within any context

Organizational culture dimension

(see figure 1).

IT diffusion

Technological dimension Figure 1. Two-dimension model of ITD Cultural dimension includes people and other organizational components (e. g. structure, processes, communication

system

and

management).

Technological

dimension

includes

information

and

communication technology tools (e.g. computers, electronic communication systems and networking). We

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Information Technology Diffusion: A Strategic Perspective see that these two dimensions should be integrated in order to achieve successful ITD within the organization. In this paper, we will explain the way these two dimensions have been considered. This will be attained through a review of the diffusion literature

3. Diffusion of IT, Theory Not Practice Dasgupta (1997: P353) defines ITD as "a collective process involving introduction, assimilation, and permeation of information systems technology throughout an organisation". O’Callaghan (1998) has identified two basic paradigms. The first paradigm views diffusion as a process of communication and influence in which people are informed about the new technology and are persuaded to adopt this technology through their communication with prior users. The second paradigm views diffusion as an economic process in which adopting or rejecting the new technology is determined by the cost of adoption and the benefits that could be achieved as a result of the adoption of new technology. But successful diffusion should be seen as communication and economic processes where both processes complement each other. Effective communication enables the achievement of any economic benefits. In contrast, weak or ineffective communication may cause the failure of diffusion process. On the other hand, economic benefits (for individuals and/or organizations) may motivate the communication process that lead to increase the growth and acceptance of innovation diffusion. Several models (innovation diffusion models) have been presented in the literature to clarify the process of innovation diffusion within the organizations (McFarlan & McKenney, 1982; Cooper & Zmud, 1990; Davis, 1993, 1989; Rogers, 1995). McFarlan & McKenney (1982) proposed an Information Technology Diffusion Procedural Model (ITDPM) that includes technology identification and investment, experimentation and learning, rationalization and management control, and widespread technology transfer. This model starts with technology identification as the first stage in the diffusion process without considering some human aspects such as the level of technical skills among users of the new technology. That could lead to the failure of the diffusion process. It also depends largely on the experimentation as a way to achieve the diffusion process and this could increase the cost of diffusion. Cooper and Zmud (1990) present an Information Technology Diffusion Perspective Model

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Information Technology Diffusion: A Strategic Perspective (ITDPM). According to this model, the diffusion of IT starts firstly when there is a pressure to change (initiation stage). This pressure leads the managers of organization to make decision to adapt this change (adoption stage) through development, installation, and maintenance of new technology, and the development of new organizational procedures (adaptation stage). If users accept this technology (acceptance stage), it will then become a normal activity (routinization stage). The final stage in the diffusion process according to this model is the infusion stage that includes the integration of new information technology with the organization’s systems to support higher levels of organizational work. This model is more comprehensive than previous model and considers all stages that are necessary to the success of the diffusion process. It also considers the partial implementation of new technology as a way to enhance the diffusion process. However, the user acceptance to the new technology should be considered before the adaptation process, which includes development, installation, and maintenance of new technology. This can facilitate the adaptation process through giving the users the opportunity to contribute in this process. It also could reduce the cost of implementation through supporting the decision making process and reducing the users’ resistance to the new arrangements that may be introduced as a result of the implementation of new technology. Within the context of ITD literature, Technology Acceptance Model (TAM) is a well-respected model of IT adoption and usage that has been tailored to explain computer usage. This model specifies the causal relationships between system design features, perceived usefulness, perceived ease of use, attitudes toward using, and actual usage behaviour (Davis, 1993). It is mainly used to explain the impact of system characteristics and end user behavior on the actual system use. This model assumes the rationality in the human behaviour through reducing the importance of ease of use and emphasizing the important of perceived usefulness. Although this assumption might be correct when people have the level of proficiency which enable them to realize and evaluate the usefulness of the target system, people who do not have enough knowledge to realize the advantages of this system may only be motivated by the ease of system use. Also, the emphasis on the relationship between attitudes and behavior tends to ignore the fact that attitudes will not be related to behaviour when people are not free to act according to their attitudes (Winter et al, 1998).

