Technology Evaluation and Imitation: Do They Have Differential or Dichotomous Effects on ERP Adoption and Assimilation in China?

Abstract

Enterprise resource planning (ERP) software is a platform for innovation with high failure rates due to its complexity. In China, failure rates of ERP are also high due to key differences between China and Western countries in terms of development, cultural, and organizational structure. Even when Chinese firms successfully adopt ERP, many fail to assimilate ERP and consequently never experience the full benefits of the innovation. The purpose of this study is to examine the predictors of adoption versus assimilation in Chinese firms so that ERP can provide more innovation than mere automation. However, the literature largely assumes a dichotomy of choices when implementing organizational innovations in business: technological evaluation and imitation. We argue that this dichotomy does not apply well to a Chinese ERP context. China has achieved tremendous success in manufacturing and industrial processes through technological leapfrogging offered by imitation. At the same time, Chinese firms are under increasing pressure to innovate because of government and market pressures. Therefore, we argue that forces of imitation and evaluation are likely both at play when Chinese firms adopt and assimilate innovations — including ERP. Accordingly, we examined how two behaviors, inter-organizational social technology imitation and rational technology evaluation, influence Chinese organizations in adopting and assimilating ERP systems. Our findings suggest that both social technology imitation and rational technology evaluation are determinants of Chinese ERP adoption and assimilation. Hence, this study offers new ways for IT and innovation researchers to explore social behavior (i.e., imitation) in IT diffusion processes and to consider the merits or risks of such behavior alongside the conventional rational approach (i.e., evaluation).

Keywords: Enterprise resource planning system (ERP), ERP assimilation, technology evaluation, technology imitation, diffusion of innovation (DOI) theory, China, adoption, assimilation