Model of Exploring the Adoption of Innovation in Organizations - Assignment Example

Assignment 1 (Author’s name) (Institutional Affiliation) Question 1 The authors are keen to understand the linking role that compatibility plays between the culture of an organization and the management of innovations therein. Organizational culture has amassed great prominence as a concept for comprehending organizations. Many studies continue to underline the vital roles of organizational culture in the outcomes and activities of an organization, including innovativeness, learning, restructuring, change implementation, creativity, innovativeness, failure and success. Organizational culture is generally understood as the shared assumptions, beliefs and values held by the members of an organization. Organizational culture therefore generally determines the strategies, goals, practices, and objectives of the members of the organization (Pride, Hughes & Kapoor, 2014). It essentially imparts on the outcomes and behaviors within an organization. On the other hand, innovation is equally a very important aspect in organizations that drives success. Organizational culture becomes compatible with innovation when the members of the organization have beliefs and values that are similar to the beliefs and values that are espoused by a given innovation. Consequently, compatibility denotes the intimate relationship between an innovation and the culture of the organization. While innovation and organizational culture in compatible organizations are complementary to each other, incompatible organizations, on the other hand, have an organizational culture (beliefs and values) that are not the similar (Ax & Greve, 2017). It is therefore widely held that changes in innovation (practices) which are not in harmony with the established cultural beliefs and values will be met with resistance from the members of the organization. A majority of studies therefore assert that new practices/ innovations will be successfully (smoothly) implemented when the culture of the organization is in harmony with the beliefs and values that are embedded in the innovation. In a study involving over a thousand manufacturing organizations in New Zealand and Australia concerning the adoption of various manufacturing practices (innovations) like continuous improvement, customer focus, benchmarking, and total quality management, it was noted that the rates of adoption increased with the compatibility of the beliefs and values associated with the innovations and the adopting organization’s culture. However, a number of other interacting factors are known to influence the adoption of innovations (Samson & Daft, 2015). It was seen that in the early adopters, the influence of the culture of the organization was much stronger while the issues of compatibility declined as time progressed. It has been suggested that this decreasing impact of compatibility could be due to the knowledge entrepreneurs’ theorizations, practice institutionalization, as well as imitative behavior. It has thus become increasingly important to understand the various dynamic factors (such as timing) that affect the adoption of innovations by organizations. It has for a long time been assumed that adoption was a result of a direct and static link between organizational culture and innovation. According to Ax & Greve, (2017), previous models have not been successful in explaining why compatible organizations may reject certain innovations at certain stages of adoption, while other incompatible organizations may do so at a late stage. It is also important to understand why some innovations are adopted and equally rejected by organizations with similar cultures. Therefore, while the authors realize that compatibility has a great degree of influence, other factors which have previously remained unexplored are also important, including timing. It is thus essential to understand how compatibility can be impeded by other previously unknown factors. Question 2 The above mentioned two stage model of exploring the adoption of innovation in organizations has become very important in understanding organizational decision making. However, several researchers have continued to assert that other factors also determine the adoption of innovation in organizations (Schermerhorn, 2014). For instance, indirect assessment of the motivations for adoption has been argued to hold more weight for the adopters compared to the assessments that are more direct. In addition, many cite the fact that the two-stage adoption model has failed to highlight the differences in the motivations for adoption in the late stage and the early stage. Therefore, it has been postulated that the model can further be explained using the idea that organizational circumstances can differ from time to time. Therefore, organizations can be late adopters because they have lesser understanding of the benefits, limitations and sustainability of a given innovation compared to the early adopters, or because they have certain principles that determine adoption practices for various