CLOUD COMPUTING VISION, INSTITUTIONAL FORCES, ORGANIZATIONAL MINDFULNESS, CLOUD ADOPTION AND PERFORMANCE OF SELECTED FIRMS IN KENYA By OREDO JOHN OTIENO M.Sc. IT, Strathmore University – 2008 B.Ed, Moi University – 1998 A DOCTORAL THESIS SUBMITTED IN FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF DOCTOR OF PHILOSOPHY IN BUSINESS ADMINISTRATION, SCHOOL OF BUSINESS, UNIVERSITY OF NAIROBI JANUARY 2016 DECLARATION I declare that this thesis is my own original work and it has not been submitted for examination to this or any other university. Signature: ------------------------------------------- Date: ------------------------ Oredo John Otieno D80/60320/2010 This thesis has been submitted for examination with our approval as the university supervisors. Signature: ----------------------------------------- Date: ----------------------------- Dr. James Njihia Department of Management Science School of Business University of Nairobi Signature: ----------------------------------------- Date: ----------------------------- Dr. X.N. Iraki Department of Management Science School of Business University of Nairobi ii DEDICATION To my parents who worked tirelessly to ensure I get a decent education. To my wife Rispa, our children Garfield, Abigail and Joshua for the warmth at home. iii ACKNOWLEDGEMENTS My journey during the doctoral studies period benefited from the generosity of many people. I am grateful to my supervisors, Dr. James Njihia and Dr. X.N. Iraki, all of the School of Business, University of Nairobi. They accompanied me in this journey with patience and were always available to provide guidance and support. A lot of thanks also go to the panel members during my departmental and open forum presentations. I am most grateful to Dr. Peterson Magutu and Dr. Cyrus Iraya who chaired my departmental and open forum presentations respectively. Many thanks are also due to Prof. Yabs who chaired the doctoral committee that approved my thesis proposal. The comments and guidance I received from those presentations were useful in strengthening and grounding of my study. My gratitude also goes to the Prof. Aduda who chaired the Board of Examiners meeting for my thesis examination. Thanks to the administrative staff at the Department of Management Science and the PhD coordination office, Hilda, Nancy and Jane. Your assistance in ensuring that the presentations’ minutes were signed and availed to me in good time contributed to the successful completion of my study. I am also greatly indebted to Felister Kandenye, Dafrose Odoyo and Pauline Amondi who tirelessly followed up with the respondents to ensure they filled the web based questionnaire. Despite the fact that you had to call the respondents many times before they could respond, you never gave up. I would like to appreciate the willingness and the sacrifice made in terms of time by the ICT managers of various firms who accepted to participate in the study. My appreciation also goes to my fellow students; Daniel Muendo, Ibrahim Halkano, Charles Borura, Gabriel Kamau and the other Kamau for the moral support. I still remember the joke about hired cheering squads during presentations. I also take this opportunity to thank my parents, Mr. Joshua Oredo and Mrs. Suslia Oredo for having to bear with my long absence from our rural home during the time I was writing this thesis report. I appreciate my wife Rispa for understanding that I needed to spend more time in the study room than usual and for religiously serving me Uji whenever I am working from the house. The occasional disturbances from my children Garfield, Abigail and Joshua provided a necessary breather. Last but not least, I thank the almighty God for the gift of life, faith, family and health. iv “The whole of science is nothing more than an extension of everyday thinking” ALBERT EINSTEIN v COPYRIGHT ©2015 John Otieno Oredo P.o. Box 72214-00200 Nairobi. [email protected] All rights reserved. No part of this thesis may be reproduced, translated, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, microfilming, recording, or otherwise, without written permission from the author except in brief quotations embodied in reviews, articles and research papers. For any information required, contact the author. vi TABLE OF CONTENTS DECLARATION......................................................................................................... ii DEDICATION............................................................................................................ iii ACKNOWLEDGEMENTS ...................................................................................... iv COPYRIGHT ............................................................................................................. vi List of Tables ............................................................................................................. xii List of Figures .............................................................................................................xv List of Abbreviations and Acronyms ..................................................................... xvi ABSTRACT ............................................................................................................. xvii CHAPTER ONE: INTRODUCTION ........................................................................1 1.1 Background of the Study ..................................................................................... 1 1.1.1 Cloud Computing Vision .............................................................................. 3 1.1.2 Institutional Forces........................................................................................ 3 1.1.3 Organizational Mindfulness .......................................................................... 4 1.1.4 Cloud Computing Adoption .......................................................................... 5 1.1.5 Firm Performance ......................................................................................... 6 1.1.6 Financial, ICT and Manufacturing Firms in Kenya ...................................... 7 1.2 Research Problem ................................................................................................ 7 1.3 Research Objectives ........................................................................................... 11 1.4 Value of the Study ............................................................................................. 12 1.5 Structure of the Thesis ....................................................................................... 13 CHAPTER TWO: LITERATURE REVIEW .........................................................15 2.1 Introduction ........................................................................................................ 15 2.2 The Concept of Cloud Computing ..................................................................... 15 2.2.1 The Genesis of Cloud Computing............................................................... 16 2.2.2 Cloud Computing Service Models .............................................................. 17 2.2.3 Cloud Computing Deployment Models ...................................................... 18 vii 2.2.4 Cloud Computing Consumption Models .................................................... 19 2.2.5 The Benefits of Cloud Computing Adoption .............................................. 20 2.2.6 The Challenges of Cloud Computing Adoption ......................................... 21 2.3 Theories of IT Innovation Adoption .................................................................. 22 2.3.1 The Dominant Paradigm ............................................................................. 22 2.3.2 The Socio-cognitive Perspective ................................................................. 