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Information Technology Diffusion: A Strategic Perspective Furthermore, through describing perceived usefulness and perceived ease of use as the two factors that determine attitudes towards using the new IT system, we are ignoring other factors that may have an impact such as, management approach, the external social pressure practiced by some individuals and groups within the organization, and cultural differences. For example, in their study to testify the ability of TAM to explain IT adoption and usage in USA, Switzerland, and Japan, Straub (et al, 1997) revealed that while TAM provides explanation for IT adoption and use in USA and Switzerland, it does not provide an explanation for Japanese experience. They conclude that cultural tendencies in Japanese culture {more uncertainty avoidance, greater power distance, collectivist sentiments, and masculinity (Hofstede, 1980)} could explain the failure of TAM in predicting computer usage behaviour in Japan. This study shows the important of cultural differences within the context of ITD research. If we compare TAM with other previous models (Cooper & Zmud, 1991; McFarlan & McKenney. 1982), we see that this model only explains the user acceptance of IT through understanding the individual response in relation to IT adoption. Other models provide more comprehensive view of ITD through considering some other organizational and technological factors. According to Rogers (1995), the innovation process within the organization consists of two phases (initiation and implementation) and five steps that usually occur in a time-ordered sequence of knowledge, persuasion, decision making, implementation and confirmation. Roger’s model views the process of innovation as a response to organisational problem, which is to be resolved through adopting an innovation (e.g. performance gap could be an incentive to implement computerised information system to reach the organizational expectations). The process of defining the organizational problems is followed by a search for suitable innovation to solve these problems. In some cases, the decision-makers may conclude (without evaluation) that a mismatch would occur and this leads to terminating the innovation process prior to implementation. When the match is established, both innovation and organization are expected to be modified because the innovation almost never fits perfectly in the organizational settings and some changes must be introduced to support the innovation diffusion as well as to resolve the organizational problems (Rogers, 1995).

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Information Technology Diffusion: A Strategic Perspective The implementation of technological innovation could be the best example to clarify the processes of redefining innovation and restructuring of organization where any computerised system is defined or, in most cases, designed to match the organizational requirements (Rogers; 1995, 1983; Davis, 1993). When this computerised system is introduced into the organization, radical changes will most likely combine it. Therefore, flexibility is required in both innovation and organizational components. As the process of diffusion proceeds, uncertainty that surrounded the new innovation will be reduced through the establishment of common understanding for this innovation. Appropriate social construction and organizational support are extremely needed to enhance this process. When all the questions about an innovation are clarified, innovation becomes a normal fact and incorporated into the regular organizational routine. This model of innovation diffusion could be appropriate to describe programmed innovation diffusion process. However, Auor & Ruohonen (1996: P3) criticise Rogers’ model under the name of classical diffusion theory. They state that "one of the major limitations in classical diffusion theory has been the assumption that individuals adopt innovations for their own independent use, rather than as a part of a larger community of interdependent users" The structure of power within the organization and some other organizational aspects such as organizational culture, management and organizational ability to define its problems accurately play an important role even when the diffusion process is formally planned and introduced. Ignoring the role of adopters in the process of diffusion could make the process unable to reach to its normal and theoretical end according to this model or any other diffusion model. This normally happens in large bureaucratic organization where top managers (who usually have full authority in decision-making) take innovation adoption decision without any previous consultation or any subsequent training (Abdul-Gader & Alangari, 1996). The concern leading to this argument is the willingness of people to accept new forms of working practices and change their traditional ways of working. According to the OASIC study, which conducted in the UK in 1996, The ignorance of these issues has been identified as the main reasons for the failure of most IT projects. In order to reap the full benefits of IT, we should subsequently match the human side, which includes organizational culture with technological components. Technology benefits can only be realised if the members of the social system have accepted this technology. A review of the available literature within

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Information Technology Diffusion: A Strategic Perspective the context of developed countries revealed that most of this literature has emphasised technological dimension where the diffusion of IT is seen as technical process that includes documentation, installation, and maintenance of appropriate technology. The perception of people and their attitude toward the diffusion of IT have been underestimated. Although few studies have investigated some human issues related to ITD, they were mainly focused on exploration of some individual rather than organizational culture issues.

4. ITD in Developing Countries Few studies have discussed issues related to ITD in developing countries (e.g. Harris et al, 1998; Henfridsson, 1995; Rose & Stroub, 1998; Kirlidog, 1996; Abdul-Gader & Alangari, 1996; Straub et al, 2001). Rose & Stroub (1998) have investigated the applicability of TAM (Davis, 1989) to ITD in the Arab world. They revealed that social and cultural beliefs are key issues to the diffusion of IT. However, their study has not identified particular social or cultural aspects. Kirlidog (1996), in his study about information systems in Turkey, claims that the managerial practices in Turkey contributes to the scarcity of IS applications where managers have a paternalistic and authoritarian attitude. The information is most likely transferred in one direction (from top to bottom) within the organization in the form of directives and commands. This study clarifies the relationship between management styles and IS applications. He also claims that people in developing countries are mainly unwilling to take risks and thus uncertainty avoidance behaviour (Daft, 1995; Hofstede, 1991) is exhibited. The desire for risk and uncertainty avoidance act as high entry barriers for information systems implementation in developing countries (Kirlidog, 1996). Moreover, the availability of highly skilled management and flexible self-confident labour are seen as considerable barriers to the diffusion of new technology in developing countries (Carnoy, 1997). Abdul-Gader & Alangari (1996: P113) state that "The richness of IT literature has primarily focused on organizations in the developed hemisphere. Even in the sporadic literature on IT in developing countries, one rarely encounters scholarly reports on IT assimilation problems in these countries’ organizations. Most studies are descriptive in nature". They investigate some aspects related to IT assimilation in Saudi public organizations and conclude that human resources issues are the most important barriers toward IT assimilation in Saudi public organizations. In fact, the process of ITD is best seen as having two major contexts: technological and cultural context. The following review has considered this classification.

