National Culture and Information Technology Product Adoption

National Culture and Information Technology Product Adoption

Kallol Bagchi Paul Hart Mark F. Peterson

University of Texas Florida Atlantic FloridaAtlantic

at El Paso University University

Abstract

National culture is likely to play a role in Information Technology (IT) adoption. Data from a large scale study of national culture are used to predict the adoption of six information technologies -- PC, Telephone, Cell Phone, Fax, the Internet, and Pager — over a ten year period in thirty one nations. The results show that even after controlling for national economic and social differences, national cultural dimensions significantly predict most IT product adoptions.

KEYWORDS

Information Technology, IT Product, Adoption, National Culture

Introduction

The worldwide growth of information technology (IT) is phenomenal, but growth has not occurred at the same pace in all nations. Worldwide, IT spending grew by more than 10 percent annually during much of the past decade, which outpaced overall global economic growth (Microsoft, 2002). Since the rate of IT growth in different countries varies from two to five times the national rate of overall economic growth, other factors besides economic growth are likely to explain national differences in IT investment. We propose that national culture characteristics are among the other factors that explain differences in IT growth.

Culture has been considered something that affects the reason for and rate of IT adoption (Harvey, 1994; Krumholtz et al., 2000). Robey and Rodriguez-Diaz (1989) suggest that culture can impede IT implementation efforts because of differences in the way ITs are interpreted and given meaning. For example, if ITs are typically introduced by young people with recent technical education, then cultural values may support a particularly strong reluctance to avoid ITs by senior managers in those societies that link status to age. Watson and colleagues (1994) described ways in which culture shapes the adoption of technology while studying the cross-national adoption of group support systems. Culturally compatible features of a technology will be appropriated and the remaining features of the technology will be reshaped or ignored. For example, culture plays a significant role in decision making (Peterson, Miranda, Smith & Haskell, 2003) and the type of technologies used to support decision making (Quaddus and Tung, 2002). While these studies consider cultural differences in the use of technologies, other studies suggest that culture is one among a number of national-level factors associated with the rate of IT adoption. The growth of computerization has been found to differ among nations and cultural regions. In recent times, computerization has grown rapidly within some Asian countries, known as Asian Tigers, but much more slowly in most African countries. Economic factors alone do not fully explain the disparity in such growth patterns. Similarly, the adoption of mobile telephones has been uneven across even industrialized nations, and this growth is arguably not only due to economic factors. One report (Intecom, 2000) noted that 75 percent of the people in Finland and Iceland used mobile telephones compared to about 40 percent in the U.S., although the U.S. economy was stronger than the Finnish economy. (The GDP per capita of the U.S. and Finland in 1990 were $18,399 and $14,216 respectively). Goodman and colleagues (1991) stated that "there are important historical, social, cultural and economic reasons for computing and telecommunication disparities (among nations) and, for better or worse, these differences make the world a more complicated and interesting place" (p. 19).

A few empirical studies have investigated the relationship between national culture and IT adoption (Straub, 1994, Straub et al., 1997). For example, Straub and colleagues (1997) found that the technology adoption model (TAM) could not predict technology use across all cultures. The TAM identifies the factors that are responsible for acceptance and use of technology in an organization such as the perceived ease of use and overall usefulness of a technology. The authors conjectured with reservations that national culture played a role. They conclude their study by suggesting: “It is not possible to say with certainty that a link between cultural factors and technology has been empirically established”. A major difficulty in establishing a link between culture and technology adoption is that factors other than culture may explain national differences in technology use.

In order to link culture to technology, one needs to control other national variables such as economic, social, and institutional indicators. National variables such as the main economic indicator GNP (or GDP) per capita are important (Barro, 1997). To quote Hofstede (2001, p. 68), “If hard variables (economic, biological, technological) predict a country variable better, cultural indexes are redundant.” He encourages researchers to use GNP per capita as an additional control variable to examine the unique effects of culture. This paper attempts to use GDP per capita as a control variable. Controlling for GDP and other societal indicators is a conservative approach to assessing the effects of culture since there is a strong relationship between culture and economic development as well as between culture and social and political systems (Inglehart and Baker, 2000; Granato et al., 1996). Inglehart (2000) pointed out the difficulty of proving the direction of causality. However, his empirical cross-sectional study provides evidence that a strong positive relationship exists between culture and national economy. In addition to controlling GDP, this paper introduces two more national indicators of economic and cultural heterogeneity other than cultural dimensions.