innovations. Robbins (2011) agree therefore, that apart from the compatibility and timing of adoption, organizational change (innovation) adoption can equally be influenced depending on whether the change will be beneficial to the organization or lead to losses. In other words, decision makers are influenced by evaluations concerning the benefits and limitations of a given innovation during their adoption decision making process. Subsequently, decision making regarding adoption is determined by potential social and economic gains or losses associated with the innovation. Early adopters of innovation can thus regard the change as that which will put it in a superior position (economic advantage) compared to other organizations, where as organizations that reject a change can be influenced by the notion that the change may cause it to lose its ability to compete (hence result in economic losses) (Shtub, 2016). Moreover, certain changes can be considered detrimental to organization’s legitimacy/ integrity and therefore lead to social consequences. On the other hand, certain innovations are widely regarded as good for business, the environment, surrounding communities, and consumers, for example, and may hence present a social advantage to an organization that adopts it (Mowen, Hansen & Heitger, 2012). Furthermore, organizations that adopt certain practices late are often driven by the fact that they do not wish to miss out on the various economic and social gains that are associated with that particular change/ innovation. Adoption decisions are hence done in a rational manner instead of simply mimicking the behavior of other organizations. There is more to adoption decision making than simply the timing and harmony with the culture of the organization. Organizations have to consider both social and economic issues that are associated with change in order to decide whether they stand to gain from the adoption or make losses in the wake of implementation (Ax & Greve, 2017). However, the economic and social considerations alone still fail to explain the timing of change adoption in an organization. Question 3 Even though it is understood that compatibility and social and economic gains determine the adoption of various innovations by organizations, it is not clear what determines the timing of adoption. This is the importance of the proposed hypotheses in the study. The hypotheses attempt to explain why various organizations adopt changes at different stages. According to the study, the higher the compatibility between organizational culture and innovations, the earlier the innovation is adopted. This is because compatible organizations are better able to recognize and comprehend the potential benefits of a change than the incompatible organizations can. Also, the compatible organizations adopt early since they are confident that their culture will facilitate a very smooth adoption/ implementation (Hoggett, 2012). As the early organizations begin to benefit from the changes, the non-adopters/ incompatible organizations also rush in to implement the changes so that they do not lose out on their rivals. Therefore, compatible organizations form the majority of the early adopters, but later on, the number of adopting incompatible organizations increase, as suggested in hypothesis one. Even so, the compatible early adopters of change only do so when the change promises an opportunity to make economic and social gains, as stated in hypothesis two. The late adopters who are mostly composed of the incompatible organizations also only adopt changes that will help them recover from the economic and social losses owing to non-adoption. Moreover, as the third hypothesis reckons, incompatible organizations will adopt the beneficial changes only if competition is very intense (Ax & Greve, 2017). Incompatible firms are thus careful not to lose further ground on fierce competitors by ignoring game-changing innovations even if they would not adopt the changes under normal circumstances (Wadhwa & Harper, 2014). Competition thus drives adoption for the incompatible firms in the later stages. References Ax, C., & Greve, J. (2017). Adoption of Management Accounting Innovations: Organizational Culture Compatibility and Perceived Outcomes. Management Accounting Research, 34, 59-74. doi:10.1016/j.mar.2016.07.007. Hoggett, J. (2012). Accounting. Milton, Qld.: John Wiley and Sons Australia. Mowen, M. M., Hansen, D. R., & Heitger, D. L. (2012).Cornerstones of managerial accounting. Mason, OH: Cengage Learning. Pride, W. M., Hughes, R. J., & Kapoor, J. R. (2014). Business. Mason, OH: South-Western Cengage Learning. Robbins, S. P. (2011). Management. Frenchs Forest, N.S.W.: Pearson Australia. Samson, D., & Daft, R. L. (2015). Management. South Melbourne, Vic.: Cengage Learning. Schermerhorn, J. R. (2014). Management. Milton, Qld.: John Wiley and Sons Australia. Shtub, A. (2016). Project Management. Place of publication not identified: Pearson. Wadhwa, M., & Harper, A. (2014). Technology, Innovation, and Enterprise Transformation. Hershey, PA: Business Science Reference. Read More