24 2.4 Empirical Literature on IT Innovation Adoption ............................................... 32 2.4.1 Cloud Computing Vision and Cloud Computing Adoption ....................... 32 2.4.2 Institutional Forces and Cloud Computing Adoption ................................. 34 2.4.3 Organizational Mindfulness and Cloud Computing Adoption ................... 35 2.4.4 Cloud Computing Adoption and Firm Performance ................................... 36 2.4.5 Organizational Mindfulness and Firm Performance ................................... 36 2.4.6 The Moderating Effect of Organizational Mindfulness .............................. 37 2.4.7 The Socio-Cognitive Model of Cloud Computing Adoption ..................... 39 2.5 Summary of Literature Review and Knowledge Gaps ...................................... 40 2.6 The Conceptual Framework ............................................................................... 42 2.7 The Research Hypotheses .................................................................................. 43 CHAPTER THREE: RESEARCH METHODOLOGY ........................................45 3.1 Introduction ........................................................................................................ 45 3.2 Philosophical Orientation................................................................................... 45 3.3 Research Design................................................................................................. 46 3.4 Population of the Study ...................................................................................... 46 3.5 Sampling Technique .......................................................................................... 47 3.6 Data Collection .................................................................................................. 47 3.7 Operationalization of Variables ......................................................................... 49 3.8 Data Analysis ..................................................................................................... 51 3.9 Measurement Model Development .................................................................... 52 viii 3.9.1 Validity ........................................................................................................... 53 3.9.2 Reliability ........................................................................................................ 54 3.10 Structural Model Development and Estimation ............................................... 55 3.11 Testing for Moderation and Mediation ............................................................ 55 3.12 Hypothesis Testing and Data Analysis Procedures ......................................... 56 CHAPTER FOUR: DATA ANALYSIS AND FINDINGS.....................................60 4.1 Introduction ........................................................................................................ 60 4.2 Pilot Study and Instrument Testing.................................................................... 60 4.3 Data Collection and Respondent Characteristics ............................................... 61 4.3.1 Data Collection ........................................................................................... 61 4.3.2 Respondent Characteristics ......................................................................... 62 4.4 Principal Component Analysis, Reliability and Construct Validity .................. 72 4.4.1 Cloud Computing Vision ............................................................................ 73 4.4.2 Institutional Forces...................................................................................... 79 4.4.3 Organizational Mindfulness ........................................................................ 84 4.4.4 Cloud Computing Adoption ........................................................................ 91 4.4.5 Firm Performance ....................................................................................... 93 4.5 Model Assessment ............................................................................................. 95 4.5.1 Measurement Model Assessment ............................................................... 95 4.5.2 Structural Model Estimation and Hypothesis Testing .............................. 110 4.6 Hypotheses Testing .......................................................................................... 119 4.6.1 Cloud Computing Vision and Cloud Computing Adoption ..................... 121 4.6.2 Institutional forces and Cloud Computing Adoption ................................ 121 4.6.3 Organizational Mindfulness and Cloud Computing Adoption ................. 122 4.6.4 Cloud Computing Adoption and Firm Performance ................................. 123 4.6.5 Organizational Mindfulness and Firm Performance ................................. 123 4.6.6 Test for the Interaction Effect of Organizational Mindfulness ................. 124 ix CHAPTER FIVE: DISCUSSION OF FINDINGS................................................130 5.1 Introduction ...................................................................................................... 130 5.2 Direct Effect of Cloud Computing Vision on Cloud Computing Adoption .... 130 5.3 Direct Effect of Institutional Forces on Cloud Computing Adoption.............. 133 5.4 Direct Effect of Organizational Mindfulness on Cloud Computing Adoption 136 5.5 Direct Effect of Cloud Computing Adoption on Firm Performance ............... 138 5.6 Direct Effect of Organizational Mindfulness on Firm Performance ............... 139 5.7 The Interaction Effect of Organizational Mindfulness on the Relationship between Cloud Computing Vision and Cloud Computing Adoption .................... 140 5.8 The Interaction Effect of Organizational Mindfulness on the Relationship between Institutional Forces and Cloud Computing Adoption.............................. 141 5.9 The Interaction Effect of Organizational Mindfulness on the Relationship between Cloud Computing Adoption and Firm Performance ............................... 142 CHAPTER SIX: SUMMARY, CONCLUSION AND RECOMMENDATIONS ....................................................................................................................................143 6.1 Introduction ...................................................................................................... 143 6.2 Summary of Findings ....................................................................................... 143 6.3 Conclusion of the Study ................................................................................... 145 6.4 Implications of the Study ................................................................................. 148 6.4.1 Theoretical Contribution ........................................................................... 148 6.4.2 Contribution of the Study to IS Body of Knowledge ............................... 150 6.4.3 Methodological Contribution .................................................................... 150 6.4.4 Implication to Policy Formulation ............................................................ 151 6.4.5 Implications to Management Practice ....................................................... 152 6.5 Limitations of the Study................................................................................... 154 6.6 Suggestions for Future Research ..................................................................... 155 REFERENCES .........................................................................................................158 APPENDIX A: THE QUESTIONNAIRE .............................................................178 x