Compatibility and the Adoption of Innovation - Coursework Example

Compatibility and the adoption of innovation Name College Over the years doing research on the demand and supply of administrative innovations has risen as the most profound field. The entrance of innovations such as the balanced scorecard, strategic management accounting, target costing and many others has lead brought about body research. (Zawawi & Hoque, 2010). The main aim of this research has been on the identification of general factors and characteristics of organizations that affect the adoption of innovation. Organization culture is seen as the shared beliefs, values and assumptions by the organizational members.(Jung et al.,2009). In this regard, the culture of an organization fundamentally influences how the members of a firm make the interpretation of social practices and objects. The goals and strategies enacted by members to connect the objects and practices to the aims of the company. (Love,2008). The author has emphasized on the role of compatibility as a link between the organization structure and innovations. Innovation is regarded compatible to a firm's culture when the beliefs and values to be applied for the affectivity of the practice are equally shared by the members of the organization.(Love and Cebon,2008). Any change in practices that wants to be used by a firm will always meet resistance from the members if they are conflicting with the cultural beliefs and values that are in existence. According to the study by Lozeau et al., (2002), new practice implementation by the management will sail through smoothly, and the use of a particular innovation is more successful when the culture of the organization is in line with the values and beliefs embedded in the organizational innovations. Research by Love and Cebon (2008), established that the rate of adoption of manufacturing practices is in direct relation to the compatibility of the culture of an organization and the adopting firms regarding beliefs and values associated with best manufacturing practices. Compatibility plays a significant role in the adoption of innovation. Compatibility between the culture of an organization and the beliefs and values related to particular innovations acts as guidance for a firm in the approval of the innovation. The basis of all these is because the innovation is not conflicting with the culture of the organization. To add on this also is a report that reported interactions between these factors in consideration in the course of the diffusion process. A suggestion by the authors alludes that the influence of compatibility declines over time as innovations become institutionalized. Hence according to them the culture of an organization is stronger among the early adopters and considerably drops on the late adopters.(Brown et al. 2004). Economic factors have been of the essence in the adoption of decisions by firms. Organization adoption of decisions is based on the consideration by the organization if either the interpretation of situations will be avenues for gains or losses. According to George et al., 2006, the analysis of the situations as either of gain or loss determines the cognition of decision makers and their motivation in adopting the decisions. In the initial stages of the diffusion process, the enactment of innovation by firms' members presents them with an avenue, and therefore the members assess the probability of maximizing the gains. On the other hand, late adopters may opt for the adoption of innovation with a motivation of avoiding the potential losses due to abstaining from the adoption of the same. Hence these economic considerations play a role in the decision-making process. The social factor is also at play in the adoption process. A firm that adopts an innovation early may be having a motive of maintaining a standard that is higher than other firms. Through this, a firm may want to outdo the competitors. Also, non-adopters always perceive the threat of lost legitimacy. In this regard, they eventually adopt a decision due to the threat. This explains the social considerations of adoption. In the same breadth, Later adopters practice social learning to know a lot about that which is working and the one not working, and they have intentions of experimenting with innovation to an extent where they can establish the standards guiding the new adoption behavior of innovations.