sajm






Restricted Geographical Growth of IT Industry in India: An Institution- Theory Perspective with Special Reference to the City of Nagpur

Shailesh Awale* and Som Sekhar Bhattacharyya**

DOI: https://doi.org/10.62206/sajm.31.3.2024.132-154

PUBLISHED :27 NOV 2024

Abstract

Information Technology (IT) Industry rapid growth was restricted to certain geographic locations in India like Bangalore, Pune, Hyderabad, Chennai, and the National Capital Region (NCR). It was important to theoretically and practically comprehend why IT industry did not expand beyond above locations, to the hinterland, like the city of Nagpur located in the center of India. The authors were interested to understand the phenomenon by applying the theoretical framework of institutional theory, along with the perspective of context of competitiveness. The authors adopted the methodological approach of thematic content analysis. Data was collected by undertaking in-depth personal interviews of senior IT business leaders, public administrators and other experts. The purpose of this research was to thematically content-analyse the factors contributing to or inhibiting the growth beyond the above-mentioned metropolises in India. Lack of demonstration of mimetic behaviour, absence of exemplary thought-leadership in the industry by large enterprises led to the restricted growth of the IT industry in Nagpur. The work culture, mindset of low-cost location, competitive wages, focus from leadership and international promotions needed to achieve a higher normative performance behaviour. Furthermore, accelerated government support, investment from extant IT industries was required towards developing improved infrastructure with a long-term perspective.

Key Words

Context of competitiveness, Information technology geographic cluster, Institutional theory, Thematic content analysis

Author Biography

*Shailesh Awale
Doctoral Scholar, Strategy and Entrepreneurship, Indian Institute of Management Nagpur, IIMN Campus, MIHAN Non SEZ, Pin: 441108. E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

**Sekhar Bhattacharyya
Professor, Strategy and Entrepreneurship, Indian Institute of Management Nagpur, Faculty Room no: 129, IIMN Campus, MIHAN Non SEZ, Pin: 441108; and is the corresponding author. E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

