Digital Innovation in Social Cash Organizations – the Effects of the Institutional Interactions for Transforming Organizational Practices

While the potential for digital innovation (DI) to transform organizational practices is widely acknowledged in the information systems (IS) literature, limited knowledge exists on the nature of institutional interactions that affect organizational practices. Drawing on the institutionalist vision, this study aims to examine the nature of interactions between the institutional forces that influence the transition to digital payments and its effects on changing organizational practices. The purpose of this study is to demonstrate how technology as a situated actor is institutionalized in the organizational context to unfold new practices. The paper draws on an in-depth case study of a government social cash organization in Pakistan. Qualitative data was collected using thirty semi-structured interviews from key organizational members and stakeholders. The findings suggest that digital innovation involves the novel intersections between the coercive (economic, regulatory), normative (socio-organizational), mimetic (international) and covert power (political) forces. Hence, digital innovation is not technological deterministic, but rather a complex socio-political process enacted through dialogue, cooperation and conflict between diverse interest groups. Technology is socially embedded through the process of institutionalization that is coupled by the deinstitutionalization of established organizational practices for progressive transformation. Our study contributes to neo-institutional theory by conceptualising a fourth construct- covert power that emerges as a political force to extend the institutional framework. The study also presents practical implications related to the effects of changing organizational practices such as institutional strengthening that can guide policymakers and practitioners in the public sector.