Studies linking culture to IT adoption to date have largely been small in scale or limited to a single organization. Most of these studies have tried to compare and contrast IT adoption in two or three countries and have attributed the adoption differences to culture (Martinsons and Davison, 2003). Despite their limitations, these studies show the importance of more carefully considering the role of culture in IT adoptions. Research is now needed to take a broader look at national culture and trends in IT adoption at a national level across the most frequently used ITs in an expanded set of nations. In order to progress in this way, the nature of IT adoption needs to be understood and the factors underlying adoption, and the culture among them, need to be identified from prior research (Rogers, 1981). The present paper, therefore, empirically assesses the impact of national culture on IT adoption in combination with other variables that have been shown to affect adoption. Our analysis will begin by providing a view of national culture, then we will develop hypotheses based on a more thorough consideration of the research introduced above about a culture’s implications for IT adoption. The hypotheses are tested using data based on culture scores. The analysis of culture effects control for three potential confounds as detailed below. These confounds are variables suggested by research noting the link of some cultural variables to GDP (e.g., Hofstede, 2001) and other research noting that research compiled about mean scores for culture and overall GDP scores need to also consider issues of within-nation heterogeneity (Au, 1999). These variables are used to predict the adoption of the most widely used IT products developed since the beginning of the 20th Century in most nations -- Personal Computers (PCs), Telephones, Cell Phones, Fax, the Internet, and Pagers.

National Culture

Culture is defined as “the integrated pattern of behavior that includes thought, speech, action, and artifacts, and it depends on man’s capacity for learning and transmitting knowledge to succeeding generations” (Adler, 1997). National culture, therefore, reflects national patterns in the core values and beliefs of individuals, which are formed during childhood and reinforced throughout life (Shore & Vankatachalam, 1996). Once set in place, culture has its own independent effect on a nation’s response to world events including new technologies. Almost every nation has an identity and common cultural experiences with a particular history, language, and set of religious traditions. These experiences shape the way all members of the nation view themselves and their world, even when individuals vary in their personal attitudes toward these common cultural experiences. In the area of information technology, for example, having experience with omnipresent telephones, PCs, and cell phones is an inevitable cultural fact in the United States that has pervasive social implications even though individuals vary in their personal attitudes and use of these technologies. Despite its significance, scholars have often overlooked the importance of culture (Boyacigiller & Adler, 1991).

The following discussion primarily focuses on the contributions to culture analysis derived from information about national culture dimensions provided by Hofstede (2001). His work focuses on societal values as reflected in configurations of items analyzed at the level of nations that are comprised of national average value statements provided by individuals. We will next introduce Hofstede’s view of culture, then we will summarize the critiques and alternatives to his model and indicate why it remains preferable to other available alternatives.

Hofstede's Work

According to Hofstede, culture is “the collective programming of the mind that distinguishes the members of one group or category of people from another” (p. 9, Hofstede 2001). Hofstede developed an empirically-based typology of cultural attributes by analyzing data obtained from surveys conducted among individuals in 53 nations in 1968 and 1972. Since all 116,000 respondents were employees of the same firm, IBM, Hofstede was able to hold constant the influence of industry and corporate culture. Based on the data obtained, he classified countries along four dimensions: power distance, uncertainty avoidance, individualism/collectivism, and masculinity/femininity. Hofstede rated each of the 53 countries in his study by these cultural dimensions (Hofstede, 2001). For example, compared to other cultures, the U.S. is very high in individualism, somewhat below average in power distance, about average in uncertainty avoidance, and somewhat above average in masculinity.

The ways in which Hofstede constructed these dimensions and the scores he provides for them have been criticized on a number of grounds. However, he and others have shown continuing relationships between these dimensions and many nation-level socio-economic, cultural, and business indicators. Hofstede’s work is still widely used and has been cited in more than 1,500 scholarly works in various fields (Hofstede, 2001). Sondergaard (1994) noted that Hofstede’s research has provided a theoretical paradigm and data that is used in other studies. A number of alternative approaches to analyzing cultural values have developed since Hofstede first presented his research, but these alternatives are less satisfactory for our present analysis. Schwartz (1994) provides scores for 23 nations and ethnic groups based on the values expressed by teachers. The limited number of nations for which he has provided this data restricts its utility for the present research. Trompenaars and Hampden-Turner (1998) also provide culture values data for several dozen nations. However, the data is based on individual items rather than indices, and the researchers confound nation with industry, organization, and occupation specialty, and the items appear to mainly reflect various forms or aspects of the single dimension of individualism-collectivism (Hofstede, 2001; Smith, Dugan & Trompenaars, 1996). Inglehart (1998) also provides values data for 43 nations and ethnic groups. However, his work value items have limited distributions (mainly the two-categories “mentioned” and “not mentioned”), and multiple-item dimensions only have been developed from his project for a limited number of politically relevant constructs. Given the limitations of the other options available and the evidence of continued validity in applications of Hofstede’s measures (Hofstede, 2001; Smith, Peterson & Schwartz, 2002), we decided to focus on Hofstede’s scores for culture dimensions. Separate analyses using indices from several other culture projects applied to a smaller number of nations are available from the authors.