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Information Technology Diffusion: A Strategic Perspective

4.1

Technological Context

Technology, from the cultural points of view, could be a source of power for individual and can shift the balance of power towards ordinary people. It makes the society in general less hierarchical. This may restrict the speed of development because people who have the power or the rulers of some developing societies might be unwilling to share their power or give power in hands of their citizens. In this regard, Nulens (1997) identifies three streams in relation to the impact of ITD on the situation within developing world. The first stream of research is based on a world vision that overestimates the one-way power of technology. In this view, the information revolution will give developing countries the opportunity to develop and eventually all countries of the world will become more equal. The second stream of research is based on the assumption that information technologies will only increase the existing inequalities and power relations between developed and developing countries. The third stream of research view technology as a part of the society, which has no value without other parts. Therefore, the notion of an autonomous technology is a misconception. However, we argue that the benefits of ITD are determined by the way it is introduced and planned. For example, when technology is introduced in an ad hoc manner without considering the diffusion context, the second stream seems more appropriate. Developing countries can successfully utilize IT through establishing an appropriate information technology foundation that is based on a high-quality economy and self-reliance. In doing this, developing countries should consider their individual needs and the characteristics of their own contextual frameworks (socio-cultural characteristics of each region) and free any political or economical pressure from other developed countries. Some problems that may face developing countries and obstruct technology implementation process are: the lack of technological consciousness of managers and civil servants, the lack of knowledge about the best way to acquire technology, the lack of capacity to design and develop their own technologies (Nulens, 1997). Though, it is possible to remove these constrains through promoting a culture that protect technology and support its use. Kaul (1997) presents some success examples. These include Malaysian government Public Service Network, which enable the government agencies to offer their services online. The Singapore government experience is another example where Civil Service program has generated S$2.71 in return for every dollar spent on computerization.

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Information Technology Diffusion: A Strategic Perspective Hanna (et al 1995) claims that several structural barriers may constraint ITD in developing countries. Some of these barriers are slow educational response to new generic technologies, poor telecommunication infrastructure, poor technical and managerial capabilities, poor regulatory framework, and low domestic demand for IT. Another constraint, which has been mentioned by Heeks (2001), is related to the justification of using technology. He argues that the achievement of financial cost-cutting goal is questionable in developing countries’ context where replacing cheap humans with costly ICTs is unlikely to be justified on financial cost grounds. In contrast, within the context of developed countries, replacing costly humans with cheap ICTs may cut costs. Therefore, the emphasis in developing countries should be directed toward other achievements (e.g. increase process speed, improve the quality of services) in order to provide some justification for automation. In his study about e-government development, Heeks also states that the few success stories cited in some studies are the exception rather than the rule for two reasons: The first reason is related to the lack of e-readiness, the second reason is related to the lack of information and research that may help e-governance initiatives in developing countries. This creates a design—reality gap. Rose & Straub (1998) have reported other problems that face ITD in developing countries. These include lack of national infrastructure, lack of capital resources, and government polices set to prevent technology transfer. In the above discussion, we have identified some models and some problems related to ITD. The term culture has been mentioned frequently. In fact, some recent studies have emphasised the important of culture within the context of ITD research. In the following section, the concept of culture and cultural differences will be discussed. Cultural impact on ITD will also be outlined.

4.2

Organizational Culture Context

Hofstede (1991: p180) defines culture as a collective programming of the mind, which distinguishes the members of one group or category of people from another. He emphasises the importance of culture in our life when he states that culture affects not only our daily practices: the way we live, are brought up, manage, are managed, and die; but also the theories we are able to develop to explain our practices. No part of our lives is exempt from culture's influence"(Hofstede, 1991: p170). In his well-known research about IBM Corporation in fifty countries and three regions in the world, Hofstede identifies four major cultural dimensions and explains how cultural differences could affect people’s behaviour and organizational

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Information Technology Diffusion: A Strategic Perspective practices. In relation to the organizational work, Hofstede concludes that Power distance and uncertainty avoidance dimensions affect our thinking about organizations while the other two dimensions (individualism versus collectivism & masculinity versus femininity) affect our thinking about people in organizations rather than about organizations themselves. The results of Hofstede’s study have great implications on the literature of all organizational issues and have raised a great debate regarding the applicability of western studies or any other country' s studies in any other nation or any other culture. He states that "not only organizations are culture bound; theories about organizations are equally culture bound. The professors who wrote the theories are children of a culture"(Hofstede, 1991: p146). For example, Henri Fayol, who was French (relatively large power distance & strong uncertainty avoidance), was dealing with management on the base of the exercise of personal power and formal rules. On the other hand, Max Weber, who was German (small power distance & relatively strong uncertainty avoidance), was dealing with management concept on the base of formal rules more than personal power. Both of them were influenced by cultural norms within their own country. The main idea that has been emphasised on this argument is that organizational, social and managerial theories are culturally constrained and reflect the culture of the environment in which its author or founder grew up and did his research.

