Abstracts
Premature Adoption of Technological and/or Administrative Innovations: Exploring the Issues and Implications through a Competitive Advantage Lens
Radha Appan, Cleveland State University, USA
Sreedhar Madhavaram, Cleveland State University, USA
Competition consists of the constant struggle among firms for a comparative advantage in resources that will yield a marketplace position of competitive advantage. Though all firms seek marketplace positions of competitive advantage, they cannot occupy such positions simultaneously. Consequently, firms that occupy positions of competitive disadvantage (and, hence, are suffering from inferior financial performance) will seek ``reactive'' innovations in search of effectiveness and efficiency advantages. Also, those firms that (temporarily) occupy marketplace positions of competitive advantage are also motivated to innovate because they realize that competitors are chasing them. Therefore, firms occupying marketplace positions of competitive advantage will seek ``proactive'' innovations in order to continue to earn superior financial performance. Overall, these reactive and proactive innovations contribute to the dynamism of competition.
As seekers of reactive and/or proactive innovations in search of competitive advantage, firms often, prematurely, adopt technological and/or administrative innovations. Although the conventional meaning of the term innovation in marketing largely refers to new product-related breakthroughs (Han, Kim, & Srivastava, 1998), the organizational innovation literature differentiates between technical innovation and administrative innovation. According to Damanpour (1991, p.560), ``technical innovations pertain to products, services, and production process technology; they are related to basic work activities and can concern either product or process,'' whereas ``administrative innovations involve organizational structure and administrative process; they are indirectly related to the basic activities of an organization.'' However, it has to be noted that some innovations such as ERP (Enterprise Resource Planning) could not be explicitly classified as either technical or administrative innovations as it could pertain to both. The adoption of such innovations can be premature in two ways: the innovation itself is in its infancy or the firm is not ready for adoption. However, so far, research on premature adoption of technological and/or innovations seems to adopt a post-hoc approach to determining whether the adoption was premature in terms of whether the adopted innovation was a success or a failure.
In addition, much of the research on premature adoption of innovations falls under the rubric of ``managerial fads and fashions.'' In a seminal paper, Abrahamson (1991) suggests that pro-innovation biases, i.e., the presumptions that innovations will benefit organizations, results in premature adoption. Defining management fads as ``widely accepted, innovative interventions into the organization’s practices designed to improve some aspect of performance,'' Gibson and Tesone (2001, p. 122-123) propose environmental pressures (competitiveness, increase in union activity, political and regulatory environment, & Dynamic and turbulent environment), forces for conformity (knowledge cascades, desire to be in the in-crowd, & desire to avoid sanctions), and organizational characteristics (frustration from past efforts, desire for differentiation, & culture of risk taking) as variables leading to fad adoption. In recent times, Wang (2010) found evidence that adoption of information technology (IT) fashions influences organizational legitimacy and performance. Overall, research on premature adoption of innovations is highly fragmented and deserves conceptual and empirical scrutiny.
In this paper, we focus on premature adoption of innovations from a competitive advantage perspective on the following issues: (i) pro-innovations bias, (ii) reactive vs. proactive orientation to produce market offerings, (iii) tactical vs. strategic nature of the innovations to be adopted, (iv) contingency variables of interest for adoption (strategy, structure, size, environment, technology, task, and individual characteristics), (v) individual and organizational characteristics influencing premature adoption, and (vi) positive and negative consequences of premature adoption of innovations. Specifically, we develop an empirically testable conceptual framework, discuss the implications of our framework for academics and practitioners, and provide directions for future research.
About the Author(s)
RADHA APPAN (Ph.D., Texas Tech University) is an Associate Professor of Computer and Information Science at Cleveland State University. Her work has been published in or has been accepted for publication in MIS Quarterly, Journal of the Association for Information Systems, Decision Support Systems, Information and Management, Psychology & Marketing, and others. In addition, she has also published her work in the proceedings of several national and international conferences. Her research interests include strategy and information systems, systems analysis and design, online auction markets, human decision making, and e-commerce related trust issues.
SREEDHAR MADHAVARAM (Ph.D., Texas Tech University) is an Associate Professor of Marketing at Cleveland State University. His work has been published in or has been accepted for publication in the Journal of the Academy of Marketing Science, Industrial Marketing Management, the Journal of Personal Selling & Sales Management, the Journal of Advertising, Psychology & Marketing, the Journal of Business & Industrial Marketing, the Journal of Marketing Education, Marketing Education Review, and others. A frequent presenter at national and international conferences, his research interests include marketing strategy, marketing theory and concepts, marketing communications, marketing pedagogy, organizational knowledge, and sales management.
