This paper studies the adoption and diffusion of a cross-cultural Interorganizational Information System (IOS), which is used to streamline the processing of financial transactions between European investment fund companies and Taiwanese banks. Drawing from institutional and organizational legitimacy theory, we argue that the adoption and implementation of technological innovation is contingent upon its alignment with three institutional pillars in different countries and the deployment of legitimation strategies by stakeholders. Departing from classical innovation diffusion theory, our empirical investigation reveals that the implementation of a cross-cultural IOS is a dynamic process involving the recognition, understanding, and management of the regulative, normative, and cognitive challenges arising in two different institutional settings. This paper contributes to the growing body of research that highlights the significance of social and institutional influences on the adoption of IOS in a global environment.
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