Organizational context, climate and innovativeness: adoption of imaging technology

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Abstract

Managers make decisions to adopt technological innovations within an organizational context. This research explores the role of organizational climate as it affects the impacts of organizational context on innovativeness. Context refers here to organizational size, slack resources, and organizational age. We analyze three known climate dimensions as moderator variables: risk orientation, external orientation, and achievement orientation. Data describe the adoption of medical imaging technologies by 70 hospitals. Climate measures come from several technology decision-makers within each organization. Technology measures of radicalness and relative advantage are ratings by five outside experts in the use of these 68 technologies. The study also includes the traditional measure that counts the overall number of innovations adopted. Innovativeness is a multi-dimensional composite variable composed of radicalness, relative advantage, and number of innovations adopted. As expected, results show that organizational size and slack are positively related with innovativeness. Hierarchical regression analyses indicate that the climate measures of risk orientation and external orientation interact significantly with the context dimensions of organizational size and organizational age. The model developed and tested in this project explains over 50% of the total variance in innovativeness.

Introduction

Widespread interest in the adoption of technological innovations stems partially from a prevailing belief that adoption improves organizational performance (Rogers, 1983, Damanpour, 1991, Irwin et al., 1998b). Organizations adopt technological innovations to help themselves achieve competitive advantage (Porter, 1985, Morone, 1989, Stacey and Ashton, 1990). Many research projects have explored various factors thought to influence the adoption of technological innovations by organizations (Kimberly and Evanisko, 1981, Meyer and Goes, 1988, Damanpour and Gopalakrishnan, 1998).

In a broad sense, organizational innovation refers to “the adoption of an idea or behavior that is new to the organization adopting it” (Daft, 1978, p. 197). However, innovations have been classified further as product or process innovations (Zmud, 1982), and as administrative or technical innovations within new products or services (Robey, 1986). Damanpour (1991) used a typology that identified four major dimensions: (a) type of organization, manufacturing versus service and profit versus not-for-profit; (b) type of innovation, administrative versus technical and product versus process; (c) stage of adoption, initiation versus implementation; and (d) scope of innovation, low versus high. The focus of our study is technical, process innovations (medical imaging diagnostics) within the radiology services of the hospital industry so we examine high scope of innovations. We include both for-profit and not-for-profit types of service organizations. Finally, we examine the adoption stage, seen as being analogous to the “implementation” stage of initiation–implementation dichotomy examined by Damanpour (1991). The hospital industry has been experiencing a dramatic change due to the increase in managed care and in shareholder-owned chains (Kuttner, 1996). The hospital industry was also chosen because of an “explosion” of new medical technology in hospitals; the accompanying escalation in healthcare costs has received considerable attention over the past decade (Kirchner, 1991, Irwin et al., 1998a). There may be little disagreement that high-tech medicine contributes substantially to the rise in costs (Johnson, 1995). At the same time, however, failure to adopt new technology may result in an eroding patient base. Adoption of technological innovations functions as a major dimension in the healthcare industry because it affects the quality, care, cost, competitive position, and even the advancement of the medical arts (Rubenstein, 1998).

We study three contextual elements of decisions to adopt technological innovations: organizational size, slack resources, and organizational age. Organizational size often exhibits an important impact on the adoption of technological innovations (Hage, 1980, Kimberly and Evanisko, 1981, Damanpour, 1992). Past research also indicates that organizational slack tends to have a positive relationship with innovation (Bourgeois, 1981, Miller and Friesen, 1982, Damanpour, 1991, Kuitunen, 1993). Organizational age has hardly received any attention from scholars of innovation adoption even though it has been studied extensively by students of organizational structure and strategy (Mintzberg, 1983).

While previous research has investigated the influences of contextual and structural variables on innovation adoption, an organization’s climate can also be expected to play a key role and yet it has rarely been studied. Organizational climate can be described as the shared perceptions of organizational members who are exposed to the same organizational structure (Schneider, 1990). Zmud (1982) suggested that it is not the structure of the organization that “triggers” innovation; rather, innovation emerges from the organizational climate within which members recognize the desirability of innovation, and within which opportunities for innovation arise and efforts toward innovation are supported. Structure can be viewed as an emergent property of ongoing action (Barley, 1986). Thus, the behavior and perception of organizational members may be critical for the successful adoption of technological innovations (Damanpour et al., 1989). A few studies have attempted to examine the relationship between climate and either the success of product innovations (Souder, 1987) or innovativeness (Rubenstein, 1989, Dunegan et al., 1992). Development and nurturing of an appropriate climate can differ widely across organizations of different sizes, slack resources, and ages. The idea that an organization’s structural factors and its organizational climate would interact in complex ways to influence its innovativeness has intuitive appeal. Yet, no study to date has examined this central issue, which provided an impetus for our study.

The objective of this study is to examine the relationships between organizational context and organizational climate as they influence innovativeness. The next section of this paper discusses the theory underlying the research model in our study; Section 3 discusses the research design; Section 4 presents and discusses the empirical results; and Section 5 offers some concluding remarks including suggested directions for future research.

Section snippets

Theory development

Considerable research exists on the organizational and environmental determinants of the organizational adoption of innovations (Kimberly and Evanisko, 1981, Meyer and Goes, 1988, Gatignon and Robertson, 1989, Germain, 1996, Ramamurthy et al., 1999, Gopalakrishnan and Damanpour, 2000). Damanpour, 1991, Damanpour, 1992 points out that organizational size and slack are two of the key factors that generally exhibit a positive association with adoptions of innovations. However, the previous

Research design

This section reports the study sample, then the measures adopted, and finally the validity and reliability for these measures.

Results

Recall that the study set out to examine the direct relationships between contextual factors (organizational size, slack, and age) and organizational innovativeness, as well as the moderating influences of organizational climate on these relationships. Before we examine the results from hierarchical regression analysis, the simple bivariate relations are considered (see Table 2 for these zero-order correlation coefficients).

Bivariate findings in Table 2 show that the contextual factors

Contributions

This study developed and tested a more comprehensive model of an organization’s contextual factors in conjunction with its organizational climate as they affect the adoption of technological innovations. Hierarchical regression analyses indicate that the model explains over 50% of innovativeness behavior. This study does provide additional support to the finding by other scholars (Damanpour, 1992, Liberatore and Breem, 1997, Gopalakrishnan and Damanpour, 2000) showing that organizational size

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