Propensity to adopt technological innovations: the impact of personal characteristics and organizational context

Abstract

This study investigated how personal characteristics and organizational context are associated with strategic decision makers' intentions to adopt technological innovations. Positive significant relationships were found between hospital top managers' intentions to adopt potential innovations and risk propensity, self-efficacy, perceived organizational strategy, perceived information processing capacity, and perceived resource availability. The impact of personal and organizational factors on intentions to adopt, implications of our results, and future research directions are discussed.

Introduction

Courses of action taken by organizations in responding to increasing environmental complexity and turbulence reflect the strategic decisions their top managers make (Hambrick and Mason, 1984). In attempts to explain how and why organizational responses to similar environmental stimuli may change, several researchers have focused on cognitive activities of top managers (e.g., Thomas and McDaniel, 1990; Gioia and Chittipeddi, 1991; Schneider and De Meyer, 1991; Lant et al., 1992). The complicated and unstructured nature of strategic issues (Mintzberg et al., 1976) makes top managers' cognitive “sensemaking” processes critically important for the outcome of the strategic decision process (Thomas et al., 1993). For organizations striving to gain and maintain a competitive advantage in today's increasingly dynamic and complex industry environment, a strategic issue that is of paramount importance is the adoption of organizational innovations from the external environment (Schewe, 1996). This paper examines the acquisition of radical organizational innovations from the external environment within a strategic decision making framework.

We adopt the definition of an innovation as “any idea, practice, or material artifact perceived to be new by the relevant unit of adoption” (Zaltman et al., 1973; p. 10). Similarly, Rogers and Shoemaker (1971)define innovation as “an idea, practice, or object perceived as new by the individual” (p. 19). The common element in both of these definitions is that what matters is whether the product (or idea, process, practice or object) is new according to the perceiving individual or adopting unit. Whether it is new objectively is not important as long as it seems new to the adopting unit. A radical innovation, besides being new to the organization, is also radically different from the current organizational practices, and thus, requires significant changes in organizational processes, behaviors, and structure (Nord and Tucker, 1987). Innovation radicalness varies with the degree of change it brings on the existing systems (Zaltman et al., 1973; Damanpour, 1988). External acquisitions of radical organizational innovations represent strategic issues since they involve major changes in organizations' structuring and resource usage patterns.

Previous studies of innovation diffusion have predominantly explored the relationship between innovation adoptions and organizational level variables (Kim, 1980; Damanpour, 1987Damanpour, 1988). For example, Damanpour (1991), in a meta-analysis of 23 empirical studies, found significant positive relationships between innovation and organizational attributes such as specialization, professionalism, and communication. Saleh and Wang (1993)investigated factors such as entrepreneurial strategy, organizational structure and climate that differentiate innovative from less-innovative organizations. On the individual characteristics side, many studies have explored the impact of the role and characteristics of key persons or champions of innovation management and implementation (Chakrabarti, 1974, Howell and Higgins, 1990b; Chakrabarti and Hauschildt, 1989; Allen, 1985; Howell and Higgins, 1990aHowell and Higgins, 1990b; Ancona and Caldwell, 1992). For example, Howell and Higgins (1990a), Howell and Higgins (1990b)found that champions of innovations take higher risks, are more innovative, and exhibit charismatic leader behaviors. Chakrabarti and Hauschildt (1989)suggested guidelines for facilitating division of labor between technical experts, sponsors, and champions of projects. Yet, there is a considerable lack of theory development, and corresponding empirical investigation, addressing the impacts of both individual variables and organizational context on innovation adoptions within strategic decision making contexts.

Given the increasing rate of change and innovation in most environments, industries, and organizations, an understanding of the effects of personal and organizational contexts on innovation adoption decisions may assist in our understanding of how strategic decision makers interpret and respond to potential innovations. Perceived effects of innovations on organizational performance lead decision makers to respond in a certain way. For example, there is evidence that perceived organizational “performance gaps” initiate a search for innovation (Zaltman et al., 1973) and that innovations are adopted with the intent of increasing organizational performance (Damanpour, 1990, Damanpour, 1991). Decision makers attribute meanings to innovations, resulting in intention to respond, and more specifically, in the acceptance or non-acceptance of new technology (Agarwal and Prasad, 1997; Tabak and Barr, 1998). The purpose of this study is to investigate the relationship between personal factors, organizational context, and decision makers' intentions to adopt radical innovations for their organizations. The study's focus is on decision makers' cognitive representations of potential innovations as the primary means of examining how individual and organizational factors might affect innovation decisions.