ýCD LIBRARY Cranfield University IV School Management \, I of PhD Thesis Academic Year 1997/98 of Mario Caldeira Understanding the adoption and use of information /information in technology systems small and medium-sized manufacturing enterprises: A in Portuguese industry study Supervisor: Prof. John Ward September 1998 This is in fulfilment thesis submitted the partial of requirements for Degree the Doctor Philosophy of of ',, LIBRARY ý CRANFIELD \1 UNIVERSITY - .. MARIO CALDEIRA UNDERSTANDING THE ADOPTION AND USE OF INFORMATION SYSTEMS / INFORMATION TECHNOLOGY IN SMALL AND MEDIUM-SIZED MANUFACTURING ENTERPRISES: A STUDY IN PORTUGUESE INDUSTRY SCHOOL OF MANAGEMENT PhD THESIS Abstract This factors factors that the levels research analysed and sets of affect and explain varying in IS/IT (Information Systems/Information Technology) the of success adoption and use of in Portuguese SMEs (Small Medium-sized Enterprises). The manufacturing and study set to fill in knowledge by into the IS/IT in out a gap not covered previous research area of SMEs. Existing found be limited due to to the work was of relevance or was out-of-date, IS/IT, did Portuguese the rapid evolution of and not address context. The followed to Seeking to IS/IT it study a realist approach social enquiry. explain success, is key to the the necessary understand perspectives and social relationships amongst actors involved in IS/IT Case in the process of adoption and use. study research was undertaken twelve SMEs in the Portuguese industry. A total 56 interviews operating manufacturing of IS/IT IS/IT IS/IT The top were conducted with managers, managers, staff, and suppliers. factors identified IS/IT into four as associated with success were clustered categories Interrelationships factors to their according perceived relevance. amongst were established firms levels IS/IT and the common patterns across with similar of adoption and success were analysed. This demonstrates that factors determinant to IS/IT research a combination of were explain These involvement in to the the top the adoption and success. are related of managers development IS/IT in-house IS/IT to the process of adoption and use, and of competencies, in IS/IT Of importance is the individual in or associated suppliers. particular presence of an the firm with IS/IT knowledge, CEO trust, and a view on how to incorporate IS/IT in the development the firm. In the SMEs that in strategic of were more successful adopting and links IS/IT IS/IT, using the establishment of co-operative with suppliers was essentially based the IS/IT than on personal relationships or ownership of enterprise, rather on The findings by theory, contractual relationships. were validated comparison with existing found theory to the the and resource-based was provide a coherent explanation of results of empirical work. Acknowledgements The by large this realisation of research was supported a number of people who have been contributed in their particular ways, without whom this research would not possible. Foremost, I like John Ward for his to to would express my very special gratitude excellent supervision, commitment and personal support. I like to thank: also would Vitor Gonsalves, in Lisbon, for my second supervisor the support given to the research; Karin Breu, Andy Bytheway, David Grimshaw, Gurpreet Dhillon for their and the comments on work; Christine Afflick, Frances Sutherland, Alex Britnell for the time and specially and effort in difficult the task spent of proof reading; The the Sue Vinnicombe, Cliff Bowman, Shai members of review panels, and Vyakarnam, for their comments and suggestions; Henrique O'Neill, for data the time the translations the and effort spent checking of in interviews; the collected Professors in Portugal that in in the and colleagues one way or another collaborated by by Ana to the research, providing access enterprises or giving comments on subject: Alvaro Lucas, Almiro de Oliveira, Joao Carvalho, Luis Amaral, Luis Lima, Mario Romäo, Rodrigo de Magalhäes Carlos Zorrinho Amilcar Gonsalves and, specially, and for important their these support all over years; My fellow Cranfield, Ron Tasker, Gilles Spony Richard students at particularly and Ford for discussing the time the the time together spent subject and all good spent during Cranfield; my stay at The for interest discussing the time research participants, access provided, spent, and the subject; JNICT, Junta Nacional de Investigagdo Cienti Tecnolögica, for funding the Ica e research; My Odete, for for her wife, all the time we were not together and patience with a husband; preoccupied Last, Henrique Teles Marcelino, is longer a very special thanks to who no amongst us but be forgotten, for his friendship his to will never as well as very strong commitment IS in Portugal, have been the established research without whom study would not possible. Mario Caldeira Cranfield, September 1998. / CONTENTS CHAPTER 1- Introduction 1.1 Research 1 rationale 1.2 Research 2 context __ -_-_-- _--_ "__-__ 1.3 Research 5 scope and objectives .......................................... ... .......... _. --.. _....... 