Escaping ‘localisms’ in IT sourcing: tracing changes in institutional logics in an Italian firm

Abstract

Organizations are limited in their choices by the institutional environment in which they operate. This is particularly true for IT sourcing decisions that go beyond cost considerations and are constrained by traditions, geographical location, and social networks. This article investigates how a company can disentangle itself from the constraints of the institutional environment. We do so drawing on a longitudinal case study of an Italian SME active in the steel industry that successfully changed its institutionally sound, but increasingly inefficient, IT sourcing practice. Our main result suggests that by attending steadily to institutional logics, organizations can become selective in how the institutional environment influences them and act more purposefully in their decisions. In particular, through the creation of companywide IT management competencies and targeted hiring practices, organizations can strike a balance between the different institutional logics guiding IT sourcing decisions and eventually shift from the dominant logic of localism to a logic of market efficiency. This change does not depend from a choice but rather builds on a process through which IT management competences are slowly integrated in the organization.

Keywords:

• IT sourcing
• SME
• institutional logics
• hiring practices
• IT management competences

Acknowledgements

The authors would like to thank the anonymous reviewers and the editors for their precious comments and encouragements that kept us motivated through the revisions. We also acknowledge and thank ItalSteel's board of directors, management, and personnel for their support and availability in all these years. Regarding this point, all names of firms, products, and people have been changed to protect anonymity. All references to existing firms and products are coincidental. Finally we acknowledge IESEG School of Management for having contributed to the funding of this research project.

Additional information

Notes on contributors

Lapo Mola

About the authors

Lapo Mola is Assistant Professor at University of Verona, Verona, Italy and Affiliated Professor at IESEG School of Management, Lille, France. Lapo Mola’s research focuses on organizational impacts of information systems. Lapo Mola has published, among others, in Electronic Markets, Journal of Decision Systems and at the International Conference on Information Systems, at the European Conference on Information Systems and at the Academy of Management Meeting.

Andrea Carugati

Andrea Carugati is Associate Professor at Aarhus School of Business and Social Sciences in Aarhus, Denmark and at IESEG School of Management, Lille, France. Andrea Carugati’s research focuses on information systems development and on the use of information technology in organizations. Andrea Carugati has published, among others, in the European Journal of Information Systems, Database for Advances in Information Systems, at the International Conference on Information Systems, and at the European Conference on Information Systems.