References

  1. Adams, W. C. (2015). Conducting semistructured interviews. Handbook of Practical Program Evaluation, 492-505.
  2. Ahuja, S., Chan, Y. E., & Krishnamurthy, R. (2023). Responsible innovation with digital platforms: Cases in India and Canada. Information Systems Journal, 33(1), 76-129.
  3. Apte, U. M., & Mason, R. O. (1995). Global disaggregation of information- intensive services. Management Science, 41(7), 1250-1262.
  4. Bakan, I., & Doðan, Ý. F. (2012). Competitiveness of the industries based on the Porter’s diamond model: An empirical study. International Journal of Research and Reviews in Applied Sciences, 11(3), 441-455.
  5. Barreto, I., & BadenFuller, C. (2006). To conform or to perform? Mimetic behaviour, legitimacybased groups and performance consequences. Journal of Management Studies, 43(7), 1559-1581.
  6. Bhattacharyya, S. S., & Thakre, S. (2021). Coronavirus pandemic and economic lockdown; study of strategic initiatives and tactical responses of firms. International Journal of Organizational Analysis, 29(5), 1240-1268.
  7. Bhattacharjee, S., & Chakrabarti, D. (2015). Investigating India’s competitive edge in the IT-ITeS sector. IIMB Management Review, 27(1), 19-34.
  8. Booth, T. (2013). Here, there and everywhere-special report: Outsourcing and offshoring. Economist, 19.
  9. Bunyaratavej, K., Hahn, E. D., & Doh, J. P. (2008). Multinational investment and host country development: Location efficiencies for services offshoring. Journal of World Business, 43(2), 227-242.
  10. Carmel, E. (2003). The new software exporting nations: Success factors. The Electronic Journal of Information Systems in Developing Countries, 13(1), 1-12.
  11. Chapman, G. P., & Dutt, A. K. (2019). Urban growth and development in Asia: Volume I: Making the cities. Routledge.
  12. Charles, M., & Ochieng, S. B. (2023). Strategic outsourcing and firm performance: A review of literature. International Journal of Social Science and Humanities Research (IJSSHR), ISSN 2959-7056 (o); 2959-7048 (p), 1(1), 20-29.
  13. Chaze, A. (2007). Real estate reaps benefits of India’s economic boom. Institutional Investor, 41(9), 1-2.
  14. Collings, D. G., & Dick, P. (2011). The relationship between ceremonial adoption of popular management practices and the motivation for practice adoption and diffusion in an American MNC. The International Journal of Human Resource Management, 22(18), 3849-3866.
  15. Di Mauro, C., Fratocchi, L., Orzes, G., & Sartor, M. (2018). Offshoring and backshoring: A multiple case study analysis. Journal of Purchasing and Supply Management, 24(2), 108-134.
  16. David, D., Gopalan, S., & Ramachandran, S. (2021). The startup environment and funding activity in India. Investment in Startups and Small Business Financing, 193-232.
  17. Davis, G., Ein-Dor, P., R King, W., & Torkzadeh, R. (2006). IT offshoring: History, prospects and challenges. Journal of the Association for Information Systems, 7(1), 32.
  18. Donovan, D. J. (2003). Emerging corporate location trends. Corporate Real Estate Leader, 2(1), 35-38.
  19. Duranton, G., & Puga, D. (2014). The growth of cities. Handbook of Economic Growth, 2, 781-853.
  20. Elman, C., Gerring, J., & Mahoney, J. (Eds.) (2020). The production of knowledge: Enhancing progress in social science. Cambridge University Press.
  21. Gandhi, S., & Pethe, A. (2017). Emerging challenges of metropolitan governance in India. Economic and Political Weekly, 55-65.
  22. Ghinmine, V. (2023). Study of India’s five trillion dollar economy. Delta National Journal of Multidisciplinary Research, 10(spl), 189-197.
  23. Hambrick, D. C., Finkelstein, S., Cho, T. S., & Jackson, E. M. (2004). Isomorphism in reverse: Institutional theory as an explanation for recent increases in intraindustry heterogeneity and managerial discretion. Research in Organizational Behavior, 26, 307-350.
  24. Hartman, P. L., Ogden, J. A., Wirthlin, J. R., & Hazen, B. T. (2017). Nearshoring, reshoring, and insourcing: Moving beyond the total cost of ownership conversation. Business Horizons, 60(3), 363-373.
  25. Harris, H. (2001). Content analysis of secondary data: A study of courage in managerial decision making. Journal of Business Ethics, 34, 191-208.
  26. Heeks, R., & Nicholson, B. (2002). Software export success factors and strategies in developing and transitional economies. Development Informatics Working Paper, (12).
  27. Heugens, P. P., & Lander, M. W. (2009). Structure! Agency!(and other quarrels): A meta-analysis of institutional theories of organization. Academy of management journal, 52(1), 61-85.
  28. Hofstede, G., & Bond, M. H. (1984). Hofstede’s culture dimensions: An independent validation using Rokeach’s value survey. Journal of Cross-cultural Psychology, 15(4), 417-433.
  29. Hsieh, H. F., & Shannon, S. E. (2005). Three approaches to qualitative content analysis. Qualitative Health Research, 15(9), 1277-1288.
  30. Hutchinson, F., & Ilavarasan, P. V. (2008). The IT/ITES sector and economic policy at the sub-national level in India. Economic and Political Weekly, 64-70.
  31. Jack , E. P., & Raturi, A. S. (2006). Lessons learned from methodological triangulation in management research. Management Research News, 29(6), 345-357.
  32. Jain, R., & Ali, S. W. (2013). A review of facilitators, barriers and gateways to entrepreneurship: Directions for future research. South Asian Journal of Management, 20(3), 122-163. Retrieved from https://www.proquest.com/scholarly- journals/review-facilitators-barriers-gateways/docview/1450594861/se-2