1.4 Thesis 8 structure CHAPTER 2- IS/IT factors in SMEs: A literature success review 10 2.1 Introduction 2.2 The information / information technology 10 concept of systems ,,,,,,,,,,,,,,,, (cid:30)__,,,,,, -,,, ,, 2.3 The Small Medium-sized Enterprise (SME)................................... 11 concept of and .. IS/IT in SMEs,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 2.4 Concepts and measures of success (cid:30)_, _, _,,. _ (cid:30)16 framework IS/IT in SMEs 22 2.5 A to study adoption and success research -_-_"______________ 2.5.1 The initial framework for IS/IT in SMEs- analysis of adoption and success "22 2.5.2 Summary the key literature IS/IT in SMEs 23 of on success and adoption 2.5.3 The framework 29 research -...... _.. _... _........... . Internal Context 30 2.6 Factors to the related ,,,, _- , -, --,,,,, ,,, , ",,,,, "-, -"",, , 30 2.6.1 Resource availability ---------------------------------------------------------------------------"----"------- IS/IT 30 2.6.2 Management towards perspectives and attitudes adoption and use----- -- 38 2.6.3 IS/IT competencies ---"-----"-----"-------------------------------------------------------------""-----"-----" - 39 2.6.4 Organisational structure--(cid:30)-, --(cid:30),,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 42 2.6.5 Power relationships and user attitudes ............................................................. .. External Context 43 2.7 Factors to the related _(cid:30) , -(cid:30) , ,, - , ,,,, , , "(cid:30) -(cid:30),,,, , , ",,, (cid:30) ,_ , 43 2.7.1 External expertise ---------- "--------- --------- ---------------------------------------------------- ------------- -- 44 2.7.2 IS/IT availability ------------------------------------------ . --------- ......... _............. --.......... .... ----- . 45 2.7.3 Business environment .................. ""-"-- .............. _..... _........ -- ---"-- ............. - Process 47 2.8 Factors to the related ... ............................................................................... . frameworks in IS/IT development.,,, 47 2.8.1 Stages, techniques methods, and used 2.8.2 People involved in the IS/IT 48 process of adoption............................................ .. 49 2.8.3 IS/IT training ..................................................................................................... . 49 2.9 Factors to the Content related 49 2.9.1 Type IS/IT.... of -...... "--- ------------------"-" --- - -................ . --------- ....... .. ------------ ...... -- -- 2.9.2 IS/IT objectives and assumptions.,, ___, _____ 51 2.9.3 Evaluation IS/IT of 51 2.9.4 Time IS/IT of adoption...................................................................................... 2.10 Critique literature IS/IT factors in SMEs 52 of the about success ............................... CHAPTER 3- Initial fieldwork development the framework and of research initial fieldwork 3.1 Objectives the of in initial fieldwork 55 3.2 The the enterprises studied ,,,,,,,,,,,,,,,,,,, ,,,,,,,,,, 55 3.2.1 Firm A .... ....... ................... "....... ......... ....... -----"-----.......................... ......... ......... -. 57 3.2.2 Firm B ............................................... .................................................. ........... 61 3.2.3 Firm C ............................ ................................................... "--................. . ...... ---" 3.2.4 Firm D 65 3.2.5 Firm E ........................ "---- ................................ ---.............. ------- ....... -------- ---------- 67 3.2.6 Firm F .................. "-------. _.................... ................ ---................... -. --....... .......... 3.2.7 Firm G .... . ......... .................... "---- .......... -" -- "-... _..................... .. -- -"68 findings from initial fieldwork 3.3 Discussion the the of 77 3.4 Interdimensional relationships .... ______________________________________________ 77 3.4.1 Context / Process .......... ............................................ .................................... 78 3.4.2 Context / Content 78 3.4.3 Process / Content ........ . ................. "---...... _ ...... _... .......................................... 79 for initial findings initial 3.5 Summary the and propositions research of ,,,,. __, ", _, ",,,,,, " 81 in SMEs------------------------------ 3.6 The framework to study IS/IT adoption and use ---- . ------ 84 3.7 Summary ......... .......... ............................................................................................. CHAPTER 4- Philosophical perspective and research strate 87 4.1 Introduction... -"- ---"----"----"------" ................... "---........ ---"...... ----....... -"---..... ------.......... ....... _ 87 4.2 Philosophical perspective ......... ................................................. .................................. 88 4.2.1 Positivism .......................... ......... ................................................................... 89 4.2.2 Interpretivism .......... ....................................................... ...................................... 