Investigating the Moderating Role of Environmental Uncertainty between Institutional Pressures and ERP Adoption in Jordanian SMEs
Abstract
:1. Introduction
- RQ1: Do mimetic pressure (MP), coercive pressure (CP), normative pressure (NP), and Environmental Uncertainty (EU) have a positive impact on the decision of SME owners/managers to adopt ERP?
- RQ2: How does the EU factor moderate the relationship between MP, CP, and NP and ERP adoption?
2. Literature Review and Hypotheses
2.1. Institutional (INT) Theory
2.1.1. Mimetic Pressure and ERP Adoption
2.1.2. Coercive Pressure and ERP Adoption
2.1.3. Normative Pressure and ERP Adoption
2.2. Environmental Uncertainty (EU) from Contingency Theory
2.2.1. Perceived EU and ERP adoption
2.2.2. The Moderating Effect of EU
3. Research Methodology
4. Data Analysis and Results
4.1. Evaluation of Measurement Model
4.2. Evaluation of the Structural Model
4.2.1. The Direct Relationship Model
4.2.2. The Moderation Relationship Model
5. Discussion and Conclusions
6. Implications
6.1. Theoretical Implications
6.2. Practical Implications
7. Limitations and Recommendations for Future Studies
Funding
Acknowledgments
Conflicts of Interest
References
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Latent Constructs | Author |
---|---|
Coercive Pressure It’s our government’s intention that our firm adopts ERP. It’s our industry association’s intention that our firm adopts ERP. The competitive environment forces our firm to adopt ERP. | Liang et al. [41] |
Normative Pressure Our suppliers are increasingly adopting ERP. Our customers are increasingly adopting ERP. Government influence your firm to adopt ERP. | Liang et al. [41] |
Mimet Pressure The adoption of ERP is positively perceived by our competition. The adoption of ERP has greatly benefitted our firm. The adoption of ERP is positively perceived by our customers and suppliers. | Liang et al. [41] |
Environmental uncertainty The technology in our industry was changing quite rapidly. Technological changes provided big opportunity in our industry. There have been major technological developments in our industry. | Bstieler [66] |
ERP Adoption My firm is devoted to adopting ERP. The business processes in my firm require the adoption of ERP. Some of my firm’s departments require the adoption of ERP. | Chan and Chong [83] |
Latent Constructs | Item | Item Loading | Cronbach’s Alpha | Composite Reliability | AVE |
---|---|---|---|---|---|
>0.4 | >0.7 | >0.7 | >0.5 | ||
ERP Adoption (ERPA) | ERPA1 ERPA2 ERPA3 | 0.795 0.907 0.845 | 0.810 | 0.886 | 0.723 |
CP | CP1 CP2 CP3 | 0.898 0.903 0.852 | 0.864 | 0.915 | 0.782 |
NP | NP1 NP2 NP3 | 0.920 0.919 0.904 | 0.903 | 0.939 | 0.836 |
MP | MP1 MP2 MP3 | 0.933 0.915 0.738 | 0.834 | 0.899 | 0.751 |
EU | EU1 EU2 EU3 | 0.832 0.751 0.732 | 0.679 | 0.816 | 0.600 |
CP | ERP A | EU | MP | NP | |
---|---|---|---|---|---|
CP | 0.884 | ||||
ERP A | 0.383 | 0.850 | |||
EU | 0.451 | 0.347 | 0.773 | ||
MP | 0.288 | 0.386 | 0.317 | 0.867 | |
NP | 0.261 | 0.371 | 0.211 | 0.305 | 0.914 |
Hypothesis No. | Relationship | Path Coefficient | t-Value | p-Value | Decision |
---|---|---|---|---|---|
H1 | CP → ERPA | 0.009 | 3.470 | 0.013 ** | Supported |
H2 | NP → ERPA | 0.194 | 5.659 | 0.002 *** | Supported |
H3 | MP → ERPA | 0.095 | 4.194 | 0.007 *** | Supported |
H4 | EU → ERPA | 0.127 | 1.841 | 0.070 * | Supported |
Hypothesis No. | Relationship | Path Coefficient | t-Value | p-Value | Decision |
---|---|---|---|---|---|
H5a | CP * EU → ERPA | −0.555 | 2.721 | 0.026 | Not Supported |
H5b | NP * EU → ERPA | 0.255 | 1.014 | 0.184 | Not Supported |
H5c | MP * EU → ERPA | −0.118 | 0.540 | 0.309 | Not Supported |
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Lutfi, A. Investigating the Moderating Role of Environmental Uncertainty between Institutional Pressures and ERP Adoption in Jordanian SMEs. J. Open Innov. Technol. Mark. Complex. 2020, 6, 91. https://doi.org/10.3390/joitmc6030091
Lutfi A. Investigating the Moderating Role of Environmental Uncertainty between Institutional Pressures and ERP Adoption in Jordanian SMEs. Journal of Open Innovation: Technology, Market, and Complexity. 2020; 6(3):91. https://doi.org/10.3390/joitmc6030091
Chicago/Turabian StyleLutfi, Abdalwali. 2020. "Investigating the Moderating Role of Environmental Uncertainty between Institutional Pressures and ERP Adoption in Jordanian SMEs" Journal of Open Innovation: Technology, Market, and Complexity 6, no. 3: 91. https://doi.org/10.3390/joitmc6030091