Culture and IT adoption

Studies of culture and IT adoption can be divided into two parts (Robey and Rodriguez-Diaz, 1989): (1) the effect of national culture on IT (Ein-Dor, Segev, and Orvad, 1993; Straub, 1994); and (2) the effect of organizational culture on IT (Burkhardt, 1994; Cooper, 1994; Robey, Gupta, and Rodriguez-Diaz, 1992). This paper deals with only national culture. Ein-Dor et al. (1993), Palvia (1998), and Gallupe and Tan (1999) have suggested that national culture is an important factor in global information management. As noted briefly above, several empirical works have studied the influence of culture on IT adoption. Straub (1994), in a trend-setting study, discussed the impact of culture on telephone, e-mail, and fax use in the U.S and Japan. His observation was that telephone use was very similar in both nations. However, fax and e-mail use varied distinctly, with Japan being a heavy user of fax and the U.S. making more use of e-mails. Straub ascribed these differences to several things including a combination of Hofstede’s cultural dimension of uncertainty avoidance and the pictorial characteristic of the Japanese written language. The high level of uncertainty and ambiguity avoidance in Japanese culture combined with the ambiguity that can arise when representing Japanese characters by the letters used in e-mail communication prevented extensive use of e-mail. Fax, on the other hand, allowed Japanese characters to be used, thus reducing uncertainty and ambiguity. Hill et al. (1998) and Straub et al., (2001) investigated the impact of beliefs and values about IT transfer in Arab countries and found that Arab cultural beliefs are a strong predictor of resistance to IT adoption. Hasan and Ditsa (1999) studied IT adoption in West Africa, the Middle East, and Australia and observed that culture was an important factor in differences in the impact of IT in those countries. Phan and Oddou (2002) similarly tried to explain IT adoption in Vietnam in terms of culture. Png et al. (2001) observed that nations with high uncertainty avoidance would be less likely to adopt technologies such as frame-relay.

The Technology Adoption Model (TAM) (Davis, 1989) provides an important theoretical explanation of IT adoption. Several authors have investigated the impact of culture on TAM. TAM postulates that beliefs such as perceived ease of use and perceived usefulness of the technology strongly influence attitudes toward a new technology. These attitudes in turn influence intentions, and ultimately, one’s behavior toward using IT. Many empirical studies about TAM have shown that it has reasonable explanatory power explaining about 40% of the variance in IT use (Taylor and Todd, 1995; Davis, 1993). Straub, Keil & Brenner (1997) tested TAM across three nations: Japan, Switzerland, and the U.S. Rose and Straub (1998) applied TAM to the Arabic World. The fit of TAM in Japan was insignificant whereas it was found to be a good explanation for IT use in Arab nations and in Switzerland. These differences in fit have been ascribed to the influence of national culture. Mao and Palvia (2002) also studied the impact of culture on TAM in China and observed that normative beliefs and subjective norms are influenced by some national cultural characteristics.

In general, these and other studies of culture and IT adoption suggest the relevance of Hofstede’s work for IT adoption (Ford et al., 2003; Harvey, 1997; Kambayashi, 2002; Krumbholz et al., 2000; Mejias et al., 1997; Straub, 1994; Watson, Teck and Raman, 1994). These studies have examined the implications of national culture for specific technologies such as GDSS, E-mail, and Fax, however the analyses have typically been restricted to two or three nations in any one study.

Figure 1. Antecedents in IT adoption.

A simplified national-level model of IT adoption that emphasizes the variables included in the present study is shown in Figure 1. We propose that three types of indicators - cultural, institutional, and economic - contribute to IT adoption. Cultural indicators could be Hofstede’s, Inglehart’s, or other suitable dimensions. Institutional indicators measure a quality of some institution category such as regulatory burden, corruption level, or legal system characteristics. Economic indicators include variables like GDP per capita, inflation, and income inequality. Technology transfer literature also shows that speed of a technology adoption in a nation depends on income per capita (economic), human capital (economic/institutional), openness (institutional) , type of government (institutional), among other things (Caselli and Coleman, 2001; Comin and Hobjins, 2004; Lee, 2000). This study focuses primarily on the importance of national culture and, in particular, its influence on IT adoption while controlling some other institutional indicators that prior research suggests are most necessary to control in order to identify the effects of culture. The present national level analysis predicting IT adoption from Hofstede’s culture dimensions fits within Kwon and Zmud’s macro-level category of IT adoption studies (Kwon and Zmud, 1987; Bagchi, 2001). In this sort of research, the adoption and diffusion of an IT depend on factors related to internal and external environments of an organization including individual, structural, technological, task-related, and external environmental factors (Kwon and Zmud, 1987). Factors such as job tenure, cosmopolitanism, education, and role involvement are examples of individual factors. Examples of structural factors include specialization, centralization, formalization, and informal network. The technological factors are compatibility, relative advantage, and complexity (Rogers, 1983). Task-related factors are task uncertainty, autonomy, responsibility, variety, identity, and feedback. Environmental factors include heterogeneity, uncertainty, competition, concentration/ dispersion, and inter-organizational dependence.

Figure 2. The extended version of Kwon and Zmud’s framework.

Kwon and Zmud (1987) argued that an IT is a formal, deliberately planned technological innovation that is introduced into an organization in response to the organization’s perceived needs. These needs span a broad range of individual and organizational motives. However, organizations are not homogenous throughout their global operations and do not exist in isolation. An organization may have different branches in many nations and workers from different nations. Even an organization with a single-nation focus has a destiny dependent at least partly on its nation's particular characteristics. Therefore, national-level characteristics can form a distinct set of separate motives and can play a significant role in the adoption and diffusion of an IT. Figure 2 shows the extended version of this framework that includes the national level variables that we will have in mind in developing hypotheses.