This thesis is concerned with how software process and software process improvement is practiced within the indigenous Irish software product industry. Using the grounded theory methodology, the study utilises in-depth interviews to examine the attitude and perceptions of practitioners towards software process and software process improvement. The outcome of the work is a theory, grounded in the field data, that explains how software processes are formed and evolve, and when and why software process improvement is undertaken. The resultant grounded theory is based on two conceptual themes, Process Formation and Process Evolution, and one core theoretical category, Cost of Process. The empirical investigation shows that software process improvement programmes are implemented by companies as a reaction to business events, and how many software managers reject software process improvement because o f the associated costs. In addition, indigenous Irish software companies largely ignore commercial best practice software process improvement models, and the reasons for this are discussed. The research also argues that software process improvement is not solely technologycentred but is also affected by wider human and organisational factors. As these ‘sociocultural’ influences have been more widely addressed in the Information Systems discipline, than in Software Engineering, this work draws on the experiences and lessons from both disciplines and ultimately resides between these two academic fields. The results o f this work provide new light on the issues facing software process and process improvement in small software product companies and make a contribution towards bridging the gaps between research and practice, and theory and practice, in both Software Engineering and Information Systems.