How does organisational absorptive capacity matter in the assimilation of enterprise information systems?

Abstract

AbstractExtant literature offers two mostly distinct perspectives on enterprise systems assimilation – driven either by internal expertise and learning capability or by external institutional pressures. This study combines the two perspectives and subscribes to the view that organisations’ learning capability moderates their acquiescence to institutional pressures. The study then anchors organisational learning capability to the concept of absorptive capacity and proposes that its two dimensions – potential absorptive capacity (PACAP) and realised absorptive capacity (RACAP) – affect enterprise systems assimilation through different pathways. Our survey‐based empirical study of Enterprise Resource Planning (ERP) systems in the post‐implementation stage reveals that while both PACAP and RACAP have a positive direct impact on assimilation, PACAP positively moderates the impact of mimetic (institutional) pressures, but not normative (institutional) pressures, on assimilation; whereas RACAP positively moderates the impact of normative pressures, but not mimetic pressures, on assimilation. Thus, our theoretical contribution lies in understanding the distinct ways in which PACAP and RACAP moderate the influence of external institutional pressures on enterprise systems assimilation.