Extending the Role of Diffusion of Innovation Theory (DOI) in Achieving the Strategic Goal of the Firm With the Moderating Effect of Cost Leadership

Extending the Role of Diffusion of Innovation Theory (DOI) in Achieving the Strategic Goal of the Firm With the Moderating Effect of Cost Leadership

Bader Abdulrahman Alyoubi, Mohammad Ali Yamin
Copyright: © 2021 |Pages: 22
DOI: 10.4018/IJSDA.20211001.oa15
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Abstract

The information system literature has long emphasized the importance of employee acceptance of information technology for achieving strategic goal of the firm and organizational performance. Consequently, this study investigates the determinants of acceptance of information technology with the extension of diffusion of innovation theory (DOI) in organizational context. Results showed that compatibility, innovativeness, trust in technology, perceived gap in IT capabilities, employee self-efficacy, and perceived cost advantage explained R^2 79.4%% variance in achieving strategic goal of the firm. The effect size analysis showed that perceived gap in IT capabilities had substantial effect size. Similarly, substantial predictive relevance was found Q^2 58.1%, 15.7% when predicting firm strategic goals and organizational performance respectively.
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1. Introduction

In this vibrant economy, the use of information technology is considered essential for organizational operations. Despite impressive advances in technology, the problem of underutilization of technology in human resource organizations is still existed. In developing countries the use of information technology is complex and crucial (Omamo, Rodrigues, & Muliaro, 2020). Therefore, understanding the IT determinants influence on employee performance and organizational performance is important. The present study fills the gap in information system and human resource literature by developing and amalgamated model which combines employee psychological and technological factors in achieving strategic goal and performance of the firm. In technology context, the diffusion of innovation theory (DOI) is extended with trust in technology, perceived gap in IT capabilities, employee self-efficacy, perceived service quality and perceived cost advantage in order to see the impact of these factors on achieving strategic goal of the firm. To the date, this study is the first that investigates the role of diffusion of innovation theory in achieving strategic goal of the firm and organizational performance.

Diffusion of innovation theory was introduced by Rogers (2003) which includes two factors namely; compatibility and innovativeness. Earlier studies had confirmed the importance of compatibility and innovativeness in acceptance and usage of information technology (Rogers, 1962, 2003; Ryan & Gross, 1943). Concerning with other constructs such as trust in technology, perceived gap in IT capabilities, employee self-efficacy, perceived service quality and perceived cost advantage are studied by several researcher in technology adoption context (Bose & Luo, 2011; Daud Norzaidi, Choy Chong, Murali, & Intan Salwani, 2007; Ghani, Rahi, Yasin, & Alnaser, 2017; Han, 2003; Ho Cheong & Park, 2005; Lee & Kim, 2007; Liang, Saraf, Hu, & Xue, 2007; R. Samar & Mazuri, 2019b; Teo, 2010; Wixom & Todd, 2005; Wu, Mahajan, & Balasubramanian, 2003). Therefore, this study contributes to the body of knowledge by examining these constructs in achieving strategic goal of the firm which in turn enhance organizational performance. Trust in technology is referred to employee perception about technology that how technology protect monetary and confidential information at organizational level (S Rahi, Ghani, & Muhamad, 2017). Author like Xin and Levina (2008) stated that organizations achieve strategic goals by gaining IT knowledge through the deployment of technology. According to D. Wang, Xu, and Chan (2008) postulated that self-efficacy effect positively on employee behavioral intention, effort and determination to carry out a task or achieving strategic goal of a firm and organizational performance. Similarly, Ghani et al. (2017) asserted that service quality bring ease in employee daily work and enhance organizational performance. Aside of direct relationship among exogenous and endogenous constructs, this study includes the moderating role of cost leadership and contributes to human resource literature. The research model of this study is depicted in Fig 1. In following sections the importance of these construct is augmented.

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