4.2.3 Realism -----"- ... _.... _. __90 "-----""----------"---..... ............................................ 94 4.3 Research strategy ......... ................................................................................................ 94 4.3.1 Selecting a research strategy ......... .................................................................... 97 interpretive to 4.3.2 The approaches case study research positivist and -_,. -",. ........ 98 4.3.3 A realist perspective of case study ..... ......... . ................................................. 103 4.4 Research Design ........ ........ .......................................................................................... 4.4.1 Overall strategy ............. "................. 105 4.4.2 Case study selection criteria ................................................................... ......... 106 4.4.3 Data collection method. - -"- .... . ......... ............ - ---.................. ------... 107 4.4.4 Data analysis method ......... .......................................................................... 4.5 Summary --... -----"---........ -" .......................... "----.................... CHAPTER 5- Case studies summaries 5.1 Introduction ..... ......... " --....... _.... - --... ..................................................... Case 1........................................................ study ...................................................... 128 5.3 Case 2 study .. 136 3 5.4 Case study 5.5 Case 4------------------------------------------------"-----.. study ...................... - ........ - ... _ 150 5 5.6 Case study ......................... ---------------"---"-- 158 5.7 Case Study 6....................................................... ...................................................... 164 7 5.8 Case study ...................................................... ........................................................ 170 8 5.9 Case study ...................................................... ........................................................ 178 9 5.10 Case study ...................................................... ....................................................... 189 10 5.11 Case study ...................................................... ...................................................... 197 11 5.12 Case study ...................................................... ...................................................... 203 12 5.13 Case study 209 5.14 Conclusion 6- Cross-case data CHAPTER analysis 210 6.1 Introduction ................................... ............................................................................. 210 IS/IT 6.2 A view about success 214 6.3 The the structure of analysis ................................... .................................................. 215 by 6.4 Data cluster analysis .................................. ........................................................... 215 6.4.1 Cluster A (firms 1,2 and 11)......................................... ................................... 6.4.2 Cluster B (firms 3 12) and .................................... ............................................ 221 6.4.3 Cluster C (firms 4,5,7 10) and ................................... ................................... 227 6.4.4 Cluster D (firms 6,8 and 9) ................... "--. --. -"-"--......... ................................... 231 6.4 Cluster sensitivity analysis ................................... ..................................................... 234 findings from 6.5 Initial cluster analysis ................................... .................................... 234 6.6 Factor analysis ............ . ----......................... .................................... 236 factors 6.7.1 Situational ............................. ............. ....... ....................... 240 factors 6.7.2 Determinant ...... . .......................... ... _.. --... - "" ............... 246 factors 6.7.3 Consequent ..................................... .................. ................................... factors 6.7.4 Not significant 251 findings......................................................... 6.8 Analysis the of .................................... 6.8.1 Summary factor 251 of cluster and analysis 6.8.2 Analysis factor interrelationships____________________ 252 of __-__ 6.8.3 Discussion determinant factors IS/IT 253 the of of success 6.8.4 Discussion findings in initial 265 the to the of relation research propositions. __ 6.8.5 Summary 269 and conclusions ................................................................................ CHAPTER 7- Theoretical the findings validation of 7.1 Introduction 271 7.2 Transaction 271 theory cost ......................................................................................... "--- 7.3 The 274 theory essence resource-based ................ ........... ----........................ ----..... --. 7.4 The in field information 277 theory the use of resource-based of systems ........... --------- 7.5 A to IS/IT resource-based approach understand adoption and use in SMEs.......... 278 manufacturing :.................................................................................. 