  33. Javalgi, R. R. G., Dixit, A., & Scherer, R. F. (2009). Outsourcing to emerging markets: Theoretical perspectives and policy implications. Journal of International Management, 15(2), 156-168.
  34. Jin, C., & Grissom, T. V. (2008). Forecasting dynamic investment timing under the cyclic behavior in real estate. International Real Estate Review, 11(2), 105-125.
  35. Joshi, K., & Mudigonda, S. (2008). An analysis of India’s future attractiveness as an offshore destination for IT and IT-enabled services. Journal of Information Technology, 23(4), 215-227.
  36. Kaleka, A., & Morgan, N. A. (2017). Which competitive advantage (s)? Competitive advantage–market performance relationships in international markets. Journal of International Marketing, 25(4), 25-49.
  37. Kent, S., Jordan, P. J., & Troth, A. C. (2014). Institutional theory, normative pressures, emotions, and indirect aggression. In Emotions and the Organizational Fabric, 197-218, Emerald Group Publishing Limited.
  38. Kohlbacher, F. (2006). The use of qualitative content analysis in case study research. In Forum Qualitative Sozialforschung/forum: Qualitative Social Research 7(1), 1-30.
  39. Latukha, M., Shagalkina, M., Mitskevich, E., & Strogetskaya, E. (2022). From brain drain to brain gain: the agenda for talent management in overcoming talent migration from emerging markets. The International Journal of Human Resource Management, 33(11), 2226-2255.
  40. Lowe, A., Norris, A. C., Farris, A. J., & Babbage, D. R. (2018). Quantifying thematic saturation in qualitative data analysis. Field Methods, 30(3), 191-207.
  41. Ma, A., & Norwich, B. (2007). Triangulation and theoretical understanding. International Journal of Social Research Methodology, 10(3), 211-226.
  42. Márkus, G. (2008). Measuring company level competitiveness in Porter’s Diamond model framework. In FIKUSZ 2008 Business Sciences -Symposium for Young Researchers: Proceedings, 149-158.
  43. Malki, S. (2022). Determinants of United States foreign investment in India. 13(2), 131-146
  44. Meyer, J. W., & Rowan, B. (1977). Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83(2), 340-363.
  45. Ministry of Electronics & Information Technology Government of India, 2023
  46. Piatanesi, B., & Arauzo-Carod, J. M. (2019). Backshoring and nearshoring: An overview. Growth and Change, 50(3), 806-823.
  47. Porter, M. E. (1990). The competitive Advantage of Nations, Macmillan Press LTD.
  48. Potter, W. J., & Levine Donnerstein, D. (1999). Rethinking validity and reliability in content analysis.
  49. Rajkumar, P. (2013). A study of the factors influencing the location selection decisions of information technology firms. Asian Academy of Management Journal, 18(1), 35-40.
  50. Rathod, S. K., & Salunke, D. S. (2022). The Socio-Economic Impact of the Samruddhi Expressway on the Villages of Vaijapur Tehsil: A Study of Utilization of Land Acquisition Monetary Returns.
  51. Schubert, T. (2023). Captive offshoring, innovation and market diffusion: Evidence from the Swedish community innovation survey. Journal of the Knowledge Economy, 1-29.
  52. Secretariat, UNCTAD. (2003). E-commerce and development report 2003 (pp. xx-xxvii). United Nation Publication, New York.
  53. Singh, T., Solanki, A., Sharma, S. K., Nayyar, A., & Paul, A. (2022). A decade review on smart cities: Paradigms, challenges and opportunities. IEEE Access, 10, 68319-68321
  54. Srikant, S. (2022). India’s USD 5 trillion economy by 2024-25–Truth or myth?. International Journal of Research in Engineering, Science and Management, 5(12), 8-11
  55. Srinivas, S. (1997). Urban development and the information technology industry: A study of Bangalore, India. University of London, University College London (United Kingdom).
  56. Sukanya R., & Sumeet S (2023). Emerging technology hubs of India. Nasscom. URL h ttps : // www. n ass c om. i n /k n owle d ge - c en te r/ pu bli c ati ons / e me r gin g- technology-hubs-india [Accessed on September 15, 2023].
  57. Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509-533.
  58. Tina Dacin, M., Goodstein, J., & Richard Scott, W. (2002). Institutional theory and institutional change: Introduction to the special research forum. Academy of Management Journal, 45(1), 45-56.
  59. Victor Diogho Heuer de Carvalho, Thiago Poleto, Thyago Celso Cavalcante Nepomuceno and Ana Paula Paula Cabral Seixas Costa (2022). A study on relational factors in information technology outsourcing: analyzing judgments of small and medium-sized supplying and contracting companies’ managers. Journal of Business & Industrial Marketing, 37(4), 893-917.
  60. Weber, R. P. (1990). Basic Content Analysis, 49, Sage.
  61. Wu, J., Harrigan, K. R., Ang, S. H., & Wu, Z. (2019). The impact of imitation strategy and R&D resources on incremental and radical innovation: Evidence from Chinese manufacturing firms. The Journal of Technology Transfer, 44, 210-230.
  62. Xiang, B. (2007). Global ‘Body Shopping’ An Indian Labor System in the Information Technology Industry. Princeton University Press.
  63. Zondag, M. M., Mueller, E. F., & Ferrin, B. G. (2017). The application of value nets in food supply chains: A multiple case study. Scandinavian Journal of Management, 33(4), 199-212.