Cloud Computing Vision, Institutional Forces, Organizational Mindfulness, Cloud Adoption and Performance of Selected Firms in Kenya

Abstract

The adoption of IT innovations has been a major area of research in information systems. The determinants of IT innovations are known to vary on the basis of the nature of the innovation and the context of adoption. While there is substantial literature on the adoption of various IT innovations based on utility computing, there is a dearth of empirical literature on cloud computing adoption by business organizations. Further, a majority of the empirical studies that have investigated cloud computing adoption by business organizations have done so in the context of developed countries. Given that cloud computing adoption has been steadily increasing in Kenya, the current study aims at investigating the determinants and antecedents of cloud computing adoption and the effect of cloud computing adoption on firm performance. To this end, the study adapted the socio-cognitive theories of organizing vision, institutional forces and organizational mindfulness to understand cloud computing adoption and its effect on firm performance. To achieve the overall goal of the study, hypotheses were formulated to test the relationship between cloud computing vision, institutional forces and organizational mindfulness on cloud computing adoption; between cloud computing adoption and firm performance; and the interaction effect of organizational mindfulness on all the relationships. The relationships and the interaction effects were specified in a SEM diagram comprising of measurement and structural models. A firm level cross sectional survey was conducted on selected firms within the financial, ICT and manufacturing sectors in Kenya. Of the 180 firms sampled, 93 completed the questionnaire resulting in a 51.6 percent response rate. The responses were then used to test the study hypotheses. Exploratory factor analysis was conducted to purify the data and partial least squares structural equation modeling used to evaluate the reliability and validity of both the measurement and structural models. The results indicate that institutional forces and organizational mindfulness have a significant positive relationship with cloud computing adoption. Cloud computing adoption was found to have a significant positive relationship with firm performance. The relationship between cloud computing vision and cloud computing adoption was found to be negative and insignificant. The results further showed that the interaction effect of organizational mindfulness on all the relationships was very low and insignificant. These research findings show that institutional forces and organizational mindfulness plays a leading role in determining organizations’ adoption of cloud computing. More importantly, the results indicate that cloud computing adoption significantly improves firm performance. A major implication of this study is that community discourse on cloud computing needs to be enhanced to build a cloud computing vision as its effect on cloud computing adoption was found to be negative and insignificant. The government, universities, consultancy firms, professional bodies and industry associations should participate and facilitate cloud computing discourse. The findings of this study have theoretical and practical implications on the adoption and implementation of IT innovations. Additionally, the findings have implications on the formulation and implementation of IT innovations policy.