The main conclusion that could be revealed is that no universal theory in social, psychological, organizational, and managerial fields exists; they are all constrained by cultural bounds. Thus, it is irrational to assume that the available literature in developed countries concerning the diffusion of IT is suitable to explain this phenomenon in other countries. This creates a huge gap in the available literature not only that is related to ITD but also to all organizational, managerial and social issues. Henfridsson (1995) argues that thirty years of experience has shown that transfer of technology intended to bridge the gap between the industrialised and the third world has failed. This failure is partly a consequence of seeing technology as something value-free. Viewing technology in this way will isolate it from its normal context, which includes people as the main actors. Heeks states emphasising the technology control over organizational issues in e-government projects that "ICTs are often conceived in terms of machinery and engineering, rationality and objectivity. Many e-governance systems are designed according to these conceptions. The trouble is that many government and civil society organisations do not adhere to these

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Information Technology Diffusion: A Strategic Perspective ’hard’ ideas. In reality, they are dominated by ’soft’ factors: people, politics, emotions and culture. When a hard IT design meets a soft reality, there is a large gap and a strong likelihood of failure"(P22). Thus, operational, strategic and socio-cultural problems should be taken into consideration and IT should be seen as development tool rather than an organizational goal (Nulens, 1997). Hill (et al, 1998) investigate the culture of Arab countries and its impact on the information technology transfer (ITT). They revealed that Arab organizations that have successfully introduced IT have paid more attention to the cultural beliefs in their organizations. They go further to identify specific social and cultural aspects that influence ITT. Social aspects, in their view, include social class, personal relations in work group, and educational level while cultural aspects include face-to-face interactions, Allegiance to family and kin group, concept of time, and religion. Based on their field study, they also identify some impediments for ITT to Arab countries that include: lack of finance, conflict with personal values, lack of knowledge/ experience, lack of training, lack of education, fear to lose identity and fear of being controlled. Hence, in order to achieve successful diffusion of technology within the organization, the fitness between the technology and the receiving context has to be considered. The receiving context includes people and their cultural background. Many evidences are provided to emphasise the importance of people within the organizational context in supporting any ITD strategy. Organizations should not implement IT projects as an end in themselves but they should think about IT as a part of comprehensive organizational change that serves and integrates with other organizational components (Cabinet Office report, 2000; OASIC study, 1996). Technology diffusion imposes some changes in the social system where people live and work and should be dealt with on this base. The success or failure of ITD project highly depends on the way people of organization perceive it and their ability to change their practices and their daily routine in order to work with new technology.

5. Issues For Future Research Certainly, it is expected to find some differences among people who belong to different cultural layers. As such differences have not been explored extensively in the literature in both developing and developed countries, the exploration of these differences and the accurate identification of them are major areas for future research in order to establish a strategic foundation for ITD. Abdul-Gader & Alangari (1996) have

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Information Technology Diffusion: A Strategic Perspective identified the absence of such foundation as the main reason for the failure of IT assimilation within organizations. Additionally, strategic planning concept needs to be explored and detailed ITD plans should be identified based on understanding of the integration between technological and cultural dimension.

6. Conclusion Although the use of ICTs may improve different aspects of our life, this positive impact depends on other organizational changes. Technology can not fix every thing but both cultural and technological changes can achieve better results. We see that the theoretical studies have not succeeded in preventing the failure of some IT projects not only in developing countries but also in some developed countries. Therefore, special diffusion model that considers the organizational setting is required in order to explain and enhance the diffusion of innovation. This could be called strategic diffusion thinking. The formulation of this thinking can be based on: œ

Understanding the concept of diffusion process within the organizational context. This concept includes

some key elements such as communication, social setting, user acceptance, economic benefits, and partial implementation of technology. œ

Understanding the organizational components in general and these are related to the people of the

organizations in particular. Future research should deal with technology diffusion as an organizational process. This can provide us with a practical vision in terms of diffusion environment. This organizational process is affected by a culture notion, which is dominant in organizations. Therefore, promoting the diffusion process requires understanding of the organizational culture and creating of a suitable cultural norm that encourage ITD.

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