Investing in Information Systems: On the Behavioral and Institutional Search Mechanisms Underpinning Hospitals' IS Investment Decisions

Author List: Salge, Torsten; Kohli, Rajiv; Barrett, Michael;
MIS Quarterly, 2015, Volume 39, Issue 1, Page 61-89.
This study integrates tenets of the behavioral theory of the firm and neo-institutional theory to identify four recurring search mechanisms that are expected to influence hospital managers’ information systems investment decisions. To account for the critical role of regulation in healthcare, senior managers’ reliance on each of these four search mechanisms is hypothesized to be contingent upon their hospital’s regulative legitimacy. Analyses of panel data from all 153 public nonspecialist hospital organizations in England reveal that hospital managers invest in IS not only to find solutions to performance shortfalls (problemistic search), but also to achieve continuity and predictability in resource allocation (institutionalized search) and signal conformity with external norms and expectations (mimetic search). We find that the desire to make adequate use of uncommitted financial resources (slack search) is salient only among hospitals with low levels of regulative legitimacy. These new insights into the motives that trigger—and constrain—senior managers’ IS investment decisions will help IS managers to strengthen their case for IS investment and guide policy makers in how best to allocate resources to IS in healthcare and possibly beyond.
Keywords: Decision making; IS investment; business value of IT; behavioral theory of the firm; institutional theory; regulative legitimacy
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#271 0.180 technology investments investment information firm firms profitability value performance impact data higher evidence diversification industry payoff return findings decisions greater
#24 0.119 institutional pressures logic theory normative embedded context incumbent contexts forces inertia institutionalized environment pressure identify mimetic dominant coupling board newly
#217 0.102 search information display engine results engines displays retrieval effectiveness relevant process ranking depth searching economics create functions incorporate low terms
#196 0.096 health healthcare medical care patient patients hospital hospitals hit health-care telemedicine systems records clinical practices physician electronic physicians longitudinal outcomes
#88 0.093 managers managerial manager decisions study middle use important manager's appropriate importance context organizations indicate field experience management major organizational results
#214 0.092 resource resources allocation chargeback manager effectiveness problem firms case gap allocating diverse dependence just bridge cooperative criticality acquisition duplication extent
#75 0.091 behavior behaviors behavioral study individuals affect model outcomes psychological individual responses negative influence explain hypotheses expected theories consequences impact theory
#57 0.069 decision support systems making design models group makers integrated article delivery representation portfolio include selection effective claims decisions rationale various
#208 0.054 feedback mechanisms mechanism ratings efficiency role effective study economic design potential economics discuss profile recent component granularity turn compared using