Organizational culture and user adoption of ERP systems: role of family business culture as two comparative cases from Sri Lanka

Purpose The aim of the study reported in this paper is to explore how organizational culture influences the adoption of enterprise resource planning (ERP) systems in two family-owned manufacturing companies in Sri Lanka. The study intends to explore how distinct cultural aspects of the two companies affected the adoption of their ERP systems differently. It focuses on answering the two research questions: (1) why the aspects of cultures of the two family-owned manufacturing companies in Sri Lanka have caused differences in user adoption of their ERP systems and (2) how the dynamisms of the cultures of the two companies could be used to interpret the level of success of user adoption of their ERP systems. Design/methodology/approach The research philosophy considered in this study is the interpretivism philosophical stance. The study follows the qualitative research methodology and the comparative case study strategy to explore the intended research issue. Further, the institutional theory was adopted as the theoretical lens to guide the study. Findings The findings of the study reveal a significant difference in the user adoption of ERP systems between the two family-owned companies, which is mainly due to their cultural dynamics. The hierarchical power dynamics in one company (Company A), along with the personal relationships between its family business owners and some of its senior managers, have created an environment to curtail the adoption of its ERP system. Conversely, the positive family business culture of the other company (Company B) has significantly influenced the achievement of a higher adoption level of its ERP system. Research limitations/implications The conceptualization of the concepts of organizational culture, family business culture and the adoption of ERP systems is done through the institutional theory adopted as the theoretical lens to address the issue of this research. Further, the study is limited to the selected two family owned manufacturing companies in Sri Lanka where the empirical work was carried out. Practical implications This study sheds light on how cultural dynamics of the family owned companies influence the adoption of their ERP systems. Hence, the owners and managers of the family businesses may stress how to consider the use of personal and power dynamics in businesses when novel technologies like ERP systems are adopted in their organizational boundaries. Originality/value The originality of this research lies in proposing the interplay between the cultural dynamics of family owned businesses and the adoption of their ERP systems. The study reveals the hidden influence of the personal and power dynamics of a family owned business on the adoption of its ERP system. This may be a newer aspect of the role of the organizational culture in adopting a new technology like ERP systems. Though the extant literature has much focused on the aspects of leadership support, change management, organizational culture, etc. it is less explored to know a specific influence of personal and power dynamics of decision-makers of family owned businesses on the user adoption of their ERP systems.