The growing level of global competition is forcing organizations to make dramatic change and improvements in order to compete, prosper, and survive (Kotter, 1996). During the past three decades, the world has witnessed some spectacular changes that have provided a totally new environment for organizations. These changes include technological and administrative innovations that organizations are dealing with in different areas of their operations such as manufacturing process, operation technologies, and information systems (Shields, 1997). It can be argued that the growing level of global competition has lead to the adoption of technological evolution, which may also require the adoption of complementary administrative innovation (e.g., Baines & Langfield-Smith 2003). Given this information, to keep pace with other competitors in the global market, the adoption and the diffusion of latest ideas, techniques, practices, and processes has become a key factor for success in organizations. Therefore, this places a greater emphasis on the innovation generation and innovation adoption in organizations in order to compete, prosper, and survive.
According to diffusion theory (Rogers, 2003), we may expect that innovation generation and innovation adoption do not simply emerge and develop full-blown. Some groups of people, some places, or some organizations may have immediate access to the innovation; some may access it later, and some may never access it. As Schumpeter (1934) remarked, an innovation and its diffusion are part of a larger pattern of social, political, and economic activity. Therefore, it is expected that innovation generation and innovation adoption be influenced by a variety of factors.
Mansfield (1961) suggested that innovation adoption is a function of the degree of uncertainty associated with the innovation, the amount of investment required to adopt the innovation, and the extent of economic advantage of the innovation. Other researchers, including Brown (1981) and Robinson and Lakhani (1975), proposed a supply and demand rationale for the explanation of innovation generation and innovation adoption. Obviously, Mansfield’s (1961) suggested factors for innovation adoption could be included in such a supply and demand concept. Brown (1981) explained that the market and infrastructure factors provide the supply side of innovation adoption and shape its course. He further emphasized that the central element of a supply framework is the diffusion agency.
Clark (1984) believes that the demand approach in the process of innovation generation and innovation adoption is more diverse and more extensive. It focuses on the adoption of innovations, which are available to everyone. He thinks the supply approach is dealing with cases where the innovation is not universally available due to the fact that the supply is under control. In other words, when every potential adopter of an innovation does not have equal access to an innovation, the supply factor might be considered as an important influencing factor in the diffusion process of that innovation.
The learning perspective has been introduced as another factor affecting the innovation generation and innovation adoption (Sahal, 1981). Expanding the scope of influencing factors, Hagerstrand (1967) proposed an information transfer explanation as another factor influencing the innovation generation and innovation adoption. Other researchers like Sharif and Kabir (1976) considered the diffusion of an innovation as a replacement process and claimed that the dynamics of this replacement process account for the diffusion rate during the diffusion period. However, in some cases, an innovation might be an addition to an employed technique or an ongoing capacity and not a complete replacement.
Key Terms in this Chapter
Innovation: Any idea, product, practice, behavior, or object that is apparent as new.
Diffusion: A process by which an idea, product, practice, behavior, or object is communicated/circulated to those to whom it is relevant.
Observability of Innovation: The degree to which the results of an innovation can be observed or demonstrated.