7.6 Comparing findings SME literature 281 the with previous 7.7 A to the resource-based model understand successful adoption and IS/IT in SMEs........................................................................ 283 use of manufacturing 285 7.8 Summary and conclusions ....................................................................................... CHAPTER 8- Research conclusions 287 8.1 Summary of research overtaken ... .... ,. _---- .. 289 8.2 Key findings... research .............. - 8.2.1 Research 1 question 8.2.2 Research 2 question 294 8.3 Contribution knowledge to ......................................................................... ............... 8.3.1 Research subject .............................. 294 8.3.2 Research context 295 8.3.3 Research method Limitations for further 295 the of study and opportunities research -8.4 ............... ............. 297 BIBLIOGRAPHY APPENDICES Appendix A- Case (check-list) study structure Appendix B- The questionnaire (iv) LIST OF FIGURES Chapter 1 Fig. 1.1 Research Context Model 6 Chapter 2 Fig. 2.1 IS/IT 18 success model ............................................. Fig. 2.2 Understanding strategic change ________________________________ Fig. 2.3 The initial fieldwork for IS/IT in SMEs analysis of ______________________________________29 Chapter 3 Fig. 3.1 Structure for data data in NUD *IST 82 collection and analysis Chapter 4 Fig. 4.1 Research 101 map ................................................................................................. Fig. 4.2 The the stages of research -----------------------------------------------------------------------------104 Fig. 4.3 Case 106 study selection criteria -------------------------------------------------------------------------- Fig. 4.4 The NUD *IST in data 107 use of analysis , __. ....................................................... Chapter 6 Fig. 6.1 The for 214 clusters analysis --------------------"---...... ----"-------------------------------" -------"---.. Fig. 6.2 Alternative 231 clusters .................... ".. _ _.. _....... - Fig. 6.3 Classification factors IS/IT 235 of associated with success .................. ............ Fig. 6.4 Factors IS/IT affecting adoption and success _________________________________ _____________253 Fig. 6.5 Relationships between key in A 55 actors cluster ................................ ............. Fig. 6.6 Patterns interactions between key in the of actors process IS/IT Cluster A 256 of adoption and use - ------"---(cid:30)-------------------------------- ----------- Fig. 6.7 Relationships between key in D 258 actors cluster .............................. ............ Fig. 6.8 Patterns interactions between key in the of actors process IS/IT Cluster D 259 of adoption and use - ............... ............ Fig. 6.9 Relationships between key in B 260 actors cluster ............................... ............. Fig. 6.10 Patterns interactions between key in the of actors process IS/IT Cluster B 261 of adoption and use - ...... ............ Fig. 6.11 Relationships between key in C 262 actors cluster ............................... ............. Fig. 6.12 Patterns interactions between key in the of actors process IS/IT Cluster C 263 of adoption and use - (v) Fig. 6.13 The influence involvement in IS/IT of management adoption 264 and success ................................ ... """-"-----"-----"--""-" Chapter 7 Fig. 7.1 Relationships between knowledge..,. 276 capabilities, competencies, skills and Fig. 7.2 Analysis determinant factors IS/IT 280 the of of success ................................... Fig. 7.3 Analysis the determinant factors their link to the SME literature 282 of and .... Fig. 7.4 A to the resource-based model understand successful adoption and use IS/IT in SMEs 283 of manufacturing ................................................................... Chapter 8 Fig. 8.1 The for 288 clusters analysis ................................................................................ Fig. 8.2 Classification factors IS/IT 290 the of associated with adoption and success ... Fig. 8.3 Relationships factors IS/IT 291 amongst affecting adoption and success .......... Fig. 8.4 A to the resource-based model explain successful adoption and use IS/IT in SMEs 292 of manufacturing ............... .........., _. _....... _........... _.... LIST OF TABLES Chapter 2 Table 2.1 Summary literature IS/IT in SMEs............. 24 of the on adoption and success Chapter 3 fieldwork Table 3.1 Comparing literature the most relevant with preliminary findings .................. 80 Table 3.2 Initial for propositions case study analysis .................................................... 83 Table 3.3 Cross-references initial of propositions to case study check-list Chapter 5 112 Table 5.1 Characteristics firms involved in the of case study research 127 Table 5.2 FIRM 1: summary .................. "--....................... "-------"-................................... 135 Table 5.3 FIRM 2: summary. 143 Table 5.4 FIRM 3: summary. 149 Table 5.5 FIRM 4: summary ........................................ ........................ (vi)