(Kennedy et al., 2009). The hypothesis from the research is of great significance. Firstly, from the hypothesis an assumption is made that selection of innovation by an organization is purely contingent on compatibility. In essence, attention is drawn that when the compatibility is high then there is an early recognition and when low compatibility exists then recognition is late. Recognition of innovations early is useful as it provides an opportunity to achieve gains if members perceive so. Late recognition of innovation from the diffusion process can be used by members as a way of avoiding losses. According to Love and Cebon (2008), compatible organizations adapt innovations before incompatible firms. Many reasons explain this. Compatible firms adopt at an early stage due to the confidence in the implementation of a practice that corresponds with the beliefs and values of the firm. The reason for compatible firms adapting an innovation is because the innovation is viewed as an opportunity. Adoption hence signifies that the firm has the potential of performing better than their competitors. The reason for adoption in compatible firms is because of the opportunities for gain hence the potential for profits should be a basis for adoption decision making by companies. Secondly, compatibility brings about preparedness in recognizing and understanding the benefits of innovation. Incompatible firms are mostly ignorant of the innovation, or they may view it as contradicting with their shared beliefs and values hence they may forgo innovation at an early stage. The decision to adopt comes in when the potential for gains has decreased, and the particular innovation poses losses to the firm due to it being adopted by the competitors of the firm collectively.(Kennedy & Fiss 2009). Thus and adoption by an incompatible firm should be viewed as a perceived response to a possible threat as compared to it being seen as an adoption for gains. Compatible firms mostly they recognize, and they make adoption in the early stages and this attributed to shared values and beliefs. According to Love and Cebon (2008), they noted that compatibility correlates with innovation adoption in the initial stages of diffusion. However, this relationship declines as the process progresses. Basing on this assertions then, incompatible firms may eventually adopt innovation in later stages of diffusion. Late adopting may be as a result of responding to pressure at the field level for not adopting. There is relevance to the business firms as those who always adapt early an innovation are firms that pose much compatibility, however, as the process of diffusion increases the proportion of adaptors reduces. Compatibility interacts positively with the potential opportunity of having gains on adoption of innovation. Due to the nature of the diffusion process being inherent, situations for nonadopters and adopters of an innovation experience changes over time. Initial adaptors always get the benefits of performing better than they were, and hence they look more prestigious. On the other hand, the non-adopters view innovation as leading to losses and may eventually practice adoption when faced with the threats of losses. Hence, the late adopter is always motivated by social motives. Kennedy and Fiss (2009), argue that late adopters may be driven by fear of incurring both social and economic loss. Non-adopters only adopt an innovation for fear of loss of legitimacy among the stakeholders. The greater the market becomes competitive, the much the incompatible firms will adopt an innovation. According to Gosselin 2007, the level of competition in the market is a driver for adoption. Even though compatible firms may be motivated by competition in assessing an innovation, the adoption is squarely based on whether the implementation will yield gain. Hence in compatible firms adoption is not a response that is automatic to competition. Incompatibility has a positive interaction with the intensity of competition in influencing the decision of adopting an innovation. When there is an innovation that is incompatible with an organization's culture, the particular innovation will later be adopted so long as there is intense competition and perceived the risk of losses by ignoring the innovation. When there is high competition, non-adopters eventually adopt an innovation not with the potential for gains as their basement, but it is so in response to the fear of experiencing losses. References Zawawi, N.H.M., Hoque, Z.( 2010). Research in management accounting innovations. An overview of its development. Qual. Res. Account. Manage Jung, T., Scott, T., Davies, H.T.O., Bower, P., Whalley, D., McNally, R., Mannion, R.(2009). Instruments for exploring the organizational culture. A review of the literature. Public Adm. Rev. 69, 1087–1096. Gosselin, M. ( 2007). A review of activity-based costing. Technique, implementation, and consequences. Chapman, C.S., Hopwood, G., Shields, M. (Eds.), Handbook of Management Accounting Research. Elsevier, London, pp. Love, E.G., Cebon, P.,( 2008). Meanings on multiple levels.The influence of organization-level and field-level meaning systems on diffusion. J. Manage. Stud. 45 (2), Kennedy, M.T., Fiss, P.C.,( 2009). Institutionalization, diffusion, and framing. The logic of TQM adoption and implementation decision among U.S. hospitals. Acad Lozeau, D., Langley, A., Denis, J.-D.,( 2002). The corruption of managerial techniques organizations. Hum. Relat. 55 (5), 537–564. Brown, D.A., Giacobbe, F., Booth, P.,( 2004). Technological and organization influences on the adoption of activity-based